Wednesday, May 14, 2008

Staying ahead of the game

I just saw a question on the Fast Company web site asking “Why didn’t AOL leverage its community to become what Facebook is?”

Since the people who makeup AOL are just folks like you and me, the problem has more to do with corporate culture than with the individuals within the company.

At the end of the 1970s I got tired of the get hired, work a few months and get laid off cycle common for an electrician working for small contractors. I started my own burglar alarm business, later going into partnership with another alarm company.

Owning and managing a small business taught me to pay attention to industry trends and always look for new ideas, methods, and products. My business partner was much older than I and ready to retire, but I couldn’t afford to buy him out and have enough cash to run the business. We sold the business and I went to work as a manager for a defense contractor.

Working for that large company, I found them focused on daily operations to the exclusion of looking for new ideas and methods. In the book “Barbarians to Bureaucrats” Lawrence M. Miller, the author, talks about the stages that organizations go through and some of those stages are driven by size. The bigger an organization gets, the more it must rely on people following the established processes. The upside is that it gets the daily work done efficiently and on time. The down side is that it makes it harder to get new ideas considered.

All businesses are started by an idea for a product or service, an individual or small group of individuals bring that idea to market. At some point the culture changes from getting the new idea to market and accepted to producing the product or delivering the service.

Profit abhors waste! Free time for your workers is not free, they are being paid for their time, so the system is designed to eliminate paid-for-but-unfocused free time in their daily schedule. The problem is that an awful lot of new ideas come out of just sitting and thinking “what if ..” or “what is a better way to do ...”.

There are two key steps to ensuring that your company doesn’t fall in this trap. First, ensure that everyone has some time to look at your industry and seen what the trends are. I mean everyone, not just your senior executives and it must be part of their working day. If you’re not willing to spend your money (in the form of time) to keep up with your industry, why would you expect your employees to spend their money (in the form of their free time) to keep up with your industry?

Second, you must have a process for even the cleaning staff to suggest new ideas. Remember that people will tell you about things they think are useful and cool and that’s what your customers want. Things that are useful and cool. In most cases the person reporting the idea will not know how to present that new and cool idea or how to monazite it. They just know it’s cool and they like it.

Management’s job is to collect these new ideas, then research them, separate out the ideas that represent real opportunities for your business, and lastly to figure out how to make money from that idea.

If that sounds like a lot of effort, that’s why it’s called work. It’s also the cost you must pay to not be caught making wagon wheels while some modern day Henry Ford is producing the Model T.

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