On Friday, October 30th, Granada Advisors will be co-hosting a Private Equity / M&A luncheon at the Bryant Park Hotel in New York City along with Celerant Consulting, a global operations consulting firm. The venue is uber-cool (see www.bryantparkhotel.com) and we would like to think the company will be also! The topic of discussion will be pre and post transaction methodologies for creating value in Private Equity and M&A.

Please see our Luncheon Invite. If you would like to join us at this event, please RSVP by sending an e-mail to events@granadaadvisors.com.

Also, let us know if you have any guests at private equity firms, hedge funds, or other alternative investment firms or who are involved with M&A either on the i-banking or corporate side who would like to join us.

For more info on Granada Advisors and Celerant Consulting, please see www.granadaadvisors.com and www.celerantconsulting.com.

We hope to see you there!

Sincerely,

Brad Heitmann
Chief Executive Officer
Granada Advisors
Phone: +1.801.824.4168
E-mail: bradheitmann@granadaadvisors.com

I read an article called “The Weird Rules of Creativity,” by Robert I. Sutton, professor of management science and engineering at Stanford. It may be my favorite article I have ever read.  Have you ever considered deliberately hiring someone who annoys you? Someone who makes you uncomfortable, or who is not good at following instructions? Or how about someone who doesn’t have experience related to the job, who hasn’t solved the exact problem you face?  Apparently, if you want to cultivate innovation at your organization, that is exactly what you should do, according to Sutton. He shares example after example of companies who have succeeded in innovation by taking traditional management practices and doing a 180 with them.  It begins with hiring: pick the people who make you uncomfortable and reject the organizational code. If your company does innovative work, you have got to have some people who are slow to learn the organizational code.  Hiring novices is one way to accomplish this because novices do not have preconceived mindsets about the way things are “supposed to get done.”

After hiring, you have got to manage for creativity.  This means encouraging people to ignore and defy superiors and peers.  Wait…that does not really make sense.  What rational manager would ever want employees to defy him or her?  Does any organization actually do that?  I doubt it.  However, some companies have managers who sometimes allow their employees to work on what they want and don’t ask for all the details.  Also, employees who get stuck in routines, however productive they may be, should be assigned to something new.

Further, he really emphasizes the need to punish only inaction, and to reward both success and failure, because the number of successes is a function of the quantity of work performed, and the ratio between successes and failures has been found to be relatively constant.  So I guess that means the more I fail, the more I succeed!  One of the reasons to reward both success and failure, Sutton asserts, is that we aren’t really that good at predicting what ideas will work beforehand.  We’ve gotta try ‘em out, and if they don’t work, get on with the next idea.  Yet, managers may be able to substantially increase the likelihood of the success of a risky project by simply convincing themselves and everyone around them that success is certain.  I’ve heard this miracle of positive thinking referred to as the self-fulfilling prophecy.  By fully committing myself to something, and believing in it wholeheartedly, it’s pretty likely I can make it happen.  Steve Jobs creates a “reality distortion field” and convinces those around him that an idea or project will surely succeed.

Of course, these weird management ideas will not work in those areas of business that need routine, repetitive work done.  However, if innovation is a big part of a company, it should adopt these “weird ideas.”

At Granada, I once asked Brad Heitmann, our CEO, for career advice. This is what he told me: “Focus on innovation. Become technically proficient at the classic skill sets, but keep an eye on the innovation prize. Do something out of the ordinary.”

What does that mean, to be innovative? Can I become more creative? I have always thought creativity was something a person is born with, or part of one’s biological personality. As I thought about this, I came upon a study done by Jeff Dyer, Professor of Strategy at Brigham Young University, Hal Gregerson, Professor of Leadership at INSEAD in France, and Clayton Christensen, Professor of Business Administration at Harvard Business School. It explores something they call the “Innovator’s DNA” and shows that creativity can actually be developed. They studied extensively the character traits of executives and entrepreneurs across the world and found that there are certain attributes that contribute to creativity in an individual. Namely, the ability to connect ideas from seemingly unrelated areas, which they call “associational thinking,” is a cognitive ability that enhances innovation. Some people are born with a higher propensity toward exercising associational thinking. They bring together ideas from all kinds of different industries, fields, subjects, and disciplines, and connect them in ways that no one else has. This happens naturally in their minds! However, the skill can be developed through practicing the following four activities: (1) questioning, (2) observing, (3) experimenting, and (4) idea networking. These activities apparently help people think about their experiences and make connections with other experiences.

So, I took the survey. This is what I learned from it:

1. I should try to ask questions such as, “What if the opposite were true?” Questioning the status quo helps a person come up with new ideas that are contrary to the norm and that may generate disruptive business ideas.
2. I’ve got to be more observant of customers, employees, surrounding, etc.! Howard Shultz created Starbucks from observing Espresso bars in Italy.
3. Wanting to take apart my old TV (at the dismay of my college roommates) to see how it works is a good thing; experimenting helps a person discover new ideas.  I should always try new things, go to new places, and test hypotheses before coming to conclusions.
4. Constantly talking to a diverse set of people across differing backgrounds increases my exposure to new perspectives, giving me a competitive advantage in idea generation.

These four behavioral skills plus the cognitive skill of associational thinking are the five discovery skills, and make up the Innovator’s DNA. Developing these behavioral skills will help an individual connect ideas across a wide range of topics. The Innovator’s DNA holds the key to coming up with innovative business ideas!

Ok. So I have some starting points to develop my creative abilities. If you are interested in the survey, check out innovatorsdna.com!

In today’s modern world everyone is looking to be on the cutting-edge.  Planned obsolescence has caused us to move from radio to LP’s to 8-tracks to cassettes to CD to MP3 or digital format.  Innovation leads us to be more precise, efficient, effective, etc.

I want to talk about a technology you probably have not heard of “QWERTY”.  Now this technology/innovation breaks the mold of our societal pattern of design, innovate, then phase out.  This innovation is over 130 years old and yet most of us use this for hours, everyday.

Dying to know what “QWERTY” is?  Well if you’re currently reading this on a standard English computer look above where you normally rest your left hand.  Q-W-E-R-T-Y should be spelled out for you one row above where you typically position your left hand when typing.  Yes, “QWERTY” is the design of our modern, everyday keyboard.  A little history on how this innovation came to be takes us back to the late 1800’s where typewriters were emerging as a popular alternative to pen and paper.  Typewriters operate as keyboard keys are depressed releasing a levered arm resting on an ink ribbon that swings to print its assigned letter on a sheet of paper.  Fairly straightforward, but what might not be as obvious is that with 26 metal arms swinging into the same position the danger of jamming those arms and creating “bottle-necks” is high.  So it was a needed innovation to design a keyboard layout that would slow down the typing speed thereby alleviating those jamming problems.  Thus came “QWERTY”, the keyboard design that we still use today.  But why in the age of computers, where “time is money” are we still using a design and innovation whose purpose has long since been served?

Now this long introduction is not meant to allow me opportunity to get on my soap box to urge Dell, HP, and Apple to standardize a new keyboard design; rather to provide insight of a pattern of human nature and behavior.  This insight is that despite the plethora of examples of the benefits of innovation our nature is adverse to change – adverse to trying new things and thinking different ways.  Through embracing change and challenging the status quo we can reach new levels of understanding and advancement.  I know that this is something that I continually struggle with and so easily forget the benefits of.  This is also something that I see as a challenge to those I manage.

I am not going to be able to give you some sort of silver bullet for how to change human nature and not only embrace change but actively seek it out.  However, I hope that this post serves as a reminder for the need to try something new, step outside your comfort zone, and ultimately provide more value in today’s changing world than outdated  and quirky “QWERTY”.

Aggregate: to bring together: collect into one sum, mass, or body.  Or to add or unite, as, a person, to an association.  The etymology of the word comes from the Latin aggregates meaning “associated” or “united in a flock”.  Related to “aggregare” which means “to lead to a flock”.

What does this mean?  Why is this important?  What is it exactly that we’re talking about?  Granada Advisors “adds” value to their clients by aggregating ideas together to produce greater results, providing clarity, and expanding other’s vision.  Our purpose in creating this blog is to provide a taste of our vision and mission to bring new ideas and insight to others.  We see ourselves as “aggregators” who through diverse competencies and backgrounds build connections and associations across the globe.

We look to provide weekly insight on various business topics and world events, as well as issues and people close to home here at Granada Advisors.  We hope to create a forum of knowledge-sharing and a community where the aggregate truly is stronger than the sum of its parts.