Innovative ideas are the competitive edge for most entrepreneurial companies. Here are some myths about where good ideas come from and ways to stimulate idea-generation at your company.
How do smart entrepreneurs know where their next idea is coming from? Simple. They give it top priority
Looking back on it, it would be tempting to dismiss Mike Stephenson's epiphany as the by-product of what can happen when entrepreneurs and alcohol mix.
After all, Stephenson openly admits he can't even remember what kind of wine he was cradling in his hands when the idea that would remake his business lodged itself in his brain. Maybe because the bottle's contents were safely corked inside. The president of Great Lakes Hybrids Inc., an agricultural seed supplier based in Ovid, Mich., was too intoxicated by the wine's packaging to take a corkscrew to it. Dining in a noisy Manhattan steak house with his accountant, a German investor, a New York City investment banker specializing in agriculture, and assorted lawyers, Stephenson actually began reading the label aloud. "There was a personalized message. The vineyard owner talked about harvest conditions, this list of things the crop had gone through to bring these grapes along. There were family details, and he'd signed the label," Stephenson says, recalling details of that 1988 night as if it were last week. "The owner's name was right on the bottle, and that impressed me." Hey, he thought, I can do this at my company--we'll sign our names on our bags of seed corn; we'll make a personal statement about our quality.
The branding idea was nothing less than a godsend. "For years we'd been looking for ways to pull ourselves out of the commodity market, set ourselves apart," he says. "It was a battle trying to move away from selling on price." As he explained this to his dining companions, they listened but gave no reaction. Stephenson didn't much notice. "I was in my own world at that point," he says.
When he got back to the office, he started talking to people in the hallways, one or two at a time, almost shyly bringing out the bottle. "My sales manager got the idea, and so did my plant manager and the production people," he says. "But they asked a lot of questions that made me think--they were thinking more about how do we implement this, and why."
Ultimately, the inspiration that sprang from a message on a bottle triumphed in a new line, christened Signature Seed. The line helped boost the company's sales from $7 million in 1988 to $18 million by 1992. And it's still the company's premium brand.
The annals of entrepreneurship are, of course, filled with such crowning moments. And everybody knows the type of CEOs who tend to star in such episodes: the tireless searchers who--on top of running their fast-growing companies--never seem to run short of either ideas or new places to scavenge for them. The same gut instinct that served them so well in turning an idea into a business proves just as adept at spinning out a steady stream of innovations, the kind that leave everybody around them wondering, "Where'd they come up with that?" Until recently, the answer probably wouldn't have provided much insight. CEOs looking to rear a steady brood of well-behaved ideas could do so by popping in at an annual industry trade show or by taking in the occasional customer comment. But there's a reason such simple--indeed, civilized--approaches don't work anymore: competition.
As industries consolidate and product cycles shrink, even the best ideas--with patents as their pedigrees--come under assault practically on arrival. Hot products, no matter how unlikely their success (read Beanie Babies), are the most obvious of those endangered species. And just try selling anything from batteries to beds over a toll-free line (or the Internet) and you'll find yourself reduced to me-too status. "The cycle of growth, of decline and renewal, is so compressed today," notes Jim Amos, CEO and president of franchisor Mail Boxes Etc., which has faced stiff competition. "The market changes so rapidly that at any moment you have to give up what you are for what you could be." That's a backbreaking burden for any CEO.
In fact, it can be downright demoralizing. "Coming up with new ideas used to be one of my favorite pastimes," says Warren Schlichting, cofounder of Yucatan Foods, a $3-million company in Santa Monica, Calif. "I simply don't have the energy or the motivation anymore."
Who does? As much as Mike Stephenson's story may sound like the proverbial lightbulb-over-the-head experience, what happened after that dinner is much more illuminating. As the bottle of wine went from hand to hand at Great Lakes Hybrids, Stephenson's original idea changed and grew. The whole experience, Stephenson says, "made us focus on quality issues." The company decided to go beyond what the U.S. Department of Agriculture required seed-corn suppliers to provide on their tags, he says. Then came the marketing ideas; the company's product tag got a redesign--as did its brochures, followed by its fleet of trucks. Though Stephenson provided the original spark, he hardly claims credit for all that followed. Who came up with the moniker Signature Seed? Ask him, and Stephenson heaves a nearly audible shrug. It's not his concern. He knows he did his part.
Stephenson and entrepreneurs like him understand that generating ideas in the name of fueling growth is a wholly different task from the "Aha!" experience that gets a company started. The sheer volume and quality of ideas a growing company consumes means that it's no longer feasible for a CEO to take each one firmly in hand, clutching it tightly through every perilous intersection. The passion that enabled you to steamroll everyone who said your business wouldn't fly will exhaust you and everyone else if it's always on display. Better to treat idea generation just as you treat, say, hiring: preserve the part of the process you feel you need to do, and make sure the company can carry out the rest. Stephenson, like many entrepreneurs, considers himself a world-class snoop; he fishes out ideas and then sends them on for refining.
