Hartford Business Journal

www.HartfordBusiness.com November 9, 2015 • Hartford Business Journal 21 BIZ BOOKS Tips for turning insights into innovation "63 Innovation Nuggets for Aspiring Innovators" by George E. L. Barbee (Inno- vation Etc. Publishing Company, $24.95). Innovators like Thomas Edison, Henry Ford, Bill Gates and Steve Jobs saw what wasn't there; they identified gaps and filled them. Barbee's nuggets show the rest of us how we can develop insight — and turn it into innovation. Here are some that will move your innova- tive process along quickly: 1. "Leading innovation with vision." Think "bound- arylessness," a term coined by Jack Welch at General Electric, speaks to collabora- tion involving stakeholders, and the understanding that the cloud presents opportuni- ties to tap expertise. Become your own disrupter. With mul- tiple perspectives, you develop a vision of what could be. Embrace it; explore it; then execute it. The following nuggets build from No. 1. 7. "Building an Innovative Net- work." Identify the "out-of-the-box" think- ers in the organization — especially those who interact with customers. Meet with a few you know best; have them share their creative success stories. Schedule a second meeting and have them bring a few creative friends from their team. Encourage com- munication and use regularly-scheduled meetings to keep everyone up to date. As the network grows, so will its ideas. With a group of creative people driving inno- vation, organizational buy-in comes quickly. 19. "Observing as an art." Stop, look and listen inside and outside work. Observe people's reactions to various situations. Jot them down. Have your cre- ative network do the same. Share the observations at your meetings; they'll connect dots that will be useful in moving innovative thinking forward. 24. "Presenting as an art." Innovators are sales- people because they're in the business of convincing people that "there's another way." While there are formal presentations, "your best presentation is discussion." Why? It personally connects the audience to your content. When they share their perspec- tives, you get a better picture of yours. 44. "Build trust within the compa- ny." Building trust balances enthusiasm for new ideas with the pros and cons of imple- mentation. "Know when to breathe life into a project and when to kill it and work on more promising projects." A slice of life anecdote or brief case study accompanies each nugget. • • • "Why Should Anyone Work Here? What It Takes to Create an Authen- tic Organization" by Rob Goffee and Gareth Jones (Harvard Business School Press, $30). "The world of orga- nizations is made and remade through the actions of the people in them." With that in mind, the authors developed the DREAMS employee function and satisfaction tem- plate. Here's a snapshot: "Difference" — True diversity goes beyond gender, ethnicity, age, etc. It includes thought processes, approaches to tasks, frames of reference and ways people learn. Employees don't want to be clones or drones. By valuing such dif- ferences you can leverage the power of divergent thinking. "Radical honesty" — In order to maximize produc- tivity, people need to know what's going on. When left in the dark, they begin to guess; productivity falls when the rumor mill starts. "Extra value" — Employees are assets that build intellectual capital. To maximize value, employee development must focus on three levels of skills: technical (job-specific), concep- tual (problem-solving and creativity), and human (communication and collaboration). "Authenticity" — This deals with your organization's "identity-defining roots." People want to work for companies that stand for and behind something. It goes beyond products and services and deals with role models and community. Everyone walks the talk. "Meaning" — Engaged employees don't work just for a paycheck. Their jobs connect them to their colleagues, stakeholders and the organization's goals. Cross-functional teams at all levels allow employees to share knowledge and build rela- tionships — the glue that holds great teams together. "Simple rules" — Com- plexity breeds misunder- standing, and brings agree- ment, fairness and discretion into question. Keeping things simple allows continuous improvement to flourish. n Jim Pawlak is a nationally syndicated book reviewer. Jim Pawlak TALKING POINTS Fast capital: Friend or foe to small business? By Anthony Price W e live in a society where speed is the norm: fast food, fast service, fast fashion and fast cars — Tesla's Model S P85D electric car has a "ludicrous" mode that rockets the car from 0 to 60 mph in a jaw-drop- ping 2.3 seconds. Industry innovators such as FedEx and Amazon set the standard, leading consumers and businesses alike to expect light- ning fast service. When we don't receive some- thing swiftly, our uni- verse seems off-kilter. If fast is the new norm, why should millions of small busi- nesses wait months for a business loan? Banking traditionally has been an industry where the standard was certainty, not speed. Banks have always embraced slow and steady as their motto when it comes to lending to small businesses. But slow is no longer acceptable to hungry businesses eager to compete at the speed of global commerce. The lending game changed during the Great Recession. As the country wrestled with how to get the economy off the cliff and onto solid ground, banks consciously dialed back their lending to small businesses. The Federal Reserve Bank of Cleveland reported that the number of bank loans under $1 million, mostly small business loans, dropped from 2008 to 2012. Small business loans are down almost 18 percent to $543 billion from their peak before the recession of $659 billion, based on national data. Bankers argue that increased regulation added unreasonable costs, making small busi- ness lending less attractive and riskier com- pared to the alternatives available. The Feds' Joint Small Business Credit Sur- vey Report found that, on average, small busi- nesses spend 24 hours researching and apply- ing for a loan. In contrast, banks take up to 60 days to close a new business loan. Adding salt to the wound: Some Small Business Adminis- tration (SBA) guaranteed loans could take up to 90 days. Small business cannot wait. Seeing an opportunity to get into an almost $1 trillion industry, new nonbank companies are filling the void for loans under $150,000. These companies lend to businesses that banks reject because they lack stellar credit, long operating histories and/or collateral. A Bloomberg BusinessWeek article stated that merchant cash advances, a type of loan based on a business' credit card processing revenue, surpassed the SBA last year as the No. 1 source for loans under $150,000. Armed with boatloads of capital from Wall Street and venture capital funds, new com- panies began lending via the Internet using sophisticated computer algorithms to under- write loans within hours, not months. For the most part, this fast capital is not regulated or covered by consumer protection laws. What you have today is an industry trip- ping over itself to lend money quickly to small businesses at very high interest rates. The commotion attracted the interest of the U.S. Treasury, which recently asked On Deck Capital, a poster child for the new nonbank lenders, and a public company since 2014, for information on online marketplace lending. For some, these new capital products can be both a godsend and a curse. If meeting payroll is a concern today, a fast loan tomor- row helps. But when cash is withdrawn daily from a business owner's bank account to pay back the loan, the business sees the true cost. Fewer dollars make it to the bottom line because the interest rate often exceeds the rates of credit cards. For example, On Deck's asset securitization that it sold to investors last year contained a portfolio of loans with annual percentage rates as high as 134.4 percent. Access to capital is a conundrum. The long-term solution is not on the horizon, but it seems likely that fast capital is here to stay. In the end, when fast capital comes calling, business owners must do their homework, because fast does not come cheap. n Anthony Price is the CEO of LootScout, which counsels small businesses how to raise capital. You can reach him at Antho- ny@LootScout.com. Anthony Price ▶ ▶ With a group of creative people driving innovation, organizational buy-in comes quickly. ▶ ▶ When fast capital comes calling, business owners must do their homework, because fast does not come cheap.

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