TrendHunter.com founder Jeremy Gutsche offers up tips to help your business stay innovative even as it becomes more predictable.
Jeremy Gutsche of TrendHunter.com advocates making your small company look big.
Predictability is one of the most important attributes of any business. Owners, investors, and acquirers all want to be able to see a reliable stream of profits well into the future.
But almost by definition, predictability can be boring. Those same owners, investors, and acquirers want to see growth, which comes from selling new products and services and/or winning new customers.
So can you be predictable and innovative at the same time?
I put the question to Toronto-based Jeremy Gutsche, author of Exploiting Chaos and founder of TrendHunter.com, a business that tracks emerging trends for customers like Google, Pepsi, and Cadbury.
Based on my conversation with Gutsche, here are five ways to make sure your company doesn't become boring on the journey to becoming valuable:
1. Set up a gambling fund.
Put aside some money to gamble on new ideas. When the BBC, the U.K.'s national broadcaster, was stuck in a programming rut, it set up a gambling fund for ideas that failed the usual new-program screening process. Producers could apply for gambling funds if their idea was cut, which is how The Office, one of the BBC's most successful programs of all time, was funded.
2. Think like a portfolio manager.
Like a money manager, envision your business as a portfolio of investments balanced to generate the best risk-adjusted reward over the long term. Gutsche recommends having some areas of your business that are reliable and predictable while reserving part of your portfolio for trying new things.
3. Reward sound decisions.
Most companies pay their employees based on results and outcomes, which means the best employees want to work in the mature area of the business that is most likely to generate good results in a predictable way. It also means your best employees stop taking risks. Instead, Gutsche recommends you reward good decisions rather than outcomes. If you reward based on decisions, you can still incent employees to try things that may be risky as long as their decision-making is sound.
4. If you're small, act big; if you're big, act small.
Small companies often have lots of ideas, but customers can be hesitant to be the first one to try them. Gutsche recommends small companies merchandise their client list and media hits to build credibility. Gutsche himself projects a larger-than-life image. If you go to TrendHunter.com, you'll see a 'who's who' list of marketers, from eBay to Microsoft, which Gutsche says gives visitors confidence to take a flyer on his business that's only been around since 2006.
Likewise, Gutsche suggests the big guys act small by carving off new products into separate companies. Similar to the way RBC and BMO launched their credit card processing joint venture under the Moneris moniker, have a separate brand and stand-alone workspace to give your new business units an entrepreneurial feel.
5. Give your employees playtime.
Set aside some company time each week or month for employees to use to work on pet projects. 3M, of Post-It note fame, popularized this technique, which has since been adopted by companies like Google and Amazon, who give their engineers time to tinker.
By following Gutsche's advice, you may just be able to create a predictable-growth company, which is the most valuable company of all.