Two giants of the global business scene have passed away in recent weeks; Ray Anderson of Interface and Steve Jobs of Apple. Ray, who I had the privilege to know, led his company with complete conviction to become an exemplar of sustainability. In Interface's own words: "Our journey started in 1994 with one person, our founder and chairman Ray Anderson. Ray challenged our then 21 year - old company to adopt a bold vision, one that required new thinking and a new model for business. We didn't have a map, but Ray's vision was a compass for our journey. As we progressed on our journey, a passion for sustainability took hold with our people and our company was transformed."
The magnitude of Steve Jobs' aspiration is difficult to comprehend, and certainly too vast to encapsulate here, yet the Apple business and its extraordinary products flowed from profound insight and instinct in relation to consumers and their use of technology.
The success of companies such as Interface and Apple tells us that it is powerful ideas that ultimately keep businesses safe and successful. As a business leader you have to know this or your tenure will be limited. You also have to know when you are looking at a big idea, and what to do with it. And, if you haven't got one or more big ideas to work with, you need to know where to find them.
The strategic significance of imagination and, specifically, the value of powerful ideas, is not well understood in an era of short-term thinking and behaviour, despite the example of leaders such as Jobs and Anderson. If you ask most top managers, 'what powerful ideas are shaping your decisions?' you will normally receive a quizzical look. They haven't thought about it and often don't seem to understand what you are talking about. Some will say, 'Are you talking about the vision thing?' Others might respond 'Oh, you mean big hairy audacious goals?'
Both of these responses reveal a degree of impatience and scepticism. It is true that 'visioning' exercises often produce no practical result. It is also true that the concept of audacious goals has done strategy a disservice - it has the effect of trivialising the strategic process and implying substantial risk.
As a result of short-term thinking, the absence of powerful ideas is often accompanied by an aversion to risk. It is the task of every business to deliberately seek risk by venturing the capital base of the firm in accordance with the aspirations and risk appetite of the owners. Great managers understand that, fundamentally, risk is good as it is the other face of opportunity. When a company's strategy primarily involves protection of the status quo, however, significant risks are avoided or minimised wherever possible. Risk is bad.
In this environment risk ceases to be a strategic matter and becomes more a matter of control. You know that this has happened when you observe the financial controllers acting as the de facto strategists for the company. This is always a concerning development as it means that powerful new ideas have almost no chance of being heard. This problem has been exacerbated by the rise in power of the corporate rating agencies which have a traditional 'risk is bad' mindset and therefore reinforce the mentality of avoidance.
Powerful ideas are not limited in their application to the vision for the business, or to goals. They are as likely to apply to the definition of the business, to business processes, and to the building of capability. Ray Anderson and Steve Jobs found them in all of these domains. Powerful ideas, wherever they are found, have a transformative effect on the business and are the most important source of long-term sustainable advantage. Looking around, it is not difficult to identify businesses trying to work with such ideas:
- the bookseller (Amazon) that becomes an aggregator, using the inventories of a large network of suppliers
- the regional bank (Bank of Queensland) that provides incentives to its best managers by offering franchised branches to them
- the companies (such as Interface) using Sustainability as a paradigm to position their products and redesign their processes
- the marketers embracing clever 'clicks and bricks' strategies that integrate Internet, catalogue and physical channels.
So, if your ideas cupboard is bare, and you are not a Ray Anderson or a Steve jobs, how do you re-stock it? First, start a conversation with a few critical questions and see what you get. 'What powerful ideas are informing our business?' 'Where and how are they driving outcomes?' 'How do we feel about these ideas - are they strong enough to deliver revenue and earnings growth over the long term?' This conversation may not be easy initially because the team has probably not thought about the business in this way. Keep going until the questions answer in a satisfying way.
If the result of this conversation is disappointing, then you have made real strategic progress; you know there is a critically important task to be accomplished and you know what it is - find some big ideas!
To do this, try working through the hierarchy from facts to powerful ideas. Out of a thousand facts, only a handful is interesting. Out of a handful of interesting facts only one or two insights may be gleaned, but these insights are often the key to the discovery of a powerful idea.
How do you know when you are looking at an interesting fact? There is one very good test: ask 'so what; why is this fact or idea interesting?' 'So what?' is my favourite question. It is brutal and uncompromising but it opens things up by cutting through to the heart of the matter. Answers to this question have a 'sign' on them; they take you somewhere that is ultimately useful in identifying powerful ideas.
It is great if a business has a visionary leader, but businesses do not need them to focus on, develop, and work with powerful ideas. Start the process of talking about them and applying the 'so what?' test. You will be pleased with the result.
About the author
Christopher Tipler is a Melbourne-based management advisor and author of 'Corpus RIOS - The how and what of business strategy'. His website www.corpusrios.com contains more material on this and related topics.