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Howard Blake Stays Hungry With His Innovation Strategy

Staying agile and innovative isn’t easy, especially when you’re running a large and established operation that’s been around for decades. Howard Blake, however, has managed it. Entrepreneur finds out how he stays hungry and keeps his finger on the pulse of innovation.

Paul Smith

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Vital Stats

Key Learnings

  • Stay at the edge of innovation. Disrupt your own operation before someone else does it.
  • Don’t treat risk as a dirty word. The key to growth often lies in embracing calculated risk.
  • Diversify without losing focus. Create verticals that complement and feed off each other.
  • Innovation and execution are not the same. They need different approaches.

Howard Blake started his business when he had nothing more than a typewriter and a scooter to his name. He would work from his kitchen and visit clients on his scooter. But those days are far behind him. Today, Blake owns a large international company that’s been in operation for more than 25 years and is worth around R350 million.

This is not a bad position to be in — who wouldn’t want to grow their business so successfully? But it does bring its own challenges.

Like an aircraft carrier or cruise ship, a large company has the size and heft to survive stormy waters, but it also turns very slowly. Change is not instantaneous, and in our modern business world, this is becoming increasingly problematic.

While large operations find themselves stuck in a whirlpool of corporate governance and risk management, small, agile operations are leapfrogging over them and disrupting established industries. One need only look to companies such as Uber and Airbnb for examples of this. Taxi operations and hotel chains all over the world are being threatened by companies that they failed to even identify as competitors.

Related: 5 Things Warren Buffett Does After Work

How does one safeguard against this? For Howard Blake, the answer is simple: Never allow yourself to become complacent.

Disrupt yourself

When Blake started his business, he did so by innovating and disrupting the way things were done.

“When I started in 1990, if you had a fax machine, you were at the leading edge of technological innovation. Most businesses weren’t utilising computers properly yet. I looked at the way people were processing legal documents, and I thought it should be automated. At the time, collecting debt was slow and laborious, so I developed a computer-based system that sped up the process,” recalls Blake.

Now, the rate of innovation is much faster, which makes it harder to stay on top of new technologies. And the fact that Blake is managing a large operation with thousands of employees can make it tricky to roll out new systems and technologies.

So, to bring about constant change and innovation, he forces his company to ‘disrupt itself’. “We take nothing for granted,” says Blake. “Every six months, we reassess the business. It’s like an airplane teardown. We take everything apart for inspection. We used to do it every 18 months, but the rate of change is now too rapid for that.”

The aim is to find ways in which things can be done in a more efficient and cost-effective manner. “We don’t mind disrupting our own services and product offerings. If there’s a better way to do something, we pursue it.

“You need to open your mind and put your prejudices behind you. It’s almost a philosophical thing — you need to fundamentally question what you’re doing. Don’t believe you’re doing things in the best way. Humility is important.”

Blake is also weary of processes that become routine. “Nowadays, as soon as something becomes routine, the profit line tends to take a dip. Your product or service won’t exist in its current form in five years’ time. If you’re not innovating, you’re dying.”

Embrace risk

Blake-Howard-Blake

For Howard Blake, risk is not a bad thing. In fact, he believes embracing risk is an important component of long-term survival. Companies have become exceptionally risk averse, and this is impeding their ability to innovate and grow.

“Risk has become a dirty word in the business world, something we all take great pains to avoid. We hire risk management companies and take out risk insurance to help us minimise risk,” says Blake.

“The problem is that many enterprises take an extreme approach to minimising risk, pigeonholing themselves in the process. Over the course of my career, I’ve seen the benefits of constantly moving out of your comfort zone and taking calculated risks. Rejecting the status quo is one of the main reasons that Blake Holdings has grown from a one-man show to a R350-million business over the course of 26 years.”

He does not, however, suggest that companies adopt a laissez-faire approach to risk management.

“As the skeletons of many failed start-ups can attest to, it’s all about calculated risk. From the start, we employed a scientific approach to the collection business in order to create better default prediction models. This approach saw us secure important clients such as Foschini and Truworths.”

You want to avoid what Opsware founder and angel investor Andy Horowitz calls ‘stupid risk’. Good risk brings with it the potential for tremendous reward. Stupid risk offers little chance of corresponding reward. 

Related: How To Build Your Business Like A Boss

Diversify

Diversification is notoriously tricky. While embracing multiple verticals can certainly result in more revenue streams, it can also lead to a loss of focus and the relinquishing of a hard-won market position.

Once one of the stalwarts of the American business world, the RCA Corporation (originally the Radio Corporation of America) decided to diversify in the 1960s and 1970s. RCA wanted to become a conglomerate, and therefore decided to acquire companies that focused on industries as diverse as carpeting, frozen foods and car rentals. Things did not go well. These endeavours had a disastrous effect on the company’s bottom line.

Frustrated employees purportedly even started referring to RCA as Rugs, Chickens and Automobiles. This attempt at diversification was one in a long list of bad decisions – decisions that ultimately resulted in RCA being purchased and broken up by GE.

But there are countless examples of companies that managed to diversify very successfully: Disney was once just an animation studio, today it has its fingers in countless pies, including a list of theme parks. Once purely a maker of computers, the bulk of Apple’s revenue now comes from cellphones. One of Amazon’s biggest money makers, meanwhile, is its cloud-computing service, which boasts a long list of large companies as clients.

“Diversifying successfully requires a careful balancing act,” says Blake. “You don’t want to lose focus completely.”

It also helps if there is some cross-pollination between your various ventures.
In the case of RCA, the company was throwing the net too wide. Apple applied
its technology and flair for design to a related field.

“While Blake Holdings may have begun as a collections company, it utilises its technology — alongside its already-existing databases — to render services across the verticals of contact centres, customer service, customer analytics, WiFi, marketing and data analytics, to name a few,” says Blake.

“These specialties all build and feed off each other, making it easier to not only launch successful new ventures, but also to hone the innovation capabilities of the existing ventures. With the advent of the digital age, previously distinct verticals have now become converged business solutions.”

Think like a start-up

The Virtual Agent is a recent addition to the Blake family of companies and an excellent example of the organisation’s approach to diversification.

“The Virtual Agent is a realty solutions company that has emerged from our experience in database services. And, like many of the successful ventures we’ve undertaken over the last decades, it wouldn’t have come to be if not for a curiosity to seek out new ways of making things better and improving industries,” says Blake.

Getting The Virtual Agent off the ground wasn’t easy, though. The Blake organisation was sailing into unchartered waters, and not everyone was convinced it was a good idea.

Related: Work Smarter Says Matsi Modise

To push the project through, Blake adopted a lean start-up approach. With Debbie Leo-Smith (an ex-estate agent) heading up product development, creation of The Virtual Agent offering was kept small and cost-effective.

“We brought The Virtual Agent to market very quickly. It was an industry ripe for disruption, and we acted decisively. The venture broke even five months after we came up with the concept. That’s the speed at which you need to operate, even within a large organisation. There’s a hunger, a desire to innovate that tends to fade into the background the more resources a business has access to. If you want to be successful, you need to find a way of holding onto that hunger.”

Paul Smith is a writer and startup scientist. He currently manages an accelerator, Ignitor, which helps entrepreneurs start and grow their businesses. Ignitor has developed a new model that significantly improves early stage start-ups odds of success. His primary research interests include understanding the behaviours of expert entrepreneurs, as well as, how to most effectively support high potential start-ups. Follow him on Twitter and visit his website.

Lessons Learnt

(Podcast) ‘Bizarre Foods’ Andrew Zimmern: ‘I’m Addicted To The Hustle’

How this week’s ‘How Success Happens’ guest overcame personal struggles and built an empire.

Dan Bova

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I didn’t know what to expect when we scheduled an interview over breakfast with today’s guest Andrew Zimmern. As you may know, the chef, writer, restaurateur and TV personality made a name for himself traveling the world and eating some, well, bizarre foods on his hit travel/food show, Bizarre Foods.

Turns out our breakfast was pretty normal – we didn’t dig into a fresh plate of scrambled brains or anything – but the conversation was anything but typical.

Over the past couple of years, Zimmern has built a true empire around his name with books, TV shows, restaurants (including his new Twin Cities joint Lucky Cricket), and a production company, but as he very candidly told me, the road to success has not been easy. He has gone through a lot of personal pain on his journey, and he says it is a daily endeavour to keep himself moving on the right track.

As Zimmern explained, over the course of his life, he’s had problems with substance abuse, depression – even homelessness – and he was very open about sharing the lessons he’s learned along the way about coping and finding redemption. We also spoke about his dear friend, Anthony Bourdain, and about the struggles of feeling overwhelmed that most of us face.

Related: Gareth Cliff Shares His Tips For Starting Your Very Own Podcast

But don’t get me wrong, he’s really funny, too! There’s nothing “normal” about Andrew Zimmern. Hope you’ll enjoy our conversation, thanks for listening.

This article was originally posted here on Entrepreneur.com.

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How BrightRock Is Disrupting The Insurance Industry With These 2 Pivotal Strategies

Developments in technology, and clear communication are positioning BrightRock to disrupt their industry and transform the consumer experience.

Monique Verduyn

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Vital Stats

  • Players: Sean Hanlon, Leopold Malan, Schalk Malan, Suzanne Stevens
  • Company: BrightRock
  • Est: 2011
  • Visit: www.brightrock.co.za

BrightRock was started around a dining room table in 2011 by four people with years of industry experience and — importantly — a diverse set of complementary skills.  They wanted to make changes to an industry with an age-old methodology by allowing customers to co-create a solution that precisely meets their individual needs, and adjusts as those needs change. Today, BrightRock is the fastest-growing insurer in the intermediated individual life risk market. It also provides underwriting management services to funeral parlour businesses and, more recently, has entered the group risk insurance market, offering its needs-matched approach to employees.

The founders of BrightRock, established in 2011, knew the life insurance industry all too well, and they found its methodology wanting. “Traditional life insurance lumps all the individual’s needs into one policy,” says CEO Schalk Malan.

“It’s a methodology that has been around for centuries. We started afresh and looked at how we could design life insurance based on individual requirements. Our cover is designed to exactly match each specific financial need. Because there is no waste, it’s more cost efficient and sustainable. And if circumstances change and our customer needs more cover, it’s easy to get it because needs-matched design enables the policy to change in line with changing needs.”

1. Embracing digital technology to provide needs-matched insurance

Suzanne Stevens, marketing executive director at BrightRock, points out that this type of innovation achieves efficiency (cost savings) and effectiveness (higher returns). “By harnessing digital technology, we have made our operations more efficient, and aggressively lowered costs by up to 30% for our customers. Every rand they spend with us works harder for them. That’s the benefit of a solution designed around the customer.”

BrightRock’s founders took a similar approach. ‘We ditched legacy thinking in favour of creating a product that is intuitive and easy to navigate. An enormous amount of time and effort went into writing and designing that system, and creating the optimal customer journey.”

Related: How BrightRock Is Rocking The (Industry) Boat In Only 5 Years Since Launch

Unlike clunky legacy systems, BrightRock’s platform is modularised, and was built according to the agile principle of rapid delivery cycles. The result is a technology stack with longevity, that is also flexible enough to be tweaked when needed.

“The advantage of the technology available today is that you can plug things in and pull them out as required,” says Suzanne. “That’s one of the enablers of a truly disruptive mindset. To step away from accepted norms and find new solutions requires curiosity and creativity, as well as a lot of courage to go up against large incumbents in the market. There is always resistance to new technology, although we are fortunate in this country to have one of the most innovative insurance sectors in the world.”

2. Effective communication is critical

These disruptors have set themselves above the rest through one surprisingly simple tactic —  effective communication. They agree that it simply doesn’t matter how world-changing your product or service is if you don’t communicate it to the right audience at the right time. New companies that fail to communicate their remarkable new development will quickly be pushed aside by other disruptors. Without a clear communication strategy that reaches the audience in the industry you’re trying to disrupt, you’ll set yourself up for failure. A key question to ask when you are developing your communication strategy is simply whether people understand what you do.

“Because the premise for our product was fundamentally different from anything on the market, communication and clear messaging were critical to convincing our clients to put their trust in us,” says Schalk.

“It was especially important to educate insurance advisors so they would understand what we were doing, why we were doing it, and how it was better than the other options available. That was key to disrupting the individual life market.”

Currently, BrightRock employs 380 staff, has experienced 40% year-on-year growth, and has an annualised premium income of more than R1,3 billion. The company has recently entered the group risk environment with a similar offering that addresses many of the same shortcomings of traditional group risk products. “The inefficiencies of the structuring of group products has meant that, to remain competitive, insurers have cut the benefits offered to employees, undermining their sense of financial security. Change is needed, and we believe our needs-matched philosophy positions us to change the group risk market too.”

‘We ditched legacy thinking in favour of creating a product that is intuitive and easy to navigate. An enormous amount of time and effort went into writing and designing that system, and creating the optimal customer journey.”

Unlike clunky legacy systems, the BrightRock’s platform is modularised, and was built according to the agile principle of rapid delivery cycles. The result is a technology stack with longevity, that is also flexible enough to be tweaked when needed.

Related: BrightRock’s 5 Entrepreneurial Tips For Start-ups

This iterative, modular approach typically begins with defining the strategy and programme plan upfront, delivering a core capability fast so it can provide benefits immediately, and then continuously improving with regular, incremental capability improvements to achieve the objectives of the strategy. It’s an approach that fosters closer collaboration between stakeholders, improved transparency, earlier delivery, greater allowance for change and more focus on the business outcomes.

“The advantage of the technology available today is that you can plug things in and pull them out as required,” says Suzanne. “That’s one of the enablers of a truly disruptive mindset. To step away from accepted norms and find new solutions requires curiosity and creativity, as well as a lot of courage to go up against large incumbents in the market. There is always resistance to new technology, although we are fortunate in this country to have one of the most innovative insurance sectors in the world.”

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Lessons Learnt

The 9 Obsessions You Need To Have To Become A Self-Made Millionaire

Here’s how to stay focused on your millionaire goals.

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The ones who succeed weren’t handed a golden ticket; it wasn’t chance that helped them cultivate their fortune. To reach millionaire status, you must be driven to reach your dreams. You must be obsessed in order to be successful.

These are the nine obsessions that give every self-made millionaire an edge in creating success and wealth.

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