Innovation is Not Free

by Paul Sloane

One of the most common barriers to innovation is lack of time. People are just too busy doing their day job to spend time trying new things. The common assumption is that working hard and working long hours are good things and sufficient for success. The mantra is "focus on delivering this quarter's results." But doing more of the same is not enough - we have to try the new.

It is as though we are so busy building rafts to cross the river that we never look up to consider building a bridge, or a tunnel or a dam or fording the river or building boats or planes or all the other things we could do. We just focus on producing those rafts.

If you want people to be creative, then set the goal (e.g. crossing the river) and then challenge them to come up with ideas. Give them time and some resources to test their ideas - to build prototypes, or to investigate what people elsewhere are doing.

Google allows its people to spend one day a week on innovative ideas. Is this a wasteful luxury? No. It has led to remarkable innovations such as Google Earth, Froogle and Gmail. Genentech has a similar provision for its people. Most organizations could not afford to give up as much time as Google or Genentech but the same principle still applies - you have to create some slack time in which people can experiment. You do not get innovation for free - you have to allocate time, money and people.

For many years 3M has allowed its scientists and engineers to spend up to 15% of their time on any project that interests them. They do not have to ask their manager's permission but they do have to keep them informed of what it is they are doing. This permission to be free has resulted in countless ideas and innovations for 3M which is regularly rated as one of the most innovative companies.

The message is clear. The leader has to free time for innovation in order to empower people to come with great ideas and to explore them. Whether it is one day a week or one day a quarter, time for innovation is critical.

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Paul Sloane writes, speaks and leads workshops on creativity, innovation and leadership. He is the author of The Innovative Leader published by Kogan-Page.

Some Decisions are Forever

by Steve McKee

Earlier this year I commented on a decision by Panasonic to rein in R&D investment in flat-panel televisions and instead expand its reach into the entry-level market (see "Is Panasonic Kissing Its Future Goodbye?").

The company appeared to be eyeing significant market share opportunities offered up by the 2009 conversion to digital TV in the U.S. It was a bold move, because while it's easy to cash in your brand equity and go down-market, once the decision is made it's nearly impossible to reverse course.

Last month another famous brand made that fateful choice. Liz Claiborne, Inc. agreed to license its namesake brand exclusively to J.C. Penney, ending decades-long relationships with department stores like Macy's, Dillard's and Bon-Ton. The Claiborne brand has long been in decline, and a Macy's spokesperson said the retailer could no longer justify expanding the line because of customer confusion between it and the "Liz & Co." sub-brand that was being sold exclusively at - you guessed it - J.C. Penney.

The Claiborne brain trust may have created their own problem by overextending the brand, a common manifestation of the loss of focus that afflicts many stalled companies. That said, this new decision may work out. It's not the first time J.C. Penney has partnered with respected, high-profile designers (Polo Ralph Lauren and Nicole Miller, to name two), and Penney is doing better than many of its rivals in this tough economy.

As with Panasonic's decision, however, this one will be interesting to watch, and will serve as yet another object lesson for any company struggling with stalled growth. Going downscale - where all the value-conscious buyers are these days--can be extremely tempting. But if you do it, make sure you're extremely comfortable with your decision. There's no turning back.

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Steve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Detroit, D.C.

by Steve McKee

Not a day goes by without more news about Detroit's beleaguered automakers. While each new development is notable in and of itself, I find it more telling to take a few steps back and look at the big picture.

Below are a few clips from selected Wall Street Journal articles I've run across over just the last few days. Take a minute and scroll through them. They tell a fascinating tale.

First, GM continues its inability to focus, revealing a growing lack of consensus between management and the board:

"In a dramatic change of course, General Motors Co. backed out of a deal to sell the company's European operations to car-parts supplier Magna International Inc., and now plans to spend billions to restructure the money-losing business itself."

"The decision...was made at a board meeting Tuesday in which the company's directors strayed from the plan of Chief Executive Frederick "Fritz" Henderson, who had spent months negotiating the Magna agreement."

"The Opel deal is the second major transaction to fall apart for Mr. Henderson in little over a month."

"Whereas Mr. Henderson's predecessor, Rick Wagoner, had often won in the boardroom by relying on the support of long-serving directors, Mr. Henderson appears to be tiptoeing through land mines of strong opinions by adjusting his game plan."

"Carl-Peter Forster, who worked for GM for more than nine years, is quitting as chief executive of GM Europe. The decision follows a vote by the company's board of directors on Tuesday to scrap a plan to sell control of the German Opel unit..."

"Despite his dissent of late, Mr. Forster was long viewed as a strong asset on GM's executive roster and his departure serves another blow to Mr. Henderson, who has seen his management bench shorten since the company's exit from bankruptcy."

Across town, Chrysler is making fairy-tale sales and market share predictions to try to convince investors (that means you, taxpayer) that it will repay the $9 billion it owes us by 2014:

"The company said it is counting on a slew of new models to spark a surge in sales over the next five years and drive its revival."

"Chrysler - which has seen its sales plunge by half in the last few years - predicted revenue will rise about 20% a year, from $42.5 billion in 2010 to $67.5 billion in 2014, and said it would break even in 2011."

"To hit its financial targets, Chrysler expects to double its world-wide sales, from 1.3 million cars and trucks in 2009 to 2.8 million in 2014, and predicted its U.S. market share will rise from about 6% in 2009 to 11% in 2014."

Meanwhile, Detroit's only private automotive company, Ford, has gone about regaining its focus, finding its nerve and sticking to its game plan.

"Last week Consumer Reports gave the company quality ratings comparable to those of Honda and Toyota."

"On Monday, Ford reported its second consecutive quarterly profit - and more impressively, a swing from a $7.7 billion cash burn a year earlier to positive cash flow of $1.3 billion in the just-ended third quarter..."

"The company gained a percentage of market share in the first 10 months of this year, no easy feat in an ultra-competitive market."

"The company's turnaround actually began three years ago with decisions that amounted to zagging every time that General Motors zigged, which was remarkable for a company whose strategy for decades was to follow GM."

"While GM kept its unwieldy assortment of eight brands, Ford sold Jaguar and Land Rover, cutting its brand lineup down to a manageable size."

"What's more, shedding brands and shunning the mortgage business has helped Ford focus on quality, where it had slipped badly early in this decade."

"Consumer Reports said last week that 90% of Fords, Mercurys and Lincolns rate average or better in quality, right up there with Honda and Toyota."

"When the economy recovers and car sales increase, Ford could be in great shape."

The automotive business is complex, but it doesn't have to be that hard. Focus, nerve, consistency, consensus - no matter the industry, all tend to diminish when growth stalls. And all are essential to getting it back.

At the moment, Ford is the only one of the Big 3 to be paying attention.

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Steve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Five Ways to Stay Focused, Be More Successful & Get More Done

by Matt Heinz

I recently asked several business and executive coaches what they do for their clients. I wanted to know more about their process, their approach, and generally how they create value for the people and organizations they engage.

Although each had a slightly different take, it all boiled down to one thing - focus. Each successful coach produced results for their clients by helping them get the most out of themselves and their teams, in every case by focusing time, talents, resources and values.

What I heard generally fell into five distinct areas of focus:

1. Focus on what's important

• It's easy to feel successful in a day that's busy. Filled with putting out fires. Getting things done. But often, we don't get the right things done. By stepping back and focusing on what's most important (not necessarily what's in front of us, or what's easiest, or what's screaming the loudest), we make far better forward progress (and often in less time).

2. Focus on what you're good at

• Know your strengths, and lean into them. Compare that to what your organization needs, and ensure that others are doing everything else for you. Yes, there's a cost to delegating, but the results will far outweigh the investment when you have more time for your strengths, and others are accelerating your cause by leveraging theirs.

3. Focus on fewer things

• Most of us take on far too much. Even if those are all things that are both important and speak to our strengths, there's not enough time in the day to get it all done. Make the hard trade-offs for what's going to drive the most value, and make the hard decisions to put other projects on the back-burner.

4. Focus on the basics

• What's most important to your business? What's fundamental? What got you where you are now? What are your values? Getting back to the basics of your business can oftentimes be the simplest and most effective way to accelerate growth and productivity again.

5. Focus on what you want

• It's amazing to me how many people let the day and its myriad influences direct not just day-to-day, but larger directional decisions that affect personal and professional success. When's the last time you took 30 minutes to reflect on what's most important to you? What will make you happiest and fulfilled? How do you map those priorities back to your life & your business?

Of course, achieving one or many of these areas of focus is far easier said than done. If you have the discipline to address and stick to these on your own, you're in the minority. For the rest of us, finding a coach (or even just a mentor) to keep us accountable and help unlock the full potential of our focus can reap significant dividends personally and professionally.

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Matt Heinz is principal at Heinz Marketing, a sales & marketing consulting firm helping businesses increase customers and revenue. Contact Matt at matt@heinzmarketing.com or visit www.heinzmarketing.com.

Laser Focus and The Perfect Client

Laser Focus

If law enforcement officers were business people, they would never struggle with questions like, "Who is my Perfect Client?" or, "Will I run out of customers if I focus on a select niche?" They would just know with confidence who they're after. Take this extreme example from my past.

It was early January of 1993 when Officer Harlan Graham of the Iowa State Patrol pulled me over north of Decorah, IA. Having wrecked my car the week before and now traveling seven miles over the limit, I was an easy target.

As I sat in the squad car and the officer wrote up a collection of what he assured me would amount to nothing more than warning tickets, lights began to flash and an eerie whine sounded from a box on the dash. So I did what I do: I began asking questions. "What's that?"

"That's my radar," came the quick reply, "and the whine tells me a car is approaching." Sure enough, just then, a car emerged from the heavy mist, doing the precise 55 miles posted as the speed limit.

"Let me show you," Officer Graham then said, throwing the cruiser into drive and pulling onto the highway. With that, we were unexpectedly on patrol, with him explaining the finer points of how the radar worked.

Just then, a van approached at 63 miles an hour, 8 miles over the limit. Time for another question. "Tell me, how do you make the decision between giving a warning and an actual ticket?"

"I always give tickets starting at 8 miles over." Then, suddenly, and with what I would swear was a hint of ornery in his voice, "Oh... you want him??" And with that, Officer Graham reached down, flipped a switch and the dense fog began to flicker a brilliant white and red. I think I nearly swallowed my tongue as I realized we were pulling a u-turn in the highway to take down the van and give the hapless driver a ticket.

My point is simple. Harlan had ruthless criteria for what "clients" he was after. Furthermore, he had absolutely zero fear he would ever run out of clients. (Yes, I asked.) After meeting Harlan, it seems absurd to think any officer is ever wandering the streets with any less resolute internal guidance. Taken in the context of a law enforcement officer, the question of whether or not getting focused is valuable seems instantly and recognizably obvious.

Yet business people do struggle with questions of focus and their implications every day. Focus can feel limiting instead of empowering. The fear and confusion is natural, but let me be the first to assure you that if it seems absurd to imagine Harlan without focus, it should be no different for you in your business. Getting focused on your best possible clients, finding more of them, and executing a sound plan to win them over is your best plan for dynamic business growth.

The Perfect Client

Imagine you could buy a police laser gun you could point at the head of a potential client and it would instantly tell you whether they were a match for you. What dials and settings would your laser gun have? Put another way, what is the profile of the typical client you want and is most worth winning?

Where are they located? Within your city, your state, your region? Or further away? What size is their company, typically, and what is their budget for your product or service? Moreover, how much of your competitor's service or product are they typically using when you find them? Perhaps most importantly, put yourself in their shoes: what is their actual motivator for considering your product or service. That is, what pain do they feel that you solve?

Finally, a question too few think to ask themselves. Would your radar gun tell you how well the client pays their bills? Reliable payment is a prerequisite to be a "Perfect Client," right? Yet many businesses end up acting as banks because clients don't pay.

When I go through this exercise with my clients, I like to ask how they came up with their answers. In particular, I like to make sure the answers hold true when I look at only the most profitable clients for the past year.

The point here is to ask what it would look like if you took your knowledge about your clients a level beyond however good it may be right now, as well as if you were even more proactive about choosing the clients that you find and do business with rather than settling for what business comes through the door.

Finding Them

You've formulated a good picture of your ideal client base. Now let's get specific.

How many of your Perfect Clients are out there? What are their names? Who are the contact people you need to call? In sessions, people are often shocked as I wait for actual answers to these questions. Yes - actual numbers, names, and lists.

If you're looking for some tools to get you started, one of the best places to head is your public library to make friends with the people behind the research desk. They may have library-only access to paid resources like ReferenceUSA and Dun & Bradstreet business searches, as well as databases that will connect you to business associations in any industry you're working with. For call contact information, also try online sites like Jigsaw.com or ProspectsDaily.com.

Again, the goal is to determine how many Perfect Clients really exist within our territory. Think why this is important. Often, people don't get focused because they're afraid "focusing" somehow equals "limiting my business" and that means "I'm shooting myself in the foot. Or head." By taking the time to find out just how many clients in our territory match our criteria, not only are we performing a valuable safety step of validating our market focus, but often the result is a surprising realization of just how much business is out there.

Now go get it.

Your Plan of Action

Winning business means going and actually solving the pain of those clients you just identified. How are you going to do it? Will it mean letters, calls, visits, or something else?

Be more specific with your plan than feels natural at first. I don't like hearing things like, "We're going to divide up the list and have the sales people call" - that's not a plan. Try this: "Bob is going to assign each salesperson 20 names by the end of today. They have until Friday to call through their list. Their goal is to set four appointments for within the next two weeks. We'll know call campaign results by close of business Friday." THAT'S a good start to a plan.

The point isn't really what you plan to do but that you plan to do something and that you do it with precision and intention. Our consistent theme here has been intention, purpose, and proactive actions make the difference.

Everybody Needs a Laser Gun

The Perfect Client concept sounds simple, and it is, but it is amazingly powerful. Taken to its fullest extent, it really is the laser gun for your business, driving you to the level of proactive, focused action you need in order to get ahead.

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Dustin Walling is Principal of Dustin Walling Associates, a Seattle-based management consulting firm providing strategy and operational consulting. For article topics, questions, or comments, Dustin can be reached at http://www.DustinWalling.com.

All material Copyright 2007-2008, Wallingford Specialties, Inc. and Dustin Walling Associates, unless otherwise noted. All Rights Reserved.