Peter Thiel and the recipe for innovation

Thiel

Peter Thiel, chess master by age 21, a doctorate in law by age 25, and founder of $1.5 billion company, PayPal at age 35 has helped to create some of the most successful businesses, in the world.

The first team Thiel created is known in Silicon Valley as the “PayPal Mafia” because the majority of his team went on to start and invest in world-dominating companies such as;

  • SpaceX
  • Tesla Motors
  • LinkedIn
  • YouTube
  • Yelp
  • Yammer
  • Palantir

Today all seven of these companies are worth more than $1 billion each. Needless to say, Thiel knows a thing or two, about creating successful businesses so, it’s no surprise that his book, “Zero To One”, on how to grow a business masterpiece, is a New York Times #1 bestseller. Here are four reasons why;

1) The ultimate innovation recipe; Zero to One

Thiel argues the greatest leaps in innovation are vertical, not horizontal. Doing what we already know how to do (i.e horizontal progress) takes the world from 1 to n, you are simply adding more of something familiar. However, on the other hand, when you do something new (i.e vertical progress) you take the world from n to 1. This is the exact formula Thiel seeks to create in every new enterprise. Theil argues that the champions of tomorrow, will not win by competing in an existing marketplace. Instead, they escape competition altogether, because their business is brand new and that is the recipe for success.

2) Success comes from monopoly not competition

The problem with competition is that your own success is constantly dependant on your competitors. You have to fight hard to survive and keep up to date. If you offer affordable products, with low margins, then you probably can’t focus on properly renumerating your employees. You have to focus on every saving every efficiency. It’s a constant battle.

A monopoly like Google, for example, is different. As it doesn’t have to worry about competing with anyone, it has wider latitude to care about its workers, its products, and its wider social impact. Google is the ideal kind of business that is successful enough to take ethics seriously without jeopardizing its own existence. It’s not just great for marketing but great for all of those involved – employees and employers, alike. In business, money is either an important thing or it is everything. Monopolists can afford to think about things other than making money; non-monopolists can’t.

In Theil’s view competition forces businesses to be so focused on the present margins that it can’t possibly plan for a long-term future. The only one thing that can allow a business to transcend the daily savage struggle for survival is monopoly profits.

3) Competition closes our creativity

Theil argues that people can be so obsessed with competition, that they focus on what has worked in the past in an unhealthy manner, without searching for future opportunities. Businesses start to rely on competitors for their own advancement, meaning they lose sight of their own purpose and why the business was created in the first place.

Creative monopolists, however, never lose sight of their original business purpose. Their success is defined by the value they are constantly adding to their market. They give customers more choice by adding entirely new categories of benefits to the world. Creative monopolies aren’t just good for the rest of society; they’re powerful engines for making the world a better place.

4) Slow and steady can win the innovation race

Many think that to win at innovation you’ve got to be the first entrant to the market. this can be true in some cases, and if it’s done well you can capture significant market share while competitors scramble to get started. However, Theil argues that moving first is a tactic, not a goal. What really matters is creating consistent cash flows in the future, so being the first mover doesn’t give any benefits if someone else can come along and unseat you. It’s much better to be the last mover – that is, to make the last great development, in a specific market and enjoy years or even decades of monopoly profits – because you have done it the best way possible.

Zero to One is full of counterintuitive insights that will help your thinking and build the foundations for a world-changing enterprise. These are just the top four insights we believe to be the most monumental, however, the book has plenty more.

 

5 reasons why fun in the office is good for business

fun

Work doesn’t have to be doom and gloom. You can execute serious tasks and have fun at the same time. Investing effort into making your workplace more fun has tangible, positive benefits for employees, and organizations.

Here are 5 reasons why fun should be part of your HR strategy.

1. Having fun improves communication and encourages collaboration 

Enjoying time with colleagues in a relaxed and fun environment, including the workspace, encourages honest and open discussion. If employees are friends with the people they work with, as opposed to simply being colleagues, then they’ll work better collaboratively and communicate more effectively. They will understand each other’s traits and it will reduce the risk of miscommunications. Having fun with people is an excellent way to build genuine trust in the workplace and employees will work together towards shared business goals.

2. Having fun makes employees more productive

A 2015 study by the University of Warwick’s Centre for Competitive Advantage in the Global Economy found that happier employees are more productive by an average of 12%.

When an employee feels low or sad for any reason, their morale and motivation drops, they may communicate less or less efficiently, and their productivity suffers.

People cope better in environments where they feel supported, even loved. Work doesn’t have to be much different.

3. Happy employees are healthier

A Harvard School of Public health study found that

“A vast scientific literature has detailed how negative emotions harm the body. Serious, sustained stress or fear can alter biological systems in a way that, over time, adds up to ‘wear and tear’ and, eventually, illnesses such as heart disease, stroke, and diabetes. Chronic anger and anxiety can disrupt cardiac function by changing the heart’s electrical stability, hastening atherosclerosis [plaque deposits on the lining of arterial walls] and increasing systemic inflammation.” It’s true unhappy employees mean an increase in absenteeism.

Absenteeism is a significant problem. UK businesses lose 6.9 days a year per employee because of absenteeism, at an estimated cost of £554 per employee. Nearly a quarter (23%) of UK organizations say ‘non-genuine absence’ is the top reason for short-term absence for non-manual workers, with this proportion rising to 30% for manual workers.

4. Having fun encourages public sharing 

Employees who have fun and enjoy work are far more likely to spread the positive word. Having a good image for your business through a marketing campaign is one thing but having it through word of mouth is so much more powerful. If every one of your employees shared news about your business to their social groups, then your audience will increase exponentially, genuinely and for free.

5. Fun breeds innovation

Social ‘play’ is crucial to creative development. An individuals’ ability to learn improves when the task is enjoyable or even fun. Play can also stimulate imagination, helping people adapt and problem solve. Innovation is the crossroads between two ideas when employees are placed in an environment that nurtures creativity a business is far more likely to find and develop innovative ideas.

This creative culture can be created through problem-solving exercises, collaboration meetings and innovation hubs in the workplace. It can also be enhanced by fun and effective group training sessions which can be organized by the following coaching firm.

Why internal communication is the secret to growth and innovation

internal communication

Joe Fredericks, founding director of PCA Law has helped to deliver communications training to over 150 clients since 2001, including over 30 leading global law firms and 20 FTSE 100 organizations.

In his recent keynote speech for Thomson Reuters, Elite Vantage NYC 2018, Fredericks revealed some key communications secrets helping top global firms to dominate their industries.

Fredericks explained, that “internal communication” is often overlooked by firms seeking to grow and innovate but it’s one of the biggest influencers impacting organizational growth. As such, those firms paying attention to internal communication can expect (and have seen) huge rewards.

On this note, Fredericks took his audience back to the “communications basics” and covered what many firms are lacking in their internal communication.

Internal communication – Why does it matter?

Great internal communication is at the heart of any successful organization. It’s a core component to employee engagement initiatives, internal work process, and motivated, unified teams across an organization.

If internal communication is functioning properly, organizations can expect to see the following benefits;

  • Team members feel more supported, have higher morals and are less at risk of burnout
  • Overall work productivity is higher (clearer delegation, fewer mistakes & more motivation)
  • With increased internal fluidity and less “hiccups” employees have more time to focus on client needs

All of these factors contribute to business growth and allow organizations to grow as they have the required internal structures to support innovation.

How to implement great internal communication

Fredericks explained two key equations, utilized by top firms to create effective internal communication.

The Trust Equation

One key ingredient to effective communication, especially in relation to business growth, is building trust.

Fredericks used the “trust equation” to show an individual’s thought process when considering whether to establish a relationship of trust.

Trust = Credibility + Reliability + Intimacy / Self-orientation

So, when seeking to establish trust in clients or colleagues one must score highly on credibility, reliability, and intimacy and have a low self-orientation score.

Commercial Application Equation

This equation supports organizational innovation.

In most cases, the word “failure” comes with a negative connotation, but Fredericks noted that one cannot innovate and grow without failing and added, that it is important to have conversations about why something went wrong within an organization. Avoiding failure is not conducive to growth. If employees do not feel like they can try something different, how can a business expect to innovate?

Fredericks used the Commercial Application Equation to explain how failure assists innovation.

Organization Confidence + Client Creativity + Productive Failure = Commercial Appreciation

“Productive failure” means to change how we see mistakes, it means embracing failure. Organizations should feel confident and empowered enough, to tell clients that they may not have been successful in the course of an initiative. In fact, Fredericks explains, the ability to embrace failure demonstrates organizational experience, in that it has grown and experimented with more effective ways of executing a task or developing innovation. Through failure, teams learn to improve and be better. The Commercial Application Equation is a useful tool for developing “the next big thing.“

Internal communications can positively transform organizations in terms of both growth and innovation. It drives organizational productivity and helps employees develop defining qualities to form deep relationships and engage in two-way conversations that eliminate bureaucracy. It is a win/win for any organization and a determinative factor for those firms seeking to remain competitive in today’s market.

To hear more from Joe Fredericks listen to his podcast interview where he discusses some of the challenges facing modern law firms and how they address them.  To listen, click here or to download and listen later, right-click

 

 

 

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