Monday, March 19, 2007

The Accidental Genius

Over the years, I’ve gone to a lot of conferences and seminars. Quite often, there will be distinguished business professors or guest speakers from the consulting world imparting their pearls of wisdom. With a Powerpoint deck up on the big screen behind them, these experts will explain the simple rules for how to succeed in business.

To make their case more powerful, they will use “real” examples from the world of business. The point they are trying to make is that other companies have put these rules for success into practice and have succeeded. Therefore, if you put these principles into practice, you will succeed as well.

I’ve been to enough of these now, that I have also seen something else happen at these conferences and seminars. Either in public during the speech or in private after the speech, I have heard from people in the audience who actually lived through the “real” example referred to in the speech. They always seem to say about the same thing:

“I was there when that happened and it didn’t happen at all like he said. There was no preconceived notion that we were acting based on the principle the speaker pointed out. In reality, it was just a lot of arguing, a lot of hard work, and some dumb luck.”

Those distinguished professors and esteemed consultants really don’t like it when people make statements like that in the middle of their speeches. They tend to respond with an evil glare that says, “How dare you ruin a great story with the truth.”

We tend to like simple stories with an obvious “cause” and “effect”: if you do one thing (the “cause”), you will achieve immediate success (the “effect”). Unfortunately, the world is rarely that simple. Reality is a lot messier, with the linkage between cause and effect a lot less clear.

The stories that these guest speakers like to tell tend to place the decision maker in the role of “genius.” The business leader in their stories uses their genius to quickly dissect a problem. Then they apply the appropriate business principle to the problem (which they are wise enough to choose properly in advance) and POOF!, the problem goes away.

Unfortunately, most business leaders are not geniuses. In fact, I’ll bet you’ve met a few leaders in your day that you would place in a distinctively different category. The good news is that you don’t need premeditated geniuses like the ones described in those stories to be successful. And that’s a good thing, because there are not enough of those kinds of geniuses to go around.

Instead, what you need is what I call the “accidental genius.” These are people who may not have it all figured out in advance, but they recognize a glimmer of success when it accidentally rises to the surface, and are smart enough to nurture it into something great. Typically, what these speakers identify as proactive genius is actually accidental genius.

The principle here is that reaction is more important than action. In other words, how you respond and adapt as feedback comes in is more important than the initial decision.

Many things may happen after you initiate an action. Some good; some bad. Some expected; some a complete surprise. The truly smart leaders are the ones who adapt and use what they learn to their advantage, even if the benfits come completely by surprise—accidentally, so to speak.

Allow me to give a couple of examples. Wal-Mart is credited as being a genius for inventing the door greeter program. The greeter is usually a pleasant older person who welcomes people to the store, hands out advertising circulars and helps people get a shopping cart. It is credited with creating a more pleasant shopping experience and improving the image of the company.

In reality, the greeter program was a happy accident. Wal-Mart was concerned about theft. It was suggested by Wal-Mart management that if there was an employee by the door spying on people, he could act as a deterrent to crime. Some of these crime prevention people were getting a little bored standing by the door and started taking on some of these other functions. Wal-Mart noticed the positive impact these activities were having. Therefore, it modified the position to be less about crime prevention and more about greeting the customer.

The genius was not a premeditated decision to create a greeter program. The genius was in discovering the happy little accident and being smart enough to capitalize on it. In most businesses, there are happy little accidents going on all the time. Unfortunately, they are often unnoticed by management. Wal-Mart could have chastised the crime prevention people for being too friendly and not sticking to the original program. Instead, they were smart enough to realize that the accidental program was better than the original, so they adapted.

Another example is Best Buy. In the early days, Best Buy was just like all the other consumer electronics retailers. It put all of its inventory in the back room, had a few items on the sales floor on display, and used high-pressure commissioned sales people to push the products on display. Eventually, Best Buy was considered a genius for moving to more of a supermarket style approach, with all of the boxes out on the sales floor for people to pick up on their own and a lower pressure non-commissioned sales force. Was this premeditated genius? Not exactly.

As it turns out, early on in the company’s history, a freak tornado destroyed Best Buy’s highest volume store. This devastated the company, who at the time was too small to absorb the loss of its most profitable store. Certain items got damaged either by the tornado or the accompanying rain storm. Items in the warehouse destined for this store had nowhere to go. If the problem could not be solved, the company might be doomed. So, in desperation, the company rented the fairgrounds and had a giant blow-out “Tornado Sale.”

The sale was hugely successful. In fact, it was more successful than running the previously most profitable store prior to the tornado. This got management to thinking about what they could learn from the fairground Tornado Sale. Let’s see…everything was out on the fairgrounds floor in piles of boxes. Items were priced lower to move quicker. The lower prices and the self service made high pressure sales people less critical in the equation. Of course, even then, they didn’t do too much with this knowledge.

However, not too long after that, Highland Appliance, who was much larger than Best Buy, came into Best Buy’s home turf of Minneapolis. They were very aggressive in the market, bringing Best Buy to the brink of bankruptcy. Best Buy came to the conclusion that they would indeed go under if they continued with the traditional cost structure in the industry. Therefore, in last ditch desperation, they remembered the Tornado Sale experience and converted some stores to the supermarket-style approach. This was done so that they could eliminate the cost of paying salespeople commissions. This last ditch act of desperation worked and the rest, as they say, was history.

Again, the genius was not entirely premeditated. There was a freak tornado and the threat of bankruptcy which forced Best Buy out of their comfort zone. It was entirely unknown whether any of this would work. However, because they were observant and learned from their accidents, they made more educated choices and improved their chance for success.

Originally, Earl Tupper, who invented Tupperware, had planned on selling his wares in the traditional way through wholesale distributors who would then sell to retail channels. However, unknown to Mr. Tupper, a Thomas Damigella in Massachusetts and Brownie Wise in Florida purchased Tupperware from local plastics distributors and began selling Tupperware in their homes, just as they did with competing products by Stanley Home Products. Eventually, these two individuals were moving so much of Mr. Tupper’s wares that they got his attention. He met with them to understand their success and changed his entire distribution strategy to home selling. By recognizing a happy accident, Mr. Tupper changed his fortunes forever.

This is why I said earlier that reaction is more important than action. Wal-Mart, Best Buy and Tupperware originally acted in rather conventional ways. However, deviations which they did not enact caused unexpectedly better results. Both companies reacted to the deviations by incorporating the happy accidents into their new way of operating.

There are problems with trying to rely solely on premeditated genius:

1) At the beginning, it is all theoretical. Until you put it into action and observe the response, you really do not know how it will turn out. It is usually better to get something small quickly out into the field and observe it, rather than spend inordinate amounts of time in a lab trying to perfect your genius prior to implementation.

2) Some of the greatest successes come from unexpected areas. You will never find the unexpected unless you are out there trying out lots of activities. Customers, employees and suppliers can come up with more ideas than the geniuses in the headquarters if you will just give them a chance and then observe what happens. And since there are a lot more of them than there are of you, you have greater odds of tapping into something great by tapping into the greater resource. Boeing is famous for tapping into its customer base for ideas. McDonald’s got some of its best menu ideas from franchisees and suppliers.

In the end, it is usually better to be able to recognize accidental genius and exploit it than to try to create it all on your own proactively.

Because the real world is a lot more complicated than the world of theory, one can often find more success by tossing a few ideas out into the marketplace to see what happens rather than by trying to perfect something in the lab. A lot of the greatest successes in business were happy accidents. You cannot make a happy accident out in the field if you are doing nothing different out in the field.

In a way, this blog is just like those people I criticized in the story—-I give a simple bit of advice, backed up by some easy examples. At least I know it’s more complicated than this, and will admit it, but there is only so much one can cover in a short blog.

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