Inc.'s editor looks at how companies use creativity as a competitive advantage; Britain's equivalent of the Inc. 500; and CEOs who've profited by selling and then buying back their own companies.
Do yourself a favor: go out and buy a copy of The Creative Priority: Driving Innovative Business in the Real World, by Jerry Hirshberg (HarperBusiness, 1998). Read it through once, and then go back and read it again.
Don't confuse this exercise with homework. The Creative Priority is a beautifully written and gripping organizational detective story. The drama begins in 1979, when Hirshberg, a young hotshot car designer working for General Motors, receives a call from a recruiter for Nissan Motor Corp., which wants him to create a world-class design facility in the United States. Thinking it over, Hirshberg realizes this is not just another job offer. It's the chance to build from scratch a radically different type of business.
Since the early days of the Industrial Revolution, after all, businesses have been organized to maximize efficiency. Although they may recognize the value of creativity, they tend to treat it as an ancillary activity--something to be encouraged away from work, in retreatlike settings. But what would happen, Hirshberg wonders, if creativity itself were to become the organizing principle of a business? Could you enhance performance in the traditional areas of concern--quality, productivity, sales--by organizing all of a business's resources around the goal of sustained creativity and innovation?
Hirshberg thinks so. He accepts the offer and launches Nissan Design International (NDI), which becomes a kind of organizational laboratory that explores the author's theories, while turning out an impressive body of design work. (Among other things, NDI goes on to produce the design for the original Pathfinder.)
Along the way, Hirshberg and his colleagues discover 11 key strategies for fostering and sustaining what he calls the creative priority. They include concepts like creative abrasion (using internal friction as a source of creative energy) and hiring in divergent pairs (recruiting with a focus on the character of the group being formed, rather than trying to find the best person for the job). The strategies are both fascinating and immensely practical for those who work in idea-intensive environments--and who doesn't these days?
And yet, in the end, what makes The Creative Priority so compelling is not so much its insights into the nature of organizations as its implications for the people who run them. In an era when intellectual capital is the only source of sustainable competitive advantage, the leader's role is to create a work environment that can attract and keep the most creative and knowledgeable employees and consistently draw out the best in them. The 15-year odyssey chronicled in Hirshberg's book suggests that the person at the top can have the greatest impact not by managing, coaching, selling, strategizing, or deal making, but through design--the design of work itself.
An Inc. 500 for the Brits
Readers of London's Sunday Times recently got their first glimpse at the British equivalent of the Inc. 500. The list is called the Virgin Atlantic Fast Track 100 and ranks the fastest-growing "unquoted" (what we'd call private) companies in the United Kingdom. The project is the brainchild of Dr. Hamish Stevenson, former co-owner of a British venture-capital journal and Virgin Atlantic Research Fellow at Templeton College at Oxford University. The lead sponsor is Richard Branson, poster boy for the entrepreneurial movement in England and chairman of Virgin Atlantic Airways. "We modeled this after the Inc. 500," Stevenson says. "Our goal is to focus public attention on the emerging entrepreneurial subculture in the United Kingdom."
As it turns out, that subculture looks remarkably similar to ours--in more ways than one. The number-six company just went into receivership. "Its demise was an important reminder that entrepreneurship is a messy process," says Stevenson. "But if you want the benefits--the job creation and the wealth creation--you've got to accept the losses as well."
'It turns out that euphoria is not a business strategy.' -- Wired magazine founder Louis Rossetto, on the overhyping of digital technology, from "The Digital Bubble," by Kurt Anderson, in The New Yorker, January 19, 1998
These are tough times for most companies that sell to the Fortune 500, as they find themselves contending with the turmoil brought on by waves of mergers and acquisitions and round after round of reorganization. But a growing number of entrepreneurs are figuring out how to make the best of the situation. How? By rethinking what they sell.
Instead of pitching their products or services, they find a big corporation that wants to buy their company. Then they just wait for the acquirer's next change in strategic direction--whereupon they buy the company back for a small fraction of the original selling price.
"I've sold my company and bought it back twice in the past three years," one CEO told me over dinner recently. "It's gotten to the point where I don't think of myself as an entrepreneur anymore. I'm running a management-buyout fund that just happens to have a portfolio of one company."
Thriving on Structure
Given the popularity of chaos theory in business circles these days, I thought I'd offer my own chaos theory of management: the more chaotic business conditions become, the greater the need for organizational structure, discipline, clarity, and simplicity.
In that spirit, we've been at work revamping the front and back of the magazine. The editorial side of the restructuring was orchestrated by deputy editor Karen Dillon and senior editors Joseph Rosenbloom and Martha E. Mangelsdorf. The art direction was choreographed by Laura McFadden. Our hope is that the changes will help make the material we publish ever more accessible--and the world we write about ever more comprehensible.
Contributor David H. Freedman's " Corps Values" profiles one lean-and-mean management machine--the U.S. Marine Corps. "Every second of the 36 hours I spent on the USS Tarawa," he admits, "I was on hallucinogenic levels of Dramamine."
After the voluminous response to his January column, Jeffrey L. Seglin, our fledgling ethicist, raises the stakes in the second installment of Black and White. His subject this time: Should you make full restitution after your business goes bust?
Most growth companies have more creative ideas than they can handle. "Their challenge," says Susan Greco, "is to turn those ideas into something tangible." In " Where Great Ideas Come From," she looks at how smart companies implement great ideas.
In " The 9-to-5 Start-up," Joshua Macht writes about a company trying to promote balance between work and life. His own balancing act includes writing at Inc. while working toward his master's degree in technology and education at Harvard.