A conversation with Tom Counsell, Executive Director of B-Hub Prague

B-Hub Prague Executive Director Tom Counsell has built 8 startups across 5 countries, speaking 4 different languages and shows no signs of slowing down.  He describes innovation as potential energy, waiting to be unleashed – “Innovation is like potential energy in physics. It represents the intrinsic creativity and wisdom of a team – the raw potential a team uses to succeed.”

Tom Counsell.

I had the pleasure of speaking with Tom about how to build a team that can harness that raw potential–as well as growing ideas–being diplomatic about failure and the amazing innovative power of poor communities.

Bringing an Initial Idea to Maturity

Start-up founders are notoriously protective of their ideas, handing out NDA’s and letting next to no one in on their freshest innovations. According to Tom, this is a mistake. He says that for an idea to mature, it needs to be pushed by the ideas of others – and the best way to make that happen is to share them voraciously.

“Any idea from the beginning is probably a bad idea. It needs to grow…before it survives and is worth investing a bunch of time and effort into.”

What about pesky copycats? Tom says not to worry about them. “No one is going to steal your idea. And even if they do…they’ll never have your vision. They can’t copy that because that comes from your soul when you’re a true founder.”

To Tom, founders need not be afraid of copycats because ideas are not what gives a startup its value.

“The value of a startup is in the ability for the business to execute on that idea, not to have the idea.”

Besides sharing with others, Tom has another piece of advice for helping an idea grow: fail on purpose.

“One thing that I like doing and encouraging people to do is push the boundaries. Do the most extreme version of what your idea is first and expect it to fail.” Tom says exploring an idea to its extreme with the expectation of failure gives you permission to focus on what you can learn rather than becoming laser-focused on first-time success.

Sharing Failure, the Right Way

Viewing failure as a positive learning experience is one thing for an individual but another thing altogether for an entire company. Tom told me he had made the mistake of announcing a failure too early in the past. What he learned was to never announce a failure without also planting the seeds for what’s to come.

“Innovation comes with lots of failure, but widely announcing failure hurts company morale,” he said. “It’s ok to announce the end of projects, but it should be complemented by announcing a plan for moving forward…Most people don’t take failure very well and they get very demotivated if you simply trash everything that they’re working on.”

Not everything that doesn’t seem to work right away is a failure, however; sometimes it’s just the wrong time. “You can come up with a great idea but it’s not necessarily useful right away,” Tom told me. In these cases, he likes to assign a team member to keep it simmering on the back burner. “Let one person take it and let it be their 10% project…Let them play with it for a year or two because you never know what might come out of it later on.”

One of Tom’s favorite innovation success stories is the story of Johannes Gutenberg’s printing press. “It was not immediately a success,” he told me. “People didn’t know what to use it for right away because no one was used to reading and very few people could read so the printing press took, I don’t know, a good 40 or 50 years before Gutenberg got any fame for doing that.”

The Trouble with Managers

On the subject of what stifles innovation, Tom raised some concerns about the role of middle management. “A middle-manager feels the full weight of failure when things go wrong, but only receives a small share in the success when things go right. So a middle-manager is unlikely to take risks. For that reason, keep your team structure flat and remove middle-manager positions if at all possible,” he said.

What makes someone a leader rather than a manager? According to Tom, leaders are concerned with vision while managers are focused on keeping a project from becoming too complex. He says this difference arises in large part due to the long term vs. short term metrics of success.

“Top-level executives want to see their businesses running lots of experiments because they know if they run 10 different experiments in 10 different departments, then one or two of them is going to yield something really amazing and help transform the business,” he explained. “But none of the managers want to be the ones that fail. So it’s difficult to convince managers or department heads to take risks that the CEO would want them to take because it hurts their career.”

The solution? Tom proposes thinking outside the box to find a better way to measure performance than the black and white success-vs-failure approach.

“Of course, you want to reward success, but you also want to reward an efficient failure.”

Tom says the Google X-Team might be the best example of this approach. “The faster you fail, you get a bonus and a vacation,” he said.

Innovation Starts with HR

Tom describes innovation programs as people programs – and he says HR is their key to success.

“[In the business of innovating] the only thing worth focusing on is intelligent problem-solving and human creativity, so it should be part of HR because it’s a soft skill. HR should be promoting and championing soft skills among everyone in the company because hard skills are becoming less important over time.”

Tom says hard skills are diminishing in value because of the rapid rise of technological innovation; “every single person in the world can generally do most services just because they have access to the internet.” Innovation, however, is a skill Tom finds uniquely human. “Delighting your customers is what you ought to be doing,” he said. “Bringing delight to your customers, that’s a very human thing.”

According to Tom, HR is also a huge key to innovation success because of the role it plays in placing employees. Employees who are in roles that are right for them, Tom says, will push their teams to success while employees who are not well-suited to their positions can stifle the innovative potential of others.

“You shouldn’t just promote whoever is the top performer to become manager because there is no guarantee they’re going to be a good manager,” Tom told me. “Maybe they’re already in the best position for them and they love that position. If you’re going to champion people as innovation leaders, check in on their personality type to make sure they’re not a square peg thrown into a round hole.”

Tom says just as important as matching people to fitting positions, is having a diversity of personality types. He says you need to have more negative, critical thinking people to balance out the innovative visionaries. Otherwise, ideas will not live long enough to be executed. Good communication, he says, is how you facilitate collaboration without fighting between the realists and the dreamers. “You want everyone to be a great communicator because that’s what helps tether the dreamers down to the executors.”

Innovation is Survival

Tom cites MIT Professors Abhijit V. Banerjee and Esther Duflo’s book Poor Economics as a huge influence on the way he thinks about innovation and business. “It changed my whole line of thinking about how to run businesses,” he told me. “It’s not a business book but it certainly changed the way I look at [approaching] an emerging market and how to think about…[getting] into the minds of different people that come from vastly different backgrounds than you because that’s certainly really important if you’re going to create a product that serves a customer that is not like you.”

According to Tom, the poorest people in the world are the most innovative. When they are healthy enough to put the work in, he says, they find the most creative solutions to problems. “It’s fundamental to evolution – you innovate, you evolve,” he said. “What they do is they find really creative ways of creating value…In a market of people that’s just oversaturated, you’re forced to create value in some way or do something useful that people will give you money for.”

This is what inspired him while serving with the US Peace Corps. He spent time in Morocco building software with a community there. “The people I served were illiterate and most had never touched a smartphone before and had never heard of the internet,” he told me, “but what I quickly found is that they’re better innovators than me….[my time in Morocco] was where I did my most impactful work, with TheAnou.com.”