Amanda Lang on how to get ahead in business

By Jonathon Gatehouse - Monday, October 22, 2012 at 11:00 AM - 0 Comments

COLE GARSIDE

Amanda Lang, CBC’s senior business correspondent and the co-host of The Lang & O’Leary Exchange, knows a few things about reinvention. After originally setting out to become an architect, she ended up as a print journalist instead, and later made a successful leap to the small screen. Her new book, The Power of Why, examines the relationship between innovation and success, both in business and in people’s personal lives.

Q: Why a book on innovation? It doesn’t seem like that novel a topic.

A: Productivity—as I spend time persuading our national news desk—is not a boring subject. It is the key to our economic prosperity. And we’re failing miserably at it—it’s tragic. So for years now I’d been giving these speeches about productivity and afterwards people would come up and say, ‘Great, now you’ve scared us to death. But what can we do about it?’ And I didn’t have a response. So I started to dig into it and what I discovered is that there is an easy answer and it’s innovation. If we can find a way to spark more innovation we’ll get greater productivity.

Q: One of the things your book argues is that we tend to view innovation too narrowly. What’s your definition?

A: It’s not mine, it’s borrowed, but the best definition I’ve seen is an old idea meets a new idea and the outcome changes behaviour. The change in behaviour is critical to the whole thing. If you create something and it doesn’t have any external influence, it’s useless. But even very incremental innovation can change people radically.

Q: You talk about things like cost-efficiencies being innovations. Should that really count?

A. Yes. The beauty of the way businesses work is that they are endlessly innovative because there is a profit imperative. I just bought a new toaster and this morning I realized it has a timer on it. Think about it. When you are waiting for your toast, the wait seems interminable. You have no idea how long it’s going to take. It’s frustrating. Now if I move the dial to four I know it’s going to take 45 seconds, and if I move it to six, that it’s going to take a minute. It’s that kind of incremental innovation that businesses do to keep us buying products, but that also make our lives better.

Q: There are a lot of fun sketches of innovators in your book, but almost all of the people you describe are Americans, or Americans who work in Canada. Are you telling us that you think that Canadians aren’t that good at innovation?

A: I don’t think Canadians have given themselves permission to innovate the way Americans do. Do I think there’s something cultural in Canada that inhibits us? Yes, 100 per cent. The very traits that we hold dear—our politeness, our collaborative tendencies, our unwillingness to let people fail badly—are all things that inhibit innovation. But one of the things that I discovered—and I hope it’s clear in the book—is that anybody can reawaken their own innovative instincts. So it’s not that Canadians can’t do it, it’s just that we may be less likely to do it than some other cultures.

Q: Do you think that has something to do with our country’s founding cultures?

A: That’s way beyond my area of expertise. But I was talking about this to a group of executives, and three Americans who moved up to Canada said it was like cold water being dashed on them. One talked about how his kid came home from school with a “Canadian A,” it was 82 per cent, but in the U.S. that’s a B+. Another one coaches basketball and spoke about how when a kid is at the free-throw line, the whole gym goes quiet. Unlike in the U.S., where the other team’s supporters are going nuts, trying to throw him off. And the other told me how a meeting that requires four people draws 12 in Canada. And everyone wants to agree: it’s all yes, and no buts. That feels good, but it doesn’t work.

Q: You’ve identified the school system as being one of the barriers to innovation. Is that a uniquely Canadian problem?

A: No, it isn’t. When you think about it, everybody’s system was designed for the industrial age and it’s still really geared around these outcomes, whether it’s standardized testing or core subjects. We’ve ignored the fact that textbooks aren’t scarce anymore, information isn’t scarce anymore. There’s no reason why the teacher has to have all the answers and give them to the kids. The challenge is, how do we create people who know how to think, rather than people who have learned what you want them to learn?

Q: There are still an awful lot of people who are in jobs where their performance is rated on how well they follow procedures. So why is it necessary that they become innovative?

A: One of the things I discovered—to my horror—is the way we’ve become disengaged. They’ve done global studies that suggest 62 per cent of us are just showing up for a paycheque. And we all know intuitively that it feels better when your brain is turned on, and you’re focused. If you allow yourself to actually connect with your work, you will find ways to innovate. But there’s another aspect. Organizational behavioural theorists believe that increasingly, no matter what your job is, you are going to be tasked with complex problems. So if we’re not actually training people to absorb and process information in a way to meet that challenge, then we’re creating a whole group of people who are in another class. Not just socio-economically, but mentally, too.

Q: In the book, you cite examples of companies like GM or Microsoft, or one could even argue Apple now, who are no longer quite so innovative. Why is it so hard for companies to remain inventive?

A: The status quo bias is the biggest threat to a successful company—and it’s arguably what happened to Research In Motion. Companies get to a point where they have all this money and pride tied up in a product and they can’t afford—psychologically, mentally—to stop coddling it. The pace of a product cycle now is so fast, that if you do that for weeks, not even months, someone else has come out and replaced you in the marketplace.

Q: Walter Issacson’s recent biography of Steve Jobs painted him as a very difficult person. Does innovation at a corporate level require a chief jerk?

A: No, but it does require permission up the chain. If what you want is everybody in an organization being innovative together, you need buy-in from the top. The biggest impediments to innovation are structures—IT, HR. Anyone who can say no to where the money goes is most likely to put a stop to that sort of creative process.

Q: But isn’t there a confrontational aspect to getting innovation started and keeping it flowing?

A: There doesn’t have to be. It’s more important to agree that failure is part of the process. In some organizations the very structure of compensation affects innovation because if you fail your bonus is cut. That’s really easy to fix. Don’t tie people’s compensation to risk because that keeps them in a little box. And on a personal level, give people permission to fail—say it’s okay to have a bad idea sometimes.

Q: You also argue that these principles have an application in people’s personal lives. How?

A: I think these lessons can be super powerful. You can absolutely apply business theory to your relationships. How often do we think, ‘What does this person want from me, and what am I delivering?’ We just sort of let people drift around us in our orbit. To me, the same way we can engage better with people at work, we can engage better with the people in our lives.

Q: You end the book with a series of myths about innovation. What’s the most pervasive one?

A: The idea that not everybody can innovate, that you are somehow born to it. There are visionaries, just like there are great artists or athletes. But most people are incremental innovators. And if there’s a message I want people to take from this book it’s that there is a spectrum and you are on it somewhere.

In conversation: Kevin O’Leary

By Colin Campbell - Wednesday, October 5, 2011 at 10:50 AM - 2 Comments

Jessica Darmanin/Maclean's

Before becoming one of the star investors on CBC’s Dragons’ Den and ABC’s Shark Tank, Kevin O’Leary founded the software firm SoftKey, which later became The Learning Company and merged with Mattel in a deal worth nearly $4 billion. He now heads the investment firm O’Leary Funds and also co-hosts CBC’s The Lang & O’Leary Exchange. His new memoir Cold Hard Truth hit shelves last week.

Q: You offer a lot of lessons in your book about how to succeed in business. Can entrepreneurialism be taught?

A: I actually think being an entrepreneur is a state of mind. If you’re going to be an entrepreneur, my thesis is that you have to sacrifice everything for some period in your life to be successful. You have to be myopic and completely focused and unbalanced in every way. Once you achieve success, you’re free to do whatever you like.

Q: You write about being steered into business by your stepfather and mother.

A: Well, my mom’s attitude was, you’re going to find your own path, and life is serendipitous. She wasn’t as rigorous and hardcore as my dad, who looked at me one day and said, “You’re going to amount to nothing. All you do is party and you want to be a photographer. That’s the most competitive industry on Earth. You’re not that good.” The guy was giving me the truth: you should go back to school and at least get some tools.

Q: There are professional photographers. You could have pursued that.

A: I wanted to do that. I wanted to go to Ryerson. His thesis was: what’s your competitive advantage? What’s your difference? I’ve met with and worked with many photographers now, and I realize that it’s a brutally competitive market and they are really, really good. I honestly don’t think that I have that.

Q: This was your stepdad. Your biological father you describe as being a real salesman. Do you think you inherited that from him?

A: I do. I noticed the other day in a photo of him with his arms stretched in a position I do a lot; it looks just like I do. He died when I was seven. But I remember him. He was a classic Irish partier. A very kind man but also a real renegade.

Q: He lived hard?

A: Very hard. It’s what those Irish guys did. My mother divorced him right before he died and I think he died with a broken heart.

Q: What do you think he would have made of Dragons’ Den?

A: He would have been proud of me. He really missed a lot of life. I think he drank himself to death. It’s something I’m very cognizant of.

I was driving a couple of years ago and Peter Munk, the chairman of Barrick Gold, calls me and says, “Did you know that I came over on a boat with your father from Ireland? He was my roommate.”

Q: Get out of here.

A: No I’m serious. He said, “I just wanted to call you and let you know that he was a great guy.” It was a remarkable moment.

Q: What about your mother? Did she have a chance to see any early episodes of you on television?

A: She did and she was always fascinated by television. She actually enjoyed Lang & O’Leary more than anything. She really respected Amanda.

Q: Your mom factors heavily in your book . . .

A: She was an amazing woman and went through a lot of hardship, but also gave me tremendous guidance and support. She had an investment philosophy that I didn’t appreciate then but I do now. She said, never invest in anything that doesn’t have yield. When she died three years ago, I was executor of her estate and I realized she had every single dime she’d ever made.

Q: That’s still your investment philosophy today.

A: And it works! It really works.

Q: She was a working mom too, right?

A: A working mom. Her father owned [a clothing factory] but his philosophy was that the daughters all had to work on the sewing line. She was the boss’s daughter but not treated differently than anybody else. That’s how I treat my kids, too. When I fly over to see my dad in Geneva, my son has to sit in the back of the bus because I say to him, you have no money. You can’t afford to sit in first class. It’s a good lesson. He gets it. It makes him mad.

Q: Your mom later became the CEO of the family company.

A: It was tough. I had a German nanny. My dad was gone. I had dyslexia.

Q: You write in your book, “Money is the lifeblood of family.” Explain that.

A: Unfortunately it’s the truth. You can say family can be held together by love, but the truth is if there’s no capital there you get into a very bad place. Money puts tremendous pressures on relationships if you don’t have any.

Q: But your parents would have loved you if they were broke and living in a shack, right?

A: Yeah, but you know . . . money tears families apart for lack of, and for too much. It’s a very powerful force and you have to understand it and respect it.

Q: People would probably be surprised to hear about your whirlwind childhood—living in Cambodia, where your stepdad worked for the UN, going to military college in Quebec. Was that hard?

A: It was hard. I think back and think I missed something. But at the same time it gave me an appreciation of the world. I own real estate in Cambodia because I know it’s a great place for real estate. No one else knows—but I lived there for two years and I’ve been back.

Q: What did you learn at military college?

A: The discipline of getting up at 4:30 in the morning.

Q: Do you still do that?

A: I do. I get up between 4:30 and 6:30 every day.

Q: Were you a popular kid?

A: I had good friends. What’s happened to me over time is my best friends are the ones I’ve been to war with in business. I make friends inside a company and I stay friends with them the rest of my life.

Q: In one of your early endeavours you worked in TV production, including on Don Cherry’s Grapevine, a half-hour interview show. What was that like?

A: I owned that format. I owned Special Event Television with two partners. The first time I made money was selling Don Cherry’s Grapevine to his son.

Q: Do you channel Don Cherry when you’re on TV now?

A: I really respect Don. When you go on television it’s because you’re trying to create something people watch. He’s very flamboyant, entertaining and I think he taught me a lot about that.

Q: On TV you have a reputation as being the mean guy. You have a story about one man who came up to you in an airport washroom after seeing you on Dragons’ Den and called you an asshole. You’ve said this kind of stuff doesn’t bother you.

A: It doesn’t bother me at all.

Q: It’s hard to believe. Everybody wants to be liked.

A: Here’s why I know I’m right about this. The reason he said that is that I’m simply telling the truth. The one thing about money is you have to tell the truth about it. It’s the only metric in life where there’s no grey. You either make money or you lose money.

Q: I think you’ve described telling someone their idea stinks as “exhilarating.”

A: Because we’ve gone through this journey together; we’ve explored an idea and we’ve come to the right conclusion: it’s stupid. That’s a good outcome. I’m not trying to make friends, I’m trying to make money. My whole theme is just tell the truth.

Q: Let’s talk about The Learning Company, which you sold to Mattel in what turned out to be an epically bad merger.

A: You know, what’s interesting is the company is back [under new ownership] with all the same brands and doing very well. I think Mattel squandered a fantastic asset. One of the big motivations in writing this book was to set right what actually happened after they acquired the company. In my mind I’ve cleared the record.

Q: Obviously you’ve heard all the criticism: that TLC wasn’t profitable, that Mattel was somehow deceived.

A: Of course, if any of that were true it would have come out in the litigation. None of it was. They had forensic accountants tear our books apart for two years.

Q: You talk about how a culture clash between your software firm and a big bureaucratic toy maker ruined what could have been a good deal. The failure must have really bothered you.

A: It made me crazy. I was out of my mind unhappy.

Q: You and the CEO of Mattel, Jill Barad, both lost your jobs.

A: Well, I mean, I wasn’t happy being an employee anyway. I had a three-year non-compete. It was the most miserable time of my life. I was making the largest salary I had ever made and I wasn’t allowed to work.

Q: You once managed to get a meeting with Steve Jobs, where you asked him to pay TLC to keep carrying Mac-compatible software. What was he like?

A: He was so abusive! Toughest guy I ever met. We were in the boardroom at Apple and he went into a diatribe like I had never heard before. But we eventually did a lot of business with Apple. He’s a tough guy. Maybe that’s why it works. And hey, there’s an asshole!