Lessons from the Rule Breakers
These 'Mavericks at Work' use fresh thinking to win at business
You're fed up with business as usual. You've got a bundle of fresh ideas and bottomless ambition. You're determined to shake up your company and make a difference.
But do you have the moxie, smarts, and staying power to be a great innovator?
To find out, compare yourself with some of the most restless and creative business minds at work today: 32 remarkable entrepreneurs who have battled bureaucracy and stasis, and won, while redefining success in their industries. In their stories, captured in Mavericks at Work: Why the Most Original Minds in Business Win, some common traits emerge. Needless to say, all the executives are talented and driven. But authors William Taylor, founding editor of Fast Company, and Polly LaBarre, a former writer there, also discovered people who exude passion and creativity, with just enough humility to hear what other people have to say.
No single profile captures the essence of these cagey innovators. But U.S. News has distilled this insightful book's key lessons into five maxims of mavericks:
Obliterate orthodoxy. As Vernon Hill was expanding Commerce Bank, he realized there was no need for yet another financial institution with the same weekday hours and basic set of services that Citibank, Bank of America, or Chase has. But he did see a need for outlets that catered to customers the way Home Depot and Target do. So Commerce has branches that are open on evenings and weekends. Coin machines in every store let anybody, whether a customer or not, sort and stack coins free. And employees are drilled on how to offer customers extra conveniences. "We don't copy the stupid banks," Hill told Taylor and LaBarre. (All quotes in this story are taken from Mavericks at Work.) "We copy the great retailers. This is a convenience business." That attitude has worked. From a single branch at its founding in 1973, Commerce has grown into a major regional bank with $35 billion in deposits and plans for 700 branches by 2009.
Successful mavericks are fearless about breaking with outdated traditions and confining standards. Instead of the cookie-cutter consistency found at sandwich shops like Subway and Quiznos, for instance, Chicago-based Potbelly Sandwich Works has built powerful brand loyalty (and lured $60 million in venture funding) with a network of stores that are all different. And regular customers learn they can order special items not on the menu. "I want the elements of our stores to be imperfect", says CEO Bryant Keil. "That's part of the charm." Southwest Airlines-cofounded by the granddaddy of mavericks, Herb Kelleher-is a role model for rule breakers like Hill and Keil. Over the years, Southwest has repeatedly upended the scheduling practices, pricing strategies, and service standards of the bigger airlines. And it prefers to hire teachers or waiters or police officers instead of airline veterans steeped in industry tradition. The result: Southwest is the only U.S. airline that has been consistently profitable over the past 20 years.
Tap other people's brains. Procter & Gamble makes some of America's most traditional products: Tide detergent, Ivory soap, Pampers diapers. Yet the huge company has also developed a cutting-edge skunk works operation to mine the latest research and scientific ideas. Sixty handpicked "technology entrepreneurs" scour the globe looking for new technologies or ideas that could help generate fresh products. Most big, old-line companies confine such research to their own R&D labs. Yet even though P&G employs 7,500 researchers, that's no longer good enough, says Larry Huston, vice president of innovation: "For every one person we have in a particular area, there are 200 people on the outside of equal minds or better." Huston's goal: to eventually import half of all new product ideas from outside the company.
Huston and others like him are seeking collective intelligence-whether from halfway around the world or a few offices down the hall. Once a year, Tom Brown, who runs a hedge fund called Second Curve Capital, sends every one of his 16 employees onto the streets of Manhattan to go into banks, open accounts, interact with tellers, and report on the experience. Brown, whose fund invests primarily in financial institutions, finds that his staff's detailed observations spotlight banking trends that he can't divine himself. Of course, the communal power of the Internet is also a potent tool for pooling ideas. A Cleveland company called NineSigma maintains a worldwide network of 1.2 million researchers. When client companies like P&G or General Motors encounter a problem their own experts can't solve, they enlist NineSigma to invite its specialists to offer solutions. "It's amazing to think there are people inside big companies spending millions of dollars to rediscover knowledge that already exists," observes CEO Paul Stiros.
Pursue more than money. Glen Senk, president of the retailer Anthropologie, likes to tell the story of a supersaleswoman who vastly outsold her colleagues on virtually every shift she worked. Senk went to her store one day to watch and realized she would push anything on customers, regardless of whether items matched or clothes looked good. So she was fired. Senk explains: "Our customers are our friends. It's never about the quick sale."
That might sound corny. But for many innovators, making money-which they unfailingly do-is part of a bigger mission. At Cranium, the upmarket toy company famous for games like Cranium and Cadoo, cofounder Richard Tait sounds evangelical about his company's purpose: "We conduct ourselves as if we are a global movement. It's the pursuit of a dream, to give everyone a chance to shine." Peter van Stolk, founder and CEO of Jones Soda, the quirky beverage company, says he started out aiming to do much more than sell soda. His ambition: "How could we create a connection with customers, let them play with the brand, let them take ownership of it?" The touchy-feely approach may not be a required course at business schools, but it produces loyal employees and customers-not to mention cheery results: Anthropologie, Cranium, and Jones Soda all succeed in cutthroat industries.
Partner with your employees. Every two months at privately owned Cranium, Chief Financial Officer Jack Lawrence holds a companywide meeting on the company's numbers. He tutors the staff on cash flow and financial ratios, and every employee then assesses his own productivity. That, Lawrence insists, helps keep the whole company focused on the right priorities. Dick Resch, CEO of KI Industries, a furniture maker in Green Bay, Wis., holds similar monthly meetings. As a growing employee-owned company, KI seems like a throwback compared with big competitors like Steelcase. Yet Resch attributes KI's success to a transparent environment. "I have tried to teach everyone, right down to the technicians on the floor, how to think like a businessperson," he says. "There are no secrets here."
Run a ramrod business. Successful mavericks are open-minded-but never flaky or disorganized. When Marc Andreessen, cofounder of Netscape, started his next venture, Opsware, he had eyes in the back of his head-thanks to the bruising he took when facing off with Microsoft in the Internet browser wars. At Opsware, Andreessen compiled a list called "Ten Reasons We're Going to Go Out of Business," to keep the staff focused. He had learned that mavericks test limits and challenge the status quo-but must still be guided by bedrock business tactics.
At SEI Investments, a financial services firm near Philadelphia, whimsy even helps maintain a competitive edge. The company's headquarters is a bucolic campus of green, purple, and blue farmlike buildings. The lobby houses fanciful artworks. There are no special perks for executives, and everybody works at open workstations that can be wheeled to new locations as people team up for various projects. Yet SEI is a highly profitable, disciplined firm that has been operating since 1968. And the colorful environment, says CEO Al West, is meant to reinforce the primacy of fresh, fast thinking. "Winning is about being able to change as fast as, or faster than, the world is changing," he says. So think big, and follow your passions-and don't lose your focus for a single second.
This story appears in the September 25, 2006 print edition of U.S. News & World Report.