The only way to boost your take home pay is to increase your productivity. And by now, just about everyone has realized that in a global economy, the only way to do that sustainably is to innovate. Working longer hours for less pay will also boost a nation’s productivity stats but who wants to volunteer for that duty?
My wife recently introduced me to a new kind of dental floss—it is sold by a major consumer products company. Their dental floss is caked with a toothpaste powder. This is so when you floss your teeth, toothpaste is applied to hard-to-get-with-a-toothbrush areas, namely your gums between your teeth.
Now this might not sound like, say, the equivalent to e = Mc**2 but, heck, I wanted to shake the inventor’s hand. If you think eating nice foods with your own teeth in your 50s, 60s, 70s and 80s (frankly, I am not counting on anything more than that) would be nice, this is an important innovation.
And I am sure it is not trivial to do this. Adding toothpaste powder to a long string isn’t easy: first, it has to stick to the string, second, dental floss is exposed to a lot of different environments and the toothpaste powder must not dissolve when the floss gets wet or is exposed to a lot of humidity and, thirdly, it can’t rot and poison people if it sits around the store for a while and then in your cupboard or (worse still) your shower stall.
Now I have read lots of books on becoming more creative and innovative, and I can recommend a couple of new ones: Think Better: An Innovator’s Guide to Productive Thinking by Tim Hurson (McGraw-Hill, 2007) and The Black Swan, The Impact of the Highly Improbable by Nassim Nicholas Taleb (Random House, 2007).
Hurson has a formula that he applies to organizations to help them become more creative; part of his formula is using Galeforce—writing down as many ideas as you and your team possibly can in five minutes (at least 50) to solve a problem you face. By going really hard at the problem in a short period of time, you prevent group-think from taking over the session or guess-what-the-boss wants behaviours or satisficing (settling for the first likely useful idea before you get any other ideas on the table) or allowing your own or others critical judgment to suppress ideas by saying things like: ‘that sucks’ or ‘that will never work’ or ‘we can’t do that because we have never done it that way before’ or ‘we don’t have the resources to do that’…
Hurson also has a six step Productive Thinking Model that he takes his clients through that looks pretty useful.
But one of the things that I think is missing from his model is provision for Black Swan events. Taleb’s book’s title is based on the idea that just because you have seen thousands of swans and all the swans you have seen are white, that doesn’t mean that there aren’t any black swans. I think that Taleb’s book will appeal to entrepreneurs a lot.
I have flown with Go Travel Direct dot com a few times. Their business model was certainly a sound one in my view. Let people book charter flights and hotels online; fly from my home town (Ottawa) direct to their vacation destinations without having to transit through either Montreal or Toronto (which adds as much as one day to trip times); fly and stay at nice places for not too much money if you book well in advance and fly full planes and get cheap hotel rates because you are delivering a lot of people to the resorts.
They later added to their business model by buying their own airline, Zoom Airlines. This way, they would have more control over their schedules and costs (or so they thought).
On the afternoon of August 28th, 2008, Zoom went bust and we have yet to see what will happen to the older and (I hope) more stable Go Travel Direct dot com. They have an alternative carrier lined up so maybe they will hold on. But clearly, the consumer’s confidence in both has suffered.
I was wondering what could possibly have been done to prevent the demise of Zoom. The business model absolutely requires people to book well in advance. It is the only way to be sure that you can fly full planes. And people who book in advance want certainty about the price they pay and they want low prices.
But who would have thought two years ago that oil prices would reach $140+ per bbl? If anyone tells you that they predicted that, they are probably not telling you the truth. I predicted higher fuels prices over six years ago (which is why I bought a VW Beetle at the time) but there is no way that I would claim I foresaw $140 per bbl.
Neither did Zoom*. Their fuel costs went up over $50 million in less than a year and there was no way they could pass those rising costs on to their customers. This is a Black Swan event of the first order and shows you that sound business models can go south in a hurry and planning can be even more useless.
(* This would make a good case study and I hope one of my student teams will take this on. If Zoom and Go Travel Direct dot com had anticipated the rapid increase in fuel costs maybe they could have built-in an inflation factor into their pricing policies. But I would guess that if they had done this, they would have lost many of their customers and actually may have gone bankrupt even sooner. It is a difficult and possibly intractable problem but, perhaps, some creative genius student will solve the problem in his or her case study. An A or A+ awaits the student who can solve this conundrum.)
I suspect that what the US is currently experiencing in 2008 is not only a Black Swan event but also something that Malcolm Gladwell described in his book, The Tipping Point. Running (unsustainable) twin deficits (Trade and National Account) for many, many years, the US has been courting disaster during George W. Bush’s two terms. Either one by itself might have been manageable but when combined with a credit crunch, a housing meltdown, little or no personal savings, enormous household debt loads including high interest, unsecured debt such as credit card debt, ridiculous CEO pay levels tied not to long term performance of their companies but to short term stock market fluctuations, greed and corruption on Wall Street plus ever increasing complexity and opaqueness in financial products, sometime this year, the tipping point was reached and a non-linear event happened.
Anyway, every year between Xmas and New Year’s, I do a bit of goal setting and planning for the next year. As usual, I did exactly that between Dec. 26th, 2007 and January 7th, 2008. I sketched out a plan and put it up in my office where I could see it from my desk. Luckily for me, no one else could see it. I looked at it again at the end of August 2008 (just eight months later) and it was embarrassing. Every one of my plans lay in complete disarray—events had overtaken them and there wasn’t a single thing on my list that had panned out.
In that time, I had: gotten my real estate brokers license, sold an existing business, changed jobs (twice) and had to learn to live with higher interest rates and tighter credit restrictions because of the melt down in the sub-prime market. Things that were going to get done, didn’t and things that were going to get built, didn’t either.
That doesn’t mean that 2008 is a write-off; far from it. I work with really nice people, I am glad I sold one of the businesses so that I could concentrate more on my University work and my work with the Brokerage and I hope for better days ahead. When one door shuts, two more open!
What I am saying is that being more innovative and creative is very important. I believe that you can learn to be more innovative and creative. But part of that is learning to take advantage of unpredictable events—somehow seeing that toothpaste powder and dental floss go together or that getting my broker’s license would lead to a completely new situation in my life, a better one.
Entrepreneurs know that necessity is the mother of invention and, while I wouldn’t wish all of the circumstances I have faced to be replicated for anyone else, I think you have to recognize that chance plays a big part in life. Mind you, you have to be open to change, be able to see how seemingly unrelated things are, in fact, relevant to each other and be prepared to seize the day.
Dr. Bruce