Are you the most innovative person in your company?
If so, you could be jeopardizing the future of your business.
When you go to sell your company, you’re going to have to convince a buyer that the business will run just fine once you leave. If you’re the person who comes up with most of the new ideas, you’re going to have trouble making the case that the business is self-sustaining.
It’s another example of how sometimes profitability is the enemy of sellability. Peter Drucker is famous for having said that the CEO should spend the bulk of his/her time on product innovation and marketing. That’s fine if you plan to be around forever. If you would like to sell your business one day, you have to find a way to get others to innovate -- even if it comes at the expense of profitability in the short run. That’s the paradox: the more time you spend innovating, the more profitable your company will be and, assuming you’re doing the innovating, the less sellable.
I used to own a research company and we produced an event called The Warrillow Summit for our customers. We grew the conference every year from 1999 – 2008. One team was in charge of event logistics, another team handled research and another group sold the exhibit space. The one area I struggled to get others to lead was the selection of a theme for the event each year.
The theme promises new thinking to make delegates return year after year and it is the most innovative part of programming an event. Picking a theme requires an understanding of trends and a willingness to get out on a limb and propose an idea that might not seem very comfortable when you first consider it.
I did everything I could to get my team to think creatively about each year’s theme: I tried to bribe them by putting a cash bonus in place for a theme idea; I tried brainstorming meetings with stuffed animals and nerf guns -- nothing worked. At the last minute, after I had exhausted all other options, I would end up being the person to come up with the theme. This was a constant source of frustration for me because with a goal to sell my company one day, I knew I needed every aspect of my business to run without me. If I couldn’t get others to innovate, I’d be stuck.
One day I decided to assemble a group of customers to give us feedback on the event and help us pick speakers for the coming year. I invited our most forward-thinking clients to join the group and one of the smartest of the bunch was a guy named Steven Aldrich who, at the time, was the head of strategy for Intuit (the QuickBooks guys). Intuit had been on the leading edge of applying a research methodology called Net Promoter Score, which measured the likelihood customers would refer Intuit to their friends. Steven suggested word of mouth marketing as our conference theme. It was brilliant. Steven had tapped into a relevant theme his peers were just becoming aware of. Steven had also shown me how to solve my problem of having innovation rest in my hands.
If you want to build a valuable business by replacing yourself as your company’s chief innovation officer, consider delegating the task to your smartest customers.
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John Warrillow is the author of Built to Sell: Turn Your Business into One You Can Sell. He has started and exited four companies. Most recently John transformed Warrillow & Co. from a boutique consultancy into a recurring revenue model subscription business, which he sold to the Corporate Executive Board (NASDAQ: EXBD). In 2008 he was recognized by BtoB Magazine’s “Who’s Who” list as one of America’s most influential business-to-business marketers.
