Andrea Kates  (akates@BusinessGenome.com) is the founder of the Business Genome® project and author of the visionary bestselling business innovation book, Find Your Next (McGraw-Hill, November 2011). As a business strategist, facilitator, and speaker, Andrea has led more than 250 business innovation initiatives for global corporations, entrepreneurs, and organizations including Royal Dutch Shell (Asia-Pacific), Audi, Allstate, Continental Airlines, GM/OnStar, Hewlett-Packard, JP Morgan Chase, KPMG, the Houston Texans (NFL), and P.F. Chang’s.   Find Your Next was based on her original research with top leaders of rapidly growing companies including GE ecomagination, IndieGoGo, LunaTik, Autodesk, Cisco, Sharp Healthcare, and Autodesk. Find Your Next reveals the keys to a revolutionary model of business innovation that has the capacity to change business as we know it.

Known to many as the next generation’s “brand whisperer,” Andrea created the Business Genome project to help companies adapt to a rapidly-changing global business environment and to gain a competitive advantage by discovering cross-industry opportunities for innovation. Her hallmark CoLabs immerses organizations in the hands-on application of cross-industry insights.

Andrea is a member of the TED (Technology, Entertainment, Design) community and featured 2012 TED speaker (short talk).

To read Part One of my interview of her, please click here.

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Morris:  When and why did you decide to write Find Your Next?

Kates: I decided to write it because it needed to be written.  Because it didn’t exist.  Because I couldn’t find a book to recommend to clients and colleagues that explained how companies were actually finding their way out of feeling stuck—that could actually delineate a process for moving forward and deliver on what everyone was looking for—a path to sustainable revenue growth.

On the one hand, we have classic literature like Michael Porter’s work, but it didn’t focus on discovery and wasn’t written for a world as unpredictable and fast as ours, today

On the other hand, we have books on innovation—by people like Clayton Christensen and Tom Kelley. When you read those books, it’s as if a pure innovation approach is for a particular type of person. An innovator. Born, not made. We can’t all be Steve Jobs (and we shouldn’t try to be).

We needed a book that everyone could relate to, that would help us realize our own innate ability to observe changes in our markets and do something about them. That would help us translate insights into growth.

Morris: Were there any head-snapping revelations while writing it? Please explain.

Kates: I love that phrase, “head-snapping revelations.” Yes. I discovered three about today’s companies that make traditional MBA thinking obsolete: 1.The speed of the market 2. The transparency of today’s business dynamic—we’re connected and social media introduces many new voices into the purchase decision and 3. The globalization of commerce.

With all three revelations in mind, I literally hit myself on the side of my head and realized why we were all so stuck.  No process existed for dealing with them. And the book changed as I was writing it.

Morris: To what extent (if any) does the book in final form differ significantly from the one you originally envisioned?

Kates: I was recently on a panel with Sean Moffitt, author of Wikibrands, and he asked me a similar question. He asked me why I hadn’t written the book earlier.  I told him I thought I had to crack the code on all of business genomics before I could even get started.

Well, that was never going to happen—I was paralyzed and overwhelmed thinking that I couldn’t write the book until I had all of the answers. I’m sure all authors feel that way when they start out. And we all have to learn when to sit down and just write.

I took a dose of my own medicine. I always tell clients that asking better questions can be the key to unlocking new answers, new opportunities. So, I decided that instead of waiting for the perfect answers to be ready, I would ask the questions with my readers. The power of the book would be the interviews themselves. My asking questions and my readers, or people that represented my readers, answering them. It was the honest telling of the messy stories that didn’t fit neatly into a 7 habits type of list. Conversations with business executives from P.F. Chang’s, GE ecomagination, Placecast, IndieGoGo, EMC Corporation, J&J Global, Korn/Ferry International, GM/OnStar told the real story of how people found their “nexts”—whether it was a multi-billion dollar “next,” like GE, or an entrepreneurial “next,” like Cooper’s Hawk Winery and Restaurant.

Find Your Next went from being yet another academic model or collection of case studies to a very down-to-earth, approachable collection of stories—and the four steps that everyone’s process has in common—whether large or small, business or nonprofit, local or global.

Morris: For those who have not as yet read Find Your Next, to what does the title refer?

Kates: It’s all about taking our organizations from point A to point B. Finding your “next” means just that—how we move toward tomorrow. How we figure out what to do next. When can we see right now? What does it mean about what might happen tomorrow? It’s not as farfetched as it sounds. It isn’t predicting the future, but really looking at the present…and looking at it differently.

How did Nikon see photos changing once mobile phones added cameras, and Flickr and Picasa added photo sharing? Easy.

Morris: What are the core components and major benefits of the business genome?

Kates: You get ahead of the shifts in customer preferences. You evaluate your current performance with creativity, like “trendability”—how well you’re adapting to changes that will affect your company. And your industry.

Morris: Briefly, how can the Business Genome approach help to achieve various organizational transformations? First, of innovation?

Kates: Don’t get seduced into the “let’s create purple tacos” side of innovation. There’s a balance to be achieved between stagnation and pure creativity. The insight here is that innovation can mean recombining things that are in plain sight and accessible, even in another industry—like Zappos customer service.

Morris: Of marketing into a world where customers can be inside?

Kates: Think of your company as an open book or a “glass house” where authenticity rules. We have to observe and listen to our customers—they’re part of our brands now.

Morris: Of talent, culture, and leadership?

Kates: Engagement comes from real buy-in-to ideas. You don’t get buy-in from employee manuals and policies. You get buy-in from real communication with the people you work with.

Morris: Of process by collaboration?

Kates: You need to get all of the players in the room at the same time when you’re designing any new process. The analogy I like is airport design—you can design an airport to streamline baggage handling or make the distance from security to gate the shortest for flyers, but one size doesn’t necessarily fit all.

Morris: Next, the transformation – and proliferation and distribution – of what you call “the secret sauce”?

Kates: Brand is a contact sport these days—everyone (management, front line, customers, competition) has a hand in the molding of your product’s market perception.

Morris: Of the emergence of trendability?

Kates: Business moves at warp speed today. We don’t have to be intimidated by forecast models or wait for the perfect strategy to hit us between the eyes. We can all put “trendability”—the ability to see signs of change before it happens—on our radar screens and build our cultures to respond fast.

Morris: As I began to read this brilliant book, I realized that what you characterize as “the next” is what Peter Drucker had in mind when discussing the future: Either we create it and then manage it or we will be vulnerable to (if not controlled by) how others manage it. Is that a fair correlation with your concept?

Kates: First, thanks for the compliment—I wrote it to bring optimism to anyone charged with driving growth for a company—large or small. The change can be as simple as getting the owner of a local dry cleaners to consider instituting local food trucks in their social media-based promotions. Or, the change can lead to a multi-billion dollar corporate commitment, like the establishment of GE ecomagination by Jeffrey Immelt, now led by Mark Vachon, who’s profiled in the book.

I do think it builds on what Peter Drucker had in mind—it was brilliant to recast the future as something we can shape, so that we don’t feel we’re victims of inevitable downturns. We can ignite a sense of adaptability when we’re faced with mutability. It is inspiring to meet the people I talked to who have done it, people like Danae Ringelmann who had a vision for a new future for funding independent films and decided to create it herself (IndieGoGo). Or Tim McEnery, who saw a possibility for a Napa Valley vineyard closer to home (in the Midwest suburbs), and founded Cooper’s Hawk Winery and Restaurants. I profiled them in the book, and learned from them along with my own readers.

Morris: However different leaders of companies such as Groupon, OnStar, Cooper’s Hawk, G.E., and Toms Shoes may be in most respects, what do all of them share in common?

Kates: Each of them had a crazy moment, a “hunch” that they could enact change into a system that had been around a long time. And, instead of ignoring their intuition, they did something about it. They listened to it.

Morris: As I read Chapter 2, I was reminded of Isaac Asimov’s observation, “The most exciting phrase to hear in science, the one that heralds new discoveries, is not ‘Eureka!’ but ‘That’s funny….’” In your opinion, how best to recognize significant patterns as they begin to emerge?

Kates: I love that you quote Asimov. When it comes down to it, humor is about the out-of-the-ordinary or the unexpected—something accidental that takes you off guard like slipping on a banana peel, or twisting a sentence to play on words. Just like when new ideas first enter your head.

There’s an internal dialogue that begins around every new idea—where two things that didn’t used to go together before are suddenly slammed together. Like newspaper coupons with social media to create Groupon. Crazy…funny…insane… maybe not so crazy after all.

Morris: I agree with you about the importance (for individuals as well as organizations) of establishing and then sustaining a competitive edge. How can factors such as those on which you focus (i.e. speed, crowd, and globe) help to do that?

Kates: First thing everyone should do is take a match and set fire to all of their SWOT strategies (strengths, weaknesses, opportunities, and threats) as the first slide in the strategy deck. It just keeps you in the past.

Instead, they should take the three new realities and put them on the wall: 1. transparency of data and the “Wikibrand” world we live in 2. Speed 3. Global connectedness. Ask yourself “if I could create a company that would put us out of business tomorrow, what would I do?” List the companies from other industries that are doing a killer job in the six genomic areas (Product innovation, Customer impact, Talent and leadership, Process design, Secret sauce—brand, and Trendability—keeping up with the pace of change, as I see them) and surround yourself with the image, the idea, the success of them. Today. And become one of them.

That’s the way to tap into what you already know you need to see—the signs of change on the horizon.

Morris: When explaining how to find one’s next business, you offer three recommendations on Page 23:

1. Sort through the options
2. Match your genome using the Business Genome elements
3. Hybridize your company
4. Adapt and thrive by breaking out of old habits

Here’s my question. Which of the four seems to be most difficult for most business leaders to complete? Why?

Kates: Number 4, adapting, is the hardest by far. That’s why Sears lost the catalogue market while LL Bean and CB2 thrived in mail order (and, of course, Zappos and Amazon and hundreds of online retailers). It’s hard to break old habits and shift mindsets, even when the facts are right there in front of you.

Morris: In your opinion, what are what you characterize as the “new realities” of customer impact? What is their single most significant implication?

Kates: We can’t live in the world of Mad Men anymore, where we “telegraph” our messages to customers and they buy what we’re selling. We have to be receptive to input from the market, even if it requires admitting where we went wrong. Howard Shultz was shocked when a confidential memo “leaked” a few years ago, that told the world how he really felt about where Starbucks’ has gone wrong. From then on, Starbucks had to operate much more like an open book. They’d already opened it once. That’s exactly what every company faces in today’s “glass house” of business.

Morris: Given you response to the previous question, what are the “new realities” of talent and leadership? What is their single most significant implication?

Kates: One great story is the generational gap one General Stanley McChrystal tells about being shocked when he tried out his usual leadership lines on the new recruits—who were Millennials. It was a motivational speech that started with a rhetorical question, “Where were you on 9-11?” He’d forgotten how old they were. “Sir, I was in the sixth grade,” was the response he got back.

The lesson there is that we can’t assume our own motivations are the same as everyone else’s, especially whoever’s listening to us. We can’t assume our own tastes are the same as our customers’. Leaders have to be masters of inquiry and understanding, not just masters of answers.

Morris: When attempting to empower various organizational processes, what are the major do’s and don’ts?

Kates: Realize that there is no single way to “optimize” a process. Systems like Six Sigma and any others designed to streamline any process (help desk systems, queues at airports, payment systems) have biases. A system that saves costs on labor at an airline help desk might very well tick off customers for being too abrupt or not fully resolving issues. You have to start with the “why”—whose perspective do you want to use to optimize a process and why?

Morris: What specifically is the “secret sauce” to which the title of Chapter 8 refers?

Kates: Secret sauce is the combination of intangibles that make your company’s mojo, brand, or message distinct.

Morris: How can what you characterize as “the game of trending and adaptation” (in Chapter 9) help a company to stay ahead of the “unpredictables”?

Kates: I coined a term, “trendability,” to describe what I think needs to become a new metric for every organization—large, small, corporate or nonprofit: “What do we see right now that will turn into the headlines that will affect us tomorrow and the next day?” It’s a dynamic measure—you have to keep refreshing your answers. The questions are timely.

Morris: In Part 3, you provide and discuss several mini-case studies that help your reader to understand the details of the “Find Your Next” process. In your opinion, which lessons can be learned from the exemplar companies (e.g. P.F. Chang’s China Bistro, Sharp HealthCare, Hyatt Hotels and Resorts, GE, General Motors, Korn/Ferry) that will be of greatest value to owner/CEOs of much smaller companies? That is, companies with annual sales of $25-million or less.

Kates: Small companies have the advantage of being nimble. They can try an iPad ordering system or simpler billing. I work out at a gym that just teamed up with a local salad bar to offer a workout + lunch option—you order your salad online by 10:30 AM and the trainer brings it to class for you. There’s a win-win that would require months of meetings to make happen.

Morris: Once someone has read (and preferably re-read) Find Your Next, let’s say that person is determined to apply what has been learned about seeing new possibilities and recognizing new realities, then shift focus to new questions and tap into patterns that are emerging and evolving. Where to begin?

Kates: Start quietly. Sit in a room and ask yourself three questions:

1. What feels different today than a year ago about our customers or our competition?
2. What hunches do I have about opportunities?
3. Who (from other industries) is doing something we can learn from?

Morris: Which question had you hoped to be asked during this interview – but weren’t – and what is your response to it?

Kates: The question would be, “What’s your next?” I’d answer that my next project is a bit ambitious, but I’m motivated to try–to actually build an engine that fuels business innovation. I’m working on it.

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To read the Part One of my interview of Andrea, please click here.

She cordially invites you to check out the resources at these websites:

http://www.businessgenome.com/

http://www.youtube.com/businessgenome

http://www.facebook.com/BusinessGenome

http://twitter.com/#!/businessgenome

http://www.amazon.com/Find-Your-Next-Company%252019s-Competitive/dp/0071778527/ref=sr_1_1?ie=UTF8&qid=1326037059&sr=8-1