Organisation : Break the Rules
Paul Sloane is the author of ten books on lateral puzzles, creative problem-solving and lateral leadership. He is the founder of Destination-Innovation, a consultancy that helps organizations develop the vision, culture and process of innovation. His book, the "Leader’s Guide to Lateral
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How often do you hear leaders using sport as an analogy for their business? We need teamwork like Real Madrid. We want performance like the Ferrari formula one team. We want commitment like the Europeans in the Ryder Cup. Sport has great attributes in terms of endeavour, teamwork and training but it is a very poor metaphor for business in one important respect – innovation. This is because in sport there are strict rules that cannot be broken without penalty, whereas in business most of the rules can be broken. Radical innovation means contradicting convention and inventing an entirely new game.
If you can find a way to rewrite the rules of the game so that it suits you rather than your competitors then you can gain a remarkable advantage. In the late 1970s the Swiss watch industry was suffering from fierce competition from the Japanese. Major brands like Omega, Longines and Tissot were in serious trouble. Nicholas Hayek took dramatic action. He merged two of the largest Swiss watch manufacturers ASUAG and SSIH to form a new company, Swatch. It took a radically different approach to watch design, creating a low-cost, high-tech, artistic and emotional watch. Within five years the new company was the largest watch-maker in the world. Swatch rewrote the rules of the watch industry. Swiss watches had competed against mass produced brands by focussing on tradition and quality but Swatch changed the parameters by making watches that were fun, fashionable and collectable.
Every business operates in an environment of written and unwritten rules. Many of these boundaries and restrictions are self-imposed and accepted without questioning. Often it is the newcomer to an industry who can ask the question, ‘What would happen if we broke the rules?’
This is what Richard Branson did when he launched Virgin Atlantic to take on the might of British Airways, American Airlines and Pan Am. They all played by the same rules; first class passengers enjoyed the best service, business passengers received adequate service and economy passengers got very few frills. Branson eliminated first class and instead gave first class service to business passengers. He introduced innovations such as free drinks for economy passengers, videos in headrests and limousine service to the airport.
The law of the land has to be obeyed but most business rules are there to be broken. In sports the referee may penalize you but in business the marketplace will be the referee and it will reward a rule-breaker who creates value through innovation. Anita Roddick, founder of the retail chain the Body Shop succeeded by deliberately doing the opposite of what the industry experts did. She saw that most pharmacies were stuffy places that sold toiletries, perfumes and medicinal creams in expensive packaging and pretty bottles. She did the opposite by packaging the goods in Body Shop stores in cheap, plastic bottles with plain labels. It saved cost and it made a statement that the contents of the packages were what mattered. The Body Shop was seen as natural, spiritual and in tune with an environmentally friendly consumer.
Oticon, the innovative Danish hearing–aid manufacturer, broke the conventions of corporate structure when it tore up the hierarchy and created what became known as a ‘spaghetti organisation’. People are not allocated to departments but move from project to project. The system looks chaotic in a conventional sense but Oticon have achieved remarkable success with it over a period of ten years.
Another renowned rule-breaker is Benetton who have deliberately breached the conventions of the clothing industry over the last 20 years. It has been highly innovative in its use of colours and fabrics. But it is probably most famous for its advertising campaigns featuring aids sufferers and war victims. The adverts were unashamedly shocking and controversial. In a world full of bland and politically correct images they stood out like a lighthouse.
Many of the rules that apply in businesses were set years ago and have endured by force of habit. A good example is the QWERTY keyboard, which is in use on all desktop computers. The original QWERTY layout of keys on the typewriter keyboard was designed in the 1870s to slow down the speed of typing because fast operators were causing typewriter keys to jam together. By putting the most commonly used letters e, a, i, o away from the index fingers of the hands, speed was reduced and jams were avoided. Those mechanical jams are long gone but we are stuck with a rule for a keyboard layout that is outdated and inappropriate. How many of the rules in your organisation are QWERTY standards – set up for circumstances that no longer apply today?
Picasso broke the rules on what a face should look like and Gaudi broke the rules on what a building should look like. To achieve radical innovation you have to challenge all the assumptions that govern how things should look in your environment. Business is not like sport with well-defined rules and referees. It is more like Art. It is rife with opportunity for the lateral thinker who can create new ways to provide the goods and services that customers want.
Copyright 2004 by Paul Sloane. All rights reserved.
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