Big Pie Wins

Whether it is for a contract, salary, or valuation, the negotiation process is a critical part of the business world. And nothing seems to invoke our primal competitive urges like a good old fashion barter. We may talk at length about the need for win-win solutions, but far too often urge to ‘better the other guy’ overcomes us and transforms the actual process into a win-lose proposition. That may be fine when you don’t need the ‘loser’ in the future, but when its a supplier, employee, or some other stakeholder whose ongoing support you need, your big win is more likely a pyrrhic victory.

Fighting for a “bigger” slice of pie does not make sense when the cost is a smaller overall pie. Certainly, the rationing of an opportunity’s value has to take in account who brings what to the table. That’s only fair and is what negotiation is all about. But ‘fair’ is not the only variable that matters. Success in business requires alignment of interests across a broad group of suppliers, employees, investors, and other stakeholders. You need them all motivated toward the same end (i.e., making a really big pie), and you simply will not achieve that if the reward (i.e., their slice) is not big enough to be motivating. If you reduce a critical team member’s motivation, you reduce the odds of your own success.

A win-win solution is one where all parties get meaningful (by their definition, not yours) value of out a relationship or transaction. Furthermore, a sustainable win-win solution is one where the value of the relationship continues to be better than new alternatives that will come along. For example, you may be able to command a great deal from a vendor that is having trouble but don’t expect to be at the top of their priority list when their situation improves. In my experience, the relationship you establish with your style of negotiation can have an even greater long-term impact than the specific terms of today’s deal. The key is to balance your desire for a big-slice win today with your need for big pie wins tomorrow.

Ty J. Shattuck
The Idea Whisperer
@tyshattuck

Phobos: The god of Fear

Phobos, the son of Ares, was the god of fear. He was a great and powerful god. He loved to toy with humans. One day he was boasting about his belief that all men were weak and fearful. He bragged that even the most powerful of men were putty in his hands.

Zeus heard Phobos bragging and suggested a challenge to his fellow god. Zeus would offer Phobos three men. If Phobos could get all three to kiss his feet (the most degrading act of the age), Zeus would give Phobos all of his powers and authority. But, if Phobos was unsuccessful, he would have to kiss the feet of the man. It would be beyond indignity for a god to kiss the feet of a mere mortal. He would be humiliated before all the other gods, and his ability to instill fear forever would be reduced. But Phobos was confident that this could never happen. He was Phobos, the god of fear. He was the very personification of greatness. He could intimidate any man. He agreed to the wager.

Zeus and Phobos went down to Earth. The first person Zeus put forward was a rich and powerful lord. Phobos went to the lord and told him that if he did not kiss his feet, all his power, fame and wealth would be taken. The great lord thought of life without his mansion, his servants and his money. It filled him with fear. He bent upon his knees and kissed the feet of Phobos. Phobos laughed and said “I told you Zeus! Men are driven by fear. No man can stand up to my power.”

Zeus then introduced Phobos to a famous and powerful political leader. The leader was a hero and revered across the land. Phobos went to the famous leader and told him that if he did not kiss his feet, all his power, fame and wealth would be taken. The beloved leader thought about his life without the praise and love of the people. It filled him with fear. He bent upon his knees and kissed the feet of Phobos. Phobos laughed and said “I told you Zeus! Men are driven by fear. No man can stand up to my power.”

Finally, Zeus introduced Phobos to a poor man. He was not wealthy, famous or powerful. Phobos went to the poor man and told him that if he did not kiss his feet, all his power, fame and wealth would be taken. The poor man laughed, “You may take all my wealth, fame and power. What have I to fear? I will not kiss your feet.”

Phobos was in shock. He had been defeated by the seemingly weakest of men. The gods laughed. He bent down upon his knees and kissed the feet of the poor man.

Ty J. Shattuck
The Idea Whisperer
@tyshattuck

In Search of Early Adopters

One of the biggest, if not THE biggest, challenge of a startup is finding that first customer. It is easy to find folks that claim an “interest” in a new offering but it is quite another to find somebody that will actually put their money where their mouth is. The first customer validates your business in ways that your friends, family and mom never can. They give you revenue, a reference customer, and a raison d’etre. Your first customer transforms your business idea into reality. But finding that first customer – that person willing to take a risk on you – is a non-trivial exercise.

So what does an early adopter look like? Well, the first thing to understand is that they likely don’t look like your ideal long-term customer. We all have visions of selling our product to the “big boys” in whatever market we happen to be in, but your first customer is most likely not one of them. You must remember that being the first customer of a new offering is a risky proposition on a whole bunch of fronts, and the “big boys” have the most to lose. Furthermore, most large firms delegate buying to mid-managers who generally don’t get rewarded for taking bets. As a result, the “big boys” are usually followers – waiting it out until at least a few others have tested and validated the value of a new offering. In contrast, early-adopter are likely smaller innovative firms (likely a lot like yourself) that need to do things differently to differentiate themselves from the big boys. And herein lies the key: find a customer who has no choice other than what your offering, and you will have found your early adopter. Don’t worry if they are not the biggest client in the world or are annoying to deal with in some way. Remember, the early-adopter is not your destination but rather a door to larger markets and clients. Be thankful for what they are: courageous and desperate enough to buy a product from somebody with no track record.

Ty J. Shattuck
The Idea Whisperer
@tyshattuck

The Fuzzy Front-End of Innovation

There is always much talk about the eureka moment - that magical moment when an idea crystalizes into something coherent - something that can be articulated, shared and built upon. We often think of the eureka moment as the start (time = 0) point in in the innovation process, not dissimilar to the big bang start of the universe. But alas, the eureka moment is far from the beginning.

Long before things converge into a eureka moment, there must exist the raw ingredients of an idea – a primordial mix of pains, problems, brilliance, dreams, passion, creativity and imagination. Somewhere and somehow within our subconscious, these raw ingredients come together over time, and eventually focalize into a conscious spark of brilliance that we call an idea. This pre-eureka phase - the so-called fuzzy front-end of innovation - is the source of all ideas and obviously vitally important to the innovation discussion. But it is also a topic that most of us are ill-equipped for. As we step back in process time, we transition from the post-eureka domain of engineers and entrepreneurs to the unexplored pre-eureka jungles of neuroscience. While neuroscience is making tremendous strides (especially with the latest functional MRIs (fMRI) research), for us laypeople the pre-eureka phase remains mostly a mystery – a troubling concept given that it is the source of the seeds of our businesses.

It is hard to accept that so much of the value we create is the result of a process beyond our control somewhere within the dark recesses of our minds. But that is indeed what neuroscience is teaching us. And while there is much talk about the environmental factors that enable creativity and innovation, the truth is that hard science usually doesn’t support these theories. I still think they are worthy conversations to have, but we must remain humble about how much we really know and understand … and we really don’t know that much. We can be troubled by this reality or we can see it as a brave new frontier.

Innovation and the Ancients

I’ve always been fascinated with the history of the ancient Greeks and Romans. From a western perspective, they were the original and ultimate social innovators. They created the very constructs of how we think and how we govern ourselves. Today it is somewhat difficult to separate the two because their architecture, religion, art and literature all seem similar to the modern eye, but a little digging reveals the Greeks and Romans were actually very different. The Greeks came first and are most famous for their philosophies that remain the cornerstone of Western society. Socrates, Plato, Aristotle and others of that era were great thinkers who valued ideas above all. The Romans were quite different in this respect. The Romans were pragmatists and their interest was in the application of great ideas. They followed the Greeks, adopted their ideas, tweaked them and then used them to change the world. The Greeks (i.e., Plato) wrote about a great republic, whereas the Romans took those ideas and actually built one.

This amazing relationship between Greek-like thinkers and Roman-like implementers forms the basis of modern innovation thinking. Applying modern language, we would say that the Greeks invented the social innovations, and the Romans commercialized them. Today, scientists and academics play the role of modern Greeks in that they generate new ideas, concepts and IP, and engineers and entrepreneurs play the role of Romans as they take these ideas and build new products and businesses.

There are important lessons to be learned from the relationship between these two great societies. Perhaps the most striking is what it tells us about the time lag between the invention and realization phases of ideas. Today we assign a lot of importance to the idea of being first, even giving it the title first mover advantage. Yet when we look at the Greek-Roman relationship, we see that it was not the first-mover Greeks that realized the value of their own great ideas. Our current preoccupation on being first distracts us from the advantage of the second-mover in the Greek-Roman relationship. Being second can be a lot cheaper and less risky than being first, as you can learn from the expensive failures of the first mover. The Romans did not just adopt the ideas of the Greeks. They also learned from the failures of Greek society. And it was this combination of great ideas and observed lessons that the Romans were able to apply so remarkably in building their empire.

None of this is to say that the Greeks were not important. In fact, without the Greeks the Romans would not have had the concepts to build upon. But it is the combination of inventor plus implementer that ultimately creates the value. So often I hear people debating the relative value of our modern Greeks and Romans, but the debate misses the point that both are essential players in the innovation play. The inventors feed the implementers new ideas, and the implementers fund the inventors with the proceeds from ideas previously realized. It is an amazing cycle that started in ancient times and continues today.

The Elusive Happy Place

I’ve had the honour of working with some truly talented and creative people in my career. That honour has allowed me to observe that extreme talent often comes with extreme passion. Where there is passion, there is very often conflict, drama and frustration. Despite my ‘no drama’ policy, I seem to be endlessly drawn into situations where passions have boiled over and I’ve had to intervene. Historically, my goal has been to find a common ground where all the parties are satisfied with the result. I’ve put tremendous energy into getting everybody to a ‘happy place’, but alas I’ve rarely succeeded. And even when I have, dissatisfaction seems to rear its ugly head again in no time at all. For the longest time, I considered my inability to develop a harmonious work environment to be one of my great failures.

Like most people I drank the coolaid espoused by management gurus who talk eloquently about great work environments where collaboration, teamwork and consensus reign supreme. Oh, wouldn’t it be nice? It all sounds so wonderful. I can close my eyes and almost feel what it would be like. But when I open my eyes, the tranquility disappears and tension, debate and endless dissatisfaction flood my reality. I wonder if those gurus ever sat in a meeting where real designers – real engineers– real leaders debated and discussed new products, new processes or new business concepts. If they had, I suspect the experience would have crushed their ‘happy place’ dreams too.

I have shared in past blog postings that I believe that passion is the secret ingredient of success. I stand by that position, but I have learned that passion has a price. Passion results from having a strong sense that things could and should be “better” in some way, whether on a technical, business or social front. In other words, passion is a byproduct of dissatisfaction with the status quo. Take away the dissatisfaction, and there is nothing feeding the passion for a better tomorrow.

Obviously not all debate is positive, but ‘healthy’ dissatisfaction is a necessary condition for creativity and innovation. A harmonious and stress-free work environment may sound nice but it is really code for complacency. I see now that my effort to make a ‘happy place’ for everyone was a fool’s folly. The tortured artist that produces great wonders can never really be satisfied, and neither can a truly innovative organization.


Ty Shattuck
The Idea Whisperer
@tyshattuck