Time to Get Innovative

There's a lot of buzz out there about the impact that this most recent economic downturn will have on innovation. Historically, great innovative ideas have traditionally gained traction as an economy comes out of a recessionary period. That means, of course that the brainstorming, development and initial launch happened during the downturn itself.

A New York Times article, cautions now, It's No Time to Forget About Innovation and like many in the field, we agree. Yet, frequently, those groups with little to show for themselves, i.e. no sales associated with the group and no direct P&L responsibility seem often to be the first areas cut. Rather than look forward when cost cutting is required, most companies look to dissolve those business units that would cause the least harm to the present operations to the company.

In a short sited way, this makes sense. Often companies that create business units focused on innovation that operate in their own silo. As we said before, this does not take advantage of the inherent creativity that abounds within the various operating units themselves and... is tempting to cut during downturns.

The fact is, innovation is inefficient. Hours and days of brainstorming often result in few if any workable ideas. Thousands of engineering dollars spent doesn't guarantee a real success. Innovation is, in some ways, a model of inefficiency. And there's the rub.

Wild market gyrations, frozen credit markets and an overall sour economy herald a new round of corporate belt-tightening. Foremost on the target list is anything inefficient. That's bad news for corporate innovation, and it could spell trouble for years to come, even after the economy turns around.

As creative pack up boxes and head out the door to home based sites and coffee shops, they take their innovative ideas with them. This is, perhaps one of the reasons innovative ideas often come from entrepreneurial ventures. And in bad times, the ranks of entrepreneurs swell and those lone operators often have time on their hands for the inefficient task of innovating.

David Thompson, chief executive and co-founder of Genius.com Inc., based in San Mateo, Calif., says that innovation "has a bad name in down times" but that "bad times focus the mind and the best-focused minds in the down times are looking for the opportunities."

All of this speaks to the issue of managing innovation in a downturn, especially for large corporations invested in producing short term profits, or at least limiting losses, for their shareholders. How to keep the innovative minds in a company from going out the door is an issue faced by most companies in this economy.

The Billion Dollar Question: An Interview with Jim Estill

We found a secret weapon in marketing - an engineer that can sell! Jim Estill was a University of Waterloo engineering techie who got into selling computers and became really good at it. The business he started from the trunk of his car became a substantial acquisition for one of Canada's leading computer distributors, Synnex Corporation. Jim is currently CEO of Synnex Canada which sells about a billion dollars of computer products a year.

Jim also became a highly involved shareholder at an early stage with Research in Motion (RIM), makers of the popular Blackberry device, where he remains on the Board of Directors.

On top of this, he is as curious and interested in new ideas as ever and has become an expert blogger. His CEO-Time Leadership blog at www.jimestill.com is a great place to learn about leadership and making the best possible use of your time.

We interviewed him to bring some of his insights into marketing and leadership to you.

Q: How has your engineering background helped you in your business?

Jim: When I started my business, it gave me credibility (I was young and looked younger). And simply spending the time in school helped my maturity level and gave me confidence.

Q: What made you go into selling from the trunk of your car, rather than staying in the engineering world?

Jim: I was designing a circuit board and needed a computer. I got a better deal if I bought 2 so I did and sold one then someone else wanted one etc.

Q: Who were your early role models and what were the main things you learned from them?

Jim: My father taught me self discipline. I have always loved business biographies so was inspired by many of them like Edison, Ford, Weston etc.

Q: What was the most important thing you had to learn to become able to take your EMJ business from zero to $330 million in 25 years - with 99 consecutive quarters of profitability?

Jim: I had to learn to give things up - to trust that other people were capable of doing parts of the job. This can be a very limiting challenge for an entrepreneur.

Q: What were the keys to R.I.M. Blackberry success?

Jim: Success is usually never just one thing. I think their focus has been good. RIM has always hired good people. RIM thinks big. RIM has good technology backed with great marketing and market understanding.

Q: What have you mainly been bringing to the R.I.M. organization (in the early stages and now)?

Jim: In the early stages, I was the big company, the public company, the company who had grown etc. So I could help with growth issues/rolodex etc. I have always been a techie so I always float my ideas on product (most of which were not done and I do not want you to think I was the brains behind product because I was not).

Right now, continuity helps. I am also a working CEO running a $1B+ tech company so certainly have relevant experience.

Q: If you could redo something in your past, what would it be?

Jim: We are the product of all of our past - including our mistakes. One of the things I often say is "Fail Often, Fail Fast and Fail Cheap" and "Having a failure does not make you a failure" so there is nothing I would want to redo.


Thank you Jim for sharing these insights with us. This should serve as an inspiration to any engineers or techies among us to explore developing our leadership abilities and learn how to become really great at selling. Visit Jim’s blog and connect with him at www.jimestill.com

What to do before quitting your day job

We occasionally get asked "I'm going to start a new business in a couple months. What should I do before I quit my day job?" Here are four different perspectives on this.

Tats: Before you hand in your resignation, make sure you do your homework. You need to be sure that there is a good product or service offering in place. An idea, set of samples, prototype and the like does not count. There needs to be a real business opportunity in there. Wherever possible, it should be proven, backed by a good plan and operating on a sound business model. It takes solid front-end marketing to determine that. There is rarely any value in quitting a well paying job on just a hunch there is a good business opportunity. Whatever it is, it needs to be priced for sale and priced for profit with all the costs of overhead, production, sales and distribution factored in.

An equally important part of doing your homework is making sure there are real customers for your product or service. Unless you are selling quilts, family and friends are not considered customers. Whether your customers are end users, distributors, retailers, businesses or the general public doesn't matter as much as whether or not they are real and sustainable.

Guest Commentary from Cathy Andersen, President of Canawipe Distributors Ltd.:

Make sure there is enough money in the bank to sustain a prolonged dry spell. It can take three years to develop a business to the point there is enough profit above and beyond the needs of the business to generate a healthy income.

You also want to be somewhat assured the business will not likely go broke within three to five years. The sad reality is that about half of all companies are simply not around five years after they are started. About a third of the ones that close do so because they lose money, another third break even and the remainder are profitable. There are many reasons for a company to close its doors, but not making a profit is obviously the main one. Having a sound plan, great people on board and being sure your product has a place in the market go a long way to ensuring your company doesn't become a casualty.

Cathy Andersen is the President of Canawipe Distributors Ltd., a distributor of the popular Wysi Wipe biodegradable towelettes. She can be reached at 604.552.3175 or at sales at canawipe.com.

Guest Commentary from Cissy Pau, Principal of Clear HR Consulting Inc.:

Deciding to start your own business is both risky and exciting. For some people, making the transition from having a steady pay cheque to having sporadic income is the most difficult part of running your own business.
If possible, consider talking to your existing employer about your plans before you quit. See if you can make a gradual transition to entrepreneurship by gradually reducing your hours at your day job (so that you still can earn an income) while you increase your hours in your new business.

You want to ensure that you leave your current employer on a good note. It is critical that you maintain positive relations with everyone in your network when you start a business. Depending on the business you want to start, your current employer, co-workers, and all your business associates and contacts could become potential customers for your new business or a potential source of referrals.

Be sure to review the terms and conditions of your existing employment contract. Make sure that your new venture does not contravene any contract terms. If there are any issues, you need to discuss the potential concerns with your employer to avoid future problems or litigation.

Consider taking a self-employment course to teach you what you need to know about starting and running your own business. Most programs will help you develop a business plan and will provide you insight into all areas of running a business so that you will, hopefully, avoid costly mistakes.

Last of all, make sure the business you start is something you are really passionate about. Doing something you love to do will make it easier to weather the ups and downs of entrepreneurship.

Cissy Pau is the Principal Consultant of Clear HR Consulting Inc., a Vancouver firm specializing in employee retention issues for small and medium-sized companies. She can be reached at 604.688.3879 or at cpau at clearhrconsulting.com.

Peter:Have enough of the right "friends" in the area. A productive network is a great asset in building a business. If you have the right people in the right places available at the right time, your business is much more likely to succeed than if you don't. Use tools like LinkedIn, Facebook and industry networking events to enhance your network.

You also need to have key mentors and advisors in place. These people can help you develop the business long before full deployment. Call on more of your growing network of "friends" as things develop. These advisors can also help with determining when to quit your job (or the business).

The business also needs to become more enjoyable and satisfying then the job. This is easier for people who hate their job than it is for those who are very passionate about their work. There needs to be passion and enthusiasm for the new venture, otherwise it is bound to fail. This is always true if you are the one leading it and doing the sales. With few exceptions, this also holds true if you are simply taking over an existing business with a track record and organization in place. The attitude of the owner affects the whole enterprise.