Companies who do it by the book end up on the shelf
Andy Law argues that there is no blueprint for innovation; innovation is de facto about change and experimentation.
In the history of organizational design and management, there have always been mavericks; managers who ignored or trod over established practice, and instead experimented with innovative and sometimes quite radical new methods. Today, companies like Google (“don’t be evil”) and Zappos (famed for its “quit now” bonus) come to mind. But in the 1990s, all eyes were on St. Luke’s, a company that was shaking up the advertising business. We spoke to Andy Law, best-selling author and co-founder of St. Luke’s.
When you look back over your career, including your time at St Luke’s and the projects you have been involved in since, what is the main lesson or insight that you have learned about managing an innovative organization?
Looking back over those years, the key insight for me is that you should never lose sight of your own personal values as you begin to innovate. To build an innovative company you have to have an innovative and energetic leader. That’s why I say that you should never discount your own personal values and strength.
If a business can normalize it will. The natural state of an organization is not to innovative. At St Luke’s we told our people that part of joining St Luke’s is joining an experiment. We got our energy from experimentation. But as soon as a company stops with experimentation it will normalize.
Ultimately, it is all about the people. I tried to build a company where the personal growth and development of our people were as important as business development. Many people in leadership positions try to factor out personal agendas by relying on abstract KPIs and performance targets. They should do the opposite. They should experiment with ways to enhance their people’s lives.
I have been lucky in my life in the sense that much that I have done and continue to do, are things that I really want to do. Everyone should have that liberating experience, not because they have much money, but because they have the flexibility.
How do you assess the impact of the internet on the way that companies organize themselves?
I’m looking at this very question in my third book ‘being present’. The major effect of the internet is to ‘atomise’ the world of business into millions of different parts. Mainly this is changing the way that organizations are viewed or perceived; but I don’t think it is changing the very nature of companies in any fundamental sense.
When people talk about social networks I often find that they confuse the ‘social’ with ‘socialism’. I don’t ascribe to the belief that social networks are a new political force; that it is a transition to a global democracy of sorts. I don’t think they do that at all. Social networks are loosely affiliated clubs of people who choose to be like minded in some way. That’s not a new political force. Similarly, I do not think that the internet will change the way that businesses are constructed in any fundamental sense, although the internet is changing the way that companies are viewed. In the past, an organization was judged by its direct stakeholders, its customers and possibly its suppliers. But today a company can be judged by anyone who wants to be a judge.
As a result, companies will become more aware of their role in society, but they also are likely to become more secretive. New forces do not always lead to change. Look at Russia; they’ve gone through three very different political systems in the last century but at base each system has operated in very similar ways.
I personally do not think that the internet will change companies. But will it change people? Yes, it will change the way in which people manage their reputations and earn a living. People can be more fragmented, in their identities, but also in their income streams. I think it is important to make that distinction between people and companies. Sadly, companies will—if anything—become more conservative as they try to defend themselves against the prying eyes of the internet.
For companies it will become far harder to be seen and heard. With the internet it has become easier for smaller brands and companies to gain exposure, sometimes massive exposure. Larger companies are jostling for visibility in a world that they share with millions of other entities. It is becoming very hard for them to be ‘present’ in a meaningful sense.
But surely the internet does allow for flatter, more flexible organizational models, as illustrated by your own organization The Law Firm? You have described it as a Global Nodal Network?
The internet tightens up relationship because everything is recorded and stored. The internet has the ability to track practically everything we do, so yes, it does create an opportunity to form looser organizational forms. At The Law Firm we have fallen in a hole in the middle, in between the two extremes. We’re neither a tight, hierarchical organization and neither are we a loose, open organization. For example, some of our nodes had exclusivity in their markets, but that was me behaving as a command and control company. We do realize now that we need to open it up more. We need to coordinate our activities around an idea or a concept, and use the logo simply as a badge. That’s why I’m going to wind it down as a company, but focus more on the concept. We still need an anchor around which to collaborate; a commitment toward a set of principles, a commitment toward innovation. Entrepreneurship comes from unexpected corners—that’s what I’ve learned. So let’s collaborate around a proposal, a concept, as opposed to an organization with me as its center. As a result, I need to reevaluate my role and skill set.
The type of ideas that you have experimented with at St Luke’s, and others like Ricardo Semler’s methods at Semco, are certainly interesting and often inspiring, but is it feasible to implement such ideas at large organizations who operate in mature, risk-averse industries?
There are some very large companies out there who have very different and very clever ways of doing things. Cemex, the giant cement maker, comes to mind. As a consultant I’ve had more success working with large companies. Obviously I don’t go in saying that all companies of the future will look like Google. On the contrary, my key argument is that most companies are only using about 5-10% of the talent they have available in their organization. The key challenge is to harness more of that talent.
You should never blame a company for its past. That’s like saying to someone that you’re too old to do much anymore. But you do have to look at the future. And that means inspiring people. The problem is, however, that they’re all reading the same textbooks. They’re all listening to the same consultants with the same ‘best practice’ advice. There’s a cloning process going on, which is a shame! The whole point is to be different, to experiment—that’s where the energy comes from. Companies who do it by the book end up on the shelf.
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