Stefan has the guts to discuss concepts such as fear, courage, tenacity, and resiliency which have a lot more to do with business success than just about anything else, but are unfortunately absent from most business books.  Stefan does a beautiful job of connecting us to the wisdom of the Serengeti.  Life may be very different in our boardrooms, but the wisdom is universal.

• The Enduring Wildebeest teach us to confront our fears and always take the next step – no excuses!
• The Strategic Lion teaches us that the pride’s connection to the strategy is perhaps more important than the strategy itself.
• The Enterprising Crocodile shows us the importance of finding the opportunities is all circumstances, not just the easy ones.
• The Efficient Cheetah teaches us that limited resources can actually be a benefit if you can be innovative.
• The Graceful Giraffe reminds us that dignity, respect, and doing the right thing are keys to success despite what appears to be a cut-through world.
• The Risk-Taking Mongoose shows us that change and exploration of the unknown can bring exciting and even superior alternatives.

I had the opportunity to speak with Stefan recently about Surviving Your Serengeti and asked him how important he thought “differentiation” or exploiting your strengths was to success in this post-recession world.  His response was that in a world that is increasingly confused, digital, and real-time driven, differentiation allows you to stand-out (not in a Charlie Sheen kind of way, but in a good way).  He also rightfully points out that differentiation is not so much about creating something entirely new, but more about packaging concepts and skills that we already know in new and different ways.

If you are a frequent reader of this blog, you know that I am a huge proponent of a US perspective that promotes a new 21^st century American dream that involves moving up the global value chain as opposed to a perspective that tries to re-create the past.  I asked Stefan how he thought Surviving Your Serengeti can help people see a different perspective, one that doesn’t conflict with the global realities of our times.  Stefan is hopeful that his book will help people find the courage to evolve.  By focusing on the life and death situations faced every day in the Serengeti, we can more easily see how “cookie cutter” many of us have become in our thinking and how we often take our every day existence for granted.

Go ahead, read the book and let it re-connect you with your own talents and skills as well as see them in others.  And then find out what animal you are, and the rest of your team, at www.WhatAnimalAmI.com.  Personally, I most closely resemble the Enterprising Crocodile.  Not great for my feminine image, but it is spot on!

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Braden forgoes all the hype and quickly hones in on those really useful nuggets of pertinent information.  If you haven’t already, you should also check out Braden’s website Blogging Innovation, which carries an absolute wealth of information from many of the world’s best innovation thinkers.

There are a lot of great points in Braden’s book, but my favorite is his focus on the importance of insight and execution in the realm of innovation.  It’s one thing to have a great idea, but quite another to know what to do with it and how best to exploit it for the benefit of your customers and shareholders.

Another of my favorite parts is his clear and very powerful explanation of the nine innovation roles.  The idea being that there are many aspects to innovation and your aperture should be fairly wide when discussing the topic inside your organization.  You’re much more likely to be successful if everyone feels they have a role that relates to your company’s innovation vision and strategy.

1. Revolutionary
2. Conscript
3. Connector
4. Artist
5. Customer Champion
6. Troubleshooter
7. Judge
8. Magic Maker
9. Evangelist

Other exceptional points that Braden addresses, which makes his book unique and extremely usable in my opinion, are the following:

• Your measurement criteria may actually be restricting the flow of the very best ideas
• Use cross-functional teams to evaluate ideas, so that good ideas don’t get killed just because someone lacks the ability to explain them well.
• There is a big difference between useful and valuable – know what it is
• Slow innovation isn’t bad innovation (iPod’s took 3 years to really catch on, and the digital audio player 25 years!)
• The underlying business model of your organization will play a big role in your company’s ability to experience innovation success – don’t underestimate it!

And my absolute favorite concept in Braden’s book, which he sprinkles among the pages, is the notion that having courage and a culture aligned to innovation are key ingredients in any venture into the world of new ideas and insights.  So, if you or your organization lacks adequate courage, or has a hard-line culture, disruptive or breakthrough innovation are probably not in your future.

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When the mayhem in the financial world let loose in the fall of 2008, I was the COO of an international corporate finance company. It didn’t matter how long you had done business with a counterparty, how much money they had made with you in the past, or if they had introduced you as their best client just last month.

This was war. I saw some of the saddest displays of human behavior that I have witnessed in my entire career.

Relationships became meaningless, literally overnight, and trust was suddenly a word that no longer held any value. Corporations insisted their employees go for the jugular as a bloody grab for what cash remained in the system ensued. I actually heard one CEO claim that they would, “Rape and pillage their way back to profitability.”

That was my catalyst . . . realizing that spending the second half of my career stuffed behind a desk dealing with auditors, accountants, and deal guys with ocean sized egos just wasn’t going to work for me any longer. I picked up my head and began to observe and learn what was happening outside the world of finance and investing.

As a 40-something with 20 years of career behind me—more than half of it working around the globe for conservative Goldman Sachs Companies—the wild west of social media, online networks, web 2.0, friends, fans, and tweets seemed to come out of nowhere.

While learning more about these phenomena, I soon realized they were symptoms of a far larger shift in capitalism that was beginning to shape the 21^st century.  I spent the better part of a year, reading, thinking, writing, and formulating my own conclusions about where things were heading and how the global recession could in fact be a catalyst for capitalism to take a new turn.

Below are some new perspectives on how we can harness the power of connectivity to create growth and prosperity, how we can blow the lid off the box in which we’ve kept capitalism bound, and how the Conceptual Age will bring more meaning, and more joy to our personal and professional lives if we are simply willing to let go of our old ideas and seek out new ones.

If you and your firm are not willing to embrace these changes, you’re likely to miss what are shaping up to be some very large and exciting steps for business and humanity.

The Power of Connection

Hindsight is obviously very far away, and others who are much smarter than I will likely come up with better concepts to explain this massive shift. However, for me it’s all about changing the way we connect to people, organizations, ideas, and personal passions. It’s about learning how to connect the un-connectable dots.

Enhancing existing connections inside and outside of companies is the one thing that most old-school business leaders overlook. Who can blame them?  We were taught in business school to focus on recurring revenues, leveraged buy-outs, IPO’s, and shareholder value. This accepted path to wealth and prosperity worked quite well in the 20^th century, but said nothing about creating meaning, developing connections, unleashing human potential in the workplace, and heading into retirement feeling as though you had created something decent in the world.

News flash…seismic shift…game changer! Social media, email, cell-phones, blogging, reality TV, and interactive marketing, are all signals that people are craving stronger and more meaningful connections in their lives.  And the younger generation is demanding it both at work as well as in their personal lives.

New companies and young leaders are gaining competitive traction, not just through adept financial practices or differentiated products, but simply because they posses a mindset pre-wired to embrace connections. Connections that allow them to more easily and effectively drive innovation, productivity, and success.

Connectivity is about a new perspective that can bring many great and wonderful changes, including dramatic increases in productivity, differentiated competitive advantages, continued long-term prosperity and happiness in the workplace. It’s about how business doesn’t really have to be boring and antagonistic. It’s about lightening up and bringing a bit of fun into the office.

Capitalism

It is also about taking a hard look at where capitalism and our economic system have come from and where they could be heading – if we have the courage to be more innovative with our underlying systems. It is about questioning some of the things we thought were true, but maybe weren’t, or aren’t any longer. It is about remembering how to push the envelope and seize the joy of creating something new and meaningful.

This is particularly true for America, which is at great risk of loosing its position as the great innovator. We’ve become complacent with mediocrity, and unless we are willing to make some serious changes, we will pay a high price (or at least our children will).  We now fight wars without regard to borders, which in the cold war days was unconscionable.  Likewise, economic systems are loosing borders as well and the very best entrepreneurs and innovators will move to the places where they can most easily create.

When we realize that not using known medical technology to vaccinate children in third world countries against life threatening diseases is actually a choice, and not a permanent side effect of capitalism, then we are free to make a different choice.  When governments realize that their highest and best use in most cases is simply to promote alignment for growth and not be the growth, solutions will come with greater ease.

What will drive the next big movement in the world of capitalism? What seems awkward today but will be a no-brainer 20 years from now? What will make going to work an adventure instead of a chore?  What will create the next wave of competitive advantage in the market place? What will the next Microsoft do better than everyone else?  What will expand capitalism such that its benefits are more than we can currently contemplate? My answer is simply connectivity.

The capitalistic continuum has always adapted to society, and continues to become more esoteric and less concrete over time. The primary resource of modern capitalism has morphed over the centuries from capital to labor to knowledge and now to connectivity.

The next wave of capitalism will focus on alignment and the inherent values and desires of human beings not only to be economically successful, but also compassionately responsible. It is through such alignment that we will actually become better capitalists as we learn to exploit its full potential.

The Conceptual Age

The Conceptual Age is about asking smarter questions? Broadening horizons, embracing new perspectives, and establishing new mindsets always begins with new questions; never new answers to the same old questions.

What do we want? What kind of legacy do we want to leave the generations to come? What do we want our lives to be about?  In what kind of world do we want to live?  How can we better connect to the bottom of the pyramid? It’s also about realizing that we have the power to not only answer these questions, but also to bring those answers to life.

Daniel Pink (A Whole New Mind) walks us through the ages from the 18^th century Agricultural Age (farmers), to the Industrial Age (factory workers), to the Information Age (knowledge workers), and finally to the 21^st century and the Conceptual Age (creators and empathizers) all transpiring as we increase affluence, technology, and globalization and the world becomes more connected.  Pink describes success in the Conceptual Age as requiring high concepts (ability to detect patterns and opportunities and combine seemingly unrelated ideas) and high touch (ability to empathize, and understand human subtleties in the search for purpose and meaning).

The very best ideas generally reside in those overlapping slivers between disciplines and the Conceptual Age will show us more of those opportunities and more importantly how to better recognize them.  It moves us from an era of scarcity, opposition, and secrets, to one of abundance, collaboration, and transparency.  It allows us to remember that we are all on the same team and generally want the same things out of life.

Check back for future posts where we will explore each of these three areas in more detail.

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If we want to be honest, and I think we should, there is plenty of blame to go around for the predicament the US finds itself in today. We severely damaged our financial system through greed, ineffective regulations (notice I’m not saying a lack of), and a over zealous homeownership policy; we somehow forgot that economies and businesses work in cycles; and we all (people, businesses, and gov’t) failed to heed the wise advise of paying down debts when times were good.

Such a significant amount of economic damage requires corrective adjustments that will simply take a bit of time to work through the system.  There’s nothing wrong with a slow and steady recovery.  It certainly beats a continual decline or a Japanese style decade of stagnation.  What’s is wrong are politicians trying to use the slow recovery to get ahead in the poles by scaring the public into thinking the sky is falling again.  That may get you elected, but it will only harm the recovery because it breeds fear and continues to divide us.  Fear affects confidence, and confidence can either have a positive multiplier effect or a negative one (Its our choice).

Let’s first look at what is NOT going to drive us out of this recession; and yes it’s the list of things that works in most recoveries, just not this one.  It’s not going to be the housing market, since it was part of the problem.  We are still in an adjustment period of getting people out of homes that really couldn’t afford them in the first place.  There simply isn’t going to be much unmet demand until after the economy gets going again.  Consumerism is another area where we got out over our skis and adjustments are necessary to find a sustainable level.  I never really understood why the government chose to incentivized people to buy houses and new cars as a way to stimulate the economy . . . it just seems a little counter intuitive to me.  The stimulus was definitely warranted, but we could have come up with some smarter programs.  But since the government owned big chunks of the banks and automakers, perhaps one can see their logic . . . conflict?

Now, where’s the potential, the upside, the areas we can focus on that can produce meaningful results.  Some economists are saying that we need investments in businesses (boosts productivity) and a focus on exports, which I agree with for the most part.  We can use the demand that is stronger in other parts of the world to help create enough economic activity in the US, which in theory should help jump-start our own demand.  That’s the beauty of globalization.

We can also look to trends, future needs, and how this new era of globalization is shaking out to find those niche areas that require capital.  Anything that is working toward solving global issues, utilizing technology in innovative ways, and meeting the needs of people in lower socio-economic stances is likely a good investment.  I can promise you, the companies working on the $1,500 car and mobile banking/markets for the developing world, will look like geniuses 25 years from now.  We may actually be creeping up on the inflection point where it is actually more risky to bet on an investment that focuses on traditional methods of growth in developed markets than it is to explore the frontier where there are bucket loads of unmet demand . . . the bottom of the pyramid.

Success for the US in the 21^st century requires a new way of thinking, a new mindset, and paying far less attention to what the politicians are saying.

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The opportunity to redevelop the real estate industry such that it contributes to the solutions the world is seeking, instead of continuing to pile on to the multitude of challenges, is huge. Such challenges include the energy crisis, climate change, natural resource preservation, population growth, urban sprawl with ineffective infrastructure, and a lack of sustainable growth practices. Those with the courage to see these opportunities and act upon them quickly will realize tremendous competitive and economic advantages.

Indulge me for a moment as I try to integrate the big picture of how the real estate industry can play a significant role in addressing the challenges we face as global citizens. Then, I’ll offer some details and specifics that outline a new approach to real estate.

Tom Friedman says in his book Hot, Flat, and Crowded, “We Americans are in no position to lecture anyone. But we are in a position to know better. We are in a position to set a different example of growth. We are in a position to use our resources and know-how to invent the renewable, clean power sources and energy efficiency systems that can make growth greener. If we, as Americans, do not redefine what an American middle-class lifestyle is – and invent the tools and spread the know-how that enables another two or three billion people to enjoy it in a more sustainable fashion – we will need to colonize three more planets.”

Real estate investors and developers play a huge role in how communities and cities are constructed, how buildings utilize energy, and what infrastructure and transportation is necessary to connect where we live to where we work, shop, and play. Without drastic changes in how we construct and live in our communities, what’s left of America’s competitive advantage in real estate will continue to fade. Others will take the lead in creating the technology and investment and development models that allow populations and standards of living to grow in sustainable ways that are also grounded in the pursuit of happiness and wellbeing for oneself and the rest of the world.

The global economic crisis should represent the perfect opportunity and context in which to effect meaningful change, unfortunately little is different today than it was 5 years ago in an industry that has endured massive losses over the last 2 years. The only changes fund managers (who ultimately control where and how capital is deployed) appear to be making are to appease their investor base with executive musical chairs, token fee reductions, and maybe a claw-back clause. Their plan is to ultimately convince investors that the world will soon get back to normal. Some fund managers are even sitting out a round or two of fundraising in order to avoid setting a precedent of unfavorable terms with their investors. These kind of non-structural changes or avoidance strategies will, unfortunately, not bring a new mindset, new strategies, creative partnerships, and the innovative models that are needed in the dynamic and interdependent world in which we all now reside. The pace of global change is so great, that the concept of “normal” may eventually become obsolete.

Investors, on the other hand, realize they have been paying too much to fund managers who, quite frankly, have lost their edge, allowing their value proposition to shrink to an almost unrecognizable point because such a large portion of profits have been driven by extremely favorable financing terms. Because investors rely on the income from their investments to fund whatever it is that they do (pensions, universities, etc.), they need to make commitments and keep the economic wheel turning. And, with so few new choices, many institutional investors are forced to give in to what fund managers are offering.

Large institutional investors have more power today than they realize, and with the right leadership they could help re-shape the industry for the better. Relying heavily on a previous track record as an indicator of likely success, in a future that will undoubtedly look quite different than the past, may not be the best strategy. A better bet may be fund managers that are more adaptable to change, that are more willing to present structures which focus on creating long-term value, and have a desire to begin working toward sustainable and energy efficient strategies of investing and development. When assets are viewed in terms of creating economic, social, and ecological value, growth is more balanced and sustainable and less susceptible to large swings in the financial and capital markets.

Suburban sprawl with carbon copy retail centers, minimally constructed housing developments, and energy-gorging apartment complexes are all simply unsustainable and will not work for the future. They are also poor examples to set for emerging markets that have to figure out how to support a net increase of 3 billion people over the next 40 years and typically look to America for answers.

The real estate industry will have to evolve because we are rapidly approaching the tipping point where it is economically advantageous to create and embrace new types of value. The real question is who will be the first group to realize just how incredible this opportunity is for those with the courage to change. Detailed below are two areas in which I believe the real estate industry can make great strides and become the leader the world needs in building more efficient communities that promote healthier lifestyles and sustainable living.

First, we must start with an investment model that is focused on creating value instead of creating fees. The days of creating a majority of profits from financing arbitrage while collecting huge fees and adding very little value are over (or at least they should be over). Those who can design integrated investment models that eliminate the double promote and have a viable long-term strategy that includes some elements of sustainability will have a tremendous competitive advantage.

Second, we must build asset management strategies that not only address the needs of capital but also begin to address the energy and climate conundrum we are all facing, offer end-users options that help solve their daily problems, and are congruent with the direction local municipalities and communities are headed. Typical asset management models are based on a pyramid structure driven by a chain of command. An integrated asset management model, as depicted below, puts the asset at center stage and focuses on adding value by integrating end user needs, investor needs, social needs, and environmental needs into one cohesive strategy.

An integrated asset management model is all about adding value. For example a C class apartment complex that provides residents with free parenting classes, free money management classes, and partners with a local non-profit that provides a mobile medical clinic to families that cannot afford healthcare, will enjoy the highest occupancy rate in its market. Alternatively, a high end retail center whose tenants all relate to health and fitness, sponsors weekend community races and farmer’s markets, will be able to charge a premium, because tenants will insist on being where the action is. Or how about an office complex that caters to “green” businesses that are happy to pay a premium because the building is carbon neutral and net positive on energy. These are just a few examples of a multitude of creative strategies available in an integrated model that views value through a multiple lenses.

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I am often asked to review and blog about new business books coming to market, and only rarely do I oblige.  When Tony asked me to review his new book, I said yes immediately. His ideas around managing energy as opposed to time resonated with me years ago after reading, The Power of Full Engagement and plays a big role in my own consulting practice. The energy management concept, if explored to its full potential, can do more to transform an organization than any other single component.

The great thing about Tony’s new book is that it is full of sound research that reinforces what Tony is teaching and helps us to really understand why we do the things we do, even when they are counter productive to our goals.  More importantly, he provides practical advise on how to begin the process of change that will work for anyone in any stage of their career, or any organization at any level of health.

Not only will you find great information to help you become a better employee, leader, or manager, but you will also find that this book will help you become the person, spouse, parent, child, and sibling that your heart desires.

If any of the following statements resonate with you, then you should RUN, not walk, to the nearest bookstore and get a copy of The Way We’re Working Isn’t Working.

• I always feel like I am behind in my work and will never catch up
• I want my team to be more productive
• I desperately want to find balance between my work life and home life
• I want my team to be more accountable and responsible
• I struggle with the daily distractions of email, phone calls, and endless request for my time and can’t get any of my own work done
• My company does a poor job of retaining employees

What I personally love the most about The Way We’re Working Isn’t Working is how it very easily connects to my own work around helping organization find competitive advantages that work in the 21^st Century.  Tony reminds us that, “In a fiercely competitive and rapidly changing marketplace, creative and big picture thinking, curiosity, and openness to learning and empathy are a largely untapped source of potential competitive advantage.”  Going from more, bigger, faster to richer, deeper, slower seems counter intuitive to most, but is in fact the best way to distinguish your company from its competitors.

I have asked Tony to give us his thoughts on a few more in-depth questions on this angle around competitive advantage.

1)   Why do you think it is so hard for organizations to fully grasp that strengthening their connection with and investing in the well being of their employees can be a tremendous competitive advantage?

There’s an instinctive tendency in all of us to default to the easiest solutions. It’s easier to demand more of people than it is to consciously invest in them. It’s also part of the short-term preoccupation that characterizes so many organizations.  If you view people as expendable and interchangeable, you don’t worry about investing in them because you believe they’re all replaceable.  Leaders with a more  long-term view recognize that when you invest in people they become more valuable over time.

We make that investment in ourselves in the years we spend in school. But many organization are too concerned with the next quarter’s revenues to think about investing in the future. But the best organizations do just that. Companies such as Apple and Google offer more to their employees than most other companies – not just in perks like the free meals Google provides or the fitness facilities Apple has, but also mentally, in terms of the environments of learning and growth they actively nurture; and spiritually, by giving employees the sense that they’re doing something that truly adds value to the world. It shouldn’t be a surprise, in turn, that these sorts of companies attract better employees and have great results.

2)   In your work with a vast array of companies, do you see more of a correlation to the age of a company and the age of its executive team and their likelihood to fully embrace energy management in their culture, or is it more highly correlated to specific industries?

There’s no question that a certain kind of company is more readily drawn to our work.  They tend to be more progressive, forward thinking and innovative than average.  We’ve had our greatest successes with technology companies and with creative companies, but interestingly, we’ve also had significant success with more traditional financial institutions.  I think that may be because the folks drawn to the world of finance are often fiercely competitive, and we’re offering a science-based way for them to improve personal performance.

Ultimately, though, we’ve been able to work in almost every kind of organization, because in the end it’s usually one or two senior leaders who make the decision about whether to bring us in.  The trick, we’ve learned, is to introduce them to our work first at a personal level.  When they see its impact in their own lives, they become evangelists for the practices we’re teaching, and the new way of working we’re advocating.

3)   What is the one piece of information that you provide to clients that seems to resonate with them the most when it is difficult for them to see how proactively managing the 4 types of energy can have a profound impact on personal satisfaction and corporate success?

In an era of overwhelming demand, what resonates first is the science-based case we make for the fact that human beings aren’t meant to operate continuously for long hours. We all know, intuitively, that the way we’re working isn’t working, and that it’s actually depleting us.   It’s thrilling for people to understand that intermittent renewal actually drives higher and more sustainable performance.  Our work gives people permission to work in ways that serve them better – and make them feel better.  And that ultimately serves their organizations better.

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There have been a couple of news spots recently on healthcare providers starting to do things differently and experiencing huge success.  In one doctor’s office in Seattle, patient emails are answered daily by a physician, and appointments last twice a long as the average doctor’s visit.  The result is a much higher level of connection between patient and doctor and a much greater chance that “health-care” is being provided as opposed to “disease management” services.  The other story I saw involved a hospital here in Dallas that last year experienced the death of a patient while he waited in the ER for hours.  They completely revamped their ER process creating a number of different pods or mini ERs that take in multiple patients at one time so they can keep a closer eye on everyone.  Again, huge success in dropping their wait times and even more impressive, a dramatic drop in the percentage of patients that left before they were seen by a professional care giver.

In my opinion, the US healthcare industry needs a new business model far more than it needs new legislation.  We seem to be in this mode in America where we think that the best solution to all problems begins with massive new legislation.  Sometimes a tweak here and there can be very helpful, but solving all problems with more rules just runs counter to everything I’ve experienced on how to create change and lasting success.

At its most basic level, it is relatively easy to see that the healthcare system in our country is a bit backward.  We pay physicians when patients have something wrong with them as opposed to when they remain healthy.  To get paid for anything, the physician must start with a diagnosis and a diagnosis code.  Any time or energy a physician spends on prevention or educating patients on how to stay healthier longer is a bottom line deduction from their profits.  It is a simple case of rewarding the wrong behaviors.  There are no fingers to be pointed or people to blame, it’s simply a model that is ineffective at creating what is needed, which is healthier and happier people at a lower cost.  Perhaps 100 years ago, when there was far less knowledge about and focus on prevention, the currently model was relatively effective.  Healthcare is no different than so many other industries (like energy, automobile, finance, and telecommunications to name only a few) that need to change with the times in order to remain effective.  What is sneaking up on most of us is that the rate of change has skyrocketed and is now at a pace that is uncomfortable to most industries and businesses.  There is hope though; we just have to be willing to change the way with think about things and be willing to do it in dramatic ways.

During the thrust of the healthcare debate, I only saw one article that touched on the real issues.  The article discussed how organizations such as The Mayo Clinic and the Cleveland Clinic appear to run at a much lower cost structure and simultaneously have reputations for the best service available in the industry.  The article attributed this in large part to the fact that doctors from different disciplines collaborated very effectively on all kinds of cases on a daily basis, which tends to cut out tests and procedures that ultimately end up being unnecessary.  Unfortunately, most of the healthcare industry is built on an “every doc for himself” model that actually dissuades doctors from taking the time to collaborate as much as they would probably like to.  It is much easier to collaborate when people are co-located and when the concept is built into the care model.

Because the “every doc for himself” model is so pervasive, it has been difficult for the industry to take advantage of technology to the extent that it could, which would ultimately benefit the patients and reduce costs.  For example, if a doctor sees a new patient and diagnosis him/her with diabetes, there schedule probably only allows for them to spend 15 or 20 minutes explaining everything.  The patient is in such a state of shock they likely are only taking in a portion of the information that is radically changing their life.  What if you could also send the patient home with a computer login that accesses their own health web page customized to their personal care needs?  It could contain a longer video, of their very own doctor, explaining everything again that they could watch as many times as they wanted and could share with family members who might be participating in their long-term care.  A private chat board could be available that is manned by an RN or Physician’s Assistant answering questions in real time.  The possibilities are endless in this area.  How many relapses could be avoided if patients watched daily videos that indicate how things should be progressing after surgery discharge or an outpatient procedure.

The point is, we need to start thinking in terms of radical changes, and honestly considering if the business model is working toward our goals or working away from them.  Imagine a time when doctors get paid for keeping people healthy.  Imagine if your healthcare facility was a place where you could workout, ask a quick question, learn about nutrition, pick up some new recipes, and get motivated to live a healthier life?  The reality is the current business model is stifling progress, innovation, and advancement in how we think about and deliver healthcare.  Our healthcare system has been narrowed down to a transaction system.  It feels like progress is being made because there have been great advancements in understanding diseases and innovating new treatments, however, very little has been done around the delivery of healthcare.  We have State of the art medical knowledge delivered, in many cases, through an outdated and archaic system.  If you are looking for ways to cut costs and increase the quality of service, this is where the opportunities lie.  Unfortunately, until we correct the structure of the system, those efficiencies will likely continue to lie dormant.

In the business world we call this a classic case of structure taking over the strategy.  You always want your strategy to dictate the best structure, not the other way around.  Unlike a single business transaction or a single company, where you change the structure relatively easily, this is an entire industry in one of the world’s largest countries.  It is likely impossible for a single healthcare provider, a single hospital, or even a single hospital system to make a change to the structure on their own.  Maybe it will require a grass roots movement that strives for a total do-over in the way our healthcare system works.  Once the structure is changed to create the alignments and incentives necessary to meet the goals then, and only then, will we see meaningful change.

As much as I dislike the behaviors that the medical insurance industry sometimes displays, it is a complete waste of time to try and fight them.  Everyone has responsibility for things getting to the point that they have, and these bad behaviors are just another symptom of a system that is governed by an outdated and ineffective model.  The insurance companies will have to be a part of the solution.  Insurance is a numbers game.  When the youngest and healthiest people opt-out because the cost is too high it simply continues a vicious cycle where the insurance companies feel they have to remove the other end of the spectrum as well in order to balance out their risk.  I am actually a fan of having a minimum insurance requirement with the government picking up the tab if someone can’t afford it.  We have this requirement in the auto industry and I believe it is one of the reasons that auto insurance seems to work so well.

If you look at healthcare as an entire business system and start to dissect its “operating statement” you quickly realize that revenues are generated by one party (insurance companies) and expenses are created by another (providers), though for the providers those expenses are viewed as revenue.  The profits from the system are shared but not anywhere near equal to the value that each party contributes or in a way that promotes the desired outcomes.  The real value that an insurance company provides is an administrative function, yet in many cases, they take an outsized portion of the profits from a value perspective and often have the most control.  The insurance companies will say they also take on the risk, but I would argue that it is the purchasers of insurance that take the risk.  When profits start to go down the insurance companies simply start denying claims, dropping high-risk people, and jacking up rates for everyone else.  They have become experts at deriving ways of mitigating their risks by passing them on to their customers, and we have let them get away with it for so long that it is now seen as standard practice.  In fairness, nothing has been done to ensure that the young and healthy remain part of the pool, which I believe could solve a lot of the insurance issues.  This would be one of those areas where some legislative changes could be good.

The real question is not, could we come up with creative and inventive ideas to cut costs and increase quality, but do we have the courage to make the necessary changes to the underlying structure?  Do we have the courage to design a model that provides the incentives to promote the investments necessary to increase service quality and bring down costs?  I hope the answer is YES.  I believe the answer is YES.  We can have all the intelligence and innovation imaginable, but without the courage to make system wide structural changes we will likely only create an updated and over compromised version of what we already have, spend a lot of money getting there, and leave an even more complex mess for our children and grandchildren to clean-up.

We must find the courage to critically examine the current system and understand how the alignments and incentives are simply miss-directed to accomplish the goals of the medical community and our society.

We must find the courage to recognize that the failures are not born of malice from any party, but are born of a system that is simply out-dated and broken.

We must find the courage to work together and commit to create the world’s finest healthcare system and be a leader for the rest of the world.

WE MUST FIND THE COURAGE TO CHANGE THE GAME!

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As an executive in two finance companies during the bubble years I became very familiar with the hiring process.  What I generally saw was that hiring managers were not interested in taking any risk on people and generally liked to hire people that were just like themselves.  I suppose they felt as though they were taking enough risk on their deals, that they wanted to avoid any in the hiring process (too much market risk, not enough people risk).  Or maybe, they were simply taking the easy way out.  Just find the person who is doing what you want somewhere else and offer him/her more money to leave.  This is unfortunately what the recruiting business had come to during those years.  The reality is, most hiring managers (especially in the finance arena) are great at deals, but relatively poor at managing people.  Therefore, it was much easier to hire people who have previously done the exact job that you are hiring for so that you can spend as little time as possible with them and have little risk that they are not good at the job you are hiring them for.  It’s relatively sound logic as long as you are not interested in adding any creativity, ingenuity, or loyalty to your business.  How loyal do you think employees are that go from job to job chasing money?

Hiring for what people have done and not who they are, gets you people who have the ability to do certain tasks, but does nothing for adding to the moral, innovative, and energy building aspects of a business.  As with most things I write about, this was fine and worked well enough in the 20^th century, but will be far less effective in the 21^st century where the world, and particularly business, is beginning to work differently.  Employees, especially the younger ones, want their careers to be about something, they want to feel as though they are making the world a better place, and they want to work on something that is exciting.  People of my age and older, we never thought those goals were possible or even plausible to attain, so we simply gave in and focused on the money convincing ourselves that it is the ultimate measure of success.  I personally, am rooting for the kids of today and tomorrow, hoping they have the courage to get what they want.

When you hire people for who they are, what innate traits they bring to the table, and how they think, then you can maximize their potential in ways that maximize your business success.  Earlier this year, at the Front End Innovation Conference in Europe, there was a graduate student presenting some fantastic research on the traits of an innovative person.  She did a great job on the research and a great job at presenting, and I found it fascinating that the discussion it sparked really showed what a novel concept this was for so many people.  Sure, there have been personality tests that have been used in hiring practices for some time, but they really only tell you a few things like can you manage people, and will you get along with the others in your group.  I don’t dismiss those questions by any measure, but I sure would love to start hearing questions like, “What do you want to create? What are your passions? How connected are you to your own internal wisdom?” used somewhere in the equation.

When I asked on twitter whether you should hire people for what they have done or who they are, I got some great responses.  My favorite from @KrisSchindler and one that I agree completely with is to look for “intellectual curiosity”.  This concept has largely vanished from large institutions, and in my opinion, is not focused on nearly enough in our education system.  It’s a skill all of us are born with, and some of us choose to use it and others do not.  Who do you want working for you?

People Risk is not only about taking risk that someone with a different background who can think from new and creative positions is going to be good for your company.  People Risk is also about allowing yourself as a manager or executive to find the unconditional value in each person as individuals and as they interact within the company.  This takes time, and even more importantly, this takes being vulnerable enough to make those really strong connections that inspire people to work at their full potential.  When people are working at their full potential in an environment where they are respected, they have no desire to go somewhere else.

Alex Pattakos, PhD, writes in his book, Prisoners of Our Thoughts:

“The transformation of work in the twenty-first century is, in many respects, a call for humanity—a new consciousness that suggests more than simply trying to strike a balance between our work and our personal life.  It is a call to honor our own individuality and fully engage our human spirit at work—wherever that may be.”

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Overtime, many businesses end up evolving through the lens of problem solving and not through the lens of what they want to create.  When you take the time to focus on what differentiates a company from its competition, what value it brings to its clients and the world, and what it really wants to become, the problems will automatically solve themselves.  If you are driven as an organization to create a shared vision and something is standing in your way, you will quickly find a way to remove it.   All the while, still focused on a unified vision.

To be successful in the 21^st century, companies must learn to get out of problem solving mode and into the mode of passionate creation.  When solving problems, you are by definition looking to the past and limiting the upside of your answer resulting in a real lack of creativity, innovation, and initiative, which are all forward looking characteristics.  Focusing on questions that matter, questions that lead to ideas and initiatives that create value, brings Courage, Collaboration, and Creativity to the table.  With those three ingredients, the sky is the limit in terms of success.

People ask me all the time HOW to bring more Courage, Collaboration, and Creativity into their organizations.  They completely understand the need, but are unsure how to make it happen in a meaningful way.  These are not the things they teach in Business School.  I tell them there is one key element.  If they can passionately embrace this one key element, the rest will fall into place.  The key is the leadership team being willing and able to ensure that the underlying business model (the core from which the company extends) is courageous, collaborative, and creative itself.  Because the majority of companies today are based on business models that date back to the 1800’s, this can feel like a daunting task.  In reality, it may require a lot of change, but it is also the ticket to phenomenal results.

The challenge of bringing real innovation into companies that are large and set in their traditional ways, is also what can give new companies a real competitive advantage.  Young companies can very easily and very quickly create environments where employees soar, that attract the best clients, and that ultimately enjoy greater success.  This gives a whole new twist to the question of, barriers to entry.  We may also need to ask, what are the advantages to entry.

Courage

If a company is willing to show the courage necessary to break out of a traditional models, try something new and more appealing and show its desire for collaboration through its core actions, then the employees will be much more likely to do what is necessary to engage the best clients, discover the best new product ideas, and work to their fullest potential.  Leaders must model the kinds of behaviors they are seeking.

Successful 21^st Century Businesses will be those that are always searching for something new and rely less and less on the status quo.  Always searching for what has changed, what new questions have emerged, and how it all interconnects.   They will use change as the fuel for their business model because they understand that they pace of change will only continue to increase overtime and at greater and greater rates.  They will also have the courage not to follow the herd and not to allow fear to dictate business decisions.

Collaboration

So many companies fail to harvest the energy and creativity already available inside their firms because their business models are designed to promote internal competition and silos.  If you want to promote cross-pollination and tap into the additional intelligence that exists only at the intersections of knowledge bases, then the internal business model must specifically promote those behaviors.

Creating teams that cross departments, functions, and even regions to work on organization wide projects is a simple way to begin working toward promoting a true culture of collaboration.  Promoting relationships and interaction between people who wouldn’t normally interact is critical.  Collaboration also promotes trust which will is quickly becoming one of the non-negotiables of success.

Creativity

When people are fearful of the consequences of any type of failure, they automatically go into a safety zone where the chances of failure are as small as possible.  This is a place where creativity cannot thrive, because creativity requires a certain amount of risk.  When people are not afraid of failure and know that it comes with a lot of great knowledge for success, they will be bring their full arsenal of creative tools.

Creating is a very natural state for human beings and one that fulfills our hearts and passions.  Thus when employees are free to create, try new things and receive critical feedback, their productivity will naturally increase.  Based on my two decades in the corporate world, working all around the globe, I estimate that most companies are operating at about half the productivity that is possible when employees are engaged and operating at their full potential.  This is not something that anyone really wants to admit, but we all know it is true.

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Last month, I attended the Front End Innovation Europe Conference (FEI Europe) held in Amsterdam.  One of the highlights was seeing the car in the picture above in person.  Yes, they drove it into a large conference room inside the Hilton Hotel.  It is the 2010 BMW Vision EfficientDynamics Concept car, and it is even more cool in person than in the photo.  It’s BMW’s answer to the green car revolution.  Though perhaps a little late to the game, I suspect it will eventually prove to be a huge success as they continue to do engineering with more style than most other car makers.  In addition to seeing the car, we got to hear directly from Adrian van Hooydonk, the Director of Design of BMW Group and mastermind behind the group that developed the car.  They clearly rose to the challenge of eloquently working Future Sustainability into their brand of the Joy of Mobility in a record amount of time.

We also received a lesson from Josephine Green, a well-known leader in trends and strategy from Philips Design, on Engaging with the Future Differently.  It was a real eye opener for many.  We also heard fantastic examples of innovation in conjunction with universities from Sigvald Harryson with Copenhagen Business School that left us all realizing the vastness of the untapped resources lurking around our universities.  The event concluded with a superb presentation from the World Business Council for Sustainable Development and an interactive session that literally no one wanted to leave.  All in all . . . a huge success!  If you missed Europe, don’t miss the Front End Innovation USA in Boston coming in May.  I suspect it to be equally as tantalizing.

I’ve written previously about the Pitfalls of Innovation, and I still believe that far more talk about innovation occurs than actual innovation because true innovation comes from doing not talking.  Just go to any third world country where people are forced to live with minimal resources and you will see what true innovation is all about.  It comes more from unmet needs and a gap in resources than heavily padded budgets purposed toward the never-ending replacement of old gadgets with new gadgets.  None-the-less, well done conferences such as FEI, are well worth it.

Below are the 7 Keys to Innovative.  Some are my standard favorites, and others I picked up at the FEI Europe Conference.

7 Keys to an Innovative Business

1) Multiple Approaches to Innovation Provide the Best Results

• Hire people with innovative characteristics
• Seek partnerships / the more unlikely, the better
• Lead users and co-invention can be extremely useful in some sectors
• Complex Coalitions (public/private/univ/venture/research) are coming

2) Don’t Overlook the Importance of an Innovative Business Model

• Ensure culture and vision include a commitment to innovation
• Business as usual is no longer an option for 21^st century success
• Traditional hierarchical and rigid organizations don’t foster creativity
• Change should be the fuel of your business model not what creates a crisis

3) Find the Right Balance Between Old, Adjacent, and New Business/Products/Services

• Varies between industries, companies, and brands
• Don’t chuck out the old, just for the sake of it
• How much of the value of your firm is based on its future potential?

4) Innovation Requires Optimism, Curiosity, and a Splash of the Future

• Spend more time studying the fringe / the middle is already known
• Analyze what isn’t and not what is / finding the gaps
• Understand the “big think” trends
• Get to know younger generations, they will be running things soon

5) From Linear, to Exponential, to Circular

• From “out of the box thinking” to “thinking without boxes”
• Renewable and sustainable are circular concepts and here to stay
• Constant feedback loops are critical to staying ahead of the curve

6) Cultivating the Right Mindset is 90% of the Battle

• Learning from failure is a key to success
• Blur the lines and anxiety around internal vs external
• Collaboration with competitors can be the best option in some situations

7) Leadership Sans Egos

• Cultivating trust requires the courage to be vulnerable
• Constructive conflict produces the best answers
• Business model intimacy – creating solutions with customers
• Money is a low-level motivator . . . find out what really motivates your employees

Originally published as guest post on Blogging Innovation !  Blogging Innovation is a great source for all things Innovation and they publish a tremendous amount of very useful information.

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