From the time of Alexander the Great to the invention of the steam engine in the 18th century, there was almost no increase in people’s productivity.

The speed a soldier in Alexander the Great’s army could travel was limited by the speed of the horse he rode or the beasts pulling his wagon; and weapons they used were all hand forged. The same was true for Napoleon’s troops 2,000 years later. But with the invention of the steam engine, things began to change. Since that time, the nominal annual rate of productivity improvement in developed economies has been between 0.5% and 2%. This is approximately the same natural improvement rate that is found in most traditionally run organizations.

But what if you could improve faster, at a rate that outpaced your competitors? And what if you could maintain this rate year-after-year? The result would be a considerable competitive advantage.

We have studied a number of companies that have been able to increase their productivity by as much as 13% to 15% annually. (read more…)

To drive innovation, you sometimes have to “break” to achieve your breakthrough.

Tesla Motors is a perfect example of a company that disrupted its industry, despite the risks inherent in innovation. Founded in 2003 as a “boutique” automotive company, Tesla soon focused on the fringe electric car movement. When the financial crisis hit, Elon Musk came close to losing both Tesla and SpaceX. After General Motors and Chrysler went bankrupt, Musk found it almost impossible to raise another round of funding. Following the acquisition of $465 million in low-interest loans from the U.S. Department of Energy in 2009, Tesla was able to file an IPO and begin trading on the NASDAQ stock exchange.

Tesla’s subsequent efforts have been revolutionary. The company introduced a transformative driving experience to the market and continues to drive down the cost of electric cars — all under the guise of a 100-year-old mode of transport.

This type of innovation requires risk, and when growing from a startup to a stable, process-driven enterprise, the willingness to allow something to “break” is often lost. (read more…)

Famous artists like Vincent van Gogh, Pablo Picasso and Andy Warhol often come to mind when we think of creativity. These innovators were famous for their artistic creativity. And while that can be a great thing, there isn’t much room for it in a business environment.

Functional creativity, on the other hand, is highly useful in business. It is a form of innovation that organizations use to come up with better solutions for their customers and can be defined by its objective outcomes.

You don’t need to be a famous artist, or even have any artistic ability, to produce creative ideas. Neither do you have to work at a heralded innovative organization like Apple or Google. Rather, it’s just a matter of having a solid process and a little practice.

Here are some ways to get ideas flowing:

1. Clearly define constraints. Constraints, contrary to popular belief, are actually a good thing. (read more…)

Business leaders act, not react. By nature they are forward-thinking and innovative — a ballast on a ship. But never before has leadership been a more critical tool, with billion-dollar brands being built overnight and distribution trending in ways we never imagined.

It’s the Internet, of course. Consumers are interacting with brands in ways that could never have been done before. 20 years ago, our choices were limited to whatever was on the shelves at our local supermarket or pharmacy. Now, every brand and product is available at anytime and anywhere.

So how do we as leaders distinguish ourselves? The key is to understand how our brands can provide solutions to problems as well as to communities (our own or others). Here are eight reasons that business leaders who incorporate social responsibility into their business models will survive and thrive.

  1. Social responsibility is great for business. If the only focus on is the bottom line (and it shouldn’t be), there will be missed opportunities and revenue streams.
  2. (read more…)

Would an executive at your company set up shop in the middle of the IT help desk, hang a gutted fish over his desk and declare, “The doctor is in?” In effect, that’s what Paul Bennett, chief creative officer at IDEO, has done, and he claims it’s helped him foster creativity in a way he previously wasn’t able.

In his New York Times essay, “Where the Fish Swims Ideas Fly,” Bennett says that his role as a “project leader for inspiration” was being stifled because his time wasn’t his own. He found himself highly scheduled, moving from meeting to meeting, sometimes in 10-minute increments. (Sound familiar?) So, Bennett took matters into his own hands: he decided to go to the epicenter of his office’s operations — the IT help desk — and create a workspace there. He hung a light that was fashioned from an actual fish over his desk and when it’s illuminated, the “doctor is in,” so to speak. (read more…)