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Innovation Winners

2010-03-15T06:02:00.001-07:00

I was browsing through Business Week's annual poll of executives to identify the 50 most innovative companies in the world and amused myself my doing a google search for their missions. Fascinating . Every company in the top 12 had a mission about what they do for customers not about themselves.

Compare that to the average turgid mission statement which goes something like : to be a leader in the provision of xxxx services in our chosen markets and to be a good corporate citizen in the way we deal with our employees and the communities we operate in.

The thing is that a mission which is specific about how you are of service becomes a powerful motivating factor for employees , liberating energy, creativity and yes of course innovation.

Here are just a few examples:

Dedication to every clients success through innovation that matter to them (IBM)

Improve the lives of the world's consumers (P and G)

Create the most satisfying ownership experience in the world (Toyota: I know, I know!!! But watch them recover)

A smile on every face (Nintendo)

Originating Intent

2010-02-17T05:27:00.001-08:00

I had a problem last Friday. I was looking for some cash. I left my flat at 7:30am knowing there were three cash machines in easy reach and I could choose any one of them , draw some cash,have some breakfast and still make the seminar I was leading, on time.

The best laid plans!

The first machine said "service not available". The second let me enter my pin and the amount I wanted and then said "try another machine". The third machine had the same problem on both my debit and credit card.

The guy behind me on the third machine couldn't get any cash either.

At this point I thought all the cash machines in London had failed. I'm a chemist by training so three experimental observations makes a theory!

Nothing on the news.

So I called Firstdirect. They were brilliant. I can't imagine any other bank dealing with it as well as they did.

Firstly they told me instantly that the chip was damaged in my debit card because one of the ATMs had reported that (they knew about all my failed transactions although none of the machines were HSBC). They told me instantly that there was a fraud marker on my credit card (always seems to happen if I buy some furniture immediately after buying lunch!) . They took me instantly through my last six transactions and as I recognised each one they took off the fraud marker.

"So Mr Harris you'll get a new debit card in the post in the next couple of days (I did), in the meantime you can draw cash with your credit card or at any HSBC branch up to a certain amount at any branch with some ID and if you need more tell us which branch and when and we'll arrange it. Is that going to work for you or do we need to do something else?"

When I created Firstdirect I set out an Originating Intent of being known for heroic customer service leaving people feeling totally taken care of. Seems to have survived these 20 odd years.

Actually I visited Firstdirect in Leeds before Christmas. The organisation is in great shape and remains a fun and vibrant place to work.

If you see an organisation struggling see to what extent they have compromised their Originating Intent (all organisations have one , even if they didn't set it out consciously) .

It's fine to declare an Originating Intent complete or finished by the way as long as you create a new one.

Business Issues for 2010

2009-12-04T04:31:00.001-08:00

I was asked recently to give my position on a number of issues facing business in 2010.

I found the questions thought provoking and so I've posted them and my answers here.

Which sectors / business models are most likely to provide the engine for growth?

VCs are looking for opportunities in e-commerce, clean energy and health care (particularly anything which reduces costs of treatment/care). VC attention is always a good indicator and all of the sectors mentioned have obvious drivers . The market for smart phone applications, particularly games seems to be growing rapidly. In addition I have never experienced a time when so many new entrepreneurs are creating SMEs ; some of this is forced entrepreneurism ie people who have been made redundant or people just entering the job market who can't find employment- some of it is the fact that web2.0 is the best ever environment for creating a new business. Historically an economic downturn has been the best time to create a new business as there is room for growth as incumbents are weakened. So perhaps this new wave of entrepreneurism will also drive economic growth. I hope so!

How can any organisation regain trust, re-build confidence and re-kindle ambition?

In a word: AUTHENTICITY. It's an overused word but in the post credit crunch world and in a world of social networks where all of an organisations'' actions and motivations are laid bare , only those companies who have a strong customer focused mission and mean it will achieve trust, confidence and re-kindle ambition.

How can you persuade a 'battoned-down' organisation to encourage innovation?

This is solely an issue of leadership. A leader has to create a context and an environment which demands innovation in a way which makes sense to the organisation. I call this a strategic rationale and it comes from an analysis of the business environment. Often an honest assessment of the risks and opportunities leads to a natural desire to create something different ie to innovate. Sometimes a leader just demands an organisation realign itself around a new mission , merely because he or she says so. As an example I've been impressed with the way British Gas have been realigning themselves around a new mission: to look after your world (ie everything in peoples' homes)

How would you characterise the impact of social networking on business?

In a word confusing. Social networking will ultimately lead to a different way of communicating and engaging with customers, a different way of segmenting them researching them, identifying them and determining their risk profile. Today companies are stumbling along the first few steps of this journey, often resented by the users who don't want companies intruding into what they see as a personal domain. On the other hand Twitter and what may follow it has the potential to be a real game changer in that it allows you to follow anybody; you don't have to be friends. Companies which have a large number of Twitter followers or about whom many people tweet are fortunate indeed, but it's easier said than done unless you are already uber-cool.

Social networks are a great leveller, they are easy and affordable for small companies to access and small companies are often better at it. Large companies who have embraced social networks have often got into trouble as the network becomes a focus for complaints. Right now social networks are occurring as a great opportunity for entrepreneurial new companies and a threat/pain in the neck for most established companies.

How can you catch or stay ahead of competition in a flat market?

This is really simple in theory and hard to implement well. It's at the heart of most of the workshops I run. To beat the competition you have to differentiate (ie a total product and service proposition which is different and better than the competition for the customer segments you are interested in) , you have to communicate that differentiation with great clarity and power and then deliver the differentiation perfectly . It is this latter part which is most difficult and where high performance environments really pay off.

Can public sector leaders learn from the private sector, and vice versa?

Having served on a cabinet sub committee and watched at close quarters attempts to bring private sector innovation and management techniques to bear in the public sector I'd say beware. Undoubtedly both sides can learn from each other but the environments and drivers are so different that the uncritical adoption of private sector wisdom into the public sector has done more harm than good in my opinion; exacerbated by the fact it is management consultants who have brought most of the private sector approaches into the public sector, advice that would be taken with a pinch of salt and a very healthy dose of scepticism in the private sector is adopted uncritically in the public sector with often perverse consequences. Don't even get me started on the way targets have been implemented!

New Economy?

2009-10-14T09:29:00.001-07:00

I've accepted an invitation to speak at this event , it's a two day bonanza for several hundred entrepreneurs : here's the link to the website http://www.triumphantevents.co.uk/events.php?access=mib-jamescaan-mike

James Caan is featuring on the first day, me on the second; the theme of the second day is making it big in the new economy.

That made me think.

I thought the new economy was dead and buried, a term invented in the dot com frenzy of 1999 .Anything that was labelled new economy saw its value soar. Anything old economy saw its value plummet.

All nonsense as it turned out, and ended by the dot com bust of 2001. For anything labelled new economy then it became a nuclear winter. Once burned twice shy as far as investors were concerned.

And yet the underlying changes that had perpetuated the calling of the dawn of the new economy were real enough as we can now see very well.

Let's go back a little. In 1993 it was obvious things were going to change . Telecommunication companies were dominated by delivering phone calls over fixed lines. TV companies delivered entertainment over the airwaves. Both industries were going digital. The prospect of intelligent , multimedia, interactive broadband fixed and wireless networks seemed likely to change things .

Perhaps things would reverse - it seemed to make more sense to deliver interactive entertainment by fixed lines and phone calls by wireless . Data could be delivered both ways.

At Mercury we developed a vision of the future of telecommunications : the delivery of People, Information and Entertainment into the palm of your hand .

It has been a rocky road but with the launch of the iphone that vision got realised almost in its entirety but not by the telecommunications industry and certainly not by Mercury. The final piece of the jigsaw fell into place for me this weekend with the internet streaming of alive England match (which was not shown on TV) for the first time . It was , somewhat bizarrely, my father (in his 80s!) that got it perfectly :I watched the England match on the web , I wanted to there at the making of history.

What it took to get here was a collaborative not for profit initiative – ie the world wide web -plus Google, Apple, Amazon, Wikipedia, Youtube, Wordpress Microsoft, Facebook and Twitter. Together, they and no doubt others I've forgotten, ushered in the real new economy : a truly connected world with the delivery of People, Information and Entertainment into the palm of your hand a complete reality. The digital generation has recreated society based on this reality in a way that's as dramatic as the 60s generation reinvention of society around ideas of freedom, and love. Just as the 60s generation caused a revolution in business by their new attitudes, wants and needs so will the digital generation – a revolution already apparent but barely started.

Add to this the fact we are in a post credit crunch, post Bush, Post 9/11 world too and I think we can say that from 2001 to 2009 the environment has been completely transformed- a true new economy .

So what's it going to take to make it big in that environment? Well come along on 10^th November and I'll tell you!

Apple Magic

2009-09-15T05:44:00.001-07:00

I attended the Apple launch last week "it's only Rock and Roll but we like it". More accurately I attended the European version of that. About 1000 Apple distributors, development partners, big customers and friends packed into the Brewery Conference centre near the Barbican to hear Apple Europe's boss Pascal Cagni tell the story of how European revenues had grown from around a billion dollars a year in 2001 to over 10 billion dollars now , quite a story. And well done Pascal for a strategy brilliantly executed.

He put it down to a wonderfully differentiated product range and a distribution and customer support strategy that was a perfect reflection of the Apple magic : making advanced technology cool (the italics are my words not his).

Then by live satellite link from California on strode a gaunt but defiant Steve Jobs. Nobody expected him to be there. His presence had everybody on the their feet applauding. And off he went demonstrating the new software and the new iPods ; nothing revolutionary but a bunch of stuff that keeps them moving ahead of competitors. Jobs apparent catchphrase of "How cool is that?" was totally infectious and the audience loved it.

There was a little surprise that the much awaited video camera came with the nano not the touch/iphone but they have 100 m nanos out there (vs 50m touch/iphones) and the nano is the product used by the 18-24 year olds who post all the videos on Youtube so it made sense to me.

There were a number of fascinations for me in the whole event which go some way to explaining Apple's success and are good general principles anyway:

Everybody who works for Apple is totally enthusiastic about the company and its products (more so than ever!) and that enthusiasm is infectious for customers and partners alike.

Apple is rigorous about delivering its brand promise (the Apple magic) across all elements of the customer experience not just the product itself

Apple is very focused on customer segmentation – they are very clear on the different customer needs/segments served by the iphone, the touch , the classic, the shuttle and the nano

There was something for every customer segment in the announcements ; every product got better, stretched to meet new unmet needs, moved further away from the competition

Finally I laughed out loud when Jobs when announcing one feature (I can't remember which) said "customers have been asking us for this for ages". So much for the oft repeated Jobs line "we never talk to customers" . They do, but they do it intelligently , not through mindless focus groups.

The Difference Engine UK

2009-07-24T03:17:00.000-07:00

After a few months of experimenting with various ways to provide practical help to entrepreneurs , based on the principles outlined in Find Your Lightbulb I have now formalised an arrangement with Anurag Gupta, founder of the Vancouver based Difference Engine to create The Difference Engine UK a coaching , mentoring, design and implementation support service for business people with big ideas.

Of the four companies we have worked with so far in the last few months , one has increased revenues by 8 times, one by 5 times and one by 3 times. The fourth has taken a simple idea and turned it into a powerful business concept and lined up the finance necessary for a launch later this year.

Anurag's track record in Vancouver and the US in nothing short of stellar: including helping apparel company Lululemon to a CAD $3bn IPO and increasing a construction company's annual revenue from CAD$3m to CAD$15m .

Anurag and I working together in the UK are focusing on start-ups with powerful ideas, high growth SMEs with big ambitions, (turnover currently up to a million pounds per annumn) and established businesses who want to become high growth (turnover one to ten million pounds pa and up ) . We make our fees affordable by having all but expenses covered by success fees , based on upside financial performance.
You can find further information at: www.thedifferenceengine.org.uk

If you are interested in working with the Difference Engine UK please get in touch by email at

info@findyourlightbulb.com

House of Cards

2009-02-13T08:52:00.000-08:00

Watching this week's cruel and unusual entertainment as the House of Commons' Treasury Select Committee interrogated society's outcasts (otherwise known as Bankers) reminded me of what I used to be told by the Bank of England guy who looked after Firstdirect. It's a house of cards old boy, he'd say , as he handed me a gin and tonic : if something dislodges one of the cards it all comes down.

He was talking about the UK banking system but the words today apply directly to the inter-connected global financial system. The old style regulators used to see their job as assessing and avoiding systemic risk ie anything that could dislodge one of the cards. It was an intense focus by highly experienced people and they didn't interfere in anything else. It worked.

It didn't work in 2008 , hence the credit crunch . It didn't work for two reasons: firstly the financial system is global now with global systemic risk and regulation remains national. The Prime Minister is absolutely right to point a finger at that. Secondly regulation has become unfocused. There are more banking regulators in the world now than ever before - probably a 100 times as many as in the 80s. There are more regulations - volumes and volumes of them. Vast fortunes are spent on computer systems to assess risk in all aspects of an organisations' business. Regulation is intrusive, unfocused and diffuse and judging by the results - useless. (I know that's unfair!) .Nobody talked in 2008 about Houses of Cards over gin and tonics. If they had done they wouldn't have missed the big systemic risks that led to a relatively containable crisis in US sub prime almost destroying us all. The biggest card that fell was Lehmans , at the centre of the trillion dollar trade in CDOs. Destruction was unstoppable after that -of all the banks to let fail......

Yes bankers were greedy, yes they made mistakes - some really stupid mistakes, yes the bonus culture became obscene, but let's not let regulators off the hook!

And while we are are at it a ritual flogging as well please for rating agencies who rated everything triple A, economists who built the risk models that turned out to be nonsense, and fund managers who urged the banks on to faster and faster expansion. And don't get me started on the whole risk management industry - it didn't exist in the 80s and not one ot the tens of thousands of people employed in it now predicted the systemic risk that would cause wholesale money markets to stop working and thus bring down the more over extended banks.

If those banks hadn't have been rescued by the way the rest of the "well- managed" banks would have toppled soon afterwards. That's what happens with a House of Cards.

Rant over, back to garlik!

A little bit of sunshine

2008-12-05T12:18:00.000-08:00

There is no doubt that the economic news all over the world is filled with doom and gloom right now. No one knows the length and depth of the recession but at least governments worldwide are taking what seems to me to be sensible action by protecting the financial system (sine qua nihil) and providing fiscal and monetary support to the economy. In fact they are providing so much support I wouldn't be surprised by a faster recovery than most are anticipating with real dangers of a bit of a boom and bust cycle creeping back in. But in the short term I sense there is a lot worse to come before it starts to improve. That doesn't mean there aren't oppotunities around though and it's important to stay positive and keep a little bit of sunshine in your life.

I escaped from the doom for a bit by spending a couple of weeks in the Seychelles - it's hard to be gloomy there and since I got back I've been really pleased by a couple of things which have kept me feeling extremely sunny.

. Firstly Garlik (of which I'm Chairman) has won the prestigious BT award for innovation- an extract from the press release below will show you why I'm so pleased with that: (the picture shows CEO Tom Ilube and Ops director Paula Evans with the awards)

05 December 2008: Recognising innovation, professionalism and best practice, the British Computer Society (BCS) IT Industry Awards
were announced last night at the Grosvenor House Hotel.
The much coveted BT Flagship Award for Innovation was collected by Garlik Ltd for their DataPatrol, Innovation for Garlik.com
project. The project also collected the Web-based Technology Project award. DataPatrol, developed in response to the evolving
world of identity theft, is the world's first semantic technology platform that aims to give consumers power over their privacy
and identity online.
Tom Ilube, CEO of Garlik commented: "We are thrilled to have been recognised and awarded two such important and prestigious awards
for our work. As we expand our business in 2009 both in Europe and in the USA and evolve the products we offer, this award
represents an especially significant honour for us."

I was also involved in the launch of Federation100 in November - this is a collection of start ups and small and medium businesses who are supported in a group with intensive coaching from Anurag Gupta, Mynoo Blackbyrn and a little bit of help from me with the aim of skyrocketing their performance, even in a recession. The membership is growing rapidly (as you can see from the photos) to our initial target of 15 companies and I think those involved in the first sessions could immediately appreciate the power of what was on offer. I'm really pleased this has got going and I have great hopes that it can help make the UK a great environment for entrepreneurs and innovators.

Mike and Anurag

Foundation100 - current members

Federation100

2008-10-09T07:00:00.000-07:00

This is a different blog post from normal. I wanted to let people who read my web site know about something I am up to

I and my collaborators have created an organisation called Federation100 . We are at the moment looking to work with companies in Europe each
with a big vision for their business , a vision that not only delivers wealth but also makes a remarkable difference in the world. I meet many such people who ask my advice - either right at the start of their businesses or after a few years when they have reached an impasse - they have got so far but can't see how to get the breakthroughs they need to take the next steps toward their vision .

What's missing , that would make a huge difference in my opinion is access to regular, affordable world class, results oriented coaching and in some cases facilitation of the provision of seed or growth finance from investors who share their vision. That's what we are trying to put in place with Federation100 - called that by the way because we intend work with the businesses in groups , groups where individual companies can spark off and support each other - a federation if you like. Our ambition for it, in a few years time, is to have a web site showcasing the 100 companies we will have worked with by then -each being a stunning success story.

It's an initiative bang in line with my intention of inspiring innovation and entrepreneurship and it came about because two people read my book and took an idea which was working in Canada - shaped it and stretched it and turned it into something I could get behind.

I'm working with Mynoo Blackbyrn who is the driving force behind this initiative . I've known Mynoo for many years as a serial entrepreneur and leadership coach.

We are working together with Anarag Gupta. Anarag has been running an organisation called the difference engine in Vancouver. The difference engine is a group of 16 businesses who get together regularly to be coached by Anarag and share their insights with each other. Here is what Anarag has to say about it :

We design and implement initiatives that produce previously unseen levels of performance and results. We are currently working in the areas of business, education, wellness and entertainment. Every project we design, or step into, generates exceptional exponential results, while at the same time causing transformation in the community and the world - hence everything becomes a difference engine.

Here is what one client had to say about Anurag :

What can I say: Every bit of advice and coaching Anurag has ever given me, be it personal or business, has made an immediate and lasting difference in my life. I can look back on so many instances where his support and assistance enabled me to achieve new levels of performance in my career, and new levels of connectedness and success in my relationships, with often immediate results. He is a gift and an asset to anyone willing and able to work with him and The Difference Engine. I highly recommend anyone who has ever had a dream for their business that looks unreachable get in contact with him right away. March 10, 2008
Jay Giraud (Salesperson / Sales Manager at Carter Honda / Carter Motorsports) worked with Anurag at The Difference Engine.

We can quote many success stories from Anurag's work - here’s just two : Lululemon (a yoga apparel company) which grew from an idea to be listed on Nasdaq for 3 billion dollars, and at the other end of the scale, Panther, a construction company which in the last 7 months has grown its revenues from from $7 million to $18 million despite the recession in that industry.

Anurag's philosophy is very similar to that I've outlined in the chapters in my book on Leadership, Brand, Culture and Hot Teams and Anarag will now be spending time working in Europe for Federation100. Mynoo and I will be adding workshops and practical help on the material covered in the other parts of my book - that is: idea shaping and stretching, funding and the planning and smart risk processes which lets you approach a big vision a doable step at a time. We have run many such workshops in the past and I think the most valuable thing people get from it is a clarity on what they are up to, on what really matters now and a clearing of the blind spots which will prevent their success.

There is so much more to say and show and those of you coming to the business growth workshop on 25th November can grab me or Mynoo then to find out more. Anyone else who is interested please contact Mynoo by email. We will only be working with 15 companies and only those we are able to believe in.

All I can say for now is that we have described the idea to five companies so far to try and get some design feedback and somewhat to our surprise four of them have asked if they can apply to join Federation100.

Exclusive: Bill Gates agrees with Mike Harris

2008-10-06T11:55:00.000-07:00

I spent last week talking about my book to over 1000 entrepreneurs in Bury (nr Manchester), Milton Keynes, London and Newport (S Wales) .

As with the last event in London in July I was bowled over by the enthusiasm and passion people can bring to creating businesses and turning ideas into money.

People were keen to hear my view on the economic crisis. I don't have any special insight but for what it's worth here is what I told them:

1.This is the seventh economic crisis I can remember since I started work in the city in 1970

2.The prediction of the end of the world and/or the end of capitalism was common to all of them

3.What was said in the eye of the storm (like now!) almost always turned out to be wrong and the crisis and its aftermath were only really understood long after the event

4.The one that scared me most was in the early 70s when the oil crisis (prices quadrupling over night) , combined with a banking crisis brought on by the collapse of commercial property values, coincided with a miners' strike, power cuts and a three day
week, together with:rampant inflation and falling stock markets

5.Banks always get into trouble in recessions - it's just that this time global digital news and blog comment , 24 by 7, has caused panic and a liquidity crisis of vast proportions at mind boggling speed.Should the liquidity crisis cause a systemic failure in the financial system it would be much worse than a depression; the modern economy depends on global banking and global payments much more then it did even 10 years ago let alone 70 years ago;if the big banks fail everything fails

6.We are nowhere near there yet and the authorities would have to be outrageously inept to get us there from here; in fact given the scale, speed and unprecedented nature of the crisis I think they have done rather well so far and I expect there is much more to come; the banks will be secured.

7.People should nevertheless prepare for a significant downturn and a reduction in revenues over the next 18 months; it feels like a nasty recession comimg on , but not a decade long depression or worse

8. Recessions create great opportunities for innovation. It's like a forest fire - some trees are destroyed , but the ones left have more room to grow and there is room for many new shoots of growth. If you think about it Silicon Valley emerged in the great
Amercian depression in the 1930s, The PC industry (Microsoft and Apple), the enterprise software industry (Oracle, SAP, Computer Associates) and Biotech all emerged in the 1970s recession and the dot com world came out the recssion in the early 90s.

9. Take heart from the fact that two of the most astute investors of modern times , Warren Buffet and Anthony Bolton both see buying opportunities in today's market and are putting their own money where their mouths are.

To cap it all here is what Bill Gates just said (quoted in numerous news sources)

"It's a very interesting crisis," said the founder of Microsoft, adding that the effect of the collapse of the subprime market
needs "requires "some type of correction… but fundamentally ... companies' willingness to invest, right now we haven't seen a huge
disruption in that."
Responding to concerns about the US$700 billion bailout plan which US President George W. Bush signed last week, Gates surmised
that "it doesn't look like fixing these problems is going to derail the economy in some dramatic way."
Gates stressed that "the amount of innovation taking place, the amount of investment is actually greater today than ever," and
said he believed this would be the answer to the current crisis.

Buffet, Bolton, Gates and Harris might all be wrong of course! I suspect we shall see over the next couple of weeks.

By the way there is another opportunity to hear me speak on innovation (and economic crises!) at the Foundation Forum on November 5th. Details follow:

The Foundation Forum: Making Big Things Happen
Wednesday November 5th 6:30 -8:30
The Foundation is a Strategic innovation consultancy consisiting of 15 people, with backgrounds in blue-chip consultancies,
creative agencies, business, banking and ventures.
We hold the Foundation Forums every 3 months as an opportunity to bring people together to discuss a topical subject and listen
to/ be provoked by interesting speakers.

Mike Harris will share with us his ideas for how to make big things happen (developed for his recent book ‘Find Your Lightbulb’)
and will invite comment and ideas from the floor.
The event is being held at The Art’s Club, 40 Dover Street in Mayfair, near the Ritz and Green Park tube station. We will be
having drinks beforehand from 6:30pm, starting the discussion at 7pm, and then more drinks in the convivial Arts Club atmosphere
from 8:15 to 9-ish.
There is no charge for attending but please Sonia know if you are planning to attend by emailing sstuart@the-foundation.com as
soon as possible.

Nick CrossPartnerThe Foundation

You don't know what you've got till it's gone

2008-09-21T02:31:00.001-07:00

As the world flirted with financial meltdown last week a song popped into my head. For once it wasn't a Dylan song although he did make a cover version. It was a Joni Mitchell song from 1970 , called Big Yellow Taxi. She wrote it in Hawaii where she had seen a newly constructed parking lot diminish the iconic view of the distant green mountains. Hence the lyrics:

Don't it always seem to go That you don't know what you've got Till it's gone They paved paradise And put up a parking lot:

What struck me when I first heard that song and still strikes me now is the universal truth of the sentiment:

Don't it always seem to go That you don't know what you've got Till it's gone

The relevance to the credit crunch may not be immediately apparent but stay with me and I'll try and make the link.

Whatever diagnoses of the causes of the great panic of 2008 eventually emerge when we have some perspective, the whole series of events must raise some questions about bank regulation.

The primary purpose of bank regulation is to avoid systemic risk - that is risks to the entire financial system. Exactly the sort of risks we have been living through. It is clear that regulators neither anticipated nor took action to avoid such risks. Until eventually the US government came to the rescue (I hope!) with a massive bail out - about time guys but better late than never!

I'm not intending to criticise regulators at all but instead just to make one observation. I thought Banking regulation in the UK was fantastic when it was the responsibility of the Bank of England.
(It was moved to the FSA in 1997 by Gordon Brown, and the then Governor of the Bank of England Eddie George came close to resigning as a result).

It used to be based on cosy fireside chats between senior Bank of England officials and Bank CEOs with many a nod and a wink.

What worked was the Bank of England official knew both banking and the institution he or she was supervising backwards and those chats stopped being cosy the second the Bank CEO couldn't explain exactly what was going on at the Bank or worse still wasn't totally open and honest about everything. There was a sense of shared responsibility for the well being of both the institution and the banking system. If there was trouble they were both in trouble.

The FSA system was far more professional and apparently rigourous but the context of the reviews shifted from "we are both in this together and these meeting are really useful to both of us" to a box ticking type of risk review that could easily miss the big picture and which certainly wasn't welcomed by the Bank as something valuable.

So there you go - I don't know whether the old Bank of England regulatory approach would have shielded British banks from a global crisis which was born in sub prime America but I bet it would have dealt with the crisis better- as of everything else in the world it is perhaps true of bank regulation :

That you don't know what you've got Till it's gone

The Myth of Risk Management

2008-09-04T01:43:00.000-07:00

I've been reading this book and it certainly chimes with my own views of risk ie that:

You can't avoid risks and it's almost impossible to make an intiuitive assessment of any risk without some sort of structured process which opens your eyes to the real issues you need to take care of

the best risk management strategy is for accountable people to take responsibility , use their judgment and confront risk with eyes open rather than seeking to avoid risks through health and safety style risk assessments or box ticking risk management and governance procedures

I have long thought that the modern corporate culture of govenance and risk management by box ticking often supported by mathematical modelling of amazing complexity takes up so much time and is so mind bogglingly boring that accountable executives just switch off and stop thinking. Somebody else is doing the thinking for them. Hence the credit crunch perhaps.

Cairns generalises this view of mine - any risk management strategy which isn't about accountable people keeping their eyes open and confronting risks can make things worse by reducing people's perception of risk (thus provoking more reckless behaviour or causing people to stop using their judgment) or by reducing people's ability to manage risks because they have been too protected .

Some examples:

In terms of risk perception: people are more worried about plane crashes than car crashes or heart disease : yet you would have to fly every day for 26000 years to die in a crash. You would have had 20 car crashes by then and died 90 times from a heart attack.

In terms of more reckless behaviour: cyclists are more at risk when wearing helmets because their own riding is more dangerous and motorists are less careful around them

In terms of stopping thinking: 25% of people will need criminal record checks under new child protection legislation; Cairns argues this will make children less safe because we will all think anybody working with our children will be safe and we won't keep our eyes open and stay alert.

In terms of reducing people's ability to manage risk: children who only play on cushioned playground areas are more likely to get injured when outdoors than those who play in apparently more dangerous areas because the latter have learned to recognise and cope with numerous unavoidable risks.

In business you can't avoid risk. It's a key leadership accountability to understand the real risks you are taking and make sure they are smart risks. It's a key leadership accountability to keep your eyes open and confront the reality of your current situation - balancing on the edge of reason.

It's a good thing small businesses can't afford the elaborate risk managment and governance processes that big businesses use - they are expensive and positively dangerous!

Strange things happen.....

2008-08-27T03:35:00.000-07:00

...,when you get committed to something and make a big noise about it!

I said that one of my intentions in writing the book was to inspire innovation and entrepreneurship in the UK such that it became the envy of the world . A big game and one in which any one individual can only make a small difference.

But big games often attract others who are playing the same game or want to join yours.

So without me really doing anything about it I find myself going on tour for a week's worth of seminars for entrepreneurs. I did one of these in London in July and it worked really well and I'm repeating that in Edinburgh on 29th September.

http://www.triumphantevents.com/events?access=edinb-mh

Following that I'm teaming up with Roger Hamilton to run four seminars across the country in the next four days. Roger is a significant entrepreneur in his own right and has written a book about different styles of wealth creation which I found very insightful. The basic thesis is very similar to mine - you can't do it alone , you need to create a hot team. What I found particularly interesting was Roger's analysis of what sort of team different types of leaders need to build and what contribution they themselves need to make to their teams.

http://www.triumphantevents.com/events?access=de-mhrh

Finally Mynoo Blackbyrn ( http://www.findyourlightbulb.com/mike-harris/mynoo.html) and I are teaming up to run a one day Business Growth Workshop on 25th November. The background to this is that I have been approached to be part of a television program for entrepreneurs where I would try to transfer my approach to building businesses to entrepreneurs who are 'on the up and up'.

The 25th November event is a 1day pilot .

http://www.triumphantevents.com/events?access=mh-bgw

All of this without any conscious effort on my part . Lots of enthusiasm for the game but nothing else. It all happened because Mynoo and Daniel Priestley of Triumphant Events got excited at the prospect of leveraging the exercises in the book into a powerful support structure for would be entrepreneurs (business and social).

Never underestimate the power of enthusiasm and commitment!

Money and Mouths

2008-07-29T05:46:00.000-07:00

So I write a book for entrepreneurs based on the idea that small companies can simply and cheaply use techniques that innovation leaders routinely use at vast cost. Techniques like customer insight, branding, culture, business planning, risk management , team building.

If you know what you are doing and use the best of modern technology I say you can get great benefit from doing things that were thought to be out of reach for small companies.

So the Garlik guys say : "We need some video - a tutorial which shows customers how to get the best out of Datapatrol . It's really expensive to do it professionally but you are a bit of a video whizz aren't you? You say modern cameras and editing software let anybody produce a professional looking video for the web. Can you do it for us? It won't cost anything then will it."

Now it's true I've been playing with video (and it's predecessor 8mm cine film) for 50 years. And it's true that I bore everyone telling them how clever I've been getting all that onto terrabytes of hard disk so I can edit it all into Hollywood like epics .

But I gulped at being asked to do a professional looking video for something as important as Datapatrol - then someone pointed at find your lightbulb and murmured something about money and mouths and so we are off - Script, Camera, Lights, Action!

Sometimes business is so much fun. Watch this space to see the results.

Those whom the gods wish to destroy

2008-07-11T04:00:00.000-07:00

The government is deeply unpopular and many put the blame on Gordon Brown and/or the global ecomony. I think there's more to it. I think there are finally many chickens coming home to roost.

There's the small stuff:

try getting a passport photo taken for a two year old (like my grandson) which meets the new regulations for size of face, position of eyes in the photo and expression What unthinking nitwit wrote those regulations?
And what about the guy asking permission to light a single candle in his fiance's birthday cake at the sumptuous new champagne bar at St Pancras and being told :
" Not without a risk assessment,which we can't do because our manager is on holiday and anyway you would probably find it too expensive because we would almost certainly need someone on standby with a fire extinguisher"

What have we done to deserve that!

Then there's the big stuff

Why do we spend so much money on getting management consultants to advise on public service reform and why do ministers take their advice so uncritically?

Either sin would get you sacked in a well managed company. Years ago we used to joke that a management consultant knew 100 ways of making love but had never had sex. There's more than an element of truth in that when it comes to management consultants in the public sector.

Why do we persist in investing in billion pound public sector computer systems when we know systems of that size almost always fail. Why don't we decentralise a bit and build lots of smaller systems - that normally works.

Why did we throw so much money so fast at the unreformed NHS? It wasn't as though the government wasn't warned. My own mantra for many years has been throwing money at a failing organisation or a failing project makes it fail faster and similar sentiments were expressed by many experts about the NHS at the time of the increased funding.

How has the government managed to demoralise morale in the NHS whilst increasing funding and salaries faster than ever before? (that takes talent!)

Why does government set so many meaningless and conflicting central targets then get surprised when people on the front line behave in strange ways trying to make sense of them?

Any one who has ever run a company would laugh out loud at the government's approach to target setting - if it wasn't so sad.

I could go on.. but it might need a book in itself.

The source of this madness ?

too much application of private sector theory to a public sector which is not driven by the private sector imperative of innovation, competition and economic value. It can't be - the public sector deals with areas whose value can't be measured economically in conventional terms.

far too much direction passed down from on high- nothing like enough left to the discretion of those who know what they are doing

political correctness and risk aversion gone way too far

Maybe we have to go deeper to find the real source.

Are all these rules, all this reliance on elitist advice and all this centralisation a symptom of lack of trust?

They don't trust us!

It certainly feels that way doesn't it?

And I'm immediately reminded of what traditional Buddhist wisdom says about those who don't trust others - that basically they don't trust themselves. Eventually we all agree with them- we agree they are not to be trusted. Sad isn't it?

Why is St Ives best restaurant so quiet?

2008-06-23T04:30:00.000-07:00

I really like St Ives in Cornwall. I first went there in the 1960s and it's still relatively unspoilt and the stunning quality of the light still attracts numerous artists.

You can still sit in a restaurant on the edge of the sea watching them bring today's fresh catch straight off the boat into the kitchen whilst eating fresh crab and sipping white wine.

The walks along the coastal path are still stunning.

I've just returned from a few days there and I'm puzzled. According to the guides there are about 6 really good restaurants in St Ives. This year and last I've sampled them all - three of them twice. In my opinion , one is outstanding, one is very good, one is good and the others I wouldn't go back to.

Five of the six were busy this year. The outstanding one was quiet. It's not the most expensive and it's not in the worst position.

Here's what a guide has to say about it:

The whole feel of St. Andrews Bistro just sets you up for a good meal. The bohemian selection of Objets d'Art, the antique tables and mismatched chairs, the huge black board reminiscent of the whole gastro pub movement. The candles, the greeting and of course the food. A well thought out menu of modern Brit classics with a hint of the Middle East. What an evocative mixture .

I loved the food there and I loved the ambience even though it was quiet.

If it was in Camberwell it would be famous and packed. It's possible it hasn't got the right product for the St Ives customer but I don't think so. Looking around the Alba (the very good restauarant) you could see and hear people who you thought would love the St Andrews.

No the product is perfectly aligned with the audience and the delivery is superb- what a pity the young guys who are running it do all of that hard stuff so well and don't pay any attention to the easy stuff. A little bit of attention to brand , marketing and promotion would do wonders.

Here's a couple of clues;

1.Of the dozen of so St Ives guides I looked at it gets into two - the other restauarants are in them all.

2.Of the six St Ives restaurants I'm talking about it alone doesn't have a web site- come on guys your sort of customers are going to want check out your website!

The times they are a changin'

2008-05-26T07:47:00.001-07:00

We had a lot of family staying over the weekend. When they had gone I amused myself by browsing some old family videos. The ones I looked at were from the 1960s.

We have about 50 years of cine film and video- all now converted and sitting on terrabytes of computer storage. Some of it is even editted. It spans five generations of the family and I find it a constant source of interest.

But I hadn't been back to the 1960s for a long time. Something remarkable happened around 1963. In 1962 the world as I had filmed it looked like TV footage you now see of the 1930s , 40s and 50s. In 1963 there seemed to be a fundamental transition: everything had changed - cars, buildings , people , clothes - suddenly recognisably modern and Bob Dylan was on the record player singing The Times They are a Changin'.

I cast my mind back to what was happening then:

a new generation (the baby boomers) , quite unlike any before it was growing up and beginning to impact business and culture
a new young American President , quite unlike any before him had created a new vision for the American people and was putting a man on the moon

Now in 2008 , 45 years later, we seem to be on the verge of another fundamental transition. The factors that have powered up economic growth and personal well being since the 1960s are apparently reversing. The pundits say we have seen the end of cheap and plentiful food, energy, travel and credit.

A new generation (the digital generation) quite unlike any before it is growing up and beginning to impact business and culture - fuelled by the continuation of plentiful and cheap consumer technology and digital information, entertainment and communication.

A new young American politician quite unlike any before him and with a new vision for a new age has a great shot at the presidency. The papers are calling him the Facebook politician. His style and vision is echoed by a young conservative leader in the UK.

As Dylan said - Your old road is rapidly agin' .

Please get out of the new one If you can't lend your hand

For the times they are a-changin'

We've seen web 2.0, we talk about customers 2.0 , sometimes we think about Business 2.0 , but I wonder what World 2.0 will look like?

The Crowd Goes Wild!

2008-05-15T03:01:00.001-07:00

Go and see the Jersey Boys at the Prince Edward in Old Compton Street.

"The Crowd Goes Wild" was the headline in the New York Times when it opened and it's an understatement.
When you walk out of the Jersey Boys you will feel better than when you walked in - even if you were feeling great when you walked in.

It is simply stunning.
The music which I had barely noticed in the 60s , seems to have grown in power over the years and is attracting us ageing boomers and the youngsters alike.

Not only that but this story of Frankie Valli and the Four Seasons will give you a few glimpses into what it's like creating a new business - if you know what you are looking for.

Here are just a few quotes from the show that will resonate with anyone who has read my book :

"You guys will get nowhere until you decide what you stand for and find yourself a name people can relate to" - Producer talking to the band when they were struggling to get a first record launched (See Chapter 7 to read about how brand is really about what you stand for)

"It's like a f****** roller coaster" Frankie Valli , talking about the ups and downs of becoming and remaining successful. (See Chapter 2 - to read about the roller coaster ride of putting a new idea into the world) )

"That Gaudio- he's got his head so far in the future he can't see what's happening under his feet " : Band realist Nick Massi talking about the band strategist, song writer and visionery Bob Gaudio (see chapter 9 - to read why visionery leadership can sometimes slip into delusion about today) .

"That is not going to work" - all the industry experts telling Gaudio to forget about what what turned out to be his greatest song and the one that cemented the band's financial success ("Can't take my eyes off you"). ( See Chapter 3 to read why many big ideas get that reaction from experts)

I also noticed that the band really took off when it passed from being led by Tommy de Vito to becoming a partnership between Valli and Gaudio. (Chapter 5 - why VCs invest in entrepreneurs who come in pairs)

As the boys sing memorably a few times in the show:

Oh what a night!

I'll let you be in my dreams if I can be in yours

2008-05-09T05:46:00.001-07:00

The official book launch is imminent. There have been some books available from late April and some reviews published already but the major bookshops should all be stocked by Monday and the marketing and PR campaign really starts then .

Writing a book is like giving birth to a new company -definitely worth a party and a few drinks, even if you have no idea what is going to happen next.

I think my best moment in writing the book was being sent a link by the Apple PR guys to a video of Steve Jobs chatting to Bill Gates.

I watched a bemused Bill listen to Steve saying

..the answer to most of life's questions is contained in a Bob Dylan song (Actually Steve added ..or a Beatles song, but I'm choosing to ignore that) .

Just in case there is any sad person reading this who doesn't know who the great man is:

Bob Dylan is an American singer-songwriter, author, musician and poet. Dylan was included in TIME Magazine's 100 most influential people of the 20th century, and in 2004, he was ranked #2 in Rolling Stone magazine's list of Greatest Artists of All Time. In 2008, Dylan was awarded a Pulitzer Prize Special Citation for his "profound impact on popular music and American culture, marked by lyrical compositions of extraordinary poetic power."

As ever Dylan has penned a line to match all occasions and in this case I've borrowed the title of this post from one of his songs. My dream in writing the book and putting this web site together is to inspire would be entrepreneurs and innovators to stop dreaming and get on with it , and to provide them with some insights and advice that lets them aim high, be ambitious, and think big.

The book is aimed at people looking to start a new company. Particularly those who have ambitions for a creating company whose value can be measured in the tens of millions at least and who realise they probably need some sort of venture funding to help them get there (probably angel funding to start with). People who would have been inspired by Innocent Drinks where a bunch of young guys with no resources started in a kitchen and with one dose of angel funding built a £300m international company,which is still growing fast.

It can be done and it's not down to luck.

The book also contains useful information for would be innovators in large companies. The web site and particularly the forum is aimed at both entrepeneurs and innovators. So come on join me in my dream and I'll see if I can help you with yours.

If all that's too much , just listen to Dylan:

The innovators anthem : It's all over now baby blue

The entrepreneurs anthem : It's all right ma I'm only bleeding

And the leaders anthem : Love minus zero/no limit

All of these are on my favourite album of all time:

Bringing It All Back Home

More on how Dylan's lyrics provide insight and inspiration to me in future posts.

Don't drop me!

2008-05-01T10:20:00.000-07:00

With Ideo CEO Tim Brown at MIT

My two year old grandson has taken to mixing in the odd "Don't drop me!" along with his usual whoops of delight if I pick him up and whirl him about a bit.

I was reminded of that this week when I ran (with Tim Brown CEO of innovation leaders IDEO) a two hour seminar at a mid careeer MBA course at MIT in Boston. We were talking about how innovation is increasingly applied across an entire customer experience not just product features and performance.

The key principle here is that any new product or service which is to be successful has to address real human needs (rational and emotional) , which are currently not being fully met. (Chapter 4 of my book covers how to come up with products and services like this. )

Anyway at MIT I was talking about the market research results we got after the first few months of Firstdirect - which broadly concluded that "Firstdirect consistently exceeds its customers expectations". That's the prize you get by meeting both rational needs (in this case 24/7 banking) and emotional needs (in this case feeling valued and looking smart). Exceeding expectations generates economic value in greater customer loyalty and lower customer acquistion costs as the word gets out.

One of the students asked a great question - "don't you just raise the bar when you exceed expectations - isn't it better just to meet expectations?"

That made me think .

And what I think is this - raising the bar puts a bigger gap between you and the competition which is always a good thing. You may have to keep innovating to maintain the gap - but that's normal. What is absolutely critical however is that once you have raised the bar you musn't let standards slip. You really disappoint customers that way and they will hate you for it.

Once you've got them whooping with delight because you have picked them up and are whirling them around , remember that in the back of their heads is a little voice saying "don't drop me!"

Start up guys

2008-04-25T03:33:00.000-07:00

I was in the IOD at 123 Pall Mall this week. There's two IOD buildings close together - 117 Pall Mall, which is quite formal and occupied by the captains of industry and 123 Pall Mall which is informal and occupied by start up guys (and gals). It's a useful and lively place to drop in for a coffee, a quick meeting or to do a bit of email.

I was meeting Startup Guy (also a member of the IOD) and a couple of members of his team. I got there early and started a tab with a bottle of water and four glasses (classy!).

Startup Guy had a quick and contemptous look at the water and went off in search of the waitress. Hot chocolates, lattes, capuccinos and teas soon began arriving with monotonous regularity.

When the meeting finished Startup Guy was leaving and I reminded him - "don't forget your tab." It's a pain if you do forget because of course they are holding your card and you have to go back to collect it - I was being helpful.

Startup Guy looked at me contemptuously again - "I'm a start up guy , I used your tab".

Startup Guy is actually a good friend and I was very happy for him to use my tab but it reminded me of a story he had told me a couple of years ago. He jumped in a cab in Palo Alto in the heart of Silicon Valley and gave the name of a hotel- not one of the smart ones:

The taxi driver laughed and said "A start up guy!"

The insight here is that start up guys make every penny count ; they stay in cheap hotels, they travel second class , they only use taxis when there is no alternative, they stretch the company's precious cash as far as it can be stretched.

This can be a shock for someone coming to work in a start up from the corporate world. It's more fun, more exciting and ultimately it can be a lot more lucrative - but don't expect life's little luxuries, or even necessities, on the company's account!

There was a happy ending for me at the IOD this week I ended up bumping into Commercial Guy and laying the tab off to him.

Every Prime Minister needs a Willie

2008-04-07T11:51:00.000-07:00

I used Margaret Thatcher to illustrate a point about leadership in the book . I was reminded of her famous quote (about cabinet colleague Willie Whitelaw) and with the book about to be published it made me wonder what every author needs?

Well evidently these days every author needs a web site and mine's ready to roll now thanks to :

Mark Garwell at Webplacing who did the web site design and construction and

Lisa Murray who did the copywriting for the web site and was my book editor

In putting the book together Lisa and I between us:

- Documented the particularly insightful conversations I could remember with entrepreneurs/innovators/leaders who I had met and/or worked with in the last 20 years (I ended up recalling conversations with 56 people covering 48 companies)

- Did 35 in depth interviews (1-2 hours each) with successful entrepreneurs/innovators/leaders specifically for the book

- Supplemented the conversations and the interviews by researching what was available in the public domain about the entrepreneurs I was using as examples . I was interested in what they had to say for themselves in print or in media interviews rather than what other people had written about them

- Wrote about 120000 words which was ultimately edited down to 65000 (that's a lot of writing and a lot of editing) .

We got each chapter reviewed as soon as a draft was written by a group of family, friends and experts, including my wife: whose encouragement I really valued and whose judgment was impeccable when it came to deciding which of my numerous anecdotes and stories actually added value to the book as opposed to being : self indulgent and only funny after several glasses of wine and then only the first time you hear it .

My editor's overriding concern on the other hand was to make sure the book contained a set of principles that were well supported by examples and were easy to use in a practical way by budding entrepreneurs . I think she succeeded fantastically well in making that happen and I hope if you read the book you agree.

Actually having never written a book before I would have floundered without the professional support of an experienced writer. So that's what every author needs...if you want to write a business book get yourself an editor!