The Power of Ideas

Nathan Myhrvold is the Founder and CEO of Intellectual Ventures, a fascinating organization that calls itself an "invention company." A certified boy wonder, Myhrvold began college at age 14, has 18 patents in his name, and spent 14 years at Microsoft at the tail end of the 20th Century.

Myhrvold once fondly recalled a memo he sent to Bill Gates while serving as Microsoft's Chief Technology Officer: "I think the title of the thing was 'a crazy idea.' He sent me back this piece of mail that I have always cherished since then, and it said, 'This is the most bizarre, craziest idea you've ever had; please proceed.'"

It may not seem newsworthy that Bill Gates had the courage to embrace crazy ideas in pursuit of the innovation that drove his company to become what it is today. But it's dangerous to dismiss this story as irrelevant if you don't feel your company needs innovation to thrive (or just to survive).

Innovating can be important to all businesses. While you're standing still your competitors - even those you don't yet know about - are improving. They may even be completely redefining your entire industry (think Newspapers vs. the web, Record Stores vs. ITunes, Pay Phones vs. Cell Phones).

So even if you have a comfortable advantage in your target market (any Sony Walkman users out there?), don't be afraid to stay current and embrace even the craziest ideas about how your customers will be satisfying their need for your product or service in the future.

Start by carefully defining your organization's Core Focus (the intersection of what you're passionate about and what your organization can do better than anyone else). Invest most of your time and energy being great at what you do now, and THEN innovate wisely. The crazy ideas worth pursuing fall within your Core Focus - which means they will appeal to the future needs of your current client base and be more easily understood and mastered by your current team.

Got a story about a "crazy idea" of your own that you'd like to share? Click "comments" below to tell us where it led your organization.

-Mike

Is Time On Your Side?

Ask 100 business owners if there's anything they want more of and 99 will give you the same two answers - "Time" and "Money." And who can blame them? It's hard to argue with the fact that more capital and more time for leaders to develop and implement winning strategies would positively impact any organization.

However, the lack of those two precious commodities are so frequently mentioned as the reason companies don't become their best that I am reminded of John F. Kennedy's famous line, "We must use time as a tool, not a crutch." After all, the lack of time and money are not so much causes of problems in an organizations as they are symptoms of other problems that can and should be addressed systematically and permanently.

Kennedy's comment resonates whenever a client's leadership team struggles to find time to work ON the business because they're working so frenetically IN the business. Often these teams rarely even meet as a group to review results, discuss the future of the organization, and solve problems. And for good reason - each of them is already putting in 60-80 hours per week on stuff that has to get done, and when they HAVE met in the past those meetings have been so long, unfocused and unproductive that calling them a "waste of time" is too kind.

If this sounds familiar, getting better at four things that may help you solve the "not-enough-time" problem at your company:

• Make sure important tasks are assigned to those who have the skills to do them well
• Document your core processes so that everyone in the organization can excel without having to be constantly monitored, coached or audited by key leaders
• Get better at making problems and obstacles go away forever
• Make your meetings more frequent, shorter and more productive

I'll share more about the tools you can use to get better at each of these items in future posts. For now, just remember that not working ON your business because you don't have time is like not going to the doctor because you don't feel well. That strategy may work for a while...but one of these days you and your leadership team are going to find yourselves in the emergency room.

-Mike

When the Going Gets Tough...

...do the tough avoid reading or watching the news? Who could blame them?

The gloom this week takes aim directly at independent business. As reported in Business Week (see full article here), there were more commercial bankruptices filed in April (over 5,000) than in any month since the new laws took effect in 2005. In fact the number of bankruptcy filings increased almost 50% since last April.

Still, many of my clients and colleagues believe these tough times create opportunities for well-run organizations and calm, opportunistic leaders. What are you and your team doing to overcome the intense pressure on your margins caused by rising costs and shrinking demand? Have you found some effective ways to weather the storm, or identified at least one silver lining in any these storm clouds?

Share your ideas by clicking on comments below. Thanks!

- Mike

Deliver Results...and Get Paid For It

Charles Steinmetz was an electrical engineer and inventor whose work at the start of the 20th century led to the development of the alternating current. Widely known as "The Electrical Wizard," he was in high demand as an expert. It was in that capacity that General Electric hired him to help pinpoint a problem in an intricate system of complex machines.

After testing and adjusting various parts of the system, Steinmetz eventually took out a piece of chalk and placed an "X" on a small component in one machine. Upon examining that component, GE's engineers were amazed to find that the "X" precisely marked the spot of the defect, and they were able to quickly resolve the problem.

Despite the fact that Steinmetz had delivered the desired results and allowed GE's engineers to move on to other projects and challenges, the company was reputedly shocked when they received a bill for $10,000 (about $200,000 today). They challenged Steinmetz to itemize the bill. His response?

• "Making one chalk mark: $1,"
• "Knowing where to place it: $9,999."

When pricing your goods and services, remember to factor in the value you deliver to your clients. Often the work you and your employees do is worth well more than the sum of your costs plus a standard (often narrow) gross profit margin. When you're passionate about delivering real value to your clients that they're unable to get elsewhere, you can be equally passionate about charging fair market value for what you deliver.