realcondolife

Near the close of 2019, I was fortunate to attend The Collective an event in New York City hosted by CB Insights. More than 30 live interviews were conducted onstage with key executives in industries ranging from mattresses, cars and flowers to pharma, banks and tech giants. Despite the wide array of topics, the lessons were aligned.  Whatever the industry, you’re in the business of collaboration and innovation. Even if the space you’re in is just starting to catch up (Proptech anyone???)  I will focus here on the two speakers that resonated with me and cover some high-level “lessons learned” from others. 

Jim McCann
1-800-FLOWERS Founder and Executive Chairman

Jim McCann took the stage first and candidly discussed how his business was on its 5^th wave of reinvention. Asked if those “waves” drove the business or the business drove the waves, he said it was a bit of both: “You have to be aware and respond to forces upon and within your business.” In the first wave, he set up a single retail flower shop in NYC, Now as the company prepares for its sixth wave, Jim is excited about the expansion of technology into their business—and using it to help customers create increasing and enhanced relationships.

What’s Old is New Again

1-800 Flowers is using technology to mimic the relationship they had with the 40 customers of their first flower shop in 1976, and adapt to its 40,000 customers. He doesn’t plan to abandon other channels (like retail) as they are all relevant for different reasons. 

It was validating for me personally to hear the inside track on strategic initiatives some wouldn’t necessarily define as innovation. This was a good reminder that innovation extends beyond “tech.”

Harry and David

The acquisition of Harry and David, a gift basket company, was made to expand the company’s offerings of gift brands and gourmet foods and to be recognized as “the leading destination for all of our customers’ celebratory and gifting occasions.” Before making acquisitions based on that positioning, they had to weigh whether to outsource or build a service themselves. McCann shared that timing played a critical part in that decision, “20 years ago we were great at creating. But we became bigger, more bureaucratic (and less entrepreneurial).” They felt the company would be better at a vertically integrated approach and selling other people’s products.

They recently made an investment in an Israeli company that’s a (free) peer-to-peer support platform focuses on how to deal with life’s challenges. One that’s inevitable and common to all of us is losing a loved one. What’s also common is sending flowers to express your condolences. Connecting the dots?  They made a strategic move to follow their customers.

Back to the decision-making process, it’s not that they hadn’t thought of doing a similar platform on their own, but as McCann said, “We had this idea for a really long time…but never got around to it.” Additionally, there are new dynamics of small companies with agility partnering with really large companies, McCann shared.

Managing Retail Disruption

McCann’s response to retail changing was also part of their strategy. Aside from the obvious question: How do you compete with giants like Amazon? “We don’t, we work with them,” the company incorporated the changing landscape of retail into their approach. “We’re looking to do interesting things with retail, and learn how to get people to interact in person.”

Some people don’t get the rationale behind hosting a dinner series that features top chefs and Harry and David products (of course) or craft workshops on how to create holiday centrepieces at 1-800-flowers locations. McCann sees the long-term picture. “It may not add up to significant customer count, but it sure changes how people think about our brand.”

McCann’s final lesson on bringing innovation into your business was a common theme over the next two days. Be curious. “You have to be on the lookout for what’s the next big thing and either partner with them or learn from them. Everything around you is changing all the time—so if you’re the one thing that’s not—you’re going to end up in trouble.”

Rita McGrath
Author of Seeing Around Corners and Columbia Business School Professor

Rita McGrath opened her session with a well-known (often forgotten) line from Ernest Hemingway’s The Sun Also Rises.

“Gradually, then suddenly.” This was the response to the question “How did you go bankrupt?”

This describes what happens in our businesses, our relationships and even our physical and emotional selves when we myopically continue to do what we’ve always done, do it well (or not-so-well) and enforce our habits, good or bad. We don’t use our peripheral vision to see what’s outside of ourselves. And as a result we are taken by surprise when things don’t go according to plan.

McGrath shared innovation is simply about looking for strategic inflection points. These are what challenge the assumptions your business was based on. And they are important, because as we all know, nothing ever stays the same. McGrath illustrated her point with the example of men’s razors.

A Competitor’s Sneak Attack

Gillette’s competitive advantage was to continually “one-up” the competition by delivering incremental improvements: first the two-blade razor, then the three. When Schick came out with a four-blade razor, Gillette’s natural response was to launch a five-blade.

Meanwhile… a small start-up was thinking about the broader picture: the things and business model that were annoying to the customer. Like, for a product so small, it’s expensive. And you have to leave your house to buy it…repeatedly. And when you go to the store, you have to wait for management to unlock the shelf so you can add it to your cart.

That’s how Dollar Shave Club was born. On top of solving the pain points for the customer, they created a subscription business model, acquiring customers by leveraging YouTube and Facebook to create brand ambassadors, rather than spending exorbitantly on traditional media. This model didn’t even cross Gillette’s mind. This is innovation. It’s not always in the number of blades.

McGrath explains that “you have to look for the snow melting from the edges. You have to get out to the edges of your organization to really understand what’s going on.”

Increasingly, industries and companies are doing this. Think Warby Parker, Casper. Direct-to-consumer models that sprouted as a result of identifying what was dissatisfying to the customer.

Her takeaway was to remember not to frame the problem statement in terms of the industry we’re in, but rather in terms of the outcome for the customer.

And to put it in the words of Silicon Valley entrepreneur Steve Blank, “Get out of the building. There are no facts inside the building so get the heck outside.”

———

OTHER LESSONS LEARNED –

SERTA SIMMONS  – JT Marino – Re Merger with Tuft & Needle –  You can’t expect a company you acquire to snap to the grid and “fit” you or your company’s culture—they will lose the magic of what made them unique and appealing in the first place.  Remember that it takes human capital to spur growth, not just financial capital.

MICROSOFT – Savina Dalla – Microsoft achieved inorganic growth through partnerships and decided on those that fill a gap and/or take friction out of the process for the end customer.  They’re also a great example that it starts from the top. Microsoft CEO Satya Nadella takes an ongoing growth mindset and when it comes to building a team and selecting talent he looks for the same.  He’ll choose the “learn it all” vs. the “know it all” every time (even if the former has a deficiency).  This stems from Microsoft’s mission statement which empowers every person to do more.  They ensure there’s an easy path to bring in ideas and they realize that there’s no one better equipped to do that than our own people.

PHARMAVITE – Tobe Cohen – Key learning is to always keep an ear close to the ground.  You soon discover ‘the higher up you get, the better the news you hear’. Good leaders ask, How do I help you grow? What obstacles and barriers can I get out of your way?

KOCH DISRUPTIVE TECH – Jason Illian – Stay in your lane. Their criteria for investments is a principled entrepreneur with a shared vision and values to make society better. Illian shared that you have to believe in creative destruction and try to destroy your own company. We are always on the lookout for companies that will destroy us. They have to create value for the shareholder and for society – and it should be a mutually beneficial partnership. Other words of wisdom were to be careful not to invest in or to chase what everyone else is chasing and to remember that when it comes to risk, it’s okay, provided that you’re compensated for it and that there’s more upside in it for you if you take it on.

US BANK – Dominic Venturo – Be cautious of the pirate ship model of innovation. A genius in a room by himself and not sharing with anybody else, doesn’t get very far.  Innovation requires socialization and collaboration in order to successfully test new ideas. Storytelling is also important in order to get people to buy in to the problem. It’s also critical to determine which metrics will demonstrate if you’ve been successful.

SPRINGBOARD ENTERPRISES – Kay Koplovitz – Koplovitz is well-known as Founder of USA Network and for creating the business model for cable networks by introducing two revenue streams – licensing and advertising. She also introduced satellite technology.  Koplovitz was the first woman to head a television network and she lightheartedly joked with the audience that in the 1970’s she was rated the 8th most powerful man in media.

It makes perfect sense that today, Koplovitz co-founded and chairs Springboard Enterprises, a global platform for women entrepreneurs, investors, and industry experts dedicated to building scalable, sustainable women-led companies. Kay’s words of wisdom regarding innovation were of course to remain curious, but she also advised “don’t think about what is – think about what is not – it’s not about doing better what someone else has already done. Take your time to think about what would make your company profoundly different.”

Koplovitz also stressed the need for diversity and inclusion in order to innovate. She shared an Accenture study finding that companies with female leadership are 11x more innovative than others. The reality however, is that despite recognizing the fact, we don’t all act on it. Kay pointed out that women are currently 34 of the Fortune 500 CEO’s and they are 6-8% of the talent in the C-suite. A word of caution to those that don’t start being inclusive, as they’re at risk of being left behind.

———-

And while we’re on that note, it was interesting that on the final day of The Collective before heading back to Toronto, a  gentleman sitting in front of me, turned around to ask me if I personally thought there was sufficient representation of women at the event.  He strongly believed that we need more of them and that the skillsets they bring to the companies and boards that they’re a part of, have a direct impact on their bottom line. I pondered his question, understanding full well the misrepresentation of the sexes in this space. It’s not new to me. I’m in a similar world.  I glanced around the room contemplating his question and then had a chuckle.  I didn’t have to do a quick head count. I could rely on my usual gauge that gives me a pulse on the subject (and that gave him a chuckle too).  “Yes,” I told him, “There’s a fair amount of us – I had a bit of a lineup to use the women’s washroom.”

Now, that’s insight 🙂

And while you often walk away from event such as these a bit energized but also overwhelmed at what’s to be done… here was the kicker.

Other great speakers worth looking into on their perspective on innovation were:

SCOTT GALLOWAY – The Four

ERIK LIUM – Mount Sinai Innovations

Check out the full list of speakers here https://events.cbinsights.com/thecollective