Jack Ricchiuto

Monday, 22 July 2002 09:36

The will to succeed

A quick tour of innovation practices across some of this year's winners easily reveals inspiring themes in how innovation plays out as a critical factor in business growth and development.

At construction industry service firm Fortney & Weigandt, promoting and providing incentives for innovation is a team effort. Profit sharing is leveraged to inspire boundless initiatives that are often more informally than formally organized. According to F&W's maverick innovator, Bob Fortney, "Our goal in life is to take each of the 200 parts of our business into continuous improvement on everything."

Innovation is a welcome strategy in this firm, especially as innovation so often implies risk taking. As Fortney puts it, "Risk taking is what we do. It's what our business is all about." From his perspective, why not focus risk-taking competencies on the very processes and systems that inspire the relationships that make up the heart and soul of the business.

Bill Zimmerman has done a yeoman's job of creating at Computer System Company the kind of new product incubator methodologies that have hatched several technical breakthroughs. By engaging both idea launch and feasibility teams, CSC has reinvented old equipment with new equipment capabilities through innovative engineering and software changes.

Many of the ideas bubble up from a culture infused with the momentum of continuous innovation success stories. In the dramatic cost savings from the equipment redesign, "the idea came from folks working on what we could do with the old equipment," Zimmerman says.

This innovative firm is not from the school where significant corporate initiatives are relegated to higher management altitudes. Instead, as Zimmerman states in one of this year's company newsletters, "We want our employees more involved in determining our future."

At SS&G, similar themes of unleashing ideas companywide are at play beneath the waves of innovation, propelling this self-reinventing firm to new industry shores.

"We encourage everyone to think in innovative ways about the business," says partner Gary Shamis.

Most of the company's new hires are from other professional firms rather than right out of school. Far from the usual NIH (Not Invented Here) management defensiveness, new recruits are encouraged to import best practices from previous work experiences. As the firm grows through mergers, the question, "What are you doing better?" evokes new approaches and a culture of innovative openness.

At SS&G, most innovation starts informally, then migrate to more formal teams that move innovation forward. Background to these efforts is the firm's achievement of being one of the first accounting companies to morph into a more broad base of financial services with a name that replaces owner monikers with an innovative brand featuring an equally broad appealing professional firm name.

Each of these stories demonstrates the ubiquitous edge innovation provides, whether the corporate environment is driven by technology, construction or professional services. Collaborative innovation -- even informally cultivated -- along with the refusal to restrict innovation to a single department or level, continues to be a common denominator in the impact innovation has on the primal triad of cost, quality and delivery. Jack Ricchiuto (jack@yournextinnovation.com) is a Cleveland-based management consultant.

Monday, 22 July 2002 09:33

From Akron to Tokyo

One would expect to find differences in hospitality staples like front-desk greetings and breakfast menus when traveling from the Marriott property in Akron to its counterpart in Tokyo, Japan.

In Fairlawn, smiles and waffles are served counterpoint to the bows and miso soup served up in Tokyo. But beyond the cultural accommodations, one notices more parallels than differences in the basic management principles practiced at both hotels.

According to Akira Suzuki, vice president of marketing for Marriott Japan, and Jolene Robinson, manager of the Montrose Courtyard Marriott, the formula for a hospitality business' success is based on obsession with the root cause of guest satisfaction: employee satisfaction. In Tokyo, Suzuki says, "our people in the company must be happy first, otherwise they cannot do a good job for the customer."

Thousands of miles away, Robinson independently mirrors this approach, observing, "If you have happy employees, you have happy guests."

For these operations, employee spirit is directly impacted by managers who are hired and promoted on their ability to win respect through collaborative, not hierarchical, decision-making.

In the Japanese Marriott operations, managers practice nemawashi, in which they talk to key staff to gain informal understanding and agreement prior to a formal decision-making meeting. Managers wanting to change staff uniforms allow that decision to evolve through conversations between staff and department managers.

Formal decisions become the logical endorsement of consensus organically cultivated in a team environment.

In Montrose, the decision-making practice is equally collaborative. Robinson says that continuous employee inclusion is necessary.

"Because they interact with guests more than managers do, employees know better what guests' wants and needs are," she says.

The consistency of attention to detail within each hotel is not subtle.

"You want guests to experience the same all the time," says Robinson, even in details such as where a towel is placed in a room. According to Suzuki, training is the key to consistency -- something honored by managers in both operations as they practice managing by walking around.

Marriott managers, according to Suzuki, strive daily to blend the best of Japanese-style hospitality management practices with the American-based Marriott approach. Employees are treated as family, and managers "have to be respected as a human being in order to be effective."

Robinson shares similar sentiments, in an environment in which "people have to love the business" in order to be successful.

Perhaps the principles of consistent service and the leadership rigor required to sustain it are more universal than we would expect. Jack Ricchiuto is a management consultant and author, who recently returned from a working vacation in Tokyo. He can be reached through his Web site at www.newpossibilities.net.

Wednesday, 24 October 2001 09:03

Decision intelligence

One of the latest spectator sports in the market analysis arena is the post-mortems on dot-com carnage.

As spin doctors speculate on the causes of death, those of us who lived dot-com failure from the inside out have never been mystified by the factors contributing to our unkind fates.

One thing that did not factor into many e-failures was the plethora of resources we had available. As we toiled in the fields of Web harvests, we wanted not for opportunities, talent or resources. With the help of eager vendors -- also virgins to this new space -- we burned through resources at unprecedented rates.

And yet, armed with the best funding and hottest intentions, we failed to deliver profits promised on Power Points.

It was always clear to us that our dot-com crashes occurred at the hands of bad decision-making -- at all levels. Smart growth is a process of making one good decision after another. A scan of start-up successes reveals that early and sustainable profitability is the byproduct of hundreds of well-researched, well-timed and well-executed decisions.

In many cases, decision intelligence means smart marketing, pricing, investment, vendor, technology, fulfillment, finance, people and planning decisions.

In all, we saw the following five decision-making flaws at the root of start-up failures.

Assuming decisions are made in the order they appear
Although decisions emerge in our personal and collective consciousness in no particular order, there are logical dependencies that drive the right order for them to be addressed. Do we decide on our market first or our revenue goals? When and how do we start to build our sales organization? How much and in what direction do we invest in new technologies?

It does matter which decisions precede others. If we tackle decisions in the wrong order, we get to make the right one the second time -- if we get the chance. It doesn't matter who voices which issues loudest or first. If we fail to prioritize our decisions effectively, we waste time and resources having to revisit them.

Allowing decisions to be micromanaged by nonexperts
Senior managers are typically fluent in one or two disciplines, not master of most or all. No matter how much savvy they have in general, they are not experts in all areas and do not create value micromanaging decisions in other areas.

This is why one of their critical leadership tasks early on is to bring on managers in complementary areas of decision expertise. Then wise decision-making occurs at the hands of experts. Humility has always been a hallmark characteristic of wise leaders -- the willingness to be honest about one's strengths and limitations. In successful start-ups, wise managers make sure they've hired people they can empower to make the decisions they have the expertise to make.

Allowing decisions to be made inside silos
Along the same lines, it makes no sense to allow any discipline to dominate complex decision processes. Technical decisions that have significant budget and marketing implications need to be made collaboratively by all three disciplines.

Financial and sales decisions that impact operations need to be made by the three together. Otherwise, we lose ground trying to deal with costly implications that could have been prevented with more collaborative decision-making upstream.

Few decisions, strategic or tactical, have only local implications to one discipline or the other. Team decision-making can make the difference between decisions that are well executed and those that stumble and fail.

Basing decisions on passionate assumptions
Most who get involved in start-ups have passionate assumptions that may or may not be grounded in data. The stronger our innate optimism, desperation or ego, the easier it is to have confidence in that which has never seen the light of research. And being natural risk-takers, we aren't intimidated by the gamble.

Whether technical, marketing or financial in nature, research drains time and resources away from moving full steam ahead in the direction of our best guesses. But it can make the difference between sustainable success and accelerated failure.

Being too attached to the decisions we make
Many start-ups emerge in dynamic environments --especially where new markets are being created. When the only change is constant and unpredictability is a norm, the most intelligent plan is an agile one -- one that can change and adapt with the unpredictable turns in the road.

Being too attached to any decision prevents us from having the agility to move with rather than against change. With agility -- the ability to let go of even ego-based decisions as they become outdated -- we become capable of responding to and capitalizing on the kind of fast-moving opportunities that are part of every start-up landscape.

We can glean important lessons from the way many dot-coms failed to manage the myriad decisions implied in all start-up environments, online or off. Whether or not we succeed in any start-up is not a matter of luck -- unless you consider that luck comes to those who stack the possibility deck with good decisions.

Lessons from profitable dot-coms reveal the same wisdom in reverse. In every case, we see organizations and their leaders making decisions with an appreciation for prioritization, humility, collaboration, research and agility.

Successful leaders are often not extraordinarily smarter than their failing peers. They simply approach their decision-making with a different set of intentions. Above all, they don't blame their market or economy on their fate. They squarely put the onus of responsibility on the decisions that drive the direction of their fate.

Experts of new enterprise incubators have been least surprised by dot-com trends. They have long considered start-up success as a factor that transcends the speed of one's technology or size of their investment.

At the root of start-up success is decision intelligence -- the organization's collective ability to make one good decision after another.

Jack Ricchiuto is a free-lance consultant, author and speaker.

Tuesday, 23 October 2001 10:49

After the fallout

Whatever industry we scan, e-commerce is the future of business as we know it.

The Akron Regional Development Board recently added an interactive feature to its Web site, which offers its 2000 members the option of communicating with each other through the site.

The impact of this feature has been most significant for the ARDB staff, which attributes a 50 percent decline in the management of inquiry calls from members, students and educators to the new feature. This has liberated staff time for the information management and research tasks that drive value to members.

"It's gotten us a lot more efficient in house," says Rebecca Guzy Woodford, ARDB's senior director of research and communications.

Without changing ARDB's mission, the Web has become an efficient information distribution method.

"We're still in the same information business," notes Woodford. "We don't see e-commerce as a change in our mission -- just more added value."

The ARDB is planning to add more value to the site by creating a B2B e-commerce portal, now in the formation phases of development. With the ability to attract, recruit and promote business growth in the region, Woodford projects the organization's future Web strategies will allow it to "be more focused and provide more services."

U.S. Office Products' (which bought out locally-based Costigan's) venture into the e-landscape began in 1993 with direct dial modem-to-modem hook-ups. Although Web sales increased more than 30 percent last year, many of the company's customers still rely on fax and phone transactions, largely because of customer access, bandwidth and adaptability to change issues.

Today, its Web catalog boasts more than 25,000 items, fulfilled within 24 hours. Even at the current level of customer acceptance, "our Web-based business has changed the organization dramatically," says Richard Costigan, vice president of business development. Customer service representatives inputting orders "now have the ability to provide true customer service."

This aligns well with the fact that most customer service reps prefer interaction and solution development with customers rather than the restricted venue of key punching and input processing.

The challenge has been to help customers embrace the new media. According to Costigan, "as much as we promote (our e-commerce) with incentives, training and promotions, change is hard for people."

U.S. Office Products' e-sales picture is bright nevertheless. E-commerce has fed sales growth, punctuated by the fact that last year, all of the company's new customers were Web-based.

Advanced Elastomer Systems, an Akron manufacturer of thermoplastic elastomers, is eagerly instituting the launch of its e-commerce strategies. According to Margaret Mattix, AES' senior vice president of E-Business and Strategic Alliances, AES sees its Web site as "a very effective tool for increasing reach and supplying information in a cost-effective way."

Even with a healthy 12- to 18-month sales cycle, e-business payoffs are already being calculated.

As Mattix indicates, "There's a cross-section of employees who are very capable, excited and supportive, and if you can tap into that, they can help middle managers who may see this as a threat to their need to be in control."

As AES management has learned, the transition to e-business and e-commerce requires more adaptability than control. Employees who bring a personal Web enthusiasm and savvy are utilized to help demystify fears and energize managers.

AES has discovered that a commitment to e-business is a commitment to eliminating fear in the organization -- fear of the loss of control, not being in mastery over new technologies and the hyped fear of job loss. At AES, this effort has been facilitated by the fact that the company began the process with a strong ERP system.

So far, customer reactions have been a mix of excitement and wait-and-see reluctance. Because commerce is a relationship, moving the customer forward has become as important as moving the organization forward. To this end, AES has smartly collaborated with 10 "competitor" raw material suppliers to form ElastomerSolutions.com, an industry-specific marketplace for light e-commerce and information exchange.

As far as e-business impacting the AES core mission, Mattix isn't worried. As she suggests, embracing e-business and e-commerce "doesn't really change who we are -- only how we do it."

From the technology expert side, Akron-based Interactive Media Group provides empathy and cross-industry Web design experience. According to IMG President Andrew Holland, many companies launch an ambitious or cautious courting of e-business with considerations of supply cost management. This is especially beneficial for companies selling late-cycle commodities that compete for fractions of market share.

Other objectives getting equal play are focused on using e-business to support field sales and to provide multiple points of access.

The biggest challenge for any successful e-business plan is making sure all of the company's disciplines are, in Holland's words, "getting their silo 'Towers of Babel' together." Marketing, engineering and operations must be equal partners in e-strategies, since at the end of the day, each significantly impacts and is impacted by business mediated by the Web.

Holland has found that although e-business doesn't dismantle the corporate mission, it does call for a significant reinvention of how business is done -- in many cases, with commensurate rewards from an equally ready marketplace.

"Companies must understand that creating an electronic channel has an advantage in terms of bricks-and-mortar and traditional sales force investments," Holland says. "Each of the elements of service must be examined in the light of the products and services that are being delivered. If they are not existent in the traditional organization, they must be created. If they are currently in place, they must be analyzed and effectively translated into the new electronic channel."

Without hyped reliance on feckless forecasts, it seems clear that businesses are already moving productively and intelligently into a venue that shows evolutionary promise.

Though no two companies may move in the same way or at the same pace, the next economies will be significantly energized by the next technologies and innovative applications used by growing enterprises.

Jack Ricchiuto is a management consultant and author.

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