Topics >  Leadership and Managing >  Strategy and Planning >  Peer Groups > 

Where Great Ideas Come From

Besides serving to make information more compact, Blohm emphasizes, conferences make it more visual. At a recent conference he saw three examples of how people are creating electronic books, which MathSoft has been working on, "and it became clear to us that we could be doing things better with multimedia." The value, he says, was the vividness of the hands-on experience. In fact, after seeing all the opportunities presented, he decided to hire a multimedia expert.

* * *

Consort with Competitors
Casting at least sidelong glances at competitors -- to note what they're producing, how they're presenting themselves -- is standard operating procedure in business. But talking with competitors and trading strategic information is a little more unusual -- and if it's pulled off, it can be an enormous source of ideas.

Although Joan Cooper, cofounder of $16-million children's clothing catalog Biobottoms Inc., in Petaluma, Calif., says that competitors aren't her primary source of ideas about how to run her company or what products to offer -- she cites her management team, a regional group of other catalog owners, and the company's 50 investors as other sources -- she says competitors have been able to offer rare insight into what works and what doesn't in the industry.

Biobottoms has traded mailing lists with competitors from its start. At a recent trade convention Biobottoms even went so far as to host a cocktail party for its competitors. In the spirit of "you share a little, I'll give a little," conversation ranged from customer-acquisition strategies (How did your ad in the New York Times pull? Can ad campaigns pay for themselves?) to relationships with vendors (How's their quality? How'd you get them to hold backup product for you?).

"We've made a concerted effort to open the communication in our niche of the industry," says Cooper. "It's like anything: if you go out closemouthed, you'll get a similar reaction. If you go out with good feelings, you will attract people."

* * *

Turn Customers into a Nonstop Focus Group
Perhaps the biggest source of ideas both broad and narrow is customers. Respondents to the Inc. FaxPoll named customers as the second-most-frequent idea source, after magazines. Some CEOs regularly take time to work the customer-service phones and hear what kinds of calls their companies are receiving; others visit top accounts and ask what they could do better and what their competitors are offering.

John Schaeffer, head of Real Goods Trading Corp., a $7-million catalog company in Ukiah, Calif., has taken the idea of drawing insight from customers even further. To begin with, he's turned the catalog of energy-saving products into an ongoing conversation between him and his customers. Laid out like a community magazine, with political articles and commentary, the Real Goods catalog elicits pages of passionate letters about the energy movement, previous letters, and Real Goods products. "The letters spur new ideas all the time," says Schaeffer. "When I started the company, I was taking orders, talking to vendors. Now I do more marketing and merchandising, so letters keep me in touch with the market."

Schaeffer credits letters with prompting the idea to produce a more simple black-and-white version of the catalog for steady customers who disdained the company's mainstream color version. Customers also provide tangible suggestions for products they want Real Goods to carry: Schaeffer estimates 10% of the catalog selections are customer inspired. Last spring the company put out the call for products that Real Goods ought to manufacture, and it already has received 300 responses.

But the biggest idea Schaeffer got from customers didn't have to do with products -- it had to do with cash. Several years ago customers sent Schaeffer two or three letters a week asking if there was a way to invest in the company. "I navely came up with this idea that sure, there's a way to invest -- send money." Why not, he mused, offer people 10% interest to lend money to Real Goods, which was better than the 8% they could get from certificates of deposit and was less expensive to the company than the 12% banks were charging at the time? He put a notice in the catalog, and customers promptly sent in $250,000. Spurred by the response, he took the original customer idea to its logical extreme and did a formal public offering under the nascent Small Corporate Offering Registration program, enabling Real Goods to raise $1 million with minimal paperwork. Once again, almost every investor came from the company's zealous customer base.

* * *

Take Advantage of Internal Technologies
Talking with people in a growing organization becomes more difficult as the number of players expands and the interaction with each shrinks. "Usually, managers get information from other managers, but I knew there would be bottlenecks or control freaks who'd clog the process," says Mac Lewis, CEO of Computer Network Technology Corp., a $22-million Maple Grove, Minn., company with 200 employees. One modern prescription for spreading ideas and comments more widely is electronic mail. In addition to giving greater access to information to greater numbers of people, electronically connecting a workplace means that ideas can more easily flow to the CEO. In companies connected by E-mail, anyone can "carbon" (that archaic term) a message to company managers. And at companies with electronically connected computers, a CEO can tap into common files and get updates on issues that might otherwise not pass his or her way.