Why 75% of Innovation Fails: From Addiction to $M Exit | David Greer
Kumar Dattatreyan: Hello, everyone. This is Kumar Dattatreyan with the Meridian Point, and I'm really excited for today's guest. We're joined by David Greer, a 40+ year entrepreneur who challenges everything we think we know about innovation. After building and selling a global software company, David argues we're missing 75% of innovation opportunities by obsessing over technology instead of focusing on culture, people, and processes. That certainly resonates with me because I work in transformation. I see this all the time.
As an entrepreneurial coach and author of "Wind in Your Sails," he brings a unique perspective shaped by 16 years of sobriety and the belief that personal transformation drives business success. David's here to discuss why disrupting yourself as a leader might be the most important business strategy of all. So without further ado, let me bring David to the stage. Thank you so much for being here, David.
David Greer: Well, thank you for inviting me. I'm super excited about this conversation.
Kumar Dattatreyan: Yes, same here. I've been looking forward to this conversation. This was pinned on my calendar for quite a while. So maybe we'll start with the innovation opportunities lost because many of us—most of us—focus too much on technology and not enough on culture, people, process, things like that. Can you elaborate on that? I'd love to hear your perspective.
David Greer: Sure. Just before we start, I'd like your listeners to know if there's some part of our conversation that resonates with you and you want any help, I offer a free one-hour coaching call to anyone that wants it. I usually say it at the end, but not everybody listens all the way to the end. So I just want everyone to know that offer is available. If you visit my website, my phone number and my email are right there.
Let me talk about it from more of a product and sales point of view first, and then maybe we'll come to people and culture. When we look at the sales process from initial lead generation all the way through the sales funnel, but then equally important, the post-implementation and what happens after—I've worked in a lot of organizations where salespeople complain, "We don't have the feature set of competitor X, competitor Y, competitor Z."
I argue it's not about feature set. I come more from the business-to-business background and the software background, so that's my perspective. But to me, it's much more important that you be able to demonstrate the value you can deliver to your client. If you are 10 times better than your competitor post-sale at actually getting it implemented, getting the teams on board, getting the actual value realized in an organization—the value that you promised—that is way more important than having more features.
The way we create belief in that is through customer testimonials and customer references. There's going to be people in the sales process who say, "Well, you don't have all the features of competitors X, Y, and Z." And you can say, "Yes, you're right. We don't. But we have the features that will make the most difference and add the most value to you, your process, and your organization."
Kumar Dattatreyan: I think you're right. It's all about differentiating yourself in some way. Some companies differentiate themselves by having this wide feature set that maybe not everyone uses. But there are companies that are more focused on what their customers truly need. They focus on the features that are actually used or actually produce the most value. That's what I get out of it—focusing on what your customer truly needs, really understanding what their needs are, and then delivering on that. That's going to result in better outcomes.
David Greer: And if we get back to disruption and innovation, I think there's great room for you to innovate about how you demonstrate that through the sales cycle and how you demonstrate that through implementation. There's a lot of room for creativity and innovation and disruption through that whole process.
In my book "Wind in Your Sails," another area that's really ripe in a sales process and brand promise is that every industry has a deep, dark secret. One of the stories I feature in my book is a local security company, Providence Security. In the security business, the dirty secret is that when an alarm goes off, something happens. That's the secret. Because what happens is the call center—maybe somewhere in the wilds of Texas—the phone rings and someone answers it, or the alarm goes off and someone calls you. Maybe you're a thousand miles from your home at the moment.
Mike Jagger founded Providence Security with the brand promise: "Five minutes to your door, your money back." Then he built a system—which turned out to be quite harder than he thought—to actually deliver on that brand promise. So here we have huge disruption to the security industry because you have someone who's willing to step up and call out the biggest secret by making a brand promise that no one else can make. Then he had to massively innovate.
I won't go into all the details—you can read my book because it's in there—but he did a massive amount of innovation so that he could actually deliver on that brand promise. Five minutes to your door. How close security guards had to be. It turns out even tracking keys. Every security vehicle with the security person from Providence Security has a key to every property they manage, but they're all coded so the security person can't collude with someone to break in. There's a whole innovation just in managing keys to people's places.
It all started with that promise—five minutes to your door. Not only do we show up at your door, but if it turns out the alarm is for water ingress—your toilet line has broken and water started pouring in the house—they now monitor all sorts of things that their customers find important to them while they're away.
Kumar Dattatreyan: Before you go to people and culture, I want to dive a little deeper. The idea of this brand driving innovation—the brand, the slogan, if you will: "Five minutes to your door." I didn't think of it that way. Nike: "Just do it." This company: "Five minutes to your door." It sounds like in this example, the owner, the innovator, came up with this catchy slogan and then had to live up to it. So he had to go through this cycle of innovation that examined every part of the value chain—how do we get somebody in five minutes to wherever there's an alarm?
But you have... I don't know how many examples of that exist. Our brand for the company that I run, Agile Meridian, is "Deliver Amazing." That was actually born out of our experience and the kind of work that we do with our clients. We pride ourselves on delivering an amazing outcome. But it didn't start out that way. It was born through experience.
I'm wondering, in your experience with business leaders, what comes first? Is it typically the slogan, or is that born out of experience? Or does innovation happen when it's this aspirational slogan or statement that drives people to think about how to deliver on those things?
David Greer: I'll bring up a couple of things. In Mike's case, I think really great companies become great companies because they recognize a pain in the market. Mike recognized that there was this industry secret that, for a certain group in the market who were willing to pay more, having someone show up was really important to them. So that was the pain point.
I also want to point out a little difference in Mike's promise from yours. Mike's promise has a brand promise and a consequence: "We show up at your door in five minutes or your money back." This is where I think a lot of businesses break down—they don't have the consequence to their brand promise. Maybe you don't make it explicit externally, but if you break your brand promise, does the VP of ops get fired?
I do a lot of work with teams with this methodology called Scaling Up from Verne Harnish. The framework actually has both the brand promise and the consequence—you actually document what happens when you don't deliver on your brand promise. This forces entrepreneurs and their teams to think more... You need to make a brand promise that's more measurable, because how will we know if we delivered it or not? And then, what is the consequence inside the company? Does the whole senior leadership team not get a bonus if we 10 times in a month didn't show up at people's doors in the five-minute window?
Mike's consequence is it costs them some money. But it's really important to include that second half of his brand promise. I'm pretty certain that it was driven from a perceived pain point in the marketplace. People thought something would happen when their alarm went off, and then he realized through his brand promise—and he's a great marketer, really great marketer—he made people aware of what the industry secret was. A certain group of those were like, "Oh, well, now that I know that, that's not what I actually expect or want from my alarm company."
Kumar Dattatreyan: That makes sense. We do have a guarantee, although it's not part of the slogan. But yes, that's a really good point—being able to live up to it. I think the difference between ours and the example you gave is yours is a lot more tangible. The interpretations of "delivering amazing" could be different based on what you're delivering. But "at your door in five minutes" is very tangible. Is it four minutes and 58 seconds? You made it. Or five minutes and 15 seconds? You're a little late, but at least you got here around the time you promised. The consequences of that—how do you bonus your people, how do you reward your people, how do you measure performance—it all can evolve around that.
So culture, people, process...
David Greer: I am a big believer that high-performing companies should focus on people and culture. Some of this is not innovation work per se, but some of it is very disruptive. For example, I'll work with new clients and ask what their culture is, and they've never written it down. So they don't know what it is. They have some vague idea, and it turns out that every person you ask has a different idea.
This comes mostly from Jim Collins in the book "Good to Great." He has two exercises. One is: if you were going to go to Mars, who are the people in your company who you would absolutely, positively make sure was on the spaceship with you? That one doesn't resonate personally with me as well, but the next one does: Who in your company would you hire again in a heartbeat? And why?
So you identify the person and then you start digging into the why. That will start showing you what's really important to you and your culture. I think people tend to be too altruistic. It has to be Disney-level. Some companies work very well by being assholes. I'm not certain I want to work with them as clients, but that is their culture.
I think at the start of the process is actually discovering your culture, then getting it written down and making it more explicit, then starting to do things. It's more of a discovery process rather than "this is the culture we want to have." Because if you want to change the culture, that's, in my experience, one of the single biggest, hardest things to change in an organization. It usually means certain senior leaders probably have to move on before you can change it.
Kumar Dattatreyan: There's so much of it tied to what you said earlier—the reward models and how people are evaluated and how these guarantees are maintained. The simple example you gave... One of the clients that I'm serving now, they're going through a transformation trying to change how they operate, how they deliver value to their customers. This is a big company—I won't mention any names—but quasi-governmental. A lot of the funding comes from the government.
They're going through this change and they're expecting a lot of behaviors to change just because they said so. However, they haven't changed anything in terms of how people are rewarded, what they mean by certain words like "collaborate" and "innovate." So the culture hasn't changed at all. Maybe the focus the leaders put into certain types of behaviors changed, but it's not reflected in their paycheck or in the daily interactions that leaders have with the managers and the doers. So it doesn't change.
David Greer: You have to lead by example. When I get deep with culture with clients, some of it is they need to get open to people calling them out when they're clearly not living the cultural values. Because people sniff it out right away when you say "this is our cultural value" and then your behavior is not consistent with what you said. People are like, "Well, you don't actually mean it. This is not our cultural value."
Let's flip around to the positive side. I've got a client I've worked with for a number of years. They've really articulated a really solid set of core values. We've had a couple instances in the last year or so where there's been people issues. I've gone back to their first reports and said, "Okay, so you're struggling with this person. Is this person living your cultural values?" They're trying to decide, should we let the person go or not? I just say, "Is the person living your cultural values?" In a couple of cases, within a week, the person was gone.
They try to be accommodating, they try... and that's part of their teamwork ethic and part of their culture. But this person was clearly violating their cultural norms and their cultural values they expect.
The other thing that's very disruptive to a lot of organizations who go really deep on this is one of the things I really encourage: What actions do you live to demonstrate your core values? For example, if someone really seriously violates a core value, do you fire them? I just gave that example—yes, they did. The flip side of that is: Do you hire for cultural fit first and skills second?
I really encourage people to make that one of their actions—hire for culture first. Because skills are relatively easy to teach. Obviously, if you need someone with a computer science degree, they need a computer science degree. But there's lots of people with computer science degrees who also fit your cultural values. So you screen first for the cultural values.
Companies that are high-performing cultural organizations, when there's a mis-hire, they eject the person like a virus.
Kumar Dattatreyan: That's a really good point. I've seen that as well in companies that are run well—companies that run with a culture-first, people-first mentality. Let's make sure we get the right people. The skills, of course, are part of it, but they're not the main part. It's more about fit, even to the point where it's a fit within the team that they're going to be on.
We've worked with clients where we've advised them to use various assessment mechanisms to assess not just their skills in terms of the work they're going to be doing, but more importantly, how they fit within the team. Are they going to clash with other members of the team, or will they complement the team because that team is lacking certain emotional skills, social skills, leadership skills, analytical skills, soft skills? Those companies are much more successful at maintaining and growing this culture—whatever the culture is that they're trying to grow: collaboration, respect, and all that kind of stuff.
Culture is very important, but you have to cultivate it. You can't just lay a set of edicts and expect that the company will just suddenly adopt those edicts and all will be well. You have to put in some ways to measure how people perform and be willing to get rid of people that don't live by those values—the cultural values that you've instilled. That will set a tone. The types of values that are rewarded, the people that are rewarded because they're embodying those values.
In your experience, when you've seen companies like this—I expect you're calling them high-performing companies—they're high-performing because they deliver value to their customers, external, internal, whatever they might be. Is that generally true?
David Greer: [Audio issues] Sorry, Kumar. One of our connections is giving problems. You were breaking up so much, I couldn't quite make out your last question.
Kumar Dattatreyan: The question was more around the correlation between companies that hire for culture, for values, and their performance. How do they perform in the marketplace versus companies that hire for skills?
David Greer: If you read Jim Collins' "Good to Great," if you read "Scaling Up" by Verne Harnish, they give pretty strong examples and demonstrate that the highest-performing companies are the ones that put people and culture first.
Kumar Dattatreyan: That's what I imagined. That also lines up with my experience working at many different companies. I want to shift the questioning to your personal journey. You've been very open about your recovery journey and how getting sober 16 years ago was the single biggest achievement in your life. That's from our last conversation. How did that personal disruption transform you as a leader? And why do you think entrepreneurs sometimes struggle with accountability?
David Greer: I think those are two separate topics—the recovery piece and the accountability piece. But let me talk a little bit first about the recovery piece.
Your listeners probably won't know unless they read the things you posted on LinkedIn for promoting this event, but I am an alcoholic and I am in recovery, thankfully, for 16 and a half years now. Like a lot of alcoholics, I was in denial for a very, very long time—at least 20 years. I'm an example of what is very common, which is a really high-performing alcoholic. I drank to... it was rocket fuel. It kept me going. It made the highs higher, it made the lows not so low. But in the end, I was just trying to cope with feelings that were uncomfortable.
Coming into recovery... there's two parts to coming into recovery. The first part is putting down the drink, which in the huge scheme of things, I think is actually the easier part. The harder part is... I used alcohol. Alcohol was like the 20% of the iceberg you can see on the surface. The 80% was the feelings underneath that I didn't know how to cope with.
The challenge is: How do I live life on life's terms without my solution of choice, which is alcohol? Because life keeps happening and businesses go bump in the night. That's what businesses do. Life goes bump in the night because that's what life does. And I can't reach for my solution.
My recovery is through 12-step recovery—the best-known 12-step recovery group. In 12 steps, we have these 12 steps, and they're not meant to be read as slogans on a wall. They're meant to be worked. You actually go and sit down with another recovering alcoholic who's done it before you, and you do the work.
That's been one of the biggest changes for me in 16 and a half years—that personal growth through working the steps, through working with some therapy. I've also done relationship work with my spouse of 43 years. All of that work lets me show up so much better as an entrepreneur, as a coach, and as a leader.
I always was quite people-focused, but I would say my listening skills are probably 10 times what they were before I went into recovery. My ability to listen to people without judgment and to hold space for them...
Part of that is that I've been to over 2,000 12-step meetings. 12-step meetings, I think, are magical because in the middle of a meeting, you can hear a pin drop because we are just sitting, listening to the person who's sharing. Even if a third of us, our minds are wandering, we're still present and we're still quiet. It's not many places where you can go where people will so intently listen and hold space for what you're sharing, regardless of what you're sharing.
Kumar Dattatreyan: That's a powerful thing to be heard. And also to listen, to develop that kind of skill to listen and listen deeply. Those are both really powerful. The outcome is that you feel heard because there's this group of people that are really intently listening to whatever it is that you're saying, whatever you're sharing. That's a great outcome. And the discipline that you have to develop yourself to listen intently and deeply and hold space for the other... I don't think I have anything comparable except my training as a coach. It's helped me listen better, but I'm sure it's not to the level that you've gone through over the last 16 years on this journey.
David Greer: I did formally train with the coaches.com. I did take formal coach training, and that, in addition to all the 12-step work, plus 10 years now of coaching... I think one of the most powerful skills we can develop is curiosity. Being curious why people behave the way they behave. That doesn't mean we don't hold them accountable, but it's like if they're not being accountable, we have to call them on it and also have some curiosity about what's missing. Are they scared? Do they not have enough resources? Is stuff going on at home? Did we just hire the wrong person—they don't have the skills? You just have to really stay curious.
Let's segue to holding people accountable. I think this is something that most entrepreneurs have trouble with. Most leaders have trouble with because you have to be comfortable in the discomfort of holding someone accountable.
I think if we start with entrepreneurs, entrepreneurs usually found businesses because they don't want to be accountable to bosses. Entrepreneurs often see an opportunity in a marketplace, but only about 10% of the population become business owners. We're a pretty weird bunch. You have to be kind of semi-crazy to go start a business. So I think that an entrepreneur holding themselves accountable is very challenging. Some of my work as a coach is helping them to be accountable. Unless you have investors and a board, but most entrepreneurs, owner-founders like the ones I work with, don't.
Being accountable is very difficult. When your business grows and when you have a leadership team, if you're not accountable to them, it just stalls the business. You can't perform at peak performance if the leader is not trustworthy and not accountable to the rest of the team. There's just a plateau that you're going to hit.
Kumar Dattatreyan: In our... we have a program that we call the Disruptor Method, and it's really to help disrupt a leadership team—how they operate, how they communicate with one another. Sadly, a lot of companies, medium to large firms, their teams are not really teams. They're groups of leaders that get together maybe once a quarter, talk strategy, and don't get a whole lot done. The Disruptor Method is intended to disrupt that and help them develop the capabilities that maybe they've lost or forgotten or just don't use because the culture doesn't support it or doesn't reinforce it.
One of the things that we stress a lot is accountability to each other, to the team. I agree—as an entrepreneur myself, it's hard sometimes for me to hold myself accountable, which is why now I'm happy I have partners that hold me accountable to the things I say I'm going to do.
David Greer: The other piece—again with the Scaling Up framework—I'm a big believer in quarterly planning, getting off-site. But I think people seriously underestimate how powerful it is to actually get things written down on a piece of paper that you can then bring out at every weekly meeting.
To come together and agree on a short set of goals... I don't allow more than five major goals for a team for a quarter. Even then, that's a lot. Of course, if you work with me, I'm going to make sure the goals are very clear—that you got across the finish line or not. Because sometimes people set goals that are very vague. But even just the process of getting together and writing them down, and then meeting again in 13 weeks, that itself helps create a lot of accountability.
Kumar Dattatreyan: I'm with you 100%. I want to shift the questions to something a little bit more fun to get people an idea of who you are as a person, the things that you do. I know that sailing figures prominently in your life. I'm wondering when you're out on a nine-day solo sailing passage, what business insights come to you that you would not get in a boardroom, in an office?
David Greer: Whether I'm solo sailing or whether I'm sailing with someone else, part of why I really love sailing is that it boils all of the extraneous stuff away. Because when you're on passage, you have your boat, you have yourself, or you have you and you have your crew, and you have to make do with what you have. You can't invent a different boat. And you especially can't change the external circumstances, which is the wind and the waves. You have to adjust your course to whatever is being delivered to you.
I've only turned back maybe three or four times in 45 years or so of sailing. But every time it was absolutely the right thing to do. I think the lesson for entrepreneurs and leaders is like sometimes when external factors change enough, you shouldn't just beat your brains trying to go to your original destination. You do need to radically change where you're aiming for.
Even if you continue to go to the destination you're trying to get to, as external factors change, if the wind is behind you in a sailboat, and the waves are kind of behind you, or at least coming from the back quarter, that's a fairly comfortable point of sail and you can actually deal with quite a bit of wind and a fair amount of waves. Now, if that is coming at you directly from the destination you're trying to reach, that's completely different. It looks and feels completely different. You're going to bash your brains out trying to beat... because you can't sail directly into the wind. You can maybe sail 30 or 40 degrees to the wind direction.
The lesson I bring back in business is that when market conditions change, when some of the people leave, when circumstances change in your business, be conscious about the change. Acknowledge the change, don't ignore it. It's very easy to ignore, especially external market changes. Understand that for a long time here, it was easy downwind sailing. Now we're going to have to beat our way to where we want to go. It's going to be disruptive and it's going to be hard, and it's still worth it because we're still heading to the right place.
Kumar Dattatreyan: Great insights. All right, one last question. Strategy, execution, cash, or people. If an entrepreneur could only focus on one of those four, which would you choose and why?
David Greer: That's context-dependent. So I can't give you... This all comes from Verne Harnish and his two books, "The Rockefeller Habits" and "Scaling Up." What we say is strategy, execution, cash, people are like the four foundations of your house. If you want to go from a house to an apartment building, you have to make your foundation stronger. So what you need to do is figure out which is the weakest of the four parts of your foundation. Which part do you need to go work on?
I encourage entrepreneurs when I'm doing strategic planning with them, at least for a quarter, try and figure out: Is it some new key hire that will move the business the most? Well, in that case, it's probably people. Or are you going to do a lot of work identifying your culture and making culture much more alive in your organization? Very much people.
Strategy is your plan. Execution is how well you're actually able to execute against your plan. So if you had a solid plan in terms of what needed to happen last quarter and where you were going, but then you fell down and you only achieved half your goals, well, your execution sucked. I think you should never be less than 80% if you're a high-performing team.
There's another thing I tell people—it's an age-old management question: Is it strategy or is it execution? Is it the plan or your ability to execute and make the plan happen? I argue it's neither. It's about alignment. You need alignment first, then you can do the rest. But if you don't have you and your senior leadership team on the same page and aligned going in the same direction, you're not going to go anywhere.
If I come back to a water analogy, since sailing on the water is my thing: if you're in a rowboat and everyone is pulling on their oar with no alignment about the timing or where you're going... It makes a lot of noise and it makes a lot of splashing and a lot of water and a lot of turbulence. So it looks like you're going somewhere. There's a lot of action. But you're just going in circles because you're not aligned. You're not pulling together.
Kumar Dattatreyan: I really love that analogy. I think you have to start with that alignment piece. I love the analogy. I'm definitely going to use that one.
All right, David, we're about out of time. What have I not asked you that you'd like to share with the audience?
David Greer: [Audio issues] Thanks, Kumar, and I appreciate being here today.
Kumar Dattatreyan: You must not have heard my question. Is there anything that I didn't ask you that you'd like to share?
David Greer: [Audio issues] I'm really struggling. You're still breaking up for me.
Kumar Dattatreyan: Okay. All right. Well, we will end here then. Thank you so much for joining us, David. I hope you all enjoyed the show, and sorry about the mic problems. I don't think it's on my end, but I'll have to check that out. But thanks again for watching, and we'll see you next week. Bye-bye.
