Most PH businesses will never fully recover
ILLUSTRATION BY ALBERT RODRIGUEZ
Most Philippine businesses will never fully recover from the effects of the pandemic unless they use the secret tools and strategies that make the fastest-growing companies around the world successful: the top 1 percent, the ones that withstand the storms and always come out on top.
If you understand these secrets and how to use the unique strengths and weaknesses of employees as an asset, you can achieve a fast slingshot recovery from challenges, propel your business to massive growth, reach national and even international market leadership—and future-proof your business.
How to make your organization future-proof
“A crisis is a terrible thing to waste! -Paul Romer
This is the first in a series of weekly columns that will cover a wide range of areas vital to making your business future-proof: from innovation to growth strategies, marketing, branding and sales, consumer trends, profitability, digital strategy, transformation and e-commerce, organizational restructuring and operations, leadership, risk and crisis management, staff retention, employee productivity, succession and more.
Innovation and why you need to worry about it
Why is innovation important for your business, profits and growth? Creativity and innovation are the two biggest drivers for the long-term success of any business. Now more than ever, in the new economic order post the pandemic, the ability of your business to produce innovation at the highest level will determine your long term success. Factors like flexibility, speed, agility and innovation will decide the future winners, not the size of a business.
When you deal with challenges, innovation will empower your business to “invent yourself out of a tight box” as Jeff Bezos said. And when it comes to opportunities, it will empower you to profit from the many new and unique opportunities that spring up everywhere in this new economic order. But most businesses are blind to them because they fundamentally misunderstand the secrets behind innovation.
What is innovation? How to produce a gold mine
There are two types of innovation: marginal innovation and zero-to-one innovation. Marginal innovation is doing things a little bit better. Think of “constant improvement.” Imagine you own a chain of hotels and now you come out with a new boutique hotel that is just a bit better and different from the other hotels in the country.
Zero-to-one innovation: these are the game changers in any industry. This is the type of innovation that revolutionizes your industry and opens up a gold mine for your business.
Think back to the hotel example above: Airbnb is zero-to-one innovation at its best. The founders saw what no one else was seeing, namely that anyone can be a hotel. Bang! No wonder it made each of the three co-founders multibillionaires.
And guess what: in the new economic order, there are countless opportunities that no one else is seeing yet that you can discover and profit from. This means: the faster you get your business to the top of the innovation game, the better and the faster you will make your organization future-proof.
What type of innovation do you need, marginal or zero-to-one innovation?
Both! Because you should constantly strive to make everything in your organization better. But at the same time you want to shoot for the stars, for those game changers that can become a true gold mine for your business. The good news? The secrets behind both are the same. If you get them right and apply them to your business, and live by them every day, you will put your business in the best position to produce a game-changing, revolutionary idea that will deliver profits for decades to come.
Innovation Secret #1: The best ideas rarely come from the top
The best ideas can come from anywhere within an organization—and they rarely come from the top! In my decades of experience working with many famous business leaders from around the world, legendary family businesses and their global conglomerates, and self-made billionaire entrepreneurs, I have yet to witness one case where a ground-breaking idea originated in the boardroom. It is about as rare as a dinosaur walking down Makati Avenue! It doesn’t happen.
What does that mean for you as a business owner or CEO? You have to empower your people to produce their best ideas because your people are your greatest capital. They will determine your survival. But in order to do this, you need to create the right structures, the right environment that will allow great innovation to happen.
First step: Realize that the best ideas can come from anywhere. When we were working with the Peninsula Hotel Group to make them the first and the only luxury hotel brand in the world to achieve a Forbes five-star rating for every hotel in its portfolio, we made sure that the management and leadership clearly understood that the best ideas can come from the bellboy in the lobby because he has more client contact every day than the management will ever have.
When I was on the phone with the McDonald’s US headquarters many years ago and we were discussing how to avert their crisis because they had missed the health food trend in the United States, it was clear what they were missing: the communication had been a one-way street from the top down. The front-line employees, the ones taking the orders from the customers every day, had much better ideas about the new consumer trends and what the customers really wanted than any fancy boardroom study could ever deliver. But nobody listened.
Don’t be the one who doesn’t listen. Realize that you need to have a system that collects and filters all the ideas across all ranks, from top to bottom, so that the best ones make it to the boardroom. People need to have a voice. Give them that voice. And you will never run out of great ideas to ensure the survival and growth of your business.
Innovation Secret #2: Innovation never stops!
Or how to avoid the innovation killers of complacency and comfort
We all remember the famous failures from the past: Kodak missed the digital cameras, Sony missed the iPod, Nokia and Blackberry missed the smartphone, the list goes on and on. These cases teach us a big lesson: Don’t become comfortable!
If you innovate when there is a problem, it is already too late. Innovation has to be a constant in your business.
Here are some practical steps you can take:
-Stay humble, especially when things are going well
-Always ask: What are we missing?
-Put a system in place that captures everyone’s ideas, then filters them and brings the best ones to you, to the boardroom. For one of our clients in the Philippines, we established “innovation channels” through which all employees could deliver ideas. Then we designed a system for the CEO, owners and management board that they could use to determine, which ideas would be the most profitable. And of course we incentivized the employees to always outperform each other by rewarding the best ideas with cash and social recognition. No wonder our client achieved the highest profit gains in their history the year after, which brings me to the next step:
-Reward people for their ideas. Filipinos love games, so if you make innovation in your business a playful game and regularly reward the winners, you will have a never-ending stream of ideas.
Innovation Secret #3: The control freak has to leave the room!
When Johnson & Johnson called on me and my group to make them the supply chain No. 1 in Latin America, there was one innovation secret that struck a chord with the CEOs of the different countries: You cannot force innovation. Innovation is a mix between structure and flexibility, order and freedom.
A global conglomerate approached us and said: “We put a group of creative millennials into the same room, lock the doors, and then ask them to come up with great ideas. But nothing happens.” I asked: “For how long do you lock the doors?” They replied: “For six hours.” “Well,” I said, “the last time I checked the average attention span of millennials was eight seconds.”
Most businesses do not understand the creative process that produces great ideas. You cannot lock people in a room and say: innovate! All you can do is to create the right environment for great innovation to happen, but then the control freak has to leave the room. This is when the magic happens.
In order to solve a problem you need to take your mind off the problem and then address it again. Google understands this well: it has pool tables, swimming pools and free massages for their staff at their headquarters. I will not tell you to become another Google, but you need to understand that there has to be a playful element in every organization to encourage optimum innovation.
Innovation Secret #3: The Filipino people are perfect for innovation!
Here is the good news: Filipinos are among the most creative I have ever seen! They are naturally playful and highly innovative.
But their creativity is often stifled by corporate environments that are too rigid.
We need to always remind ourselves that Filipinos need to be encouraged to speak up and contribute, otherwise their respect of higher ranks and their fear of potential social shame will stop their flow of ideas.
Encourage mistakes! The president of one of our clients’ companies in the Philippines loved to send public-shaming emails when they made a mistake. And put the entire board on copy! Nothing can stifle employee creativity and innovation more than to publicly put others down for their mistakes and degrade them in front of others. People will forever deny you their best ideas from that day forward.
If you apply these secrets of innovation, your business will join the ranks of the top innovators in no time, and you have taken a giant step forward in your quest to propel your business to massive growth, reach national and even international market leadership—and future-proof your business. See you next week. INQ
Feel free to get in touch with Tom for inquiries, questions, comments or feedback at: [email protected]
