I am pumped to interview my long-time friend, Andrea Kates about her latest book, Find Your Next. Based on her Business Genome Project, we will discuss how she got the idea for and the ramifications of this process for both businesses and entrepreneurs alike.
I first met Andrea Kates on the dance floor of Barbour Gymasium’s Dance Studio where she presented her brainchild of an idea to 7 others of us University of Michigan Dance Department students. This may well have been Andrea’s original hybrid genome idea.
OK, so, Andrea, we’ve known each other since college from years back! But, seriously, the idea that Wolverine Dancers (our in-house dance company at University of Michigan) was like an early genome/hybrid concept sticks in my mind!
There are so many great ideas in this book, and I have so many questions.
JMC: Why don’t you tell everyone a bit about your background and how the Business Genome Project came about?
I have an unusual background–started out with a lot of intensity as a dancer and choreographer. I graduated from college when I was 19, so that gave me time to pursue that passion before I shifted to my next career–an MBA with an emphasis on market research. I was always an innovator–as you mentioned, at University of Michigan I was part of the equivalent of a “startup”–a dance company within the university that created new rules. We studied the discipline of ballet, but chose more contemporary music and themes.
When I started my own business consulting practice, I did exactly that. I was still incredibly driven and relied on my MBA skills like finance and accounting to drive clients aggressively toward their revenue goals. But, I learned how to take the risk out of a more innovative approach. Like helping a major hotel chain study Enterprise Rental Car and Chipotle to redesign their hotel guest experience.
JMC: You talk about how The New Killer App–the skill that enables some companies to thrive and forces others to go extinct–is to see the future more quickly. Can you elaborate?
Cross-industry insights are the New Killer App. We miss so many opportunities for breakthrough by studying only the competition in our own backyard—as if tomorrow’s double digit growth will come from today’s approach, plus 10%. So, we run faster and jump higher, but in the meantime, if we’re Nikon and we’re trying to keep up with Canon, the iPhone comes in and provides a camera that everyone can use everywhere and overnight we miss the market shift.
If we look at other industries (like Nikon studying mobile phone innovation), we find the real opportunities for sustainable growth.
JMC: You mention the idea of seeing the interconnectedness of things instead of pulling them apart and also seeing combinations, patterns. You give the analogy of a frog: Can you explain ‘The Frog’ to our readers?
First, thank you for such a close read of Find Your Next. The frog story starts with a classic line about frog dissection. They say that frog dissection is like humor. If you’re trying to study and understand what makes a frog “tick”, you can take the frog apart, piece by piece to inspect each part. The problem is, at the end of the exercise, you’ve killed the frog. (Like a joke—if you try to over-explain each component, you’ve ruined the moment and no one will laugh.)
That’s just like what we do in business strategy. A lot of times, we study our pricing, our products, our customer impact or our competition, but we miss what’s really important. Like if we ask people what they like about Cheer versus Tide, we’ll hear a lot of answers. But we might miss the big picture—that they hate doing laundry. So, we end up adding a new fragrance to Tide when what we should have done is create a laundry service.
JMC: In Find Your Next, you talk about, whereas the former approach to business was seeing strengths, weaknesses, opportunities & threats (SWOT), the new approach needs to be more about the Business Genome idea of: Sort, Match, Hybridize and Adapt?
The way that traditional MBA programs are structured is based on management skills not skills for discovering strategic opportunities for the future. I studied benchmarking, forecast models and SWOT as the core tools for strategy. Then, after working with more than 250 companies, I had an aha moment—the reason that people felt “stuck”—whether they came from manufacturing, consumer goods, hospitality, healthcare—was that they had made their processes as efficient as they could and still couldn’t get the growth they wanted.
That’s when I embarked on research to replace the SWOT with a new approach, where you sort your current situation as the first step, come up with a “hunch” (hypothesis) of what your next opportunity might be, hybridize—borrow something from another industry (like Zappos’ customer service as an example, or Uniqlo’s in-store experience). That puts you in a position to adapt much more quickly to change.
JMC: Can you describe how companies like Jiffy Lube found its “Next”?
The Jiffy Lube example is an illustration of how a company evolves from Pennzoil (an oil company with a commoditized product—oil) to Jiffy Lube. They could have benchmarked against ChevronTexaco for ages without making headway. But, if you combine the oil itself with a comfortable place for hanging out (like Starbucks provides—WiFi, great chairs, good atmosphere), you can imagine something outside your “now” and get to a “next”…Jiffy Lube, where you can get your oil changed while you wait in a home away from home.
JMC: One of my favorite notions you talk about is that of “Alchemy”. Would you talk a bit about why that is important?
Alchemy is not a word that most business textbooks would include. That’s because there’s an art and a science to business strategy. When I interviewed Mark Vachon, the head of GE ecomagination, he confessed that he was actually against the whole concept of ecomagination and voted against it when Jeffrey Immelt first introduced it to the board. Years later, Vachon came around—he had to immerse himself in some new realities about a changing customer preference for sustainability and realize it was not a flash in the pan. No spreadsheet provided clear, irrefutable evidence that GE ecomagination would work. But billions of dollars of profits later, it turned out that the unique blend of elements—the alchemy—of sustainability + manufacturing was exactly what the customers wanted next.
JMC: You give a couple of great analogies for businesses/entrepreneurs. One is the “Corporate Wetsuit”. Can you explain the significance?
A lot of us in business–whether we’re running a dry cleaners on the corner, a university, or a global company—become complacent. We don’t realize that change is on the horizon. Or, we ignore the signs we see.
If we’re in education, and we notice the growing number of online courses and informal ways to learn like Khan Academy, we should think to ourselves, “I wonder if online education will be a threat or if it’s a sign of changing waters.” Like a snorkeler swimming comfortably in warm waters who happens to glance up and see an igloo on the horizon.
If they don’t put on a wetsuit—that is prepare for the future (whose early signs are visible—in plain sight—today), we won’t survive.
JMC: Would you tell us what “Blue Ocean Strategy” (Kim & Mauborgne 2005) is all about?
Renee Mauborgne (and others, like Tom Kelley and Clayton Christensen) opened up the world of innovation and set the stage for a new wave of thinking about strategy. Mauborgne devised a structure for climbing out of the box of “silo-ed” thinking, where you think of “next” based on who’s adjacent to you and try to out-compete them. She suggested that you could get out of the red waters of bloody competition and find a blue ocean—like when Cirque du Soleil reinvented the circus. They didn’t try to be Ringling Brothers Barnum & Bailey. They went for the “blue ocean” and found a whole new competitive space. And won. Big time.
JMC: I love Daniel Pink’s thoughts on “Motivation” from his 2009 book, Drive, The Surprising Truth About What Motivates Us” . He says customers have,”…an innate need to be self-directed, to learn, to create, and a yearning to be part of something larger than ourselves.” I totally agree. Why do you think this is such a Universal idea?
Yes. I totally agree. We all want to be freed up from models that stifled us. The economic crisis has been refreshing (not to sound like a Pollyanna)—we’ve had to rethink our assumptions. And the Millennials have made us all think about making a difference again. That’s a great environment for a change in attitude. Plus, motivated workers make for profitable companies. So it’s a win/win.
On a more personal note I have to wonder…
JMC: How do you keep it together? w/ your schedule, travel, and the growth of your business–especially since the release of your book? In other words, how do you keep balanced and healthy?
I’m lucky because I love my work. It sounds a bit cliché, but I was very specific in pursuing the type of life I live today. I’m almost an evangelist when it comes to helping companies dig out of their ruts and discover new opportunities for revenue growth. Whether it’s a global financial services company or a hospital system or a regional carpet design firm, or a small manufacturer or a consumer goods or hospitality company. So many people are stuck, and I find it energizing to talk about it, work with teams, write, do research, and engage with my peers (panels, public speaking). My husband travels, too. All I can say is, “TGFS—thank god for Skype.”
JMC: What does Andrea see as the big ‘Next’?
I see 3 big forces that have fundamentally changed the face of business as we know it—probably forever:
1. The speed of change. Forget 10 year plans as the only guide. We need new dashboards that provide ways to read Big Data today and drive what I call “speed to insight”—a competitive skill that I was never taught formally but that all of the leading businesses have in common. Speed to insight allows people to seize opportunities ahead of the curve.
2. The dynamics of the transparent, connected internet-enabled world of commerce. Authenticity and listening are new skills. Privacy has changed forever. The crowd can invent new things (like on Quirky.com) and join forces to sell things (like etsy.com). Memos are public. We live in glass houses. And organizations like the Hyatt are listening to their Yelp comments to help shape their nexts.
3. Globalization. Whether we like it or not, whether we’re local or multinational, we are suddenly in a newly-global work environment. We can go on elance.com and find graphic designers who do what we do for substantially different hourly rates. We are in competition to hire talent against companies from all over the world.
What do you see as a significant trend on horizon?
I see early signs of something I’m calling The Fourth Place—a place that goes beyond Starbucks, who tapped into the concept of The Third Place. If you study State Farm’s newest experimental pilot called Next Door or even ING’s cafes, you’ll start to notice a new type of place for people to hang out that isn’t home (the first place), isn’t work (the second place) isn’t a coffee shop (like Starbucks). Maybe we’re starting to feel like “squatters” if we hang out at a Starbucks for 4 hours. Maybe we work from home and want connection with other people like ourselves. Maybe we want a place to have a new type of conversation (like Next Door’s community chats about how to deal with student loans). But I see all types of Fourth Places popping up in the US and in Europe.
Andrea~It was great talking to you! There is a wealth of information in this book for the future of all entrepreneurs and small and large businesses alike. Go buy it!
Find Your Next by Andrea Kates. Thanks, Andrea!
Andrea Kates (akates@BusinessGenome.com) is the founder of the Business Genome project and author of the visionary bestselling business innovation book, Find Your Next.
As a business strategist, facilitator, and speaker, Andrea has led more than 250 strategic business initiatives for global corporations, entrepreneurs, and organizations including Royal Dutch Shell (Asia-Pacific), Audi, United Airlines, GM/OnStar, Hewlett-Packard, JP Morgan Chase, the Susan G. Komen Foundation, the Houston Texans (NFL), Humana, Zurich Insurance and P.F. Chang’s. Find Your Next was based on her original research with top leaders of rapidly growing companies including GE ecomagination, IndieGoGo, LunaTik, Autodesk, Cisco, Hyatt Hotels and Resorts, Johnson & Johnson and Sharp HealthCare.
Known to many as the next generation’s “brand whisperer,” Andrea believes that the secret to revenue growth comes from cross-industry innovation. Her hallmark CoLabs immerse organizations in the hands-on application of cross-industry insights. Andrea was a featured 2012 TED speaker (short talk).