By: Bill Taylor

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When you are the founding editor of Fast Company magazine, you get an up close look at some of the most fascinating and successful organisations in the world. Over the years, these organisations have been rewriting the rules of business. In Practically Radical Taylor gives us the road map for transforming companies, shaking up entire industries, and challenging ourselves to lead in brand new ways.

Transforming your company

Transforming your company is hard work, especially if old habits reign supreme. Taylor shows us that the most successful companies combat this problem in two ways.

First, they develop a capacity for vuja de, which the flip side of deja vu. It’s the skill that allows you to look at a familiar situation as though you’ve never seen it before. Consider the story of Swatch Group, the famous Swiss watchmaker.

By the early 1980s, the once powerful Swiss watchmakers had lost their stranglehold on the world market, much like the North American automobile industry has in recent years. In fact, the Swatch Group (then called SMH) had sales of $1 billion but losses of $124 million. When Nicolas Hayek took over the company, he was urged by bankers to start selling assets, including Omega, the watch of choice of 007.

Unlike many of his counterparts at other Swiss companies, Hayek resisted the urge to sell off assets and send their manufacturing operations to Asian countries. Instead, he looked at the hundreds of years of watch making experience the Swiss had built as a competitive advantage, and not only kept his brands but also his manufacturing operations in Switzerland.

He had looked at a situation that many others had seen, and saw the situation anew. Fast forward to 2008, and Omega is producing $1 billion in annual sales and hundreds of millions in profit, all on its own.

Second, these organisations also realise that looking outside of their fields will also give them insights that otherwise would have remained untapped. There are many famous stories about Henry Ford, but none more illuminating than this one.

In 1912, Ford took a tour of a Chicago slaughterhouse. He noticed that the meat was hanging on hooks that were mounted on a monorail. As each man finished their part of the process, they would push the carcass down to the next man. As the story famously ends, the first assembly line the world had ever seen was producing automobiles at Ford.

Henry Ford is not alone in looking for ideas outside of their industry. Commerce Bank (now owned by TD) took their cues from the retail industry rather than the banking industry to grow from a market valuation from $400 million to $8.5 billion over the span of one decade.

What industries could YOU be stealing ideas from?

5 truths of corporate transformation

1. Most organisations in most fields suffer from a kind of tunnel vision, which makes it hard to envision a more positive future. What can you do to get over this? Realise, as Cynthia Barton Rabe does, that “what we know limits what we can imagine”. Walk into work each day as if it was your first time. You’ll see things you’ve never seen before and will start identifying new possibilities for yourself and your organisation.
2. Most leaders see things the same way everyone else sees them because they look for ideas in the same places everyone else looks for them. Demand that you and your team steal ideas from other industries. Don’t ask what your competitors are doing, ask what companies in other non-related industries are doing. This is where you’ll find the most original ideas.
3. In troubled organisations rich with tradition and success, history can be a curse - and a blessing. The challenge is to break from the past without disavowing it. Check in with the founding principles of your organisation. You might find that a return to your first principles will actually transform your organisation (again!).
4. The job of the change agent is not just to surface high-minded ideas. It is to summon a sense of urgency inside and outside the organisation, and to turn that urgency into action. So stop talking about it and get to it!
5. In a business environment that never stops changing, change agents can never stop learning. It doesn’t matter how you do it either. Just be on a mission to learn more than your competition, and most importantly, apply what you learn.

Shaking up your industry

If transforming your company is hard, shaking up an entire industry is even harder. There are two things that companies who are successful in doing it pay attention to.

First, companies like Zappos (the world’s largest online shoe retailer) and Ryan Air have taught us that shaking up an industry requires you to be the “most of something”. For Zappos, extreme customer service is their calling card. For Ryan Air, it is stripping out as many costs from their operation as possible to pass on their customers.

These companies also realise that being the “most of something” doesn’t mean that you need to narrow your focus. In fact, Zappos doesn’t see themselves as an online shoe retailer, but as a customer service company. This leaves a whole world of possibility open to them in the future.

Second, it’s not good enough just to be different - you have to be different on purpose. This means you have to have a purpose. This doesn’t mean that you have to spend two days at an off-site retreat deciding on the purpose of your company and then come back and hang banners and plaques on the wall.

What you need to do is ingrain your passions and beliefs into the everyday life at work. For instance, the Geek Squad has become famous for their Volkswagen Beetles and quirky uniforms. But their brand is much more than a marketing ploy. They have something they call The Little Orange Book.

It contains a six-point pledge that ever single member of the Geek Squad has to sign. My favourite point is #5: “I will consider my job done only when my client is completely overwhelmed with joy. And instead of assuming they’re happy, I’ll ask them”.

To shake up an industry, you have to be the most of something, and be different on purpose.

5 new rules for starting something new

1. 1t’s not good enough to be “pretty good” at everything. Blank-sheet-of-paper innovators figure out how to become the most of something. Just make sure that your “most of something” is a valuable thing to your customers and prospects.
2. Just because you’re “the most of something” doesn’t mean you can’t do lots of different things. Being unique is not about being narrow. Consider London Drugs, who instead of just buying a corporate jet for their executives, created a charter airline company instead and used the London Drugs ethos to make it as successful as the drug stores it is named after.
3. Long-term success is about more than thinking harder than the competition. It’s also about caring more than the competition. Thinking is important, but caring more is your ticket to success. Lip service to things like “great customer service” doesn’t mean anything if you don’t back it up with a caring and empathetic workforce.
4. In a world of endless choice, companies must engage customers emotionally, not just satisfy them rationally. Remember, if your customers can live without you, eventually they will. Zappos doesn’t have the lowest prices for shoes online, but they will move heaven and earth to create an emotional connection with their customers. The result, very profitable repeat customer business.
5. Starting something new doesn’t always mean starting a new company. You don’t need to be a “blank-sheet-of-paper” entrepreneur to embrace a “blank-sheet-of-paper” mind-set. Maybe it’s just something in your own department at work. You just need to have the “blank-sheet-of-paper” mindset.

Challenging yourself

Ultimately, it’s the work you do on yourself as a leader that is the hardest. A new crop of leaders understands that it takes a new mindset or two in order to engage with a workforce that demands participation and wants to be invested in their work.

First, these leaders understand that they don’t have to have all the answers. As an antidote to this approach, Taylor introduces us to the Orpheus Chamber Orchestra - an organisation that serves as a new model of leadership.

Since their inception in 1972 and through its rise to prominence as one of the world’s most celebrated chamber orchestras, Orpheus has operated without a conductor. Imagine an entire organisation functioning where the leadership was transferred to whoever was best equipped to handle the role given the circumstances it was facing.

Second, these leaders understand that there is hidden genius - everywhere. Sometimes, as Netflix has taught us, it resides outside of the walled garden of your company. Netflix created the Netflix prize, which promised $1 million to anybody who could improve the performance of the Netflix algorithm that suggested new movies to customers by 10 percent.

Tens of thousands of people from 186 countries around the world rallied together to try and solve the problem. Ultimately, a group of people who were close to hitting the mark banded together at the last minute to win the prize. Imagine a world where a group of people larger than the total number of people that work for your organisation will try and solve one of the most important issues your business will face? That’s an innovative solution if I’ve ever seen one.

Third, these leaders all share the distinction of being “humbitious”. This is a term that was coined by Jane Harper, a veteran from IBM. The blend of humility and ambition sets them free to learn each and every day but to also tenaciously strive toward whatever goals they are working towards.

5 habits of highly humbitious leaders

1. Real business geniuses don’t pretend to know everything. This will be challenging at first, but you will not lose the respect of your team by admitting you don’t have the all the answers.

2. The most creative leaders don’t just tap the power of hidden genius to attract new ideas. They leverage the virtues of collective genius to evaluate the ideas they attract. This means not only giving your employees a voice in the idea-generation process, but a voice in the idea-picking process as well.

3. Not all new ideas are good ideas. So leaders who ask for lots of ideas have to get good at rejecting the bad one without demoralising the people who contributed them. This is a fine balance, and it must be done. Otherwise you risk alienating your team, or worse, losing focus on your most important goals.

4. Leaders who are eager for outsiders to share ideas with them have to be eager to share their ideas with outsiders. Idea sharing is a two-way street.

5. Humbition can be more than an individual style of leadership. It can be an organisational way of life. Can you imagine the power of an entire organisation who is both humble enough to keep learning and ambitious enough to apply what they learn in the service of your goal?