Use Guerrilla Tactics to Locate the Best High-Speed Paths to Growth

Until Robert McEwen, CEO of Goldcorp (a gold mining company based in Canada), attended a conference at MIT about the free software movement, no one had probably ever thought about accessing experts inexpensively to help find more gold. Mr. McEwen took that powerful software example and applied it in a new way to his own industry. In the process, an important business model innovation was born.

But that success doesn't mean that all important business model innovations have already been developed and applied. Here are some other examples of value-adding innovations that you could apply:

1. Outsource the key development and value-adding tasks. People are outsourcing more and more. The usual approach is to outsource what isn't very important or takes up too much time. But you could stand that idea on its head and let outsourcers bid to take on your most important activities with compensation tied to results.

For Goldcorp this could have meant selling off the right to explore and develop the mine while still owning the mine and retaining an important part of the cash flow. Because each such deal would have freed up or generated substantial capital for Goldcorp, the firm would have been able to purchase and develop many more mines -- and more rapidly -- with this approach.

Many reject this concept of outsourcing key tasks because they appreciate the value of having an organization become superb at these tasks. That view can be shortsighted. Many organizations couldn't begin to develop a capability to do key tasks that's nearly as good as what's available immediately from another existing organization.

Many entrepreneurs who understand this concept simply sell their company or assets to the organization that can add the most value. That price, however, will be lower than putting the more effective organization in harness and gaining from whatever they learn to do better.

2. Shift your focus from the main goal to finding out about the best use for the leftovers. We all try to get more of what we understand best. A gold miner tries to find more gold and make more money from it. A writer tries to find more people to buy and read writing. In the process, there are a lot of surplus resources and materials created.

If you think of those leftovers as your main source of profits, better solutions will occur to you and to those who think about these questions. In gold mining, there is a lot of effort put into digging holes in the ground and carting out rubble. What else can you do with those holes and that rubble?

In the backup electronic and paper storage businesses, underground facilities in hard rock environments are considered to be very valuable. Can some areas be inexpensively converted into these uses?

Rubble may also contain other valuable minerals. Have the tailings been processed to take advantage of that? Many mines have piles of tailings from decades of mining when prices were less than 5 percent of today's prices. It often becomes reasonable to reprocess those tailings to extract different minerals.

The remaining rubble with the proper treatment may help make good road beds and foundations. A Japanese railway ran into seemingly unlimited springs of mineral water in a tunnel it dug. Does your mine contain mineral water that could be profitably bottled and sold for its superior taste and health characteristics as the Japanese produced from their tunnel? See Corporate Creativity by Alan G. Robinson and Sam Stern (Berrett- Koehler, 1997) for more information about the Japanese example.

3. Determine if you can access free resources in new ways. The world is full of people who would like to learn new skills that will enable them to pursue their personal interests and careers.

Many of Habitat for Humanity's more experienced volunteers are involved for this reason. If you offer those who are going to help you more chances to learn that are valuable to them, you can staff many more of your efforts with volunteers.

A gold mine might do this by offering internships for geologists, training for apprentice miners, workshops for those who want to learn how to maintain equipment, and applied business courses for those who want to work in higher administrative roles. Many of your existing employees and volunteers would probably relish playing these leadership and educational roles so the added cost may be slight.

Another for-profit organizational approach could be to donate a portion of improved results to a charitable purpose. The for-profit organization could then coordinate with a charitable organization to find talented volunteers who would like to spend some time improving the for-profit organization in order to increase charitable contributions.

Here are questions designed to summarize what you learned from examining ways to avoid significant obstacles to expanded consumption or usage of your offerings:

-What are the three most expensive obstacles to avoid?

-How do the costs of avoiding those obstacles compare to the costs of eliminating the obstacles instead?

-Why are those obstacles more costly to eliminate than to avoid?

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