Then, just a few years ago, we thought we were primarily a company focused on small businesses, but now, with QuickBase, we have a system that's used by 53 of the 100 largest companies in America. We built a system for small work teams and it got adopted by midmarket and Fortune 100 companies. These things emerged from the creative work of our people and the unpredictable maelstrom of the market.
So you don't just say to an employee, "Hey, that's not what we do here"?
I do say words like that, when it comes to ethics, values, and how we treat people. On those issues, when an employee wanders off the ranch, it's important to be clear.
At the same time, when it comes to creating new products and businesses, the standard of success is not "what we do here." To me, success is changing customers' lives for the better, solving their important problems. That means we're constantly trying new things, things that have not been "what we do here."
I am often asked by employees, customers, and others to define the strategy of the company I lead. It sounds to me, however, as if you are saying that I'm making a mistake if I try too hard to answer that question.
Exactly. I think it's valuable to have a vision that's passionately held, but you also need the agility to change it. I've learned that adhering to a strict business definition would have prevented some of our bigger successes. If I had done that five years ago, 15 years ago, I would have defined us away from uncovering huge markets that we now serve. Instead, I focus on where we can find an important but unsolved problem for customers. That's what delivers our home runs.
Is there any advice you'd give to somebody going into business today?
Plastics.
Really? Oh, I get it, you're making fun of me by quoting The Graduate.
I certainly wouldn't pretend to know what business any individual should enter. The advice I would give is to listen to your heart. You can't succeed at something you don't love. You must find something you just love doing and find through that passion a way to change the customer's life, to change the world for the better. That's where your entrepreneurial destiny will lie.
That sounds corny, but I've found that it's a very common driving force for entrepreneurs--the deep belief that they are making the world a better place.
No question. It's hard being an entrepreneur. You get sand kicked in your face all the time, and worse. It takes undying love and passion to keep going. If your mind is wandering to something else you'd rather do, go do that.
Do you think the technology that's widely available today has made it easier to become a successful entrepreneur?
Yes, with a few important caveats. It is certainly easier to start and easier to scale a business and to deliver the kind of quality and service that only a large business could deliver in the past.
What are the caveats?
One is that your weaknesses will get broadcast more widely. Word of mouth is getting broadcast and amplified by the Internet. Think of Zagat, TripAdvisor, and Amazon reviews. Customers are gaining a megaphone to tell all about how you treated them.
Good companies that treat their customers really well are going to pick up more customers. And companies that treat customers poorly will suffer. To me that's good news.
But you don't have a lot of time to get things right. This is going to force business leaders to figure out how to be delivering better for their customers every week. Good enough just isn't good enough. Customers can now vote publicly and come or go in mobs.
Smaller companies historically have been slower at adopting new technology. Do you think that's changing?
Yes, because technology has gotten cheaper. Installing a computer-controlled manufacturing system 30 years ago was really expensive. General Motors (NYSE:GM) could do it, but not a relatively small company. That has changed. In fact, it's more efficient now to be small.
Smaller is better? There was an award-winning film that came out a few years ago called The Corporation, which basically argued that large companies are getting bigger all the time and dominating our lives more and more.
It used to be that there were economies of scale in almost everything. The most efficient computers, in terms of speed and cost per bit, were the Cray and the IBM 360. But in the 1990s, there was a major reversal. The cost per bit suddenly became cheaper on small disc drives than big disc drives. Microprocessor-based computers became cheaper than any other form of computer. It now costs less per employee to install technology in smaller companies than it does in larger companies.
So smaller companies now have a competitive edge?
Yes, I think that's what this change means. I also would tell growing companies to be wary of someone trying to sell a technology solution that requires a lot of people to get it to work--system integrators, consultants, and the like. You are going to end up with something that drags you down, something that is hard to maintain and can't change as you change.
As somebody who runs an increasingly large company, do you still in the long run feel that there's a place for big companies?
The point is not size, it's agility. Agile firms of any size, small or large--think Toyota--will win. Rigid firms will disappear.
There's a natural progression that companies go through as they grow, moving from hungry and innovative--a "have not" mentality--to defensive and protective--a "have" mentality. That's when bureaucracy seems to set in.
The question for corporations is, what is the fountain of youth? What keeps your company forever young and revolutionary and willing to embrace change? Some companies seem to have found it. Procter & Gamble (NYSE:PG) is 170 years old and is continuing to invent and innovate and be customer focused. What I learned when I worked at P&G was to remain focused on solving the customer's problems. That's what keeps your company young.
A lot of leaders want the system underneath them to affirm their choices, to prove them right. Is there a basic humility you have to have to let the customer be the boss instead of the boss?
That's deeply rooted in my beliefs. The future belongs to humble leaders. Humble to let your people lead and be led by them. Humble to make the customer your boss. Humble to listen and listen intently. Humble to know that almost all of the best ideas come from others. Humble to admit you were wrong, and tell your team. I try to live this way every day. I usually fail, but I keep trying.
