Taylor, Bill and Polly LaBarre

As co-founder and founding editor of Fast Company, William C. Taylor helped to launch a magazine that won numerous awards, including two National Magazine Awards, and played a part in defining the new world of work. Bill, now adjunct professor at Babson College in Massachusetts, wrote a monthly column for the New York Times Sunday Business section called "Under New Management," and he's the coauthor of three previous books about strategy, leadership, and innovation: The Big Boys: Power and Position in American Business, No-Excuses Management, and Going Global.

 

Polly LaBarre spent eight years as senior editor of Fast Company, where she wrote articles on strategy, creativity, and personal success. She co-hosted the magazine's Real Time conferences and helped to create a high-level roundtable series, "Fast Talk," which she moderated in locations around the world. She has spoken to business audiences globally and appeared on Good Morning America, CNBC, and PBS's Nightly Business Report. She was one of the authors of The Big Moo.

[Bios adapted from their website, www.mavericksatwork.com.]

tompeters.com asks …

The name of the book is Mavericks at Work: Why the Most Original Minds in Business Win by Bill Taylor and Polly LaBarre. What’s the news here?

BT: The news is there are new and different answers to some of the oldest and most basic questions in business. What does it mean to have a winning strategy? How do you create lasting value in the marketplace? How do you make enduring connections with your customers? What’s the right way to unleash innovation? How do you win the battle for talent?

These are not new questions; they are, in fact, some of the most basic and fundamental questions that businesspeople have been asking themselves for decades. We think we have a set of new and compelling answers. We discuss a number of companies, executives, and entrepreneurs that represent a breath of fresh air in a world that, for those of us who love innovation and passionate business, for the last five years has felt like an ice age of scandal and skullduggery.

Sure, Enron and WorldCom come to mind, but are you believing too much of the media hype?

BT: If your perception of reality is based on what you see on the front page of the Wall Street Journal every day, as it is for a lot of people, there’s been an awful lot of bad news for five years in a row. It goes back to the Wall Street research scandal, the mutual fund scandals, and the CEO misbehavior right up to the present with this Dynasty-style soap opera intrigue on the board of Hewlett-Packard. That is one version of what’s happened in the last five years. It’s hard to suggest that that’s not a big part of the story.

Our notion is that there’s been a kind of hidden history in the last five years. A whole generation of companies has quietly and quite effectively been rethinking how some of the basics of business get done. In industry after industry there’s been this changing of the guard, where the companies that are now generating all the growth, creating all the jobs, generating all the shareholder wealth, are companies that a decade ago were dismissed as outliers and wild cards. They’re now the ones in positions of power, or at the very least the ones that are succeeding and growing in industries where everybody else is consolidating and cutting back.

PL: It’s also the notion that business conversation has essentially been flat and uninspiring. We’ve connected with this new class of business creators who are exciting, inspiring, and instructive.

The four arenas that we spend a lot of time on in the book surround the question of strategy, that having the courage to be different makes all the difference in business today.

Could you talk about those four arenas?

PL: One of the clarion calls that we heard in the last five years was the letter from the founders of Google, stating that Google is not a conventional company and they don’t intend to become one. The unconventional, independent spirit of maverick companies, companies that stand for important ideas more than simply selling competitive and great products, is the right spirit for the next era of business.

When we talk about standing for important ideas we mean that these are ideas that shape the future of an industry, that reshape the sense of what’s possible among customers, among employees, among investors. That distinctive and disruptive sense of purpose is the hallmark of a maverick. A company with a clear sense of purpose wins. That’s the first principle.

The second principle concerns relationships with customers. Sharing your values beats selling value. That’s the paradox at the heart of the relationship with most companies and their customers today. Companies keep offering better deals, the cheapest, the easiest, the most relevant products, services and experiences. Yet customers seem less and less satisfied with those offerings. We believe there really is a customer satisfaction crisis across the economy.

When everything keeps getting cheaper, better, easier, and faster, offering customers something that’s a little cheaper or a little better doesn’t win you a place in their hearts or their lives. Companies and organizations increasingly have had to move away from just selling value to striking a genuine relationship on the basis of distinctive values. They’ve had to devise a psychological contract, much like the one Starbucks has. They’ve redefined customers’ expectations and reinvented an entire category.

We posit that every maverick company is based on a distinctive and disruptive sense of purpose, and a set of really important ideas. The next question is, where do those great ideas come from? This is the third realm that we spend a lot of time on in the book. If you look at the old definition of innovation, the boss was usually the smartest guy in the room. It usually was a guy, and he thought up all the great ideas and the troops did all the executing.

The new model of innovation is that nobody is as smart as everybody. Great ideas come from anywhere and anyone in the world. You have to be smart and open and curious enough to ask, and to create a mechanism to gather those ideas.

The fourth principle will not come as a shock to anyone. In this world of disruptive strategy, open source innovation, and psychological contracts of customers, your success as an organization is built upon one very core and perennial reality: The people are the company. You simply cannot have a great company that’s filled with people who are of not so great quality. Your organization cannot be better than the quality of the individuals in it. That raises a lot of questions about why great people would want to work in your organization. Do you know who the right great people are when you see them? Do you know where to find them? Most importantly, how do you unleash these folks? Once you get stars into the company, how do you create systems that unleash the best contribution from individuals and teams? Those are the four areas that we focus on.

Now that you’ve finished the book, is there a company that lingers longest in your mind?

BT: There are three for me. The first one is Commerce Bank—which I know is a favorite of the Tom Peters world as well. What an amazing, fun-loving, theatrical group of people. Who ever knew that going to a bank could be so much fun—or that making it fun to go to the bank could be such a strategy for success? For people who want to see the “experience economy” brought to life, this is the company that does it. What a breath of fresh air!

The second one is ING Direct. What I love about ING Direct is that, maybe more aggressively than any of the new generation companies we’ve been writing about, this is not just a company; it’s a cause. The term that its CEO, Arkadi Kuhlmann, uses is: strategy as advocacy. Everything ING Direct does as a business grows out of the proposition that its core mission, its disruptive sense of purpose is to “lead Americans back to savings,” to be a voice of financial sanity in a country where too many of us have gone mad with respect to our money. It adopts all kinds of business practices that are completely at odds with what any conventional banker would do in the banking industry. They make no sense to the financial establishment, but they make perfect sense to ING Direct because the whole purpose of the company is to upset the apple cart.

Arkadi said to me, “First of all, we’re not just building a company; we’re transforming the industry. Secondly, don’t talk to me about our business model, what products and services we sell. Talk to me about our value system, what ideas we stand for. Then we’ll get to the products and services.” That is probably the purest version of strategy advocacy I’ve seen.

The third one of my favorite companies is Pixar. Partly because it’s such a household name, and the results are so stunning. Steve Jobs bought control of this company 20 years ago for $10 million and just sold it to Disney for $7.4 billion. That’s pretty spectacular.

What I think is so crucial about Pixar is, maybe more than any company we’ve seen, it understands that it’s an incredibly disruptive and successful presence in the marketplace. The fact that it has really transformed what audiences expect from digital animation and storytelling in the movie theater is totally connected to its distinctive and original approach to the workplace. The reason Pixar’s movies work so well on the screen is that it has reinvented the approach to movie making. In the movie industry, everybody is a free agent. Pixar said, that’s fine for some people, but we’re going to do the opposite. Everybody is an employee, a long-term investment. We’re going to make a commitment to art as a team sport.

I get a mailing from ING about every three weeks. It’s the equivalent of the old AOL disc.

BT: I know, they’re very aggressive marketers. What’s so funny about that is, to this day, for all of their advertising, 45 percent of their new customers still come by word-of-mouth, because it’s such an offbeat presence in the marketplace.

Polly, you mentioned Starbucks. I just interviewed John Moore, author of Tribal Knowledge [subtitle: Business Wisdom Brewed from the Grounds of Starbucks Corporate Culture] …

PL: I read it.

His primary point was that Starbucks didn’t start off to be a brand or the third place. They just wanted to give people a good cup of coffee.

PL: You could argue that there was a turning point with Starbucks. Our book is really about a new generation of companies. Starbucks and Southwest Airlines are companies on what we think of as the Mount Rushmore of mavericks. So we don’t do a big case study on Starbucks.

But I do think it’s important to look at when Howard Schultz came in to take over. From the very beginning he talked about his experience of being in Italy, being in a café, and what the experience of having a cup of coffee was like there. In the beginning, it really was about creating a new experience. Of course it was about great quality. Bill mentioned strategy as advocacy. From a maverick point of view, the value system, the reason for being in business, is the first point of entry.

When you talk to Herb Kelleher about Southwest, he doesn’t say, “We’re in the airline or transportation business.” He says, “We’re in the freedom business. We exist to democratize the skies.” Everything about their vaunted economic model is in service of their value system. The reason why they have this direct, quick turnaround, no frills, low cost, low fare economic model has everything to do with this value system. How can we be the lowest fare airline so that we give regular folks the freedom to fly that rich folks have? That model is so successful that it’s become an obvious story that exists across the industry today.

You can wonder, is the Starbucks story about the coffee or is it about the experience. But there’s absolutely no doubt that the lesson is, in order to find a place in people’s lives, it’s not just about the product, it’s really about this compelling relationship that you create with customers.

People read these lessons and then try to apply them to their own companies, but in reverse order. If you already have a company and it already has its pillars for whatever it stands for, how do you change that? How do people take the lessons they’ve learned and apply them to their own businesses? These mavericks seem to have the right mindset from day one. You say this is a “how to” book; I’m not quite sure I see that.

BT: To me, it comes down to the crucial role that authenticity plays in every company in the book. You can’t fake a sense of purpose. You can’t fake a commitment to wanting to make a psychological and emotional connection with your customers. That’s going beyond just being able to knock 5 percentage points off the price compared to the guy down the street.

We’re trying to allow people to either a) be more explicit about what they’re already doing, or b) be inspired by, and learn from, ideas that they could try to apply to their own companies. Not import them willy-nilly and identically into their companies. You have to put your own spin on it. There’s a difference between being a “how to” book and being a recipe book—

PL: It’s about how you can start having these conversations inside your business about who you are and what you are fighting for. Can you excavate that sense of purpose, that one thing that you do that if you went out of business tomorrow your customers, your employees would truly miss?

A good example to contradict your point that it has to happen from day one is HBO. I spent a bunch of time with Chris Albrecht [CEO of HBO]. When he started as the head of original programming, HBO was already 10 or 15 years old. He sat down with a group of his executives, and said, “Are we really groundbreaking?” The answer that came back was, “Not really.” The conversation continued, “Okay, but do we aspire to be this? Do we have this in our DNA in some fashion?” “Yes.” “So what can we do?”

But that was day one of the present HBO.

PL: Any company can create transformation points.

I agree with you there. They have to be willing to blow up the old idea of HBO, or whatever it is.

PL: I think this book does advocate thinking differently. It’s called Mavericks at Work. It’s not about changing things just a little bit. There is a high level of courage and boldness. One of the reasons that we decided to write a book is this belief that the maverick spirit is the right spirit.

Bill has a saying, which I love, “What red-blooded American businessman or woman wakes up in the morning, looks in the mirror, and says, ‘Okay, I’ll stand for business as usual.’?” We wanted to tap into this notion that business at its best can be inspiring, instructive, and exciting. We wanted to create a book that would give people at all levels of their organization access points to that.

What about H.J. Heinz? The most fun factoid in the book, for me, was the American Customer Satisfaction Index. H.J. Heinz is at the top of the list of customer satisfaction in America. That reminded me that Alcoa’s Reynolds Wrap Aluminum Foil was the brand with the highest brand equity in America. These are not companies that are ever going to show up in Mavericks at Work. Is there a disconnect here? Why are they rated so highly? They’re pretty dull companies.

BT: I agree. That is a fun statistic. But I think it is more a commentary on customer expectations than it is on corporate innovation. I think the nutshell answer is that as a customer, your level of satisfaction is always relative to your level of expectation. I think over these oh-so-many decades, people know what to expect from their ketchup, and the ketchup tends to deliver it quite reliably, bottle after bottle. And so people are satisfied.

Compare that to the new generation companies, whether it’s internet providers, or personal computer makers. They have unleashed this revolution in customer expectations that they are simply not fulfilling. We have now trained customers in high tech industries to assume that every year, every product will be 20 percent cheaper, three times faster, and 50 percent smaller. That’s now become a constitutional right in the United States. When you do that, you get yourself on a competitive treadmill. People assume that that’s the way the world works. It’s very difficult to keep them satisfied relative to their very limited expectations vis-à-vis their condiments.

The challenge for companies that style themselves as much more creative, much more nimble, much more aggressive and avant-garde than H.J. Heinz is, now that they’ve unleashed these expectations, how do they actually satisfy their customers in some other way? That gets us back to the issue of emotion and psychology.

Both of you are refugees from Fast Company, and you may or may not have been around when Fast Company published an article called “Built to Flip.” Then we have Jim Collins’ book, Built to Last. On which side do you fall? Should companies build to last? Or should companies just be projects?

BT: You want us to weigh in on the great debate between Jim and Tom? Are we talking to tompeters.com or jimcollins.com?

PL: We should also say that a bunch of early readers of the book wrote back to us and said, “This reads like In Search of (a New Kind of) Excellence.”

I noticed your disclaimer that not all these companies will survive the test of time.

PL: We wanted to be very clear about what we were trying to do in this book. The message in this book is this: We can change the conversation inside our organizations and among businesspeople in order to make not only individuals more successful, more engaged, and more innovative with their work, but organizations as well. But I don’t think we’re canonizing any of the ideas in the book or saying that there is one right way to do things.

These organizations are innovation factories in the sense that they’re constantly doing the work of experimentation and innovating on the art of innovation itself. And we haven’t even talked about the innovation section of the book. There’s this relentless inventiveness around not just products, services, and experiences, but the daily processes of organizing work and connecting with customers. Everything from how to have a meeting to how to create an architecture of participation.

I think it’s really about connecting with that spirit and getting that conversation and that energy going in your own work. As Bill said, there’s a difference between a how-to book, “here are some next practices to inspire you,” and a recipe book, “six weeks to flatter abs.” That’s not what we’re doing.

Okay, but clearly you’re not going to answer the original question.

PL: Bill should answer it, because he co-founded the magazine.

BT: We were both around for the “Built to Flip” debates. I have my own personal theory, which is that there is no independent social science in the world of business. Basically, any business author’s argument is a projection of their own personality. Anybody who knows Jim Collins knows he is a methodical, wonderfully serious-of-purpose guy. If you spend an hour with the guy over dinner, it’s no surprise that after he spent five years researching the companies of the world, he decided that the secret to the universe is being built to last.

I’ve spent a lot time with Tom over the years, and he is the Energizer Bunny of humanity. He’s interested in a million things at once, and is just endlessly fun, perky, and exploding with energy. It’s no surprise to me that his take on the universe is that it’s a project world and everything should have a half life of a year.

On the other hand, Peter Drucker, may he rest in peace, also weighed in and said the corporation, as we know it, isn’t going to survive another few decades. He’s basically saying that the way these businesses are organized now isn’t going to last.

BT: I have no definitive answer one way or the other. What interests us—I think this is also a projection of our personality, or at least my personality—is ideas that are designed to last. We visited scads of companies, and wound up settling on these 32 organizations as the companies that would form the kind of raw materials of the ideas we brought to the table. I want to be very honest. There’s no social science patina around these 32 companies.

How did you pick them?

BT: We picked them based on in-depth access to lots of companies, and what we felt were the power and originality of the ideas these companies represented. Not their size, not their industry. Behind every one of these companies to date is tremendous business performance and financial results. But I don’t want anybody to suggest that their past results are in any way a guarantee of future performance. So in that sense I wouldn’t want anybody to go out and create a stock portfolio of these companies. Maybe that is, in a sense, my own reservation about the “Built to Last” thing.

Based on almost a decade at Fast Company and five years at the Harvard Business Review before that, I consider myself, and I’ll speak for Polly, we consider ourselves very savvy evaluators of the power of ideas on which organizations are built. We’re also intellectual venture capitalists. We visited places in the same way that venture capitalists visit potential investments. We figured out what the ideas are that we feel are worth investing in, in the sense that they can really teach people exciting new ways to think about their own company strategy, their own techniques for recruiting the best people in their industry, and so on.

We went deep inside these companies. Not so much studying their financial documents, but spending days and weeks at meetings, participating in events. Polly took classes at Pixar University. I went to all kinds of training sessions at Commerce Bank. Multiply that by a lot. You develop a great confidence in the quality and staying power of the ideas themselves. That doesn’t mean that some company won’t make an acquisition that turns out badly or put out a product line that doesn’t work in the marketplace. A bad quarter or a tough year doesn’t invalidate the power of the ideas around which the company is built.

I have always been interested in ideas with staying power and ways for readers to learn from the ideas that we showcase. I don’t necessarily come down on one side or the other about the aim of building a company that lasts a century, or building a company that lasts 18 months. I think it’s a big enough world for both to co-exist.

PL: There are many ways to be a maverick. There’s a lot of diversity in this book. Some of the companies are tiny and some are huge. Some of them are mavericks on all dimensions, some more on one than others.

What happens next with Mavericks? Does this become a franchise or is this just a project? I think you mention a movement in the book.

PL: When we set out to do this, it was in the spirit of the project we worked on a decade earlier at Fast Company: How do we change the business conversation? We have ambitions to create that conversation. But we’re in the early stages of figuring out how we’re going to create a platform for it.

You do have “A Manifesto for Mavericks” at mavericksatwork.com.

PL: Right. We intend that to be a viral message. It’s set up so that people can read it, share it, email it, talk about it.

Will that be published at ChangeThis?

BT: Yes. [Note: it is there now.]The world remains hungry for and needs genuinely fresh thinking about the power of business at its best, and how you make that happen. I do think for the last five years we’ve all been—to go back to where we started—immersed in the daily headlines around the face of business at its worst. There are tens of millions of people who love their jobs, or want to love their jobs, and want to create value in the marketplace. Whether they’re part of a giant company or an entrepreneur, they bring value systems that make them proud and want to see the connection between what they believe in as people and the work they’re doing in the real world. I think that’s the human condition. There’s always a voracious hunger for thinking advice and role model companies that show people how to do that.

You also see an explosion of energy, intensity, and excitement over ideas and information moving around on the web. Tompeters.com is a great example of that. I have yet to figure out how we take our ideas, the ones people are hungry for, and what we’ve learned from fascinating companies and marry that to the bottom-up, peer-to-peer raw energy of the internet. What is the new platform for moving business ideas around in the same way that the print magazine Fast Company was the platform for a decade ago?

Our first goal, and our colleagues may not want to hear this, is to sell an awful lot of books. Our second goal is to figure out what to do with the response to our new web-based platform. If we release some energy into the business culture, with the book, with mavericksatwork.com, what does the business culture send back to us? How do we tap into what all kinds of people, all around the world are doing with their own businesses? How do we allow them to add to the arsenal of ideas, tactics, and great stories? It’s not unlike what you guys do at tompeters.com.

Don’t be such a suck-up. [Laughter]

BT: Ultimately, people are looking to experts to help start conversations, get them talking and to make sense of all this.

I’ve always believed that the presence of the internet would alter everything. It has altered everything, but I think that it will continue to alter things in a bigger way. That’s why I particularly like the open source section of your book.

BT: I just haven’t seen how you do that yet in the realm of business. I know how you do it with photos through Flickr. I know how you do it with horny teenagers through MySpace. I don’t know how you do it from the point of view of people who are serious and passionate about their work. How do you create essentially a peer-to-peer social software—

I think it’s constant exposure. Understanding that you can share everything and that sharing everything doesn’t kill you.

PL: But how do you harness it? We mention the Goldcorp Challenge [“Rob McEwen, chairman and CEO of Goldcorp Inc. based in Toronto … issued an extraordinary challenge to the world’s geologists: We’ll show you all our data on the Red Lake mine online if you tell us where we’re likely to find the next 6 million ounces of gold.”]. Is there a way to create a version of that?

That was my favorite part of the book.

PL: It’s really exciting stuff when you think about it. Not the top-down design of this experiment, the “help us think about where to drill for gold.” But the wonderful humility, openness, and sharing spirit of leadership of Rob McEwen. He doesn’t only take these ideas, which are diverse, surprising, and rich in so many ways, but he creates a platform for people to actually create their careers, in a way. We’re nowhere near creating anything like that, but it’s an idea.

What’s instructive is that none of these other companies have bothered to try to imitate what Mr. McEwen did.

BT: Right, very true.

PL: So there’s room for innovation.

What’s the story with this acid green color scheme?

PL: Don’t you like it? Have you received the finished book or do you just have the galley?

I have a galley. I like the idea that you signed the galleys. Normally the galley is kind of a throwaway thing, but this is signed. You’ve created a whole new experience for me.

PL: I love the color, but we have heard that some people are drowning in green. We’re painting the world green.

I like it that way. That spine stands out in a bookstore.

BT: I have a different experience. Based on Tom’s blurb at the top [“I didn’t read this book, I devoured it.”], whenever I send someone an email, I get an email back saying, “I didn’t just read your email, I devoured it.” Ralph Nader and I wrote a book together 20 years ago called The Big Boys. Tom wrote a review for the Washington Monthly, which became the foreword for the paperback. I was at a wedding recently, and Ralph was seated next to me. Apparently he’d gotten his galley of Mavericks, because when he ate a piece of cake he said, “I didn’t just eat this cake; I devoured it.” [Laughter]

That’s fantastic. He was waiting that whole meal for an opportunity.

BT: And then he burst into hysterics.

Polly, Bill, I appreciate your time.

Links:

Website: www.mavericksatwork.com
Blog: www.mavericksatwork.com/blog/

Emails: williamctaylor (at) – yahoo.com
             polly (at) – bbridge.net