Mavericks at Work

WHY THE MOST ORIGINAL MINDS IN BUSINESS WIN

William C. Taylor & Polly LaBarr

To Chloe, Paige, and Grace— mavericks at home

WCT

To my parents— who held me close, but never fenced me in

PL

Contents

INTRODUCTION

The Maverick Promise

PART ONE

RETHINKING COMPETITION

Chapter 1

Not Just a Company, a Cause: Strategy as Advocacy

What ideas is your company fighting for? • Can you play competitive hardball by throwing your rivals a strategic curveball? • Changing the channel: The one-of-a-kind network that transformed television.

Chapter 2

Competition and Its Consequences: Disruptors, Diplomats, and a New Way to Talk About Business

Can you be provocative without provoking a backlash? • Why strategic innovators develop their own vocabulary of competition. • Winning on purpose: The values-driven ad agency that carves its beliefs into the floor.

Chapter 3

Maverick Messages (I): Sizing Up Your Strategy

Why “me-too” won’t do: Make-or-break questions about how you and your organization compete.

PART TWO

REINVENTING INNOVATION

Chapter 4

Ideas Unlimited: Why Nobody Is as Smart as Everybody

How to persuade brilliant people to work with you, even if they don't work for you. • Why grassroots collaboration requires head-to-head competition. • Eureka! How one open-minded leader inspired the ultimate Internet gold rush.

Chapter 5

Innovation, Inc.: Open Source Gets Down to Business

Have you mastered the art of the open-source deal? • Why smart leaders “walk in stupid every day.” • Bottom-up brainpower: How a 170-year-old corporate giant created a new model of creativity.

Chapter 6

Maverick Messages (II): Open-Minding Your Business

Shared minds: The design principles of open-source leadership.

PART THREE

RECONNECTING WITH CUSTOMERS

Chapter 7

From Selling Value to Sharing Values: Overcoming the Age of Overload

If your products are so good, why are your customers so unhappy? • How to build a cult brand in a dead business. • “Our customer is our category”—the retailer that sells a sense of identity.

Chapter 8

Small Gestures, Big Signals: Outstanding Strategies to Stand Out from the Crowd

Do you sell where your customers are—and your competitors aren’t? • Warm and scuzzy: How Howard Stern became the world’s most unlikely teddy-bear salesman. • Why the company with the smartest customers wins.

Chapter 9

Maverick Messages (III): Building Your Bond with Customers

Brand matters: The new building blocks of cutting-edge marketing.

PART FOUR

REDESIGNING WORK

Chapter 10

The Company You Keep: Business as if People Mattered

Can you attract more than your fair share of the best talent in your field? • How to find great people who aren’t looking for you. • Building the character of competition: Why the world’s friendliest airline unleashes the “warrior spirit” in its workforce.

Chapter 11

People and Performance: Stars, Systems, and Workplaces That Work

The first law of leadership: “Stars don’t work for idiots.” • How free agents become team players. • From bureaucracy to adhocracy: The many merits of a messy workplace.

Chapter 12

Maverick Messages (IV): Practicing Your People Skills

Hiring test: Is your design for the workplace as distinctive as your designs on the marketplace?

APPENDIX

Maverick Material

ENDNOTES

ACKNOWLEDGMENTS

INDEX

COPYRIGHT

ABOUT THE PUBLISHER

Introduction

The Maverick Promise

Nearly 25 years ago, the beloved and influential historian Daniel J. Boorstin wrote a much-praised book called The Discoverers—A History of Man’s Search to Know His World and Himself. The book is an exhaustive study of the human capacity to challenge conventional wisdom and move forward—in the arts, in the sciences, in technology. As he told the stories of world-shaping advances, Boorstin reminded his readers of “the courage, the rashness, the heroic and imaginative thrusts” of those who seek to break new ground, and of their “battle against the current ‘facts’ and dogmas of the learned.”

Much of Boorstin’s story-telling features the great explorers (Portugal’s Bartolomo Dias and Vasco da Gama, Italy’s Marco Polo and Christoper Columbus) as well as breakthrough tools such as the microscope and the telescope, which provided new windows into the world and transformed how we made sense of it.

But one of Boorstin’s most likeable characters is the little-known Henry Oldenburg, an early hero in the formation of the Royal Society of London. Today, of course, the Royal Society serves as the national academy of science in the United Kingdom, and is an establishment institution of the first order. Nearly 350 years ago, however, at the time of its formation, the Royal Society represented a deep-seated challenge to the British establishment’s bias against innovation, experimentation, and new ideas—a much-needed triumph of curiosity over received wisdom. The Royal Society’s motto, Nullius in Verba (“Take nobody’s word for it; see for yourself”) captured the restless spirit of Oldenburg and his colleagues, whom Boorstin dubs “the defenders of novelty.”

That restless spirit is what animates the great modern adventure of innovation and entrepreneurship. There is nothing more powerful in business today than a genuinely new idea, and the sense of experimentation that goes along with turning a new idea into a marketplace reality. In an era of hyper-competition and non-stop change, the only sustainable form of market leadership is thought leadership. Ideas matter: the only way to stand out from the crowd is to be a creator and defender of novelty.

This is the message at the heart of our book, Mavericks at Work. In industry after industry, organizations and executives that were once dismissed as upstarts, as outliers, as wildcards, have achieved positions of financial prosperity and market leadership. There’s a reason the young billionaires behind the most celebrated entrepreneurial success in recent memory began their initial public offering (IPO) of shares with a declaration of independence from business as usual. “Google is not a conventional company,” read their Letter from the Founders. “We do not intend to become one.”

Nor does the unconventional cast of characters you will encounter in this book. From a culture-shaping television network with offices in sun-splashed Santa Monica, California, to a little-known office- furniture manufacturer rooted in the frozen tundra of Green Bay, Wisconsin, from glamorous fields such as advertising, fashion, and the Internet, to old-line industries such as construction, mining, and detergent, they are winning big at business—attracting millions of customers, creating thousands of jobs, generating tens of billions of dollars of wealth—by rethinking the logic of how business gets done.

Alan Kay, the celebrated computer scientist, put it memorably some 35 years ago: “The best way to predict the future is to invent it.” We believe the companies, executives, and entrepreneurs you’ll meet in the pages that follow are inventing a more exciting, more compelling, more rewarding future for business. They have devised provocative and instructive answers to four of the timeless challenges that face organizations of every size and leaders in every field: how you make strategy, how you unleash new ideas, how you connect with customers, how your best people achieve great results.

We’ll be the first to admit that most of the case studies and examples in Mavericks at Work are situated in companies with operations in North America. That’s a reflection of where we are based, and the organizations and leaders we know best. But as we’ve traveled the world spreading our maverick messages, we’ve become convinced that the ideas these case studies illuminate are just as relevant in Birmingham as they are in Boston, Massachusetts, that maverick strategies and practices are just as likely to be hatched in London as they are in San Francisco or Austin, Texas.

Last September, for example, as part of our lecture tour for Mavericks at Work, we spent a day at London’s Tate Modern gallery, not to admire the exhibitions (although we did a bit of that) but to participate in an idea summit organized by WPP, one of the world’s leading marketing- communications groups. The highlight of the day was a talk by Sir Martin Sorrell, WPP’s founder and CEO, and a force to be reckoned with in the realms of marketing, media, and global strategy.

Sir Martin painted a mesmerizing picture of the still-underestimated power of China. The country is producing 465,000 engineers per year, while the US produces 56,000 per year. China Telecom alone has 340 million subscribers, he noted. That’s more than five times the number of customers than there are people in the United Kingdom.

He also emphasized a defining strategic challenge for big companies everywhere. On the one hand, there is vast oversupply of products. From cars to computers, dishwashers to disk drives, there are too many makes, models, and brands chasing too few customers. At the same time, there is a worsening shortage of talent—making it tougher for giant companies, who are getting their brains beaten out in the product market, to find the brainpower they need to win.

But for us, the most striking insight came from Sir Martin’s discussion of the competitive dynamic between his firm—a global marketing powerhouse—and digital powerhouses such as Google. One participant wondered: Are the new Internet giants allies of or rivals to marketing giants such as WPP?

Certainly, Google is a business partner of WPP, he replied. (In fact, WPP is Google’s biggest customer.) But Google also aspires to play a bigger and bigger role in how advertising works, from print to radio to the Web. In other words, the Internet giants are both friends and foes—or “froes,” to use Sir Martin’s phrase. They are both friends and enemies—or “frenemies,” to use his other phrase.

Froes. Frenemies. These simple terms capture a huge transformation in the logic of business competition and organizational performance. Think of the relationship between Apple and the music labels, or between semiconductor companies and personal computer makers, or between Chinese manufacturers and the Western companies they supply.

Each side can’t live without the other—they have to be friends, allies, business partners. Still, each side is intensely wary of the other. The music labels resent Apple’s insistence on how prices should be set for iTunes downloads; Western companies understand full well that even as they avail themselves of China’s low wages in the short term, they are creating a new generation of competitors in the long term.

Indeed, everywhere you look, the dividing lines of business are being erased and redrawn. No wonder there is so much turnover in the executive suite—the dynamics of competition keep getting more complicated. As do the dynamics of life inside organizations. There’s a reason that the TV program The Office has been a runaway hit on both sides of the Atlantic. All of us have experienced the twists and turns of office politics (not to mention the incompetence of many people in positions of authority). But the same dividing lines that are being erased between companies are also being erased within companies. It’s more complicated (and thus more maddening) than it’s ever been to be part of a big organization.

The official “org chart” has less and less to do with how work actually gets done. Life inside companies is an ever-changing mix of projects, teams, and deadlines. Colleagues whom you need to recruit for your big assignment may try to recruit some of your prized team members for their big assignment. It’s nothing personal, it’s just the way things work today. And as writers and thinkers, we understand it now better than we did before, thanks to that fresh insight by Sir Martin and his colleagues at WPP.

We hope that the ideas and insights in our book will have an impact on how you make sense of the world around you. We’ve always believed that the first step in any successful venture—starting a company, launching a product, even writing a book—is to establish a clear definition of what it means to succeed. Our definition of success for this book begins and ends with its impact on you. We will consider Mavericks at Work a success if it opens your eyes, engages your imagination, and encourages you to think bigger and aim higher. Most of all, we will consider it a success if it equips to you act more boldly as a leader and win more decisively as a competitor. We will measure our success by how much we contribute to yours.

That said, this is more than a how-to book. It is also a what-if book. Business needs a breath of fresh air. We aim to restore the promise of business as a force for innovation, satisfaction, and progress. Indeed, despite the many bleak headlines, blood-boiling scandals, and calamitous financial meltdowns over the last five years, the economy has experienced a period of transformation and realignment, a power shift so profound that we’re just beginning to appreciate what it means for the future of business—and for how all of us go about the business of building companies that work and doing work that matters.

To this end, we approached our work in the spirit of the Royal Society. We didn’t take anybody’s word for what was happening in business. We ventured out to see it for ourselves. We immersed ourselves in organizations that have shaped the course of their industries by reshaping the sense of what’s possible among employees, customers, and investors. We spent countless hours with leaders at every level of these organizations, from CEOs to research scientists, who understand that companies with a disruptive point of view in the marketplace also need a distinctive approach to the workplace.

We went deep inside these organizations, looking to understand the ideas they stand for and the ways they work. We participated in a filmmaking class at one of the world’s most successful movie studios. We attended a closed-to-the-public awards ceremony at Radio City Music Hall, where employees of what has to be the world’s most entertaining bank sang, danced, and strutted their stuff. We sat in on a crucial monthly meeting (the 384th such consecutive meeting over the last 32 years) in which top executives and front-line managers of a $600-million employee-owned company share their most sensitive financial information and most valuable market secrets. We walked the corridors of a 120-year-old research facility where a team of change-minded R&D executives is transforming how one of the world’s biggest companies develops new ideas for consumer products. We walked the streets of Manhattan with teams of employees from a hard-charging hedge fund, who were sizing up ideas about stock-market picks.

This book is our report back to you from the front lines of the future—an account of what we saw, what it means for business, and why it matters to your company, your colleagues, and your career. It is not a book of best practices. It is a book of next practices—a set of insights and a collection of case studies that amount to a business plan for the 21st century, a new way to lead, compete, and succeed.

Our basic argument is as straightforward to explain as it is urgent to apply: when it comes to thriving in a hyper-competitive marketplace, “playing it safe” is no longer playing it smart. In an economy defined by overcapacity, oversupply, and utter sensory overload—an economy in which everyone already has more than enough of whatever it is you’re selling—the only way to stand out from the crowd is to stand for a truly distinctive set of ideas about where your company and industry can and should be going. You can’t do big things as a competitor if you’re content with doing things a little better than the competition.

There’s another well-known bit of philosophy, this one made famous by Hall of Fame basketball coach Pete Carril, that captures the competitive spirit at the heart of this book—and the maverick mindset that guides the companies we visited. During his 29-year tenure, Carril’s Princeton Tigers regularly squared off against (and often beat) teams whose players were bigger, faster, and more physically gifted than his team. “The strong take from the weak,” his coaching mantra went, “but the smart take from the strong.”

This book is devoted to the proposition that in business, as in basketball, the smart can take from the strong—that the best way to outperform the competition is to out-think the competition. Maverick companies aren’t always the largest in their field; maverick entrepreneurs don’t always make the cover of the business magazines. But mavericks do the work that matters most—the work of originality, creativity, and experimentation.

Who are these mavericks? The core ideas in this book are rooted in the strategies, practices, and leadership styles of 32 organizations with vastly different histories, cultures, and business models. Half of them are publicly traded companies or business units inside public companies. The other half are divided among privately held companies, venture- backed startups, even not-for-profits. Some of them are giants, with thousands of employees and billions of dollars of sales. Some of them are pipsqueaks, with a few hundred employees and sales in the tens of millions of dollars. But all of them are business originals, based on the distinctiveness of their ideas and the power of their practices. They are rethinking competition, reinventing innovation, reconnecting with customers, and redesigning work. In short, they are creating a maverick agenda for business—an agenda from which every business can learn.

Taken together, these companies demonstrate that you can build winning organizations around high ideals and fierce competitive ambitions, that the most powerful way to create economic value is to embrace a set of values that go beyond just amassing power, and that business, at its best, is too exciting, too important, and too much fun to be left to the dead hand of business as usual.

Here’s one small example of the death of business as usual—an example we encountered after the first edition of Mavericks was published. Earlier this year, Dave Balter, founder and CEO of a Boston-based company called BzzAgent, decided that his fast-growing firm was ready to enter the UK. BzzAgent (pronounced “Buzz Agent”) is a pioneer in the field of word-of-mouth marketing. It recruits volunteers (312,000 at last count) to sample products, share their opinions with friends and neighbors, and report back to the company. BzzAgent has been a phenomenon in the United States, with high-profile press coverage, generous venture-capital funding, and lots of blue-chip clients.

But its first big step into London was a misstep. Balter hired a UK executive to run the operation, and it was a clash of cultures from the outset. Balter and his US colleagues are passionate, high energy, messianic. Their new British colleague was cautious and laid-back. After 60 days, by mutual agreement, BzzAgent and its first-ever British hire parted ways.

This hiring miscue is hardly unusual; companies often stumble when they enter new markets. What is unusual is that BzzAgent shared this episode with anyone who was interested—employees, investors, clients, volunteer agents, the media—through its company blog, called the BeeLog. Balter wrote a long entry that described his travels to the UK, his decision to hire this executive, and why things didn’t work out. “We failed,” he concluded. “But we failed fast.”

This is a small taste of the new world of radical transparency. It’s one thing to read essays by pundits about how the Internet eliminates secrecy in business. It’s quite another to encounter a company like BzzAgent that has chosen to throw itself open to outsiders, share its inner workings, and let the chips fall where they may. “Our business is built around the power of people sharing their honest opinions,” Balter says. “We decided to show the world that we could work the same way.”

To be sure, the BeeLog has its share of cute stories about office pranks and new hires. But there’s some pretty edgy stuff as well. For example, BzzAgent, like lots of companies, has an advisory board of gurus who (in theory at least) take an interest in its strategy and operations. Indeed, every quarter, the company prepares a confidential report for its board of directors, and then sends the report to its advisory board as well.

Balter always wondered whether these advisors paid much attention to the briefings. So one quarter he slipped a phony slide into the middle of the report. The slide suggested that members of the advisory board were each about to be sued for millions of dollars. Only three of the company’s 15 advisors responded to the report—a sure sign they weren’t reading it.

Balter posted an entry about his experiment on the BeeLog (complete with the phony slide) and invited visitors to share their advice about what he should do about his disengaged advisors.

Why is Balter willing to be so open about how his company works? For one thing, it’s a matter of authenticity. People want to do business with companies that share their values, and one way to demonstrate your values is to lift the veil of secrecy around your operations. “Openness is in our life blood,” he says.

It’s also a matter of connection. Business is no longer just about transactions, it’s about relationships—real bonds between companies and their customers. What better way to strengthen a relationship than to be honest about your shortcomings?

Finally, it’s about learning—getting smarter faster. Indeed, when Balter phoned us back to do our interview, he was at lunch in London with the new head of his UK office. This executive had read his post about the hiring miscue, and was clear about why he was a better fit. Today, BzzAgent’s UK business is booming, with 26,000 volunteer agents and a long list of clients.

“It may seem scary to share your problems with the outside world,” Balter says, “but it’s also the best way to solve them. You get to the root of the issues so much quicker.”

We can’t promise that Dave Balter’s maverick company—or any of the companies you meet in these pages for that matter—will thrive, without setbacks or reversals, for years to come. (The realities of competition are too treacherous for that.) We can’t promise that every technique or business practice we highlight will work as well in your organization as it does in the organizations we describe. (There’s a difference between learning from someone else’s ideas and applying them effectively somewhere else.)

What we can promise is that we’ve written a book that is as eye-opening, as energetic, as flat-out useful as we know how to make it, a book that aims to be true to the maverick spirit of the agenda it champions and the leaders it chronicles. To that end, we thought it would be useful for us to take the time, at four separate moments in the book, to highlight a set of Maverick Messages—the action-oriented essence of the ideas we explore and the stories we tell. We also thought it would be valuable to end the book with a collection of Maverick Material—resources that will help you keep learning long after you’ve finished reading.

We’re not sure what Henry Oldenburg and the seventeenth-century mavericks behind the Royal Society would think of the ideas and leadership practices we chronicle in Mavericks at Work. But we do know that the spirit of innovation and experimentation that they celebrated nearly 350 years ago feels alive and well in business today. We hope that the material in our book provides you with some guidance on your journey into the future. Good luck!

William C. Taylor

Polly LaBarre

www.mavericksatwork.com

November 2007

NOTES - INTRODUCTION
THE MAVERICK PROMISE

1. Alan Kay uttered his immortal words at an early meeting of the Xerox Palo Alto Research Center (PARC). He spent the 1970s at this hothouse of innovation. The full quote is even more instructive: “Don’t worry about what anybody else is going to do…. The best way to predict the future is to invent it. Really smart people with reasonable funding can do just about anything that doesn’t violate too many of Newton’s Laws.” For more on Alan Kay, see his organization’s Web site (www.viewpointsresearch.org).

2. Pete Carril’s career record at Princeton was 514–261. His teams won 13 Ivy League crowns and held their own against many powerhouse programs. See The Smart Take from the Strong: The Basketball Philosophy of Pete Carril by Pete Carril with Dan White (University of Nebraska Press, 2004).

3. There’s more than a little mythology surrounding the origins of the word “maverick.” In The New Language of Politics (Random House, 1968), word maven William Safire repeats a colorful (but wholly inaccurate) story about Samuel Augustus Maverick: “Old man Maverick, Texas cattleman of the 1840s, refused to brand his cattle because it was cruelty to animals. His neighbors said he was a hypocrite, liar, and thief, because Maverick’s policy allowed him to claim all unbranded cattle on the range. Lawsuits were followed by bloody battles, and brought a new word to our language.”

In fact, Samuel Augustus Maverick (1803–70) was a graduate of Yale, a signer of the Texas Declaration of Independence, and a fabulously successful land speculator who cared little about cattle. (Maverick County in southwest Texas is named in his honor.) When someone repaid a debt with 400 head of cattle rather than cash, Maverick’s caretakers allowed them to wander unbranded. Over time, locals who saw unbranded cattle would say, “Those are Maverick’s”—and a term was born that today refers to politicians, entrepreneurs, and innovators who refuse to run with the herd. (Not to mention Tom Cruise’s fighter-pilot character in Top Gun.)

In a neat twist of fate, several of Samuel Maverick’s descendants became legendary political figures in Texas with an undeniable, well, maverick streak. His grandson, Maury Maverick Sr., was a pro-FDR congressman during the New Deal and one of San Antonio’s most controversial mayors. (Maury Maverick Sr. famously coined another term—“gobbledygook”—to describe his interactions with New Deal agencies.) Samuel Maverick’s great-grandson, Maury Maverick Jr., was a crusading lawyer, legislator, and newspaper columnist who championed free speech and civil rights. In many respects, the Maverick tradition is to San Antonio politics what the Kennedy tradition is to Boston politics—colorful, influential, and impossible to ignore.

For accurate information on the Maverick family and the term itself, see these sources: Turn Your Eyes Toward Texas: Pioneers Sam and Mary Maverick by Paula Mitchell Marks (Texas A&M University Press, 1989); “Mavericks Are Texas-Grown” by Leon Hale, Houston Chronicle, January 23, 2004; “The Last Maverick” by Jan Jarboe Russell, Texas Monthly (July 2003). Another go-to source is The Handbook of Texas Online (www.tsha.utexas.edu/handbook/online), which has entries on multiple generations of the Maverick family as well as on the terms “mavericks” and “mavericking.”

PART ONE

Rethinking Competition

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