Rebecca Reynolds' business was born in the shower.
There's a happy cliché about inspiration in the shower-- you're relaxed, you're enjoying the spray of warm water, and good ideas surface in your consciousness like dolphins in a seascape. But Reynolds' flash of inspiration was nothing like that.
What happened was that her throat started to burn and her eyes started to sting because of the noxious fog rising from the product she was using to scrub away the shower mildew. After she finished her work, Reynolds used those red eyes to do some online research about the chemicals listed on the product's label. An organic shopper from way back, she had always been highly particular about her family's health. She was horrified to realize that she had been exposing her family and the customers of her small house-cleaning business to such bad chemicals. So for the next year, she turned her kitchen into a lab to invent cleaning products based on the kind of benign ingredients people used in the somewhat distant past.
"It was me standing by the sink surrounded by laughing children," says Reynolds, 44. "One time, I filled up the whole counter and sink because I added baking soda to a vinegar solution--it was like a volcanic reaction. But I finally figured out effective cleaners that smelled good."
In 2002, Reynolds started Green Clean. The 25-employee company sells a line of green cleaning products, does both residential and commercial cleaning in the Cleveland area, provides green cleaning consulting nationally and internationally, and just opened an organic lifestyle store called Planet Green. Reynolds expects to break $1 million in sales this year and keeps finding new and profitable ways to grow.
Set Yourself Apart
Thousands of companies call themselves innovative. However, experts say that what sets the real innovators apart is that they have developed new products and business models that have resulted in actual improvements in their bottom lines. Other metrics can also distinguish the real innovators: Many entrepreneurs, like Reynolds, also gauge their com-pany's success by how far it pushes the needle on the green and socially responsible scales.
Not all fresh ideas turn into solid companies. It's not enough to be different, says Peter Skarzynski, co-author of Innovation to the Core--your differences must matter to consumers. He recommends first developing an "aiming point" that identifies a clear customer need. "What are the customers' problems and how are they solving them today?" he asks, using as an example the pre-iPod days when people cobbled together CDs of their favorite songs--a time-consuming and awkward process--in order to make the music they loved portable. "Innovative companies have insights into the compromises the customers are making and find ways to resolve those compromises in a way that's favorable to the consumer."
How many times have you forgotten to plug in your cell phone or BlackBerry, or worse, lost the charger to your device entirely? How many times have you sorted through the tangle of cords on the floor, trying to figure out which one would put the juice back into your fading PDA? This is the kind of customer compromise that immediately occurred to Izhar Matzkevich, 46, the founder and CEO of WildCharge, when he first heard about the technology that his now-partner Mitch Randall, 47, was developing. Originally destined to be a powering device for robotic toys, the WildCharge technology--which has resulted in a product that looks something like a cookie sheet--allows consumers to just drop their power-hungry devices on its surface to re-charge them without cords.
The Boulder, Colorado, company launched in 2005 and is projecting 2008 sales of $6 million to $8 million. The potential is huge. "This technology can be used for anything that needs to be charged or uses power," says Matzkevich. "Think of the billion-plus mobile phones sold every year. Think of the tens of millions of laptop computers, portable music players, games, even power tools. We have this term we use--we're trying to 'boil an ocean.' Consumer electronics are an ocean."
Another successful entrepreneur created his innovative niche in a very different high-energy field. Paul Hemming already had many careers and interests: He'd been a filmmaker, a DJ, a record store owner, an art gallery owner and a student of Eastern philosophies. Three years ago, he decided to combine all these elements into a nightclub, restaurant and entertainment complex that he says is completely different from anything else in his hometown of San Francisco and possibly even the world.
While clubbing usually suggests excess and ultimate exhaustion, Hemming created his nightclub and restaurant (under the parent company Zen Compound) to be sustaining in every possible way. At Temple nightclub, he serves exotic cocktails made with organic ingredients and herbal extracts. He stimulates customers' imaginations with art exhibits and even the club's décor, which relates the story of an ancient temple being rediscovered by visitors from the future. There will soon be a healing center on-site and space for nonprofit organizations and spiritual leaders to interact with customers. Hemming's restaurant is called Prana--a Sanskrit word having to do with the universal life force--and it fuses Indian ayurvedic principles and Chinese herbal traditions to create healing menus.
Hemming's complex also incorporates just about every green innovation in the marketplace, as well as some that aren't. He and his staff recently installed hanging gardens on the outside walls to make it a "living building." They use corn-based cups and straws that become compost, not garbage. They're planning to install a dance floor made from piezoelectric crystals that convert the energy from all that dancing into electricity. They also have plans to install an urban wind turbine as well as solar panels, with the ultimate goal of being completely off the electrical grid at some point in the future. "I really want the space to be a testing ground for some of these sustainable technologies and concepts," says 34-year-old Hemming.
Hemming deliberately set out to not only offer an innovative product, but to also turn the model of nightclub development on its head. "Nightclubs are usually successful because they work with either promoters or big-name DJs, who bring in the crowds," he explains. "I went against both of those models. I wanted the space to be the draw. I wanted people to show up on a weekly basis because they believed in what we were doing." All those potential customers may not have realized that they needed or wanted an entertainment complex that caters to their desires for dancing, healing food, artistic stimulation, spiritual enlightenment and green living, because one never existed before. Now they're flocking to Prana and Temple--which draws in 1,000 people on a good night--and Hemming is projecting sales of $3 million for this year.
Fan The Flames
But once entrepreneurs like Hemming, Matz-kevich and Reynolds come up with their winning idea and manage to translate it into a business, how do they keep the creative juices flowing? That might be the greatest challenge of all. If you're successful, imitators will be quick to follow you, taking away some of your business. Success can also have a dampening effect internally, as the demand for products and services requires you to establish the kinds of systems and procedures that once seemed so stodgy. And often, entrepreneurs try to revive their company's initial innovative spark but wind up with handfuls of worthless glitter.
Many experts say that continuing success depends on knowing who and what you and your company are--and are not. "We call it Apple envy--like, 'Where's my iPod?'" says Lara Lee of Jump Associates, an innovation consulting firm that helps clients from Nike to Target create growth opportunities. "That's really critical, or you'll have innovation run amok. You don't want everyone energized around an innovation effort and producing a bunch of great stuff--and then getting demoralized when their ideas aren't taken up."
Lee says this means having a lot of clarity about your business' strengths, your customers and your strategy. "Look at yourself through the eyes of your employees, your customers, people in the community, people at regulatory agencies--cast the net wide," she urges. "Hold the mirror up from a lot of different angles. Just talk to people and then analyze the feedback to find a common theme."
Paying this kind of attention to relationships--what Lee calls empathy--is crucial to helping entrepreneurs figure out how to work innovation into every part of their business. "Innovation isn't just about new products," says Lorin Coles of Alliancesphere, an advisor to global technology and financial firms. "It's about every aspect of the business--how they promote themselves, how they sell, how they deliver, how they support, how they package."
Coles believes that today's best businesses are reaching out to customers, suppliers and others, and asking for their honest opinions more than ever before. "It takes some courage to start with a blank sheet of paper and have a discussion," he says. "If you're a supplier to a manufacturer, it means asking them what they're not getting. What is adjacent to what you're providing them? You also have to ask questions internally, especially of your sales and service people who are out there every day with the customer. You'd be surprised how much they can tell you about what you should be doing or what your competitors are doing."
The kind of deep listening that Lee and Coles recommend is what helped Jay Jackson and his wife, JL, first realize the potential of Global Surroundings, their recycled teak furniture business. While Jay, now 44, had a job managing the distribution of audiovisual products in Southeast Asia, JL found that there was a market for custom-made furniture for foreigners moving to Singapore. The couple launched their furniture importing business when they returned to the United States 12 years ago, making arrangements with a factory and crafts-men in Yogyakarta, Indonesia, to make furniture from the teak walls and floors of homes that needed to either be restored or torn down. "We were selling the concept of uniqueness at first," says JL, 44, of the Phoenix-based company. "We thought it was really cool that this dining room table was made from someone else's floor."
But their company was regarded as just another furniture manufacturer at industry trade shows. Then they realized that many customers looking for sustainably made products were excited by their recycled teak because it didn't involve further rainforest destruction--and excited by their stories of rebuilding villagers' old teak homes with brick after a destructive earthquake. The Jacksons not only refocused their business on the eco-friendly market, but also fine-tuned their offerings by paying attention to home and garden trends. They found that high-income families were eager to invest in lavish outdoor living rooms. The Jacksons already had the perfect material, as teak is weather-resistant, so they paired up with designer Mark Suess to develop a line of high-end, outdoor furniture.
The Jacksons didn't just find out how to produce the right product by listening to their customers--they figured out how to market to them. Trade shows were still a struggle in this hotly competitive market, so they decided to establish a presence at some of the places frequented by their high-end consumers. In one case, they had a prime spot in a luxury lifestyle pavilion at a collector car auction, right next to the Learjet space. "You have to figure out nontraditional ways to market to the end consumer," says JL, who expects sales of $1 million this year. "Be in the places where you can be seen without the competition."
Investing From Within
Perhaps the greatest source of ongoing innovation is a company's own employees, and owners of highly innovative companies recommend hiring the right kind of people from the start. Much of an employee's success in this environment depends on having the right mind-set, according to Edward Hughes, the 42-year-old founder and CEO of PowerMetal. Based in Carlsbad, California, PowerMetal manufactures the kinds of nanometals origi-nally developed for the nuclear power and defense industries and partners with leading sporting goods brands to make stronger, lighter equipment. For this market, employees have to be ready for a rapid product development cycle and aim for innovation--but be comfortable with failure.
"Hiring for attitude is paramount," says Hughes, who anticipates sales of $2 million to $5 million this year for his 3-year-old company. "You want people who will keep trying to innovate even if they fail. You don't want the kind of person who gets knocked on the ground and doesn't get up again. Really, it's about the type of person they are rather than the qualifications on a piece of paper."
At WildCharge, Matzkevich looks for simi-larly resilient individuals, especially those who have no qualms about questioning their own established wisdom or the company's. "You can never assume that what you have is the best thing in the world," he says. "We're always questioning ourselves here and challenging each other. No one is assumed to be the bearer of eternal knowledge. We don't want anyone to be afraid of voicing their opinion, because no one is always right and no one is always wrong."
In addition to encouraging this ongoing dialogue, WildCharge also funds what Matzkevich calls sandbox projects. Individual employees are given some broad directions about where breakthroughs are needed, then handed a substantial chunk of cash so they can play around with various ideas. "We like to keep people having fun and thinking out of the box," he says. "If someone disappears for two days, that's fine. Lo and behold, three days later, you get a creative design file and you look at it and think, 'Wow, that's really cool!'"
Ultimately, this kind of faith in the creativity and power of employees pays for itself. "You have to find ways to engage, align and [motivate] employees toward your broader purpose," says Skarzynski. "There's a mountain of evidence--make that a mountain range of evidence--that shows that highly engaged employees have a dramatic impact on the bottom line."
Kristin Ohlson is a writer in Cleveland.
Does your business suffer from tired ideas? Mix it up to get some new perspectives.
Companies spur innovative thinking when they recognize that the things they do best can actually hamper them. "A company's own way of doing things, its own methods, its own expertise can get in the way of doing things better and more innovatively," says Cynthia Barton Rabe, author of The Innovation Killer: How What We Know Limits What We Can Imagine--and What Smart Companies Are Doing About It.
Rabe suggests companies rejuvenate their thinking with what she calls "zero-gravity thinkers." She defines these as people who have psychological distance from the company or team, people who have Renaissance tendencies--"who think broadly and out of the box on a regular basis"--or people who have related but not identical expertise in the area needing assistance. A marketing and innovation consultant and speaker, Rabe learned the value of such people while she was at Intel as a zero-gravity thinker herself.
Basically, this meant that Rabe--who had a consumer-products background--was placed onto teams where she had related but not identical expertise and didn't report to anyone on the team. She was able to ask questions that forced the team to question their most basic assumptions and brought a fresh perspective and new insights to their work.
Rabe recommends that companies large and small try this approach. Companies can reach outside for these zero-gravity thinkers, too--hiring, for instance, consultants who specialize in electrical engineering to come in and work with mechanical engineering teams. Or consultants in fast-food retailing for businesses engaged in DVD rentals. Companies can also get really inventive and swap creative employees with other companies in their city or region.
"I'd love for people to try this," Rabe says. "Small businesses are often part of organizations that help them make connections. They can try swapping their own innovative thinkers with other companies that are noncompetitive for a month. This is a huge opportunity to share brainpower, and everyone benefits."