Physics of Business Growth: Post #4--Structure

Structure and Growth: Successful systems-aligned companies create innovative strategies, policies (especially HR), and cultures that are structured for change. Such companies celebrate success and “console” failure with lessons learned, ask questions, and are respectful, playful, open to new ideas, and curious. Best Buy serves as a good example with its innovative inverted pyramid—customers on top, employees next, finally servant leaders. Three approaches to innovative structure that promote growth: 1) Structure innovation initiative inside the company. Example: At Best Buy, the front of the house management is entrepreneurial and customer centric, but the back of the house is run by headquarters; 2) Segregate innovative initiative outside the company—like biotech where it may take years and cost a lot; 3. Build hybrids, like at IBM under Gerstner—Emerging Business Opportunities (EBO) to grow new opportunities that can become their own P&L organizations.  Engaged employees result from policies like promotion from within, good HR policies, perceived fairness in compensation and promotions, constructive feedback, equality, stock ownership and leader humility and stewardship.

Physics of Business Growth: Post #3--Systems

Growth Systems: Alignment accelerates growth. It does no one any good to have internal systems bumping into each other—stifling growth. Thus, HR policies, reward systems, culture and structure (to mention just a few) need to be tested and aligned to facilitate growth, not frustrate progress. For example, if CEOs are rewarded for quarterly growth, they’ll likely take short-term gain over the long view—creating just the opposite of growth. “Asking for new behaviors in a system that still encourages, measures, and rewards the old behaviors is a complete waste of time or, worse, engenders cynicism and mistrust.”  Successful growth companies—like Best Buy, Southwest Airlines and UPS—are rare and produce an engaged workforce; humble, passionate leaders; and a learning environment.

Phyiscs of Business Growth: Post #2--Mindsets

Creating Growth Mindsets: Leaders need to create the kind of environment where innovation can thrive. Chance favors the prepared mind, and mindset determines choices. A learning mindset, a broad repertoire of experiences, and customer empathy all create the kind of mindset required to thrive in an uncertain, adaptive environment. Cognitive diversity especially improves decision quality. Some creativity engineering techniques: Challenging assumptions; Connecting unrelated ideas; Visualizing how the future might look; Collaborating with diverse people (and customers); Improvising when necessity requires it; Reframing by asking a different question; and, Playful experimentation.

Physics of Growth: Post #1--Overview

Overview: The shift in the natural laws of the “physics” of business, from steady state to uncertainty, calls for a fundamental shift from business as usual to innovation and experimentation. To become a growth company, approaches must change when underlying assumptions change. Despite understanding this shift, fundamental mindsets, corporate values, systems and processes can be misaligned and work against critical, even survival, innovation. Research shows that growth companies leaders are both humble and passionate. The workforce is engaged, loyal, and really knows the customers.  The business has a simple strategy that everyone understands. These companies have a growth formula: Creating growth mindsets, building internally aligned growth systems, and having a growth process .
The Physics of Business Growth: Mindsets, System, and Processes (Stanford University Press, 2012) by Edward Hess and Jeanne Liedtka, reviewed by Steve Gladis, March 2015

Zero-to-One: Post #8 FINAL--7 Questions

Seven Critical Questions 

Every Business Must Answer

1. Can you create breakthrough tech instead of incremental improvements? (Engineering);

2. Is now the right time to start your particular business? (Timing);
3. Are you starting with a big share of a small market? (Monopoly);
4. Do you have the right team? (People);
5. Do you have a way to not only create but also deliver your product? (Distribution);
6. Will your market position be defensible 10 and 20 years into the future? (Durability);
7. Have you identified a unique opportunity that others don’t see? (Secret). 

Zero-to-One: Post #7--Thiel's Tips

Thiel Tips.  Keep corporate boards small—no more than 5 unless you’re publically

traded; avoid part timers—either people are on or off the bus; CEOs of early stage startups should never make more than $150K to encourage innovation; equity can align people, but should align it to risk—the more risk and future orientation, the more equity.  However, even then be judicial about giving equity away—you want people fiercely loyal to your mission; define roles and keep it simple—maybe focus on only one critical role per person; incorporate distribution into design of a product or it will fail; complex, large scale sales don’t require salespeople but rather the CEO or senior exec; a product is viral when users invite their friends; paying people moderately ($20) to sign up and invite friends works; poor sales rather than bad product is the reason businesses fail; need to sell company to the press through media; computers won’t replace but will complement people—the future will be about how computers can help humans solve problems.