Every failure looked like a winner
Intuit founder and former chairman Scott Cook once said, “For every one of our failures, we had awesome spreadsheets,” explaining that what looks good on paper doesn’t always work in reality. If fact, “nine out of 10 companies that succeed start out following the wrong strategy,” according to Innosite Ventures managing director Scott D. Anthony. “New businesses can’t be forecast,” he told a group of Management Association of the Philippines (MAP) members last week.
Anthony was in town for a series of meetings, and agreed to speak over lunch with MAP members. He has coauthored or authored three books on innovation, his first with Harvard Business School professor Clayton Christensen. Christensen is a leading thinker on innovation, and Anthony’s original mentor, it seems. He was Christensen’s senior researcher before joining Innosight. Anthony’s latest book is The Silver Lining: An Innovation Playbook for Uncertain Times (Harvard Business Press, 2009).
Formerly president of Innosight’s consulting arm, Anthony has transformed himself into a venture capitalist (or should I say free-market entrepreneurial risk-taker) based in, of all places, Singapore. In 2003 and 2004, Anthony led a project to help the government of Singapore understand how to create an environment that fosters entrepreneurialism and innovation in the nanny state. I couldn’t help but wonder how that went, and asked him what he was doing living in Singapore, which is known more for its sprawling government corporations and regional multinational headquarters than entrepreneurship.
Anthony gave me four reasons, noting that he is “bullish” on Asia and the opportunities it presents this century. First, he agreed that there are a lot of large companies in Asia that need fixing in innovation terms. Earlier during his talk Anthony had pointed out that Asia’s greatest brand in electronics-Sony-missed all of the recent innovations in consumer technology, including the iPod, Kindle, Wii, and the Flip, a digital camera mostly used to create online videos.
His second reason is that Anthony expects Asia to grow strongly for the next 20 or 30 years, explaining his bullish perspective. Most experts agree that signs are good this will be Asia’s century, or at least the next two decades. That’s not at all certain, however, particularly if tension between the world’s two largest trading partners-China and the U.S.-continues to grow. China’s biggest boosters in the U.S.-American multinationals in China-are increasingly unhappy with China’s perceived unfair trade practices.
As a result, momentum to sanction China by introducing protectionist trade policies threatens that country’s economic momentum. This year, China expects investors to pour in about $100 billion into the Chinese economy, creating millions of jobs. However, if China’s access to the U.S. market is hampered because of its moves to limit access of U.S. companies to its own, all bets are off. Influential Nobel prize-winning economist Paul Krugman is advocating a 25% surcharge on goods from China because China refuses to subject its currency to market forces to ensure its exports remain cheaper than U.S. products. Prosperity is never assured and prospects can quickly unwind.
The third reason Anthony chooses to live and work in Singapore is that Asia “is a great lab for new businesses.” Innosight Labs helps entrepreneurships get on their feet and try out new innovations, which leads to his fourth reason for being in Asia, “interest in emerging businesses.” Anthony said that with lots of advice and mentoring and not much initial capital, it’s possible to create new, exciting businesses.
To illustrate how companies become innovators, Anthony referred to two other well-known experts, first reminding us that Charles Darwin didn’t argue that it is always the fittest that survive the evolutionary development process; rather, that the most adaptable to change survive. For Anthony, companies that are best suited to adapt to and manage change become enduring companies.
He also suggests that to be comfortable with change, companies should be on a never-ending search for “wild” ideas. To illustrate, Anthony looks to Pablo Picasso, who said, “Good artists copy; great artists steal.” Anthony said, “Failure to imagine the business is fatal,” and innovative companies should do four things, starting with asking questions, especially of those who interface directly with customers.
Second, observe, especially customers and those you want to be customers. Then, experiment, and “purposely complicate your life.” Being innovative isn’t supposed to be easy. Fourth, network with people who are different from you. Cross fertilization is always healthy. Looking at a problem from a different perspective can result in making an unseen or overlooked opportunity visible.
I guess we could add a fifth principle of innovation: Don’t let a spreadsheet convince you your idea is a winner.
(Michael Alan Hamlin is the managing director of TeamAsia and a Manila-based author. His latest book is High Visibility: Transforming Your Personal and Professional Brand . Write him at email@example.com and follow him on Twitter, Facebook and LinkedIn.).