We did a thing this summer called I.P. (intellectual property) Fridays. You take the traditional corporate summer Friday where everybody’s supposed to be allowed to leave at 2 p.m., but everybody has to work anyway so they can’t and they just feel miffed. So we get a big lunch for everybody and at 2 p.m. on Friday, we close to client work and spend from 2 to 7 working on our own internal projects. And the ideas for those come from anywhere in the company.

We have a little form with a few simple questions on our internal blog, and then a few of us vet the ideas. We want them to be simple, because we want small things that we can act on quickly. So we’ve got all this stuff out in the world that we created for ourselves, and people get excited about that.

This is exciting news, since I already knew agencies like Anomaly and BBH are devoting time to develop I.P. of their own. I’d like to see more companies — not just ad agencies, integrate this kind of approach into their business models.

LINKS:

“Hey, Rock Stars: Take Your Show Someplace Else” – NYTimes.com

3M’s 15% Program – via PSFK

1. An Open Letter to All of Advertising and Marketing

2. Things Real People Don’t Say About Advertising

Pink Ponies: A Case Study

Truth in Advertising

Case Study #241: The Sistine Chapel

Business Guys on Business Trips on Tumblr

If you haven’t seen “The Corporation,” you should. This documentary does a great job of highlighting a lot of the problems caused by big business in America.

Let me be clear: I’m not saying I’m against big corporations, capitalism or making a profit. The problem is that a lot of companies ( Monsanto, Goldman Sachs, etc.) focus on profit so single-mindedly that they act with complete disregard for how their actions impact society. This is both a difficult and highly complicated situation – can a company focus on creating shareholder value AND consumer value simultaneously?

So it was a real coincidence that I came across this interview on Influx Insights with Account Planner Ashley Alsup and this quote:

“I think corporate America is much more broken than it realizes. Not because it’s so behind on ideas, because it’s not. The ideas are there, they just can’t get made. Mostly because American corporations are not structured around creating great products and bringing them to marker in a speedy, transparent way. They’re structured around a story told for Wall St. The sheer number of business units, layers and competing roles prohibits real leadership, the ability to make decisions and get things done. But it gives the impression of a mighty ship.

As a result, privately-owned companies are the engines of innovation and ideas because that’s where the purity of purpose is. They tend to produce superior products that come from a personal mission, love and insight. They have a closer relationship with their consumers and tend to tell the truth more often and behave in a transparent and responsible way. If we want to change the larger corporate culture, we have work on both ends of the market. We have to help smaller companies become the biggest threats they can be. And we have to help corporate clients regain the purity of purpose, make good decisions, agree to behave differently. But you can’t have one without the other. Because people rarely change unless they are incentivized to. We have to work together to alter the incentive.”

The key takeaway is that there’s a lot large organizations can learn from smaller ones. The challenge is figuring out how to incorporate small biz behavior within a a large company’s business model.

LINKS:

Read the full interview: “Meet the Makers – Speaker Interview – Ashley Alsup“

Ashley Alsup on Twitter

The World According to Monsanto: Pollution, Corruption and the Control of Our Food Supply on Fast Company

“Though the company is privately held and does not respond to questions about its finances, it is evident that craigslist earns stupendous amounts of cash. One recent report, from a consulting firm that counted the paid ads, estimates that revenue could top $100 million in 2009. Should craigslist ever be sold, the price likely would run into the billions. Newmark, by these lights, is a very rich man. When anybody reminds him of this, the craigslist founder says there is nothing he would care to do with that much money, should it ever come into his hands. He already has a parking space, a hummingbird feeder, a small home with a view, and a shower with strong water pressure. What else is he supposed to want?”

It gets better:

“Newmark’s claim of almost total disinterest in wealth dovetails with the way craigslist does business. Besides offering nearly all of its features for free, it scorns advertising, refuses investment, ignores design, and does not innovate. Ordinarily, a company that showed such complete disdain for the normal rules of business would be vulnerable to competition, but craigslist has no serious rivals. The glory of the site is its size and its price. But seen from another angle, craigslist is one of the strangest monopolies in history, where customers are locked in by fees set at zero and where the ambiance of neglect is not a way to extract more profit but the expression of a worldview.

The axioms of this worldview are easy to state. “People are good and trustworthy and generally just concerned with getting through the day,” Newmark says. If most people are good and their needs are simple, all you have to do to serve them well is build a minimal infrastructure allowing them to get together and work things out for themselves. Any additional features are almost certainly superfluous and could even be damaging.”

I’m always interested in reading about business models and their perceived strengths/weaknesses. No matter how I look at it, I always come back to the same conclusion: businesses that succeed today are successful because they provide their customers value.

“…whenever a top G.M. executive was called to appear before lawmakers in Washington, staff members would prepare a briefing binder as thick as a Manhattan phonebook and hold multiple meetings to strategize over five minutes of testimony…”

Here’s another:

“In a famous memo that circulated in Detroit during the late 1980s, Mr. Johnson complained that the company was hampered by its inability to execute.

“Teamwork has been replaced by Balkanization,” he wrote. “Our culture discourages open, frank debate among G.M. executives in the pursuit of problem resolution.”

Through the years, outsiders and even company insiders have complained about the months of study required for simple decisions, like making design changes to a bumper or headlights. “

I think one of the best moves made so far is bringing in new blood with a new CEO (Fritz Henderson) and new chairman (Edward E. Whitacre, who was previously at AT&T). Whitacre even admits he has no prior auto industry experience, but I think this is an advantage, instead of a hindrance.

The new executives at G.M. will (hopefully) have a fresh perspective. New products and technologies (cars, cell phones, etc.) can be learned, but true leadership skills are much more difficult to cultivate.

Business is still business, and I believe two things G.M. can do to ensure future success are:

1) improve execution(get things done in a fast, efficient manner)

2) understanding people (teamwork, inspiration, getting the most out of your employees, etc.).

LINK:

U.S. Takes on the Insular G.M. Culture

“Chase the vision – not the money”

- Zappos.com CEO Tony Hsieh

Zappos CEO Tony Hsieh recently spoke at the SXSW festival in Austin and I just wanted to highlight a few things that really resonated with me.

Most people think of shoes when they think of Zappos.com but the company also sells clothing, cosmetics, electronics an even housewares. Even with the myriad of product offerings, however, their focus isn’t on promoting all these products – it’s on customer service, since they noticed that 75% of their business comes from repeat customers. Their philosophy is:

“Take most of the money that we would have spent on marketing – on paid marketing, and instead, put that into the customer experience and then the repeat customers and word-of-mouth become our true form of marketing.”

What is customer service?

It begins with policies. Most companies make it very difficult to find contact information. Zappos.com goes the opposite route – they promote their phone number because they WANT to talk to their customers. They believe the phone is their best branding method.

Call centers at Zappos are treated unconventionally. If a Zappos item is out of stock, a Zappos employee will actually look up that item on a minimum of 3 competitors’ websites to help the customer find the item that they’re looking for – this really blew me away.

Why does Zappos do this? Because they’re not trying to maximize profit on every potential transaction – they’re trying to build a relationship with customers for a lifetime.

Zappos also does surprise upgrades to repeat customers and provides overnight shipping at no extra cost. This is a perfect example of “under promise, over deliver.”

At a certain point, Zappos discussed their brand ethos, and what they wanted to be about. It wasn’t shoes (the product), it was about customer service (broader purpose – highest calling they can aspire towards).

Zappos’ number 1 priority is company culture. Hsieh says that if you build a great company culture, then everything else (like customer service and building an enduring brand) will happen naturally.

How do they create a strong culture?

1) Hiring: The company doesn’t hire people that aren’t a good cultural fit even if they have relevant technical skills and work experience.

2) Training: Everyone goes through the exact same customer focused call center training regardless of their position. Zappos also offers all employees full compensation for their training plus $2,000 if they choose to LEAVE the company at any point until the end of the training. By doing this, they feel that they only keep employees who are a true cultural fit and believe in the company’s long-term vision.

3) Zappos Culture Book: This is an UNEDITED Zappos book the company puts out that asks employees to write their thoughts about the company culture, which is then given to potential employees to let them decide if the culture is the right fit for them. The high level of transparency I find here is really refreshing.

4) Twitter: Zappos has actually encouraged employees to participate on Twitter and even holds Twitter classes during new hire orientation, with over 400 current users. As Hsieh says,

“It’s been a great way for Zappos employees to meet up outside the office (and that builds company culture) and then when they’re inside the office there’s just a higher level of trust and communication. They see each other as people, not just as coworkers.”

Zappos believes that culture and brand are really the same thing. Hsieh says Zappos used to be about shoes, but they made a conscious decision to be about something more meaningful – customer service. I think that’s the key word – “meaningful.” By doing something you are passionate about, that has nothing to do with making money, you can then indirectly achieve all your business objectives. What Zappos found was that when they gave their employees a higher purpose to work for, they became more engaged and committed.

This was the first time I’ve heard Hsieh speak and I think it’s great that he’s having such success pursuing a vision that I think most other CEOs would say is idealistic and ineffective. I couldn’t help thinking of the book “Raving Fans” as I was writing this post – it’s a fast read and I highly recommend it if you’re interested in learning more about remarkable customer service.

I’ll leave you with this last Hsieh quote:

“I think there’s a big difference between motivation and inspiration. You can accomplish stuff by motivating employees, but I think you could accomplish a lot more by inspiring them to a bigger vision that has meaning to them and that you’re passionate about.” Yes, indeed.

Here’s the videos of Hsieh speaking:

SXSW 2009 – Opening Remarks: Tony Hsieh Part 1

SXSW 2009 – Opening Remarks: Tony Hsieh Part 2

Further info:

Follow Tony Hsieh on Twitter

Inc.com “How I Did It- Tony Hsieh, CEO, Zappos.com“