Month: April 2016

Are You Killing the Creativity in Your Business

Are You Killing the Creativity in Your Business“Creativity” is one of those things (like its close cousin “risk-taking”) that nearly all leaders love to hail, praise, and rhapsodize over. So why is actual creativity in the workplace so rare?

It’s because hailing, praising, and rhapsodizing are free and have no consequences. (Although, actually, they do; more on that later.) It’s kind of like hailing, praising, and rhapsodizing over the Paleo diet while finishing off that Big Mac. You might feel like you’re doing something good, but nothing really changes.

Although this analogy may seem extreme, it’s actually pretty apt. If you’re eating a Big Mac while espousing a Paleo diet, your actions are completely at odds with your words. (That is unless further research reveals that our proto-human ancestors dined on two primitive all-beef patties, primitive special sauce, some veggies and primitive cheese, all on a primitive triple-decker sesame seed bun.)

It all comes down to a basic and universal truth: talk is easy; execution is hard.

This is why so many leaders talk about the importance of creativity in the workplace while doing virtually nothing to actually support creativity in the workplace. Because talk is easy; execution is hard. But it’s the execution that actually changes things. It’s the execution that causes one business to achieve breakthrough results while another languishes.

If you, as a forward-thinking leader who truly understands the value of creativity, want to move from mere talk to actual execution, you need to first get rid of the obstacles to creativity. There may be many of these lurking in the shadows of your business, but you should first look for these three:

1. Your self. You, as the leader, have the potential to be the biggest catalyst for creativity within your team. But you also have the potential to be the biggest obstacle. If you jubilantly shout, “Let’s get more creative!” while at the same time saying…

“Don’t rock the boat.”

“Here’s why that won’t work… “

“The last time we tried something crazy like that, we got burned.”

“That probably won’t fly with the higher-ups.”

“That’s the stupidest thing I’ve ever heard.” (And no, I don’t care that Bill Gates and Steve Jobs said this. It’s still wrong.)

… then you’re an obstacle. Either change or stop lying about how much you value creativity. Remember those consequences I talked about way up in paragraph 2? Among them is the very strong possibility that when you don’t back up your pro-creativity talk with pro-creativity action, you start to lose your most creative people. Because trust me, creative people don’t want to work with leaders like you.

2. Your systems. Every business needs systems. Systems streamline essential and everyday functions. Systems provide a critical sense of order. Systems ensure that payroll is met, that inventory is maintained and that vendors are vetted. Here’s the catch, though. While rigid systems work great for routine functions, creativity is not a routine function. Creativity doesn’t adhere to a 9-to-5 schedule. Creativity doesn’t thrive in a cubicle. Creativity doesn’t always wear a blue three-piece suit. So as a leader, identify the areas of your business where you want creativity to thrive, and then remove any non-essential systems that are getting in the way of that creativity.

3. Your space. Creativity is all about connecting dots. These dots can be people, places, things, ideas. That spark that happens when two dots collide? That’s creativity! And the more different the dots, the more creative the idea. Look at it this way. If two yellow dots collide, you’re going to get a creative-and yellow-idea. But if a yellow and a blue dot collide, you’re going to get a green A green idea, where there were no green dots. Now that’s creativity! [You: “Okay, you’ve kind of lost me with all of this dot talk.” Me: “Fair point. Let me bring it back to your world.”] If, for example, your marketing people only interact with other marketing people, they’ll get marketing people (i.e., “yellow”) ideas. But what if you throw a blue dot into the mix? Say, someone from accounting? Or someone from outside-maybe an actor, or a historian? Now you’ve got some interesting dots, with lots of interesting possibilities! What if, instead of just subscribing to industry magazines and journals, you have a few copies of Smithsonian, or Lapham’s Quarterly lying around? That’s a cool mix of dots, which could lead to some really cool ideas-ideas that the competition couldn’t possibly come up with, because they don’t have that particular mix of dots in their space.

Creativity is important. It’s what’s going to keep you in business, and ahead of the competition. And it’s your job, as a leader, to do more than just talk about it.

How To Keep A Sharp Focus On Your Best Ideas

Faced with an ever-increasing workload, a man talked to his accountant about stepping up from being a one-man work-at-home business to employing some staff. It would, he thought, ease the pressure.

The accountant, a money management expert par excellence, had other ideas, and was blunt in his reply. All he said was: “The next time you say that, I shall put you in a cupboard and beat you with a broom handle until you change your mind.”

The reasoning behind his brutal assessment of the proposal was simple. Not only was the extra work insufficient to support another employee long-term, but the business model was a poor fit. The business was home-based, and simply didn’t have the space for another employee, long or short term. What’s more, he hadn’t considered the expense management dimension, but had been looking from only a workload perspective.

Hiring staff for a spike in workload is always going to be a bad idea. It will solve short-term problems, but will bring with it new headaches of its own, starting with the recruitment process, and going on to all of the background commitment involved in employment law.

The more effective option

Far better, said the accountant, to seek the help of other self-employed people to help lift the short-term burden, which would have a dual benefit. Firstly, the pressure would be eased, and secondly, a channel would have opened for work to flow in the other direction, thereby making at least two companies more profitable with no extra legislative and HR burden.

And so it proved. But the same thinking is equally effective is sorting the wheat from the chaff for all business ideas. Every individual has ideas; the clever part is in which deserve to be called good, and which deserve to be ditched.

A further illustration of this is in the TV ‘reality’ show The Apprentice, where the sharing of an idea comes under intense scrutiny. Certainly the programmes are voyeuristic, and intended to be good television, but the principle holds true. What the candidate thought was a sound and solid foundation turns out to be anything but, through hyperbole or simply plain misunderstanding of the numbers.

Where to get a second opinion

Examining ideas through the prism of someone else’s perception makes you acutely aware of which are good, and should be followed up. But where to get the right kind of opinion? Don’t ask family members, by and large. Their view is likely to be skewed, because they’re family, for one thing. For another, they may well not have the right kind of business experience.

Accountants are good people to ask. These days the right one is much more than a number crunching expense manager, but will have lots of sound advice they’d be willing to share. It’s in their own interest, as well as yours, to see that your business succeeds.

And what to do next

And when you’ve got the advice and acted upon it, remember that measuring the success of your idea is vital. Never forget either that the reason you’re in business is to generate income to sustain your lifestyle, so make use of one of the money management apps in common use today. Naturally, we’d recommend you to use an intuitive expense manager app that will let you see where you’re spending, and to initiate controls if that’s what’s required.

A Business Case for Going Green

Looking into the near future, I see low energy prices. As of today, energy prices are remarkably low in fact. They have dropped so much that companies, whose sole business model is setting an example of how sustainability is achievable, are losing money at a rapid pace thus making the outlook for the Green Industry quite bleak.

What is the Green Industry you ask? It was a term coined by the United States Green Building Council to certify buildings that are built to perform at optimal levels both in terms of construction and energy consumption. This plays directly into carbon reduction from decreased emissions. These types of projects are referred to as Leadership in Energy and Environmental Design or LEED. There is often a premium that is paid for a building to obtain a LEED certification, which is then subject to maintaining the building certification status with follow up commissioning to verify that the building performance hasn’t lagged from the original design. The premium for this service can be in the range of five figures with little guarantee of a return on investment.

Energy Star is another certification that functions on a slightly different level focusing solely on building performance based on energy consumption with a heavy emphasis on mechanical engineering and project savings. Both of LEED and Energy Star certifications are useful in their own ways, but often times include relatively new concepts that may not be perceived as safe investments.

The Green Industry relies on sustainable construction practices and clean energy technologies for overall success. More often than not, the Green Industry at its core is met with serious adversity. This adversity hinders the advancement of an entire industry that fundamentally wants to help people consume less and save more. The clean energy tech that needs to be incorporated for these projects to make sense is not usually an easy pitch to investors for a number of reasons.

Take solar power or wind for example. I like solar power because it’s a very practical and abundant resource. I believe there is a great market in wind generation also, but the fact remains that the performance of these technologies is sporadic.

Solar power is great during peak hours of electrical demand, typically in the afternoon, but occupancy during those hours can be very low. Another difficulty is when clouds come over head. This can immediately effect solar generation having a tremendous impact on the output. It would make sense to cover high rise buildings with solar panels to decrease heat gain, while improving building performance. The problem there is roof space in the city is often to small for solar to make sense.

Wind power meets barriers because of the nature of the technology. It’s difficult to deploy on a small scale because of local municipalities and the hindrance of neighboring views. Not to mention the first cost. One important question concerning wind power is when it’s most useful? From a business perspective, during times of high electrical demand to reduce the load on the grid and reap the rewards of off-peak electrical costs. Sounds great in theory, but the highest peak demand is during the afternoon hours of summer months when wind blows the least.

Energy Storage seems to be the holy grail of clean energy. Without out it, the industry continues to sputter. Energy storage could solve most of clean energy’s problems yet it’s almost impossible to get a CEO to sign off on a multi-million dollar project that won’t pay for itself.

Historically, and I’m talking within the past ten years, lithium is the go to resource to create batteries for clean energy. However interesting and useful lithium may seem, it also has major drawbacks including availability of raw material – there is a finite amount in the world, lifecycle, possible environmental hazards, weight, safety hazards in regard to building codes, and mostly first cost. Lithium batteries are a very expensive solution to fixing clean energy’s drawbacks. The more I research energy storage the more it makes sense, but if people are charging thousands of dollars per kilowatt then the market will never take it seriously.

Sodium Ion (salt water) batteries are promising. They’ve only been on the market for a few years, but their price points are a fraction of lithium. They are also lighter, have a decent warranty, and can store over 6 hours of useful energy.

If programs like demand response begin to spread then energy storage will make total sense. That way even if clean energy resources aren’t available, business owners could charge the batteries during off peak hours, to reduce grid demand during “events”.

Events are a term used by Demand Response companies to describe a time of peak usage where they need to cut consumption in order to reduce the strain on the grid. Demand Response companies offer investment opportunities for customers who are willing to shed loads during events. There are different tiers of Demand Response a customer can enter with a provider, but having energy storage available would reduce the chances of losing power to a valuable part of their building when they may need it most.

Clean energy fundamentalists won’t admit it, but natural gas is an ideal transitional fuel to take us to the next level. Looking at it from “a big four” perspective, you have: Nuclear, Coal, Foreign Oil, and Natural Gas. No one wants fallout from Nuclear, not to mention how the natural life of the waste outlives the containers. Mercury from Coal, and runoff from the mines are highly toxic. Wars for oil and a global economy that rely on the performance of such a volatile resource only leads to tragedy accompanied by the spread of fear. Then you have natural gas. Fracking is not ideal in many ways, but one could argue that natural gas is by far the lesser of the four evils. Its emissions are a fraction of the alternate fuels. It’s abundant in the US. We could adapt every vehicle to it, and natural gas is useful as a power source.

Utilizing natural gas for cogeneration is a great application and a nice way to transition into a decentralized approach to our energy infrastructure. If Homeland Security is worried about domestic threats to our power plants or transmission systems, taking a micro grid approach to the future of energy could be greatly beneficial in many ways. People who opt to install Cogen systems for their businesses can burn natural gas to create on-site electricity for their buildings plus reclaim the exhaust energy for heat, hot water or even cooling (trigeneration). A simple cogen system in a high rise residential building can cover up to 40% of the electrical load. So in times of power outages or demand response events, a cogen system will operate with a steady baseline to provide convenience power to a large chunk of the building. Cogen systems are typically between 70-80% efficient where grid power is maybe 30% at best. That’s a big deal, and when you factor in reduced utility rates and available incentive packages, cogen makes great sense.

MicroCHP is another natural gas burning technology that can help bring clean energy to the center stage. Just think of a cogen unit for homes or small businesses. Again, the problem is first cost. People balk at spending 4 times the cost of a boiler for a MicroCHP unit. Alternately, a MicroCHP unit will offer a nice payback and a source of on-site power generation to increase grid resiliency.

Risk and Reward Manager Profiles and Innovation Outcomes

One of the interesting challenges that managers face is the tension between expectations of senior leaders that managers minimize risks for their organizations while also motivating their direct reports to be more innovative. Finding a balance is no easy task, as managers consider the impact of decision-making on their reputation, job security, the impact decisions might have on their direct reports, and the short- and long-term impact of their decision-making on their organization.

Consider the following management profiles and the possible outcomes of these mindsets:

HIGH RISK AVOIDER – This manager defaults to the safest possible decision and encourages his or her direct reports to do the same. The manager will rely heavily on established policies and procedures and punish his or her employees who do not carefully follow these guidelines. This fosters a culture of risk avoidance in this unit. Employees that will thrive in this environment are those that like a predictable routine and are reassured by the presence of clear parameters for decision-making. This manager will likely push any risk up the chain of command rather than making a tough call himself or herself.

HIGH RISK TOLERATOR – This manager is very comfortable with risk and encourages his or her employees to test the boundaries of policies and procedures when a possible benefit can be seen for the company. This manager expects that his or her employees will fail and make mistakes and accepts this is the cost of doing business on the cutting edge. The manager will encourage employees to try new things and step outside of their comfort zones, rewarding them when they successfully innovate but avoid punishments that might stifle future innovation. Employees that will thrive in this environment are those that enjoy autonomy, are comfortable with change, and naturally look for new and better ways of doing things. This manager will likely assume responsibility for decision-making and look to upper management for the financial support and latitude to achieve innovative outcomes.

MODERATE RISK MANAGER – This manager is willing to take calculated risks and recognizes that he or she may forego major innovations when the potential for success seems slim. He or she will likely encourage employees to keep their eye out for opportunities and allow latitude for deviations from policy or process, but feel more comfortable if the employees discuss anything beyond minor risks with him or her before moving forward. This manager is likely to forgive minor missteps as a result of innovative activities, but large-scale mistakes would not be expected or accepted without repercussions. Employees that will thrive in this environment are those who appreciate the opportunity to be creative, but prefer to defer to managers when greater risks are apparent. This manager will likely involve upper management before taking action on riskier decisions in the same way he or she expects to be involved in these decisions with his or her direct reports.

It is important for managers to recognize that the way that they approach risk in their business unit and the value they place on innovation must be in alignment. A manager cannot expect to play it completely safe and also generate large-scale innovations. How employees are rewarded (and punished) influences the way that they approach problems and their willingness to try new things.

There is no “right” way, as each approach has its own benefits and drawbacks. High risk managers are probably not well suited for managing nuclear power plants. High risk avoiders are probably not well suited for working on Wall Street. A moderate approach is not a silver bullet compromise either. Small incremental changes may be great in a large bureaucracy, but equally harmful if the next great innovation would be missed because it appeared too risky on the surface.