The Business Efficiency of Integrity

A 2-fer! One of my favorite companies & sites! Menasha, 165+ years old, is growing, profitable, solving customers' real problems and having an impact.  Key? Integrity - it truly pays dividends. Read on.  

"While much has been written about the relationship between integrity, trust and profitability in the last few years, there are companies who have lived this for over 100 years, like a 165 year old, billion dollar plus, 6 generation family business in Wisconsin, Menasha Corp.  Last year, in a discussion on the paradox of integrity, trust and vulnerability with John Hagel, Saul Kaplan, Mike Waite, President of Menasha Packaging Corp. (MPC) and myself, shared how integrity is key to Menasha’s success."  Read on..

The Risk of Not Taking Risks

My friend, Doug Sundheim’s new book, Taking Smart Risks, is an early winner for 2013 Must Reads.   Before I get to how great the book is, the story of how Doug and I met starts with taking a smart risk!  Doug had read a post of mine about my wonderful client, Menasha Packaging and asked if I would be willing to introduce him to them for a book he was writing.  Of course, I did a bit of due diligence into this Doug guy and said yes.  I’m so glad I did!

Part of the problem with risk today is how it’s defined and ingrained in our society.  Take the definition, “exposing oneself to the possibility of loss or injury.”  The definition talks about what can happen as a direct result of risk – the ‘output’ of risk but definitely not the outcome, which is what Doug eloquently supplies – “exposing oneself to the possibility of loss or injury in the hopes of achieving a gain or reward.”  For many people, though, “the emotional cost of not risking and having to live with that regret [is] much greater …than any career or financials … costs.”

By reframing the definition of risk, Doug shows the power of smart risk taking.  We rarely look at the risk of NOT doing, of NOT innovating, of NOT trying.  In essence, it a different perspective of opportunity costs – the opportunity cost of NOT doing something.  I see this everyday in my work – organizations that see innovation as a risk instead of seeing not innovating as a bigger risk.  Doug makes the costs of playing it safe very clear: we don’t grow, win, create and we lose confidence and bluntly, don’t feel alive and meaningful.  If we can get this to change, imagine the positive power that can be unleashed.

Which gets to another key point in Doug’s book – the paralysis of security.  We create an illusion of security around us today, one that is heavily dependent upon our other illusion of control.  The issue isn’t going from security to insecurity.  We’re already not secure in terms of ‘stuff’ whether we recognize it or not.  We’re already not in control of our circumstances whether we recognize it or not.  However, we can be secure in who we are and what we stand for and in how we control our own reactions to life. A key to smart risk taking is, as Doug says, the ability to “increase our tolerance for uncertain circumstances.” If we are secure in who we are, what we stand for and how we will react, we can welcome uncertainty for the opportunity it really is.   That is why I truly believe that entrepreneurs, for instance, are not more risk-o-philic but fundamentally define risk like Doug does.

The book’s practical wisdom, advice, and tools for how to take smart risks are critical.  This is uncharted territory for many and Doug’s practical guidance will make it easier for us to learn how to and actually take smart risks.   This is particularly important for some of the hardest areas of smart risk taking – our own ego and our ability to communicate.  Through stories about humble leaders and constant communicators, like Mike Waite, Doug demonstrates how critical the ‘soft’ skills are in successfully taking smart risks…and in the payoffs.  These are truly fundamental to taking risk. 

It’s been almost exactly 1 year since Doug and I met for breakfast in NYC and talked about his book and how I could help.  That was the start of our friendship!  I introduced him to the incredible leaders at Menasha Packaging and Thogus, my 21st Century manufacturing client.  The result of Doug’s taking the risk to “ask”?  He got some very real and powerful stories of leaders we can emulate and learn from, I got two of my fabulous clients in his book, and we all now have a field-guide for the New Year and beyond to help us take smart risks.  I look forward to seeing the great things that will happen because of it!

Someone = Us!

When you see a need or issue, what do you do? Most of us shake our heads and say, “Someone should take care of that.”  Well, someone = us!

Perhaps one of the reasons someone ≠ us is that the perceived risk of ‘doing’ diminishes our courage.  Perhaps innovators and entrepreneurs aren’t more risk-o-philic, they just define risk differently – not following one’s passion and purpose is a greater risk than financial or reputational security.  Perhaps this is a basis for Rebellious Optimism.

As some of you know, I’m so enthusiastic and hopeful about our future because of the people I’m serendipitously meeting, of all ages, shapes, sizes, creeds, and colors.  Let me highlight 3 companies, separated by 162 years:

NBA Math Hoops: What do you do when you’re 19, in college, and have a burning passion to help underprivileged kids learn math using their passion for sports?  You create a scalable solution! Meet Khalil Fuller.   The NBA has given him a free license agreement, Hasbro’s committed $100,000 to make the game, and Echoing Green named him as a finalist for their prestigious fellowship.   A national pilot with a majority of free/reduced-lunch students shows significant improvement in 51% of the math scores and improvement in attitudes about math – for both boys and girls.  Khalil is preparing for a 2012 Fall launch.

Lesson:  Get out, meet some Gen-Zs and Millennials.  We can all learn from their transformative innovations.

Thogus:  You’ve just spent big bucks getting ISO certification for half your revenue stream, the Big-3 Auto guys; but you’re tired of being their “bank”.  So you fire them!  Now what? 3rd Generation Matt Hlavin decided to create a 61yr old startup. He reinvented the entire business model and the company is growing exponentially.  What was a ‘job shop’ is now a high-tech and biomedical design and engineering company with rapid prototyping/additive manufacturing up to full-scale injection molding capabilities.  Matt is using design to balance the experience of age with the freedom of youth, from their gym to the plant floor to employees themselves.

Lesson: A key to success is the 21st Century is embracing, leveraging and balancing paradox. 

Menasha Packaging: Meet the163-year-old family-owned company who’s leadership team reinvented their business model and re-invigorated their culture 7 years ago, putting their careers on the line.  What drove this level of risk? Stewardship & Optimism. They view themselves as stewards of their customers, their employees and families, their economic and social community impact, and the family legacy.  They have Rebellious Optimism that they can and will succeed.  Menasha’s ongoing success, even in the recession, is testimony for “doing what is right”.  They are well known for bringing some of the most innovative, effective solutions to market.  They are hiring talent and growing.  And, as I post this, we are in the sunny Wisconsin woods, continually innovating the future.

Lesson: Don’t use a company and management’s age as artificial constraints for innovation.

What examples do you have of Rebellious Optimism? Please share and think about telling your story at Rebels At Work!!! 

Innovation's Enemy? Success!

The saga of Congress, the White House and the budget is horrendous.  If they can’t agree on 1% of the budget for six months, can they really create a budget to cut the deficit and debt for a year?

Everyone took last year’s election as a mandate for one party over the other, but it really was a mandate for an economic revolution. Is the government capable of re-inventing itself? Of innovating?

We can look at other examples, like big companies. There has been a lot discussion of whether or not big companies can innovate. I've seen some do it, but not many. Does that answer the question? Kind of.

What is the biggest inhibitor to innovation? Success! So many of my clients have been both blessed--and cursed--with success, even in this recession, that it’s skewing their perspective of the future.

They are sitting on a lot of cash that they are hoarding...for lots of reasons (like fear of a double dip, etc.). But now is the time to really innovate - to disruptively innovate.

For most of them, the amount of money it would take to experiment, to prototype, to try some things is insignificant compared to what they have in the bank. This may be, for some, the least financially risky time to innovate - financially, not culturally. Culturally, the risk is huge!

They say to themselves, look at how we're doing despite the economy, we must be doing something right! And they were/are...but not for that long. For many their R&D and innovation pipelines are two or three years out max.

Let's look at some who didn't innovate. Remember Wang? DEC (Digital)? The original AT&T (bought out by the kids it spun off)? Hey, Smith Corona? Yahoo!? Blockbuster? In fact, ‘netflixed' is a now a verb! And Blockbuster even says they saw it coming but didn't really heed the warning signs.

Then there are those that were able to reinvent themselves. P&G, IBM, Ford, Apple. What was the difference? People. Management. New leadership (in the case of Apple, original leadership returning) brought in new insights, were not entrenched in the groupthink and were able to see and start the turn-around.

But this isn't easy nor is it typical.  I've had the privilege to work with a few companies that have been able to do this, but again, it's due to very special people. Check out one that still amazes me - Menasha Packaging .

Innovation's 2 New Letters: HR

We’re all finally recognizing that management and innovation are social activities – people activities. So it has struck me as rather odd that HR is hardly mentioned in the conversation. Why?

Perhaps it’s because corporate management and HR have a 20th century mindset towards HR. What we need is a 21st century mentality, especially given the increasingly social aspect of “work” and the talents of our Gen-X/Y/Z colleagues.

So go figure when a 160+-year-old company in a very 20th-C industry uses HR in a very 21st-C way. Well, that’s Menasha Packaging – yup, packaging – old, boring, brown box stuff. Actually no, really cool, innovative and sustainable retail packaging.

How did this happen? The GM of Menasha’s biggest complex, Mike Riegsecker, simply didn’t know better. He didn’t know that using his HR director, Sharon Swatscheno, was unusual or radical.

Given Sharon’s talents and knowledge of the organization, it simply made sense to have her facilitate the innovation sessions and manage the process. Why not? This also made it easier to include innovation metrics and tactics into his team’s personal performance plans.

In all honesty, much of the success isn’t the title/role of HR. It’s Sharon – see, people once again! Sharon didn’t view her role as tactical, but strategic, and so did Mike. Because of Sharon’s knowledge of the organization, she was able to create highly effective cross functional/disciplinary teams as well as provide the necessary training and tools.

Her role helped people overcome their fears of innovation – looking stupid, making mistakes, failing, peer pressure, losing control, etc.

What can you do to use your HR people more strategically? What can you try?