“Approximately once a decade, a radical new technology emerges that fundamentally changes the business landscape.  In every case, regardless of prior competitive dynamics, businesses that understand and appropriately adopt the technology win, while those that fail to do so lose.  In the 1970s, this was mainframe computing.  IN the 1980s, it was the PC. In the 1990s, it was the Internet.  And today it is the online social graph.” (Clara Shih in The Facebook Era)

The social graph is the world wide web of people.  It is the map of everyone on the Internet and how they are interconnected.  The social graph is for people what the Internet is for interconnected webpages.  Social networks like Facebook, LinkedIn and MySpace are helping to construct this social graph.

Each of these radical technology evolutions has been punctuated by a cycle of innovation, commercialization, emergence of new applications, and then large-scale impact on business.  The online social graph is following this cycle, and is facilitating a “new, more nimble, and more efficient class of businesses that outcompetes those using technology from the previous era.” (Clara Shih)

I started working with the Internet and online communities almost 13 years ago in 1996.  I created Adoption.com, which became the world’s largest adoption service of which I’m aware (measured by the number of people using its services each month).

As my first consulting project I created the initial vision and directed the creation of the first website for Law.com, which I have been told sold for about $20 million within approximately 2 years of launch (unfortunately, I didn’t get any equity in the project).  I also built the Families.com online community and sold it in 2007.

During the last two years I have been doing consulting work for next-generation digital media properties, such as a large iPhone application and the 4th largest Facebook application, with 54 million registered members.

I have also built niche social networks (such as GenealogyWise.com) to leverage the social graph within niche industries.  These niche social networks provide tools that enable members to connect and share content with others who share similar interests.  GenealogyWise is just a few months old, but it already has 13,000+ members, 3,000+ sub-groups on genealogy-related topics, 700+ blog entries, 350+ videos, etc.

How could a social network help your business to seize your opportunity within the social graph?  If you are an accountant or attorney who practices a specific type of law, you could build a social network for people interested in your areas of practice.  If you own an emergency preparedness company or a manufacturing company, you could build a niche social network of your potential clients.   If you are part of a membership organization or are planning an event, a niche social network can help you recruit and develop stronger relationships with members and attendees.  If you are a politician, the social graph is an essential element of your campaign. President Obama’s social media strategy was given a large portion of the credit for his election victories.  If you are interested in sewing or if your child has a health condition, you can build a social network of people who have similar interests.

Then, once you have developed a successful social network, you can generate revenue in a variety of ways, such as selling advertising, directory listings,virtual goods, classified ads, e-commerce and subscription sales.

I have expertise in creating niche social networks, developing social media strategies for businesses, and helping organizations to better monetize their digital media properties. If your business could benefit from qualified, seasoned consulting to better seize the opportunities within the social graph, I would love to help.

Another client is almost completely dependent on Facebook. This client has seen phenomenal success in building a Facebook application.  However, when Facebook changed their design a couple months back, the prominence of third-party Facebook applications was diminished, and most of the leading Facebook apps have seen a huge dip in traffic.  Because of this recent Facebook strategy, Facebook apps that were too dependent on the Facebook platform must now diversify away from Facebook by building their own websites, and using social media websites such as as Facebook as marketing channels for their own websites, over which they have control.

Being too dependent on a third party who owns or controls a critical element of our businesses, is a recipe for disaster.  It’s like building a skyscraper on leased land.  Sooner or later that lease will come due, and the land owner will have all of the leverage in negotiating the new lease.  Businesses need to be the masters of their own destinies and own or control their key assets.  They need to not put themselves in a position that gives too much leverage to an essential partner.  Businesses in this position need to work quickly to diversify and regain that needed control.

What has been your experience with these type of business relationships that create too much dependence on a third party?

Made to Stick talks about a research study that compared the effectiveness of donation requests using different approaches.  One donation request provided statistics about the masses of people in one region of Africa facing hunger and poverty.  The second letter simply told the story of one needy girl from that region and said that all money donated would go to her.   Obviously, the second letter was tremendously more successful.  

People are much more willing to help if they know of a specific need, instead of just helping a cause.  In other words, when people learn of a huge problem they often feel that “someone should do something”, but they feel the problem is too large for them to solve themselves, so they do nothing.  It’s kind of like a room that is so messy you don’t know where to start, so you go do something else.  However, when we connect with a specific person with a specific need, we are much more likely to sacrifice and help, because we know we can do something to make a huge difference to that person with whom we are connected.  The specific connection makes the service much more real and meaningful. 

The Adoption.com Photolisting is an example of this principle that I have observed first hand.   When prospective adoptive parents are able to see pictures and read bios of orphans they often connect with and then adopt a specific child.  Many parents choose to adopt internationally after connecting with a specific child, who otherwise would not have adopted. Many parents who thought they only wanted to adopt a healthy Caucasian infant in the U.S. end up adopting an older, special needs child from a foreign country because of the connection which they formed with that child by using the photolisting.

If I came to your church congregation and spoke about the many foster children in your state who need to be adopted, I might have a few families come talk to me after the service.  However, if I brought 12 of those foster children with me and explained that I needed emergency foster homes for those children that night, ALL of the children would be taken in (if the families were qualified), and most of those children (if not all) would be permanently adopted by families in that congregation.

Think about it.  How many of us would, without a second thought, take in a starving orphan who showed up on our doorstep needing a place to stay?  I believe there is enough food, money, compassion, time, and great people in this world to solve huge social crises such as the world orphan crisis, hunger, needless death to curable diseases, and poverty.  The problem is not a lack of resources, but instead is effectively connecting those resources with great people who would be willing to help.  

So, then the question is how we can create those connections on a scale large enough to solve the otherwise insurmountable social problems in our world.  Kiva has showed us one of the large pieces of this solution by helping to everyday people, like my family, connect with and lend to entrepreneurs in third-world countries.  On-the-ground organizations help qualify and administer the loans.  And, their repayment rate would put to shame EVERY major bank in the United States.  My family tried to make a loan around Christmas time through Kiva, and the system was a little too effective.  There were more than thousands of people making loans and only four entrepreneurs seeking loans.  By the time we read through a newly posted loan and tried to participate in the loan, the full loan had already been fully funded.  There were more people at that time trying to loan than people listed seeking loans.  I just looked at Kiva as I wrote this blog entry, and it looks like there are now 208 active entrepreneurs listed seeking loans.  However, just in the last week more than 2,000 loans have been made by people like you and I, totaling more than $750,000.  This is another example that there is an abundance of great people, food, money, compassion and time to solve the world’s greatest social problems.  We just have to figure out how to create the specific connections.  

I want to build my future career greatly around this concept of creating connections to solve world social crises.  How can we more effectively build connections between great people in need and the great people who would love to help if they were just connected with specific situations? 

I have no idea if this story is true, but it illustrates clearly a common problem that businesses experience as they start to grow.  I have observed this type of paralysis which results from indecision, and often the results of not making a decision are worse than either of the viable decisions that could have been made.  

In other words, sometimes a business just has to quickly make the best decision possible with the available information and move forward, even if that business is not positive the decision is the best option.  Often companies don’t have enough information to make a perfect decision, or enough time to wait to make a decision.  Competitors can quickly leave behind the dinosaur companies who are unable to rapidly make the necessary decisions.

Sometimes decisive CEOs are criticized for not listening enough to their managers.   Strong leaders need to walk a fine line where they ask for and encourage passionate feedback from their managers.  However, managers then need to respect the responsibility of the CEO to quickly make a decision.  

Those decisions will not always be perfect.  However, the ability to quickly move the company forward is an essential attribute of a successful CEO and managers need to support their CEOs in these decisions after the CEO has heard their feedback.  Not doing or agreeing with what a manager has advocated is not the same thing as “not listening”.  CEOs are going to be wrong sometimes when the are analyzed with the hindsight of perfect knowledge.  However, it is often even more wrong to not make a decision.

· GoTo/Overture (became Yahoo Search Marketing) – paid inclusion search engine that was renamed Yahoo! Search Marketing after it was purchased by Yahoo to compete with Google AdSense.

· CitySearch – local city guides, acquired by IAC/InterActiveCorp.

· Commission Junction – affiliate marketing leader purchased by ValueClick.

· Insider Pages – Yellow Pages written by friends; a local search engine built around the concept that the best way to find a local business is through a personal recommendation. The Insider Pages community has written over 500,000 user-generated reviews of local businesses across the USA. The company was acquired by CitySearch/IAC in 2007.

· The DotTV Corporation – licensed the rights to the .tv domain, and sends the island nation of Tuvalu enough money from this license that it was able to join the United Nations. The company was acquired by VeriSign in 2001.

· eSolar – makes electricity generation from large scale solar thermal plants cost-competitive with fossil fuels. With mirrors that are 100 to 300 times smaller than conventional designs, eSolar’s product affords substantial advantages, including a 50 percent cost reduction. eSolar just received $10 million from Google and developed the solar power for the Google campus.

· Aptera Motors – is building lightweight, low cost composite electric and plug-in hybrid vehicles that are safe and reliable. By employing patent pending low cost composite manufacturing methods and cutting edge computational fluid dynamics, the company’s first car, the Aptera typ-1 will be available for under $30,000.

· Snap – is dedicated to getting users to results they really want faster. Snap.com delivers superior relevance and visual, rich and interactive search results to broadband users, and offers risk-free, flexible Cost-Per-Action advertising to advertisers. The company’s Snap Shots service is an open platform for delivering contextually relevant content such as stock quotes, streaming audio or video, product information and more, directly to users as they browse the web. (I have implemented Snap technology on this blog.)

· Tickets.com –a leading provider of tickets for sports and entertainment events worldwide.

· Compete – web analytics website that allows visitors to view and compare traffic to websites around the world (a site I use constantly).

· eToys.com – internet toy retailer, purchased by KB Toys.

· Picasa – a digital photo organizer for the PC that was widely reviewed as the best product on that platform. The company was acquired by Google in 2004.

· WeddingChannel.com – a central resource for couples about to get married. The site attracts millions of unique visitors each month and contains the bridal registries of a wide variety of retailers. WeddingChannel.com merged with The Knot in 2006.

· PayMyBills.com – online bill payment service acquired by PayTrust.

· Intranets.com – provided on-demand collaboration services — an “instant intranet” — for small businesses or departments and groups inside large organizations. By the time it was acquired by WebEx Communications in 2005, it had amassed over 300,000 paying subscribers and 10,000 corporate sites.

· NetZero – one of the first companies to offer free, ad-supported dial-up Internet services. It expanded its services with low-cost access in 2001. In that same year, it merged with Juno Online Services to form United Online. United Online is publicly traded on the Nasdaq stock exchange (Nasdaq: UNTD).

· HomesDirect – quickly became the largest online auction site for foreclosed properties with more than 10,000 homes sold per month. It was acquired by eBay in 2001.

· AirWave Wireless – a leading provider of specialized tools to centrally manage large, multi-vendor wireless LAN, mesh, and WiMAX networks.

· Free-PC – an opportunity to deliver free PCs to consumers, with the costs fully borne by advertising revenue. After providing free computers and Internet access to 20,000 customers in just a few short months, the company was acquired by eMachines.

· Energy Innovations – delivers cost-effective, grid-competitive solar electric power. It is currently developing the Sunflower, the first high-concentration PV system designed for commercial rooftop and adjacent ground-mounted applications.

· X-1 Technologies – changes the way corporate information is accessed and acted upon by end users. The company pioneered fast-as-you-type searching, intuitive interface, file and email previewing, the ability to save searches, and the ability to act on the found email or files. X1 is now available in both desktop and enterprise editions.

· New.net – provides more logical web address ending suffixes such as .travel and .shop. By partnering with Internet service providers to enable these new addresses to be recognized, the company sought to expand the market for web addresses and make it easier for users to find sites of interest. The company was acquired by Vendare Media (now Connexus) in 2004.

· Partsearch – a leading provider of Outsourced Parts Management (OPM) solutions.

· Infinia – improves the quality of life by changing how the world generates and uses energy. Having developed and delivered innovative Stirling engines and generators since 1985, the company’s technology is at the core of residential combined heat and power appliances currently being commercialized worldwide.

· Cooking.com – the leading online superstore for all things related to cooking.

· Desktop Factory – developed a breakthrough desktop 3D printer with capabilities similar to traditional rapid prototyping systems costing tens of thousands of dollars more. Combining high performance and low cost in a desktop size, this printer will allow three-dimensional printing to become pervasive in business, schools and homes.

· Perfect Market – an automated search engine marketing company that helps online publishers monetize content. The company maximizes the profitability of publishers’ pages by adjusting the amount spent with each traffic partner as calculated by Perfect Market’s proprietary algorithms through a closed loop feedback system. The high degree of automation provided by their patent-pending SEMgine™ technology is the key to profitably monetizing content that would otherwise remain invisible to Web searchers.

· InternetBrands – is a leading operator of media and e-commerce sites for “large ticket” consumer purchases, such as cars, real estate, mortgages, and travel. InternetBrands operates a portfolio of websites with 34 million visitors and 458 million page views in March 2008. In April, Internet Brands purchased five new websites, including FitDay.com. Some of the other InternetBrands websites include:

o CarsDirect

o Autos.com

o VacationHomes

o ApartmentRentals

o Loan

o CruiseReviews

o BikeForums

o Vamoose

o DVDtalk

o FamilyCorner

o FlyerTalk

o HorseTopia

o HuntingNet

o World66

o WikiTravel

o vBulletin (powers the Adoption.com Forums.)

o And many others.

IdeaLab was the simultaneous home to about 50 dot-coms at the height of the Internet bubble. After the burst of the bubble, Bill and IdeaLab went through some dark times. They had taken private placement funds at a $9 billion valuation, but then dropped in value to an estimated $500 million. Both sides eventually came to terms and dropped the suit.

After the dotcom crash Gross and IdeaLab shifted their focus to “big, impactful, change-the-world companies”. They felt it was going to take at least five years to get any company profitable, so they needed to focus on much bigger opportunities to make the effort worth while. Gross says, “We slowed our pace dramatically. We still had 20 ideas a month, but we just rejected 20 a month for six months, before we started one.”

Now, IdeaLab focuses on about 16 companies in a much more diverse portfolio. Bill is starting fewer new ventures, showing more restraint in which companies he starts, holding his companies longer, and trying to stay further out of the way of his management teams while they do their jobs.

IdeaLab has been a dream for a serial entrepreneur such as Bill Gross. He has all of the entrepreneurial tools he needs to create great businesses, and the business incubator allows him to spin of many ideas simultaneously. However, even with his phenomenal resources and talent, some of his businesses have failed. He has learned from these mistakes, and has modified the IdeaLab strategy.

Bill Gross said: “We found after starting fifty Internet companies after five years, the ones which succeeded were the ones with protect-able, intellectual property. It was not time to market, it was not how fast or lightweight the company was. It was how deep a reach, how proprietary, and what differentiation and barriers to entry those companies had so that others wouldn’t copy our idea. It led us to say–that building stuff was not bad. It wasn’t that assembly lines were a bad thing; it’s just that building things without protect-able differentiation is bad. We thought we should start companies in all our areas of expertise, as long as it meets the criteria of making an important difference to the world, that it meets the criteria of having fundamental demand, as well as meeting the criteria of company structure–protect-able, differentiable barriers to competitive entry. All our energy companies have that all in spades. In all aspects, they are large opportunities, with big potential impact, and also have patent protection and trade secrets that make it hard to copy the idea. We’ll continue to start Internet companies, too, but put them through the same test — big impact on the market, big potential, and intellectual property. “

What can I learn from Bill Gross as I create my new ventures? I am particularly impressed with his focus on social entrepreneurship, as many of his ventures make the world better, such as the clean energy companies. Life is to short to spend it just building businesses that make money. There are plenty of ideas and opportunities. I need to focus on those ideas that make a large social contribution in addition to making a profit.

I am impressed that Bill Gross and the IdeaLab team discipline themselves to toss out so many good ideas so that they can pursue the great ideas. I need to focus on fewer ideas that have the potential to be really big. I need to select ventures that have substantial demand, and have protect-able barriers of entry.

(Source: I gleaned information to write this blog entry from various sources, such as Wikipedia, the IdeaLab website, and news articles.)

In examining the history of visionary companies we were struck by how often they made some of their best moves not by detailed strategic planning, but rather by experimentation, trial and error, opportunism, and–quite literally accident.

This week I read an interview in Founders at Work with Paul Buchheit of Google. Paul was the creator of Gmail and developed the first Adsense concept. He also suggested the now-famous Google axiom “Don’t be evil.” The part of the interview that stood out most to me was that before Paul began the Gmail project, he didn’t receive a detailed spec with features, as you would expect from a company such as Google and a project of the magnitude of Gmail. Instead, Paul was given the non-specific charter to work on some type of email or personalization project. They just said, “We think this is an interesting area.” Paul went on to create the Gmail email program that has helped to revolutionize email.

Google didn’t try to micromanage Paul Buchheit. They hired a very talented employee, pointed him in a general direction, and then allowed him to do something even more amazing than what they were expecting. Google has done this repeatedly. Each of the Google developers is allowed to spend 20% of their time on a project of their choosing. In this way Google tries many new projects, and then runs with the ones that work.

The authors of Built to Last call this concept “branching and pruning”:

The idea is simple: If you add enough branches to a tree (variation) and intelligently prune the deadwood (selection), then you’ll likely evolve into a collection of healthy branches well positioned to prosper in an ever-changing environment.

Note how essential the pruning step is in this process. If we just try a lot of things and don’t prune, we will have a lot of projects falling somewhere in the mediocre to good range. To have a tree filled with great branches, or a company filled with great projects, we have to discipline ourselves to continuously prune away the less healthy branches or business concepts as we continue to add new branches or ideas.

William McNight was the visionary CEO of 3M, one of history’s most innovative companies. 3M utilized this “branching and pruning” concept extensively to develop products such as Post-It notes and Scotch tape. 3M allowed their team members to sprout tiny “twigs” in response to problems or ideas. Most of these twigs did not develop into anything. However, each twig that showed promise would be allowed to grow into a branch or even a tree.

3M developed a system which created a culture of continuous innovation. The following elements were implemented by 3M to create this systematic innovation:

• 15% Rule – allowing people to spend 15% of their time on projects of their own choosing and initiative. 3M executive Geoffrey Nicholson said “a lot of the things [that led to the Post-it] were accidental.” However, if 3M employees had not been doodling with weird adhesives during their 15% time, 3M would not have invented the Post-it note.
• 25% Rule – 25% of annual sales need to come from products introduced in previous 5 years.
• Golden Step Award – for team members responsible for new 3M business ventures.
• Genesis Grants – internal venture capital to develop ideas.
• Technology Sharing Awards – for team members who developed technology and successfully shared it with other divisions.
• Own Business – 3Mers who championed a new product could get the opportunity to run it as her own project or division.
• New Product Forums – sharing the latest innovations across the company.
• Dual Ladder - allows technical and professional team members to move up without sacrificing their research or professional interests.
• Problem-Solving Missions – small teams sent to customer sites to solve specific problems.
• High Impact Programs – each division selects one to three priority products to get to market in a short time frame.
• Profit Sharing – to stimulate individual investment.

McNight’s philosophy was captured in the following phrases which became part of the 3M culture:

• Listen to anyone with an original idea, no matter how absurd it might sound at first.
• Encourage; don’t nitpick. Let people run with an idea.
• Hire good people, and leave them alone.
• If you put fences around people, you get sheep. Give people the room they need.
• Encourage experimental doodling.
• Give it a try–and quick!

McNight understood that not all experimentation would prove favorable:

Mistakes will be made [by giving people the freedom and encouragement to act autonomously], but… the mistakes he or she makes are not as serious in the long run as the mistakes management will make if it is dictatorial and undertakes to tell those under its authority exactly how they must do their job. Management that is destructively critical when mistakes are made kills initiative and it’s essential that we have many people with initiative if we are to continue to grow.

Johnson & Johnson is another example of effectively implementing this concept of trying a lot of things, keeping the things that work, and quickly getting rid of the things that don’t. R.W. Johnson Jr. said, “Failure is our most important product.” He understood that companies must accept failure as an essential part of this innovation process.

In conclusion, the process of “trying a lot of things, keeping what works and getting rid of what doesn’t work”, if understood and harnessed, can be a powerful process to stimulate progress. For this to work I need to experiment with a lot of ideas, nurture the good ideas, quickly get rid of the ideas that don’t work, and accept failure as an essential element of the innovation process.

Find Built to Last: Successful Habits of Visionary Companies at Amazon.com

(source for much of this article: Built to Last)

Kiva works to qualify and monitor microfinance institutions (”Field Partners”) around the world. Then, these Field Partners post profiles of qualified local entrepreneurs on the Kiva website. Then, individual lenders (like you and I) can read through the profiles of business opportunities and decide which we would like to fund. Individual lenders can contribute just a few dollars, or the entire amount needed. Many requested loans are for just a few hundred dollars.

Once the needed capital is raised, Kiva sends the funds to the Field Partner, which distributes and administers the funds. The local entrepreneur then uses the funds to start or improve a business, or in some cases to improve living conditions. The borrower is supported by the Field Partner and often by a borrowing support group in the local community. Here are some examples of lending opportunities on Kiva:

• Help a fisherman buy a refrigerator in Azerbaijan.
• Improve a restaurant in Pakistan.
• Increase inventory in a spare parts stand in Ghana.
• Increase inventory for a timber business in Tanzania.
• Buy farming equipment and supplies in Samoa.

During the course of the loan, which usually lasts 6-8 months, the lender can receive journal updates and track repayments. Eventually, as the borrower repays the Field Partner, those funds are then returned to Kiva. Kiva claims that its borrowers have a historical repayment rate of 99.7%. Once the loan is fully repaid, the lender can elect to withdraw the funds, or to re-invest the funds in another lending opportunity. Lenders can choose to invest smaller amounts in a larger number of lending opportunities, and keep a portfolio of loans in which they are participating.

Field Partners do charge an interest rate to the borrowers, but Kiva will not work with organizations that charge too high of a rate. Kiva lenders do not receive interest because of U.S. government regulation. However, PayPal waives all transaction fees, so 100% of the funds loaned reach the entrepreneurs in developing countries.

According to Kiva, as of April 13, 2008, 40,577 loans totaling $27,502,710 have been made by 277,535 lenders through Kiva with an average loan size is $520.20.

I believe that most people who learn about Kiva are moved to help. So, what can we do to help? We can obviously choose to start lending, even if it is a very small amount. We can give Kiva gift certificates for birthdays and holiday gifts. Families could save their change, and together select the people to receiver their loans. We can also ask that others make contributions to our Kiva account for their gifts to us. I would LOVE to receive a Kiva contribution as a gift, because it would be far more meaningful to me than traditional gifts.

In addition to Kiva, eBay also operates a similar project, MicroPlace.

Far better to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows not victory, nor defeat. – Theodore Roosevelt

President Kennedy set a BHAG for NASA when he said “this Nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to earth.” This was bold and outrageous, yet achievable.

Like the moon mission, a BHAG is clear, compelling and serves as a unifying focal point for the company, individual or organization. BHAGs engage people and often create immense team spirit. In setting a BHAG, the company should ask: Does it stimulate forward progress and momentum? Does it get people’s juices flowing? Do team members find the BHAG stimulating, exciting and adventurous? Are team members willing to throw their hearts, souls and creative energies into the BHAG?

In 1990 Sam Walton set a BHAG that Wal-Mart would reach $125 billion in sales. At the time, the largest retailer in the world had reached $30 billion. The only corporation which had attained a sales volume close to $125 million was General Motors.

Boeing gambled their entire company on a BHAG to build their first commercial jet airplane, the 707. Walt Disney gambled everything on Snow White as a full-length, animated feature film. IBM made an all-or nothing investment in the IBM 360 computer. Tom Watson Jr. wrote about the IBM 360 decision:

There wasn’t going to be much room for error. It was the biggest, riskiest decision I ever made, and I agonized about it for weeks, but deep down I believed there was nothing IBM couldn’t do.

The following are concluding key points from Built to Last about BHAGs:

• BHAGs have clear finish lines so everyone can know when they are achieved. However, it is very important for companies to set a new BHAG once the first is achieved to avoid a stagnation or paralysis of “we’ve arrived.” A BHAG only helps an organization as long as it has not yet been achieved.

• A BHAG should be so clear and compelling that it requires little or no explanation.

• Team members should clearly believe that they can and will reach their BHAG. Built to Last says that “It simply never occurred to them that they couldn’t do what they set out to do.”

• A BHAG should be exciting on its own. If a BHAG doesn’t get the team members’ juices flowing its not a BHAG. A good BHAG will survive the departure of a founder or CEO, as was the case with Wal-Mart.

• A BHAG should be completely outside the company’s comfort zone. It should require heroic effort to achieve.

• BHAGs should be consistent with the company’s core ideology and company needs to be careful to preserve its core while pursuing its BHAG.

Find Built to Last: Successful Habits of Visionary Companies at Amazon.com.
(Source: Built to Last)

According Jim Collins and Jerry Porras in Build to Last, the “tyranny of the OR” leads businesses to feel that they can only choose one option or the other, but not both, such as:

• Change OR stability,
• Conservative OR bold,
• Low cost OR high quality,
• Creative autonomy OR consistency and control,
• Invest in future OR do well in short-term,
• Make progress through methodical planning OR by opportunistic groping,
• Shareholder returns OR good for world,
• Values driven OR profit driven.

Visionary companies embrace the “genius of the AND”, the ability to embrace both extremes at the same time. They figure out how to have one option AND the other simultaneously. Does this seem irrational and unrealistic? Possibly, but this is exactly what visionary companies are able to do.

I believe in implementing the “AND” principle in as many situations as reasonably possible. I believe that businesses can be profitable AND values-driven, which is the heart of “social enterprise”, and can result in even greater profitability, as with Adoption.com. I believe businesses can have low cost AND high quality, ad demonstrated by Wal-Mart or Google business applications.

I believe businesses can protect the core business AND relentlessly stimulate progress, as every visionary company seems to have found a means to accomplish. Sam Walton (Wal-Mart founder) said:

You can’t just keep doing what works one time, because everything around you is always changing. To succeed, you have to stay out in front of the change.

Find Built to Last: Successful Habits of Visionary Companies at Amazon.com.

(Source: Built to Last)

Being a charismatic leader or having a great idea is “time telling”. Companies built around “time tellers” might look like a genius with a thousand helpers. Building a company that can thrive long after the leader is gone is “clock building”. The greatest creation of a “time teller” might be his or her amazing and innovative ideas or products. The greatest creation of a “clock builder” is the company itself and what it stands for. The company itself is the ultimate creation.

For example, Sam Walton valued change, experimentation and constant improvement. However, instead of simply preaching these values, Walton implemented organizational mechanisms to stimulate change and improvement. For example, when an employee in a store had an idea, that idea was immediately distributed throughout appropriate parts of the world-wide company.

Great companies, like Wal-Mart, Sony, Marriott, Merck, Boeing, Nordstrom, 3M and HP started without great ideas (they weren’t “time telling”). Instead great people focused first on building good companies (“clock building”). In fact, several of these companies failed with their first ideas. According to Build to Last research, great ideas brought forth by charismatic leaders might be negatively correlated with building a visionary company.

This doesn’t mean that charismatic leaders cannot be successful; it just means charismatic leadership is not necessary to create a successful, visionary company. In fact, according to Built to Last research, companies without charismatic founders are in great company along with 3M, P&G, Sony, Boeing, HP and Merck.

This also doesn’t mean that great ideas are not important. Each of the great companies ultimately had many great ideas. However, the great companies started their organizations first, hired the right people, and then developed their great ideas and products. In the visionary companies, the companies were not vehicles for products, but products were vehicles for great companies. The constant development of innovative products from visionary companies results from being outstanding organizations, and not the other way around.

Built to Last teaches:

The single most important point to take away from this book is the critical importance of creating tangible mechanisms aligned to preserve the core and stimulate progress. This is the essence of clock building.

In the past, I have lead far too much with “time telling” as the visionary creator with many helpers. As I develop new organizations, I will focus more on “clock building”, and developing the best organizations I can, which can thrive long after I am involved.

Find Built to Last: Successful Habits of Visionary Companies at Amazon.com.

(Source: Built to Last)