Continuing with the theme of innovation, recently read The Circle of Innovation by Tom Peters published by Vintage Books,1999. Many of the themes outlined in Mr. Peters book have not changed and many companies have still not figured out how to do innovation. Companies do parts of innovation, but forget the other parts. In the service economy the greatest asset is people, but if you look around do most companies treat and pay their employees as their greatest asset? The answer not surprisingly is no, often companies ask for innovation, but stability for the employee remains off the table. In just about every group meeting of employees the author has been in, the first question was about job stability, the second how the company can do better. Each and every employee would know the competitive landscape has changed, more is asked, less is given and whatever fat existed is just not there anymore. Even in these conditions companies can and need to innovate.

Mr. Peters has 15 themes of how innovation works and includes
1. Distance is Dead – with high speed internet which is the standard, we are all neighbours. Some you like, some you work with, but you all share something and every year it is easier to communicate with those around the world as it is to communicate with those around the block. Another aspect is cutting jobs, while part of any solution, is only a short term fix; the more important question is how does the company innovate to grow?

2. Destruction is cool – in many ways it is easier to destroy an organization than to change it. However most of us do not want to destroy, we prefer to change at the margins. It is hard, destruction means to try a new approach using the tools of the trade which now exist. One company the author worked for spent many dollars on a new motto for their letterhead, the consultants noted each aspect of the motto represented a different strength of the company. Most of us in the audience and customers thought it was ugly and liked the old one better. The moral is just because something is new, it is not necessarily better if it does not reach the customers. The understanding has to go beyond the designers.

3. You can’t live without an Eraser – the eraser means to wipe out some of the old thoughts about how business is done so you can figure out how business is done today. Part of that is having an organization that accepts mistakes, learns from them and keeps trying without firing everyone. Mr. Peters has a great chart with questions is failure tolerated? do ideas flow? do we swing for the fences or hit singles? do we thrive on change? do we take a new idea and test it..fast? we think anyone can be a big winner?
Another aspect to innovation is cost, many expect costs to be high. In a survey in Inc. – the cost to start up a company 34% of the time was less than $10,000 and 59% of the time less than $50,000. The numbers indicate to start does not need a great amount of resources. To do the next steps to a roll out to potential customers and existing customers that is where the resources are needed. The point is to start and test does not need many resources.

4. We are all Michelangelos – can every department be converted into a business? Mr. Peters would say yes. If it was a business would it be serving its customers or would they want to go somewhere else? If the number one reason for switching providers is service, are the departments within the company delivery the service to both inside and outside customers? Could every department be providing awesome customer service? why not? does the leadership see and acknowledge the lowest paid employees as great people or are they seen as cogs in a wheel?

5. Welcome to the White-Collar Revolution – to stay in the job, the question is how have you made your company a better place?
more in part 2 and 3.

Linking to dividend paying stocks, every company whether they pay dividends or not has to live and breath innovation. Much of innovation stems from the leadership at the top, do they really want it or do they say they want it? When the company is living off its dividends it is easier to say than really want to. When the company is losing money or market share, it typically moves to wanting it more. As a shareholder, you have to look to see if your company wants innovation, has new revenue streams and is the dividend safe?

There are more questions than answers, till the next time – to raising questions.