Why Maverick Companies Succeed in a Competitive Environment

An Interview with Polly LaBarre

"The invisible decisions you make are often ten times more important than the visible ones."

As a core member of the original Fast Company team, Polly LaBarre played a central role in the remarkable success of a magazine that changed the way leaders think and talk about competing, working, and winning. In her eight years as senior editor, Polly wrote influential articles on strategy, creativity, and personal success. She co-hosted the magazine’s signature annual Real Time conferences and helped to create a high-level roundtable series, “Fast Talk,” which she moderated around the globe. A graduate of Yale University, she lives in New York City. She talked with the Journal of Business Strategy about her new book (co-authored with William C. Taylor), Mavericks at Work.

In visiting hundreds of companies over the years, you’ve seen a lot of mediocrity. In general terms, what sets a maverick company and it’s employees apart from the also-rans?

When we sit down with employees and managers in the company, they don’t start off talking about how they’re going to make more money. They don’t show off their new spreadsheets. Instead they say things like, “Here are the ideas we stand for” or “This is how we make a difference; this is our blueprint for the industry. Here’s what we see is wrong and this is how we want to fix it.”

Today successful strategy is a form of advocacy. You also have to champion a cause. So when you’re forming or running a company, you really need to answer the questions, What ideas are you fighting for? What do you stand for? Do you have a compelling and interesting blueprint on where you industry can and should be going? Leaders who set the terms of competition have set up forms of renewal and reform, they have a distinctive and disruptive sense of purpose. This is what sets the mavericks apart.

You note, “The harder executives work to make things cheaper, more reliable, and more desirable, the more unhappy they seem to make their customers.” As consumers, are we jaded spoiled brats now?

It’s not just that we the customers are fundamentally ungrateful, but we live in a world of too much stuff. Nearly everyone in the developed world has nearly enough of everything. In that world, how do you stand out? You can’t just sell great products or provide great service. Those are just table stakes now. You have to stand for really important ideas: what your world view is, what you’re fighting for. That doesn’t have to mean in a moral noble sense—we’re not all out to save the rainforest (although that’s nice)—but you need an original point of view that clicks with customers, energizes employees, and really shapes your business. Without that, you do get lost in this commodity world.

The thing is, mavericks thrive on this new spirit of competition, they are energized by the notion of it getting harder every year and customers being more demanding. They like the conundrum of it because they know the answer is originality and innovation. That tracks back to what kind of company they are running, what kind of  leader they are, how they are unleashing the best from every person they work with.

Why do companies find it so hard to be memorable, to truly stand out? Most of us can probably think of a dozen industries where it’s hard to tell one company from another, even when there are ample ways to stand out and impress customers. Why is so hard to have, as you put it in the book, “a distinctive and disruptive sense of purpose that sets you apart from your rivals”?

It really is hard to stand out. Standing out starts with asking yourself, as a person and as an organization, some tough and searching questions. In our eyes, you shouldn’t start a business unless you have a distinct and disruptive point of view. Can you answer the question, “What are you fighting for?” Each of the mavericks we cite as examples did and can. Herb Kellerman at Southwest Airlines said, “We want to democratize the skies.” Arkadi Kuhlmann at ING Direct said, “We exist to lead America back to saving. We are an alternative to the worst practices in our industry.”

The team at HBO says, “It’s not TV, it’s HBO.” Here’s a company that’s not a start-up and is owned by a big media company, one that’s not exactly known as being innovative. Midway through HBO’s existence, when they already had that slogan, Chris Albrecht took over and said “Are we who we say we are? Are we really worth paying more for? Are we really distinctive, an alternative?”

The answer that came back was, “Not really, but we’d like to be.” So they decided to jump off this cliff called “original programming.” They spent a ton of money and took huge risks, all guided by the question, “Who are we and what do we stand for?” That is one of the most powerful questions to ask, whether you’re two students in a garage dreaming up an idea for a business or are executives at the top ranks of a big established company.

You note in several places the importance mavericks place on pleasing the customer rather than worrying about the competition. Are companies less liable to be blindsided by a competitor if they’re truly focused on their customer’s needs and wants?

There are really two answers to that question. One, if you are pursuing an agenda that’s so original and unconventional in the industry, you don’t have to worry so much about looking over your shoulder at the competition. You’re not playing the same game and don’t have to worry so much. You’re not in that game where everybody’s agreeing to the same playbook and we all just nip and tuck at the margins. Mavericks say, “We’re not in the business of that, we’re forging our own path. We don’t care what the rest of the world is doing; we only care about pleasing our customers.”

Of course every business leader is going to say they’re listening to the voice of the customer—you won’t catch them saying otherwise—but when you are a customer today and can’t even get your cellphone provider on the phone, it’s obvious that most people aren’t really listening to their customers. Instead it seems they have declared unofficial war on their customers.

One of the mavericks we cite is Mike McCue, co-founder of TellMe and formerly a VP at Netscape. At Netscape he and Marc Andreessen woke up every morning worried about what Microsoft was going to do and how they were going to beat Microsoft. He says that “they mooned Microsoft,” so after that it drove everything they did. They didn’t really have time to think about the customer—it was all about their competitor. Now at TellMe he says, “Every time we look at the competition or have a meeting about the competition, we turn it into a meeting about the customer, about how we can improve things to better please the customer.”

MBA students are almost indoctrinated with the ideas of brand extensions, constant growth into new markets, and adding new revenue sources. Tell me about the thinking behind the statement, “Companies that compete on a disruptive point of view are defined as much by the opportunities they choose not to pursue as by the businesses they do enter.

Our basic point is, the teams with the clearest sense of purpose are the ones that win. This not only defines a new realm to compete in, but defines a unique culture. ING Direct’s whole mantra is to lead America back to savings. So they offer a very limited range of products, all in the interest of providing high interest rates, of helping Americans save. They get add some 100,000 new accounts each month, they get billions of dollars in deposits every month. So of course any self-respecting MBA would say to keep that growth train going you should add brokerage accounts, auto loans, add on new business offerings to the clients you have already got.

But the other products are not instruments of savings. It’s not what ING Direct is fighting for. They do provide some mortgage products because they believe it’s an instrument of savings to build up equity in a home, but that’s about as far as they want to stray from their core mission.

It is the same story with Southwest Airlines. At one point they were considering competing with a company named Muse Airlines by adding new planes to keep up—a different model that would require pilots and mechanics to be trained on two systems. But Kellerman asked, “Why do we exist?” He decided they existed to enable regular people to fly, people who weren’t the well-to-do. The mission was democratizing the skies.  If they added the new planes or, for that matter started handing out more than one pack of peanuts, they wouldn’t be able to offer the same low fares that enabled them to meet their mission. It adds a level of clarity that less focused companies don’t have. One of our mavericks put it really well when he said, “The invisible decisions you make are often ten times more important than the visible ones.” The things you decide not to do can be as important in shaping your success as the ones you do decide to do. Call it maverick restraint I guess.

You stress the importance of tapping many sources for ideas, including looking outside the company. In your role with Fast Company, have you found that growth company entrepreneurs have a hard time scaling back their role as “the big idea man or woman”?

With the maverick leaders we decided to profile, there are two common traits that you wouldn’t necessarily think of going together. First, most of them have an incredibly strong point of view: they can be opinionated, very brash, sometimes quite colorful. But they don’t have the big ego that makes them think they are the smartest person in the room. They all have what I like to call intellectual humility. They have a strong idea about where their company is headed, but they are very open to the idea that they don’t have all the answers. They tend to surround themselves with people smarter than they are and know that great ideas can come from anywhere. They see their role as a leader to find a way to invite those great ideas in.

They are like open source leaders. They ask how they can structure the company or the project in a way that they can pull in the best solutions available anywhere. They’re asking, “What’s our architecture of participation?” They know that no matter how big or great their company is, 99% of the smart people out there will never be able to work for them. However, though all smart people may not be able to work for you, they may want and be able to work with you. Figuring out a way to draw those people in is really the next wave of innovation.

I thought it was interesting that the ING Direct and Southwest Airlines try hard to hire people outside of banking or airlines for most of their positions. Is it worrisome that so much resume screening is done by HR software systems that filter by keyword and that so many job ads require xx years of direct experience in a very specific industry?

It doesn’t worry me, but I think there is misplaced faith in technology for recruiting. Screening software can be a very powerful tool when it is paired with a very pointed perspective of who is the right kind of person for that role. It works when you really know not only what credentials matter, but when you have a pointed perspective on who the right and great people are for you and your company. The logic of Southwest Airlines and ING Direct’s hiring, by the very nature of who they are and what they are trying to do, is that the usual kind of hire for that industry is not the kind of person who is going to fit in a excel in that environment. If you have a really distinct point of view and sense of purpose, you’re not going to be for everybody.

Most maverick leaders kind of tumble into this answer that character and who you are as a person is as important or more important than credentials. They can teach you how to become a bank teller or a flight attitude. Attitude and spirit are far more important than specific skills because they can’t teach you that. They need the right spirit from the beginning.

I would argue that it’s the main reason Southwest has had such a great long run, despite being battered by competition. They have dedicated themselves to building what they call “that warrior spirit” person by person. Use all technology, they are aggressive about recruiting, but they are also innovative and smart about how they screen people for character, about the mechanisms they are going to use for behavioral recruiting.

You say you like to ask CEOs the question, “Why would great people want to work here?” and that the results are often disappointing. Is this a question that smart job candidates should be asking in their interviews?

Sure! That could be quite a provocative question, but it would be a good screening question for the candidate and would probably impress the interviewer. What it means is that you the candidate are not just looking for a job, for a paycheck. You are showing you really want to connect with an organization that’s doing work that’s meaningful to you, that there’s an agenda behind the organization. I don’t know any kind of good leader that wouldn’t be excited about that kind of candidate!

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Interview conducted in November 2006 by Timothy Leffel, managing editor. To see more about Mavericks at Work, visit the web site or blog.

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