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Monthly Archives: January 2012

When I was being trained as an ‘Inventor’ – a job title which continues to give me a lot of pleasure – at the innovations consultancy WhatIf, it was drummed into us that ‘brainstorming’ was the lowest form of idea generation. Yes, you can throw a bunch of smart people into a room and see what they can pluck out of the ether, but it is a progressively inefficient technique. Not only are the ideas likely to be random, weak and derivative, but the participants – and I have heard this first-hand from teams that are required to churn ideas day-in, day-out – rapidly become jaded and creatively exhausted.

But the real weakness of brainstorming is that it encourages creative egotism. I took part in one session – professionally facilitated in a fair and even way –  where, at the end, we all voted for the ideas we wanted to develop further. After the dud ones had been culled, leaving a handful of post-its clinging to the whiteboard, one participant slumped into a chair and declared their disillusionment with the whole process. Their reason: “None of the ideas that are left are mine”!

Research indicates that innovation is not delivered via an individual’s Eureka-moment ‘inspiration’ but by groups of people combining existing notions into never-seen-before combinations.

Hybridisation is the name of the game.

It’s exactly the same when you are growing a business. Even in the unlikely event that your enterprise replicates another identically, it is highly improbable that it will follow the same path or pattern of growth. One thing you can be sure of as its leader is that, sooner or later, you will find yourself in unknown territory. And then you’ll be looking for a map, a template, a model that you can recognise and say – an audible note of relief in your voice – that’s where we are, that’s the shape we need to be. If only.

When you need a model of how to deal with an aspect of growth – a management structure; a set of processes; a new commercial model;  a business development strategy; an evolving org chart – it is unlikely to emerge from a brainstorm or any other ether-tapping technique. Nor, given the unique character of your business, will it come from importing an existing model lock, stock & barrel.

We’re back to hybridisation, the fundamental technique for creating new things. You need to mash up previous models to make a new one. It’s tricky to make a mash-up from a single piece of source material. So if the only model you really know is the one you’ve developed within this company, a company that needs a new one pretty damn quickly, then you simply don’t have the means to hand.  Scouring Amazon for business books and learning models secondhand in the comfort of your room doesn’t count.

You need to find a way to bring the experience of those models into your business, even if it’s just for a short while, so you can work the creative alchemy that makes new things from the clash of the old.

Much as every entrepreneur would like to think their business is unique, certain patterns recur when companies grow. There are recurrent watersheds that an enterprise must cross as revenues and team expand. They happen to everyone and there’s no way to avoid them.

These milestones along the path of growth occur when the organisation reaches certain sizes – roughly speaking at 10-12 people, 30-35 and about 120. I’m told by another serial CEO/non-exec that the one after that happens around the 300 mark, though I’ve not personally been there.

Each of these staging-posts signals that the structures and processes which sustained the business up to this point are not the ones it will need in the next phase, after the watershed. I’ll put it more strongly; those structures and processes simply won’t work, not then. If you’ve taken a business past a dozen employees, you’ll know this from experience. Take a simple function like internal communications; every entrepreneur remembers the early days when you all worked in a single space, probably around one big table, and communication happened via a mixture of osmosis, shouting across at each other and earwigging.

Then there were eight or ten of you and that began to stop working. A couple of people working on the same project developed significantly differing impressions of what the client wanted and how much they had said they were prepared to pay for it.

By the time there were twelve of you it was really starting to create problems.

Extrapolate that syndrome from communications across project management, client/account handling, operations, finance, management information, product development, marketing and so on – those interdependent activities that constitute the humming engine of a functioning business – and it’s easy to see how what was relatively organic, unstructured and implicit might need to become more planned, structured, codified and agreed. The transition into each subsequent stage poses similar challenges but in a more complex form that reflects increased size.

And if you use a lot of freelancers – which is not just prudent commercially for many entrepreneurial businesses, it is also a sensible response to the technology-driven fragmentation of digital-era expertise – then you may well experience a special version of the problem. You’ll look at the books and note that there are only twenty-two people on them. Phew, there’s a way to go before you have to deal with the thirty-something transition. So then why are you having all these problems with people being less-than-fully aware of what each other is doing; why is your work flow creaking at the seams and why is it so difficult to keep track of project profitability?

Forget the payroll for a moment and look around the office/studio. Do a head count. Remind yourself that for the past four months there have been six or seven freelancers in the house on any given day. So you have actually been managing a team of twenty-eight or twenty-nine people, knocking on the door of the next stage and – as soon as you stop to think about it – experiencing symptoms of an organisation that’s not quite fit for purpose.

There’s a simple remedy. Always adopt the systems and processes of the next stage to the one you are in. Not the current one. You simply don’t know when the unexpected additional brief, the one extra contractor, the new business win from a client in a hurry, will tip the business over that watershed – there is no data available about the future.  So don’t get caught on the back foot. It’s a world of pain that’s entirely avoidable.

People talk about growing a business as it were an option, a lifestyle choice. It isn’t. It might well feel empowering to ponder an imagined bifurcation in the entrepreneurial path, to consider a couple of jauntily-angled signs that point, on the one side, to frantic scaling and untold wealth and, on the other, to a genial working day that goes on (more or less) forever. Except it doesn’t quite work like that.

Like an adolescent offspring, a young business is a pain; it will keep trying to grow up. Despite your best efforts to hold it back – conscious or otherwise – there’s an inexorable internal dynamic that makes a business, if it’s any good, need to expand. No doubt a smart economist, or maybe just a decent accountant, has a good explanation for this. Whatever. For a business owner it is either a blessing or a curse;  for many, in theory it’s the first but in reality it’s the second.

Paradoxically, this unstoppable momentum doesn’t stop a lot of creative businesses staying more or less the same size for years. They grow a little, push up the evolutionary scale for a while, only to settle back down to where they were a year, or eighteen months, ago. Having briefly entered the choppy waters of growth, they beat a retreat back to harbour, to calm water. Only it isn’t calm, back where they came from. It’s just a different kind of chop: too much work; not quite enough revenue; too few hours in the day; too little structure; flimsy processes, management structures and profits.

I worked, briefly, with a business that has gone through this cycle every couple of years since its inception. It has tremendous expertise, a charismatic leader and enthusiastic clients who tend to get on board at the top of the cycle and ended up questioning the quality of outputs, the attention to the subtleties in the brief and the evident chaos in project management.  What they experience is the point where the business has the opportunity to push through to the next level of growth but fails to grasp it.

A whole sorry catalogue of causes get blamed for this sort of entrepreneurial Groundhog Day, including – surprise, surprise – our old friend, a lack of investment. The most common culprit, though, is much closer to home; it’s the entrepreneur themselves.

Indeed, the syndrome  is so common it defines a key rule of entrepreneurial expansion; a business only grows at the speed with which the MD and directors can increase their personal Management Bandwidth.

The peak, from which these businesses invariably fall back, marks the limit of the leader’s (or leaders’) current management capabilities. Commercially, growth is there for the taking. The vision, goals, confidence and skills to grab it are not.

They need to be acquired, in either sense of the word – learned or purchased – for the cycle to be broken.

Ouch, that was quite a night! They used to talk about making your own amusement, back in the day, and now we’re all experts in doing just that. Not in a singing-songs-around-the-campfire kind of way, but in a pedal-power-your-own-rave kind of way.  Actually I couldn’t say which made my legs more sore; the static cycling, taking my place in the long queue to wait my turn, or the dancing. Vinyl certainly made a bigger comeback than anyone anticipated.

It was a wonderful New Year’s Eve, one of the best I can remember. The fair on Peckham Rye, the stalls, the brew-tents, the home-made food (the only kind there is, if you think about it),the fire-pits (they’re going to have to rename One Tree Hill soon), music everywhere, families promenading, kids running amuck – a lovely vibe.

All that self-made entertainment got me thinking about how inventive we’ve become. Again. Not the old sort of inventiveness, figuring out how to sell people stuff they don’t need in every single spare second of their lives or working out how a teenager in Kyoto can kill pretend people on a screen while they’re battling another teen in Munich. Every time I crank the handle, I think – thankfully – about the guy who invented the Wind Up Web and managed, against all the odds, to keep the internet up-and-running. I suspect there were some things we just could not do without, whatever happened. So we found a way.

We’re all entrepreneurs now. Out of necessity rather than choice. Even the select few who have a job do it more for the satisfaction than the pay; even they need to run their micro-businesses on the side, brewing eau-de-vie, repairing spectacles or whatever. Everyone does their thing, it’s like we’ve democratised the economy. You run your one small, local specific enterprise and make enough for what you need to barter or buy and that’s it, that’s what you do. That is you, in a way. Like me and my pies. So glad I invested in a wood-burning oven before they all got snapped up. Slowly working my way through what’s left of Sydenham Hill Woods. Some things we never learn.

My goodness, we’ve become good at doing the right thing. We need no instructions or incentives to recycle, it’s the only way to hang onto the stuff we have; we all feed our energy surpluses back into the grid; grow our own veggies and dope; we all make do and mend. Everyone wears vintage now.

But I can’t help thinking, here at the start of another new year, that we could have used our undeniable capacity for innovation and creativity to solve the real problems we had, back before everything came tumbling down. Maybe we wouldn’t have prevented what happened, but we might have engineered what they used to call a ‘soft landing’, might have saved more of the things we valued in those days of outrageous plenty.

Still, if there’s one thing us humans are good at, it’s starting over, rebooting ourselves. And if I take one crumb of solace from our current predicament (because, let’s face it, we’ll always be in one predicament or another) it’s that we’re all fundamentally,  undeniably dependent on one another now, inextricably yoked together in that daily effort of entrepreneurism and invention, the one that keeps us all alive.

Happy New Year, everyone!