At the recent New York Tech Meetup (a monthly event where 700+ geeks preview new technologies), some students from Brown University demonstrated a game where people in the audience could use their phones to battle each other in a real-time tank warfare game. The game was projected on the venue’s giant theater screen. It was not a game for iPhone or Android. The game could have been played on a payphone: Players dialed in and controlled their tanks using touch tone numbers on their keypads. The demo was awesome, even without a fancy touch screen.

News websites and tech blogs are brimming with stories about iPhone, Android, BlackBerry, and dozens more smartphone varieties. Apple just topped 300,000 apps, and worldwide smartphone sales grew 50% in the past year.

But the non-smartphone industry (“dumbphones,” as some call the handsets), has kept pace with some fresh innovation of its own. New York-based group-texting startup GroupMe just raised $850,000 from high profile investors like First Round Capital (Mint, StumbleUpon) and Betaworks (Bit.ly, TweetDeck). Other dumbphone-friendly startups like Snaptu and Fast Society are making waves, and mobile donation platforms that cater to non-smartphones are skyrocketing in popularity.

Given the meteoric rise of the smartphone, why would anyone invest in dumbphones right now? For one, “dumbphone” is probably a misnomer; the real market for mobile innovation includes phones of all IQs. Here are four reasons why the “everyphone” space is bursting with potential.

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1. Market Penetration

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People bought nearly 62 million smartphones in the second quarter of 2010 (according to Gartner research). But compared to the 264 million new “dumbphones” sold in the same quarter, all those iPhones, Androids, and BlackBerrys are just a drop in the bucket.

“The latest figures suggest that some 90% of the world’s population now has access to a mobile phone,” says Patrick Meier, a director at the crisis-mapping non-profit Ushahidi, which tracks human rights violations around the world by allowing people to report via SMS, Twitter, and even landlines. “We are designing the Ushahidi platform in such a way that there is no single point of failure.” By catering to the lowest common denominator in mobile communication, Ushahidi has been able to respond to disaster and violence situations from Haiti to Kenya, and beyond.

Dumbphones rule the developing world, and at current growth rates, it will be years before smartphones outpace the rest of the market worldwide. The limiting factor isn’t price, but rather the availability of mobile broadband. The lack of 3G broadband in developing countries will keep dumbphones on the map for a long time. Although smartphone sales are growing at double digit rates –- we noted 36% in the U.S. earlier this year –- smartphones won’t be as popular as regular phones in the U.S. until Q4 2011 or Q1 2012, according to Nielsen.

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2. You Can Build Apps for Non-Smartphones

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Don’t think that smartphones are the only mobile devices that let you check Facebook. Mobile startup Snaptu, as well as Microsoft’s OneApp, provide software that let feature phones access popular apps like instant messengers, social networks, feed readers, news and sports updates. Companies can build apps and port them to dumbphone platforms, or even develop cloud apps based on SMS.

Twilio, for example, provides tools to build apps for SMS or voice, and allows the code reside in the cloud so less capable phones can access it.

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3. SMS Doesn’t Go Away When You Upgrade

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“I think we are going to see a lot of amazing things happening in the SMS space,” says Matthew Rosenberg, co-founder of Fast Society, which recently launched an app that allows users to throw together temporary groups for parties or events of any kind, with instant conference calling and group texting. Since Fast Society is based on SMS, it works on any phone — dumb or smart.

“People are people, and we wanted everyone to be able to come party,” Rosenberg says. “Why exclude anyone?”

Mobile donations are another area that could have been limited to a smartphone app, but by using SMS, organizations like the Red Cross have been able to raise millions for charity.

“Done correctly, mobile giving has the potential to raise [organization]-transforming amounts of money for a cause,” says Jim Manis, chairman and CEO of the Mobile Giving Foundation, which provided the technology for the more than $43 million donated via mobile during the January 2010 Haiti earthquake. “It has the ability to acquire and engage new, younger donors and at response rates higher than other channels.”

Companies like Venmo (slogan: “Text money to anyone with a phone”) are evidence that SMS-based payment for everyday goods and services is on the rise as well.

The model for this new wave of mobile innovators is to build apps and phones that work for everyone, but to include advanced features for those with more capable phones.

“We start on SMS as our fundamental building block, but we’re already building the layers on top of it,” says Jared Hecht, co-founder of GroupMe. “Data, location, planning, group buying — these are all things that necessitate a smartphone.”

He continues, “The best thing about [what we’re doing] is you only need one person in your group to have a smartphone, or be smartphone savvy, to utilize these tools [and] to make them effective for the whole group.”

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4. There’s Money on the Table

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There are more than 4.6 billion mobile phones in the world, and there is at least half a decade or more until dumbphones stop being relevant. That means billions of dollars are on the table for innovators in the feature phone space.

The future of mobile is here, and it’s even in the phones you’d least expect. “For years, people have been saying that mobile is right around the corner,” says Hecht. “That’s not the case anymore… It’s an exciting time to be here.”

Marketing to the lowest tech denominator isn’t shortsighted in the case of mobile devices; it’s grabbing more of the market. Even as the dumbphone market shrinks, clever companies with useful apps should be able to keep their converts no matter what phone they upgrade to.

[Via Mashable]

android, apps, blackberry, Dumbphone, Innovation, iPhone, Mobile 2.0, Mobile Web, Phone, Smartphone, SMS

Next month, Citibank will begin testing Card 2.0, a groundbreaking new credit and debit card device that securely links multiple accounts.

These futuristic cards stole the show at the DEMO startup conference last month in Silicon Valley. The cards have embedded buttons and graphic displays, yet they’re as thin and flexible as a normal credit card.

Citi’s version of the card will allow users to select between two buttons on the card at the register. One button will let the user pay with reward points; the other button lets them pay with credit. Cardholders can pay with rewards points anywhere their Citi credit card is accepted.

The cards will be called 2G (as in “second generation,” a naming convention similar to that of other mobile gadgets); each one will contain a chip and a battery with about four years of life.

Citi’s employees have been testing 2G cards since May, according to reports, and the bank plans to roll the cards out to its customer base in mid- to late 2011. Some cardholders will be selected to start using 2G cards now.

Citi’s Dividend Platinum Select MasterCard and its PremierPass Elite are both rewards-focused cards; they’ll be the first to be offered as 2G cards.

Jeff Mullen is CEO of Dynamics, Inc., the company behind the cards. He told The New York Times that Citi’s 2G cards were mere baby steps, saying, “We are just scratching the surface with what these cards can do with these initial products… We are trying to be the innovation arm of an industry that has never had one.”

Here’s a demonstration of how some other Card 2.0 products work:

What do you think of Citi’s first “baby steps” with Card 2.0 products? Would the availability of these kinds of cards influence your banking decisions? Let us know what you think in the comments.

[Via Mashable]

Banking, Business, Card 2.0, Citibank, Credit Cards, Innovation, Personal Finance, Technology

With more than 65 million listeners, a huge money-making mobile business and plans to make it into your living room and car, Pandora is the web-based streaming music service to beat.

It’s easy to forget that Pandora was once a troubled startup on the brink of ruin. Having launched in 2000, the now 10-year-old company has been plagued by expensive track royalties for most of its existence (and still is). In 2008, Founder Tim Westergren openly stated that Pandora was facing a “pull-the-plug kind of decision.”

Westergren is now singing a much different tune — thanks in no small part to Pandora’s wildly popular iPhone application and the company’s ability to serve highly targeted advertisements. In an e-mail exchange with Mashable, Westergren opens up about his 10-year tenure with Pandora and expounds upon important decisions, missteps and lessons learned over the years.

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Raise Money Much Earlier Than You Think

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Pandora has raised upward of $55 million in investment funding over the course of its 10-year lifespan. Those funds have helped the service stay afloat in difficult times and have given the team room to innovate around new and emerging platforms for internet radio.

Westergren, then, knows a thing or two about the venture capital process and advises other startups to go after funding aggressively early on.

“After your seed round, I’d say raise money much earlier than you think you should. It’ll always take longer than you expect, and you don’t want to be anywhere near running out when you’re negotiating a term sheet,” Westergren says.

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Adapt to Latest Trends

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“Mobile has truly opened the gateway for Pandora to inherit the next era of radio listening,” Westergren says.

The company’s mobile app strategy shift began with the release of its iPhone application in 2008. With that single decision, the company discovered that, in fact, it is more a mobile company than anything else — mobile now accounts for 50% of the business — and one poised to capitalize on music listeners transitioning from broadcast radio to internet radio.

“Smartphones have completely redefined our company and our category. They have made Pandora truly an anytime, anywhere experience — both technically, and perhaps more importantly, in the minds of consumers,” Westergren says.

Pandora refocused its business around mobile at just the right time, quickly turning the metaphorical corner toward profitability after adapting to a new trend in mobile music consumption.

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You Don’t Need to Base Your Business in the Silicon Valley

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There’s an ongoing debate about whether a startup needs to be based in San Francisco or the neighboring Silicon Valley in order to thrive. Pandora has proven that a startup can stay relevant even with a home base in a less trendy neighborhood.

“When we launched in 2000, there was nothing left in [San Francisco],” Westergren explains. As such, Pandora set up shop across the San Francisco bay in Oakland, Calif., and, “That turned out to be a huge blessing in disguise.”

“Oakland has been great; reasonable rents, a thriving downtown, affordable housing prices (a great boost for recruiting), and an incredibly responsive and supportive City Hall that has helped us in innumerable ways,” he says.

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Earn Employee Trust and Loyalty

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Pandora’s employees pushed through the company’s much publicized troubled times, so we asked Westergren what he did as a leader to keep the team motivated.

“That really starts with hiring,” he says. “We hired great people and then we earned their trust and loyalty.”

On the trust and loyalty front, Westegren further explains, “I think our team feels respected, empowered, and genuinely excited about the company’s mission. We treat people fairly, we are transparent about our decision-making, and we lead by example. That’s about all you can do.”

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Manage the Pace of Innovation

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Ideas abound inside Pandora’s Oakland-based headquarters, so one of the company’s biggest challenges isn’t driving innovation, but rather massaging the team’s feverish ingenuity into a controlled, business-supported process.

“We’re lucky in that we have a team of product designers and engineers who are restless. They’re never lacking for ideas to improve or expand Pandora. I would say our challenge is more around managing the pace of innovation while tending to the needs of the business in the near term,” explains Westergren.

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Believe in Your Idea

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“The best piece of advice I can give to entrepreneurs is don’t be shy about believing in your ideas — even if folks around you think you’re crazy. Entrepreneurship requires a little crazy. Just be prepared for a long and often uncertain journey. The good stuff doesn’t come easy,” says Westergren.

Business, Digital Business, Entrepreneurship, Innovation, small business, Technology, Tips

The Tata Group, India’s version of Acme and maker of the supercheap Nano automobile, recently introduced a $22 water purifier that works without electricity or running water. (Every few months it needs a new $6 filter.) A big-hearted, philanthropic, and important effort? You bet—cue the somber stats about preventable waterborne diseases. But check out the size of the market for a product like that: Some 900 million people worldwide lack access to clean water, 200 million of them in India alone. Tata is saving lives and making a killing.

That’s why, at next year’s G-whatever meeting in France, world leaders would do well to rip up those big checks to tin-pot autocrats and channel the cash to startup companies instead. Help those companies make cheap, useful products to sell to the world’s poor, who will use them to become less poor, and everybody wins. Management guru C. K. Prahalad advocated this very idea six years ago inThe Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits, and now a few companies like Tata are putting it into action.

D.Light Design is a case in point. After witnessing the inefficiencies and harmful health effects of kerosene lamps as a Peace Corps volunteer in Benin, Sam Goldman returned to the US to earn an MBA and pursue a very specific agenda: Replace kerosene lighting, everywhere, with inexpensive solar-powered LED lamps. Three years ago, he launched D.light to produce such lamps and has already sold 250,000* to customers throughout the developing world at an average price of $20 apiece. The company hopes to light the homes of 50 million people by 2015.

Another example: Forty percent of humanity gets by on less than $2 a day, and most of those people are rural farmers. Efficient drip irrigation systems could triple or quadruple their yields while reducing their costs, but manufacturers haven’t bothered making drip systems for tiny farms. In 2004, a company called Global Easy Water Product began selling a setup that can be used for small plots. The price: $32.50 per quarter acre. In just two years as a for-profit venture, it has sold more than 250,000 units in India.

“Conventional development economics was always about increasing per capita income to a certain level before people become consumers,” says Vijay Govindarajan, a professor at Dartmouth’s Tuck School of Business. The new view flips that logic on its head: Providing access to modern technologies by creating supercheap products may, in fact, be the best way to improve economic well-being. For entrepreneurs, the race is on to tap that massive population of penny-wielding consumers-in-waiting. Put another way, if Coke and Marlboro can sell to the world’s poor, companies whose products are actually useful should be able to do it, too.

But selling to subsistence farmers takes some reshuffled thinking. To simplify a bit, companies in traditional markets design a product, figure out what it costs to make, and then select a profit-maximizing price. That approach assumes, of course, that your market exists in the first place. When doing business in Burundi, you’re trying to conjure buyers out of thin air. To do that, you start by committing to a price as close as possible to nothing. The task, then, is to design a product that costs even less to make. Only with what Govindarajan calls “frugal engineering” can companies gain access to the masses at the bottom of the pyramid.

Of course, that’s easier said than done, especially for big firms that are already hardwired for other priorities (Tata is the exception here). But nimble startups can have a real advantage in this new environment because they aren’t trying to satisfy the tastes of existing first-world customers.

The trick is balancing affordability and quality. In a Harvard Business Review article last year, Govindarajan, together with Tuck colleague Chris Trimble and General Electric CEO Jeffrey Immelt, wrote that people in emerging markets “are more than happy with high-tech solutions that deliver decent performance at an ultralow cost—a 50 percent solution at a 15 percent price.” That’s not a green light for lame products, though. As in any market, what’s being sold has to fill an unmet need. The poor may be poor, but they’re not stupid.

[Via Wired]

Business, Business Development, Economics, Economy, Engineering, Innovation

Over the past ten years, the smartphone has gone from a large, belt-holstered badge of geekiness to a mass-market mobile computing platform. In the mid-’90s, PDAs were being paired with mobile phones for the ultimate in mobile connectivity. Early examples included the IBM Simon and the Nokia Communicator. At the beginning of the last decade, these devices became more sophisticated as cellular data technologies, mobile processors, and touchscreen displays matured.

In this photo gallery, we survey the last ten years or so of smartphone history with a look at two important smartphones from each year. Though the later half of the decade is mostly dominated by Apple’s iPhone and more recent Android-powered phones, there have been a number of impressive models, such as the iconic Nokia Communicator series, Palm Treo, and Motorola Droid.

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2000/2001

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The Ericsson R380—the spiritual predecessor to the later P800 and P900 series, was one of the first Symbian-powered devices, and is considered by some to be the “first” smartphone on the market.

Nokia first launched its 9000-series communicators in 1996, though the 9120 was the first to feature a color screen. Nokia also dropped the original Intel 386-based processor and GEOS operating system for Symbian running on an ARM9-based core. Nokia’s 9000-series gradually introduced many of the features we now consider common smartphone features.

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2002

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Few remember Handspring, the company started by the original Palm founders to build PalmOS devices that Palm itself couldn’t or wouldn’t build. For instance, Handspring was the first to release a color PalmOS device, and the first to launch a PalmOS-powered smartphone. The original Treo 180 was a flip-style device which married PalmOS’s PDA capabilities with a cell phone. Shortly thereafter, Palm bought Handspring, and the Treo became one of the top smartphones for the next several years.

Ericsson merged its mobile phone division with Sony’s, assimilating Borg-style into Sony Ericsson. The partnership injected Ericsson’s devices with some serious Sony style, the early fruits of which resulted in one of the first camera phones, the P800.

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2003

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The T-mobile Pocket PC Phone Edition was one of the first Windows Mobile (then called Pocket PC) smartphones. Windows Mobile devices were quite popular among business users because of the integration with desktop Windows, and compatibility with Exchange enterprise e-mail servers and Office documents.

Shortly after Palm brought back its “wayward” founders, the company launched the Treo 600. The flip form-factor was dropped in favor of a solid, “candy bar” style, and the hardware was improved with a backlit QWERTY keyboard, color screen, and a low-resolution camera. For the next three to four years, the Treo dominated the US smartphone market.

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2004

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RIM had been making several BlackBerrys earlier in the decade, which added e-mail and cell phone capabilities to the company’s popular, business-class, two-way pagers. However, the 6120 is significant in that it was the first BlackBerry to be built like a phone—previous models required a plug-in headset to make calls. Many high-powered executives quickly became addicted to the connectivity of their “CrackBerrys.”

The Treo line was still going strong in 2004, and the 650 increased the screen resolution to a whopping 320×320 pixels, added support for the fledgling Bluetooth, and bumped data speeds up to EDGE/CDMA standards. Palm would continue with minor upgrades for a couple years before the Treo line eventually fizzled, as customers glommed on to modern touchscreen platforms like iPhone and Android.

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2005

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The svelte, laser-etched, brushed aluminum, Motorla Razr was for many Americans the first smartphone they ever used. It stayed on the market as one of the top-selling mobile phones in the US for several years, and large carrier subsidies and price drops made it an easy choice in later years. Moto’s customized Symbian UI suffered from carrier limitations in many cases, though a large cottage industry supported hacks to enable features—like Bluetooth tethering—that some carriers forced Moto to disable via firmware.

The iPAQ started life as a Pocket PC PDA, but HP later added cellular hardware to make it a smartphone proper. The Windows Mobile-powered 6500 competed heavily with the Treo 650 released the year before. The 6500 added EDGE 2G data connectivity, but oddly lacked WiFi and camera hardware. Later variants added these features back.

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2006

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Danger’s Hiptop smartphones, marketed as the Sidekick by T-mobile, were popular among celebrities, high-tech geeks, and, thanks to instant messaging apps and a QWERTY keyboard, teens. The third-generation hardware, built by Sharp, also benefitted from the device’s built-in access to downloadable apps—a model that Apple later made famous with the iPhone App Store.

HTC, now well-known for Android smartphones like the T-mobile G1 and Verizon Droid Incredible, made an early mark by building OEM Windows Mobile-based touchscreen devices. The Cingular 8525 was one such device.

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2007

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In mid-2007, Apple changed the smartphone landscape overnight with the release of its now-iconic iPhone. Though the first generation lacked 3G capabilities, and the only (official) way to deliver apps was via the Web (Steve Jobs quipped that HTML and JavaScript were the iPhone’s SDK), the WebKit-powered Mobile Safari set a very high bar for the future of the mobile Web. Apple also maintained control over its device, instead of letting carriers dictate features—though that control cost Apple 5 years of exclusivity with AT&T in the US.

The Nokia N95 smartphone was one of the first to integrate all of the hardware we now consider common on a smartphone, including a 5MP autofocus camera with LED flash, GPS receiver, WiFi, Bluetooth, front-facing camera for video calling, video out, and more. The N95 could also run apps built for native Symbian, JavaME, or the mobile version of Flash.

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2008

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With the iPhone 3G, Apple added higher-speed UMTS data connectivity, which was just beginning to become widespread in the US. The company also opened up the iPhone to third-party developers. Apple launched the App Store in July, and the rest is mobile developer history.

HTC built one of the first Android-powered smartphones, continuing its success as a smartphone OEM. The device launched in the US as the T-mobile G1, the first “Google-powered” smartphone.

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2009

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Verizon kicked off a very successful campaign to add Android phones to its line-up by licensing the “Droid” name from Lucasfilm. It’s marketing push has made “Droid” synonymous with Android smartphones in the US, and helped propel Android as one of the most popular platforms domestically. The original Droid was recently updated with minor tweaks, confirming the design as a successful formula.

Palm was an early leader in smartphones due to its successful Treo line, but the company quickly floundered under the weight of tough competition from Apple and others when it couldn’t manage to get its next-generation products out of the R&D pipeline. A hard reset with management and a round of high-profile hires from Apple’s iPhone division resulted in the webOS-powered Palm Pre. Though it wasn’t successful enough to keep Palm from being eaten up by HP, its innovative webOS showed just what developers could do with technologies like HTML, CSS, and JavaScript.

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2010

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Does the iPhone 4 have some issues with its external antenna design? Sure. Has that stopped it from being one of the top selling smartphone models worldwide? Not one bit. Apple improved nearly every aspect of the iPhone, including powering it with its A4 processor, including a “print-quality” IPS display, adding a front-facing camera for FaceTime video calls, and packing in a 5MP camera that, pixel-for-pixel. beats nearly any smartphone on the market. With tons of developer support, Apple’s platform is consistently providing competitors with a quickly moving target.

Plenty of Android-based smartphones have launched this past year, but Samsung’s Galaxy S series is unique in that Samsung managed to launch a version on every major carrier in the US. Unlike most smartphones, you can get a Galaxy S—with slight cosmetic variations and different carrier-specific apps—on Verizon, AT&T, and T-mobile. Sprint also carries a 4G-enabled, QWERTY slider variant built off the Galaxy S Pro.

Though we may not have covered your favorite smartphone model from years past, these 20 devices represent some interesting milestones along the path to smartphone ubiquity. If there was a device you really liked but feel like it got left out, sound off in the comments—be sure to let us know why you couldn’t live without it (until your contract was up, that is).

[Via Ars Technica]

android, Apple, Google, Innovation, Mobile Phones, Nokia, Smartphone, Technology

At first, the idea of tying a bra on your face to let you breathe easier may seem ridiculous but this award-winning emergency bra is certainly an innovation.

Sexy red lingerie and heavy breathing have traditionally gone hand in hand. But a bra from inventor, Dr. Elena Bodnar, is designed to let people breathe easier. Her Emergency Bra is a protective device that transforms from a bra into two respiratory pace masks to filter out harmful airborne particles, such as those released by fire, explosion, terrorist, radiological, biological attack, and natural disasters.

Recognizing that most people don’t generally carry around specialized respiratory devices, Dr. Bodnar designed a device that would be at hand when needed. The bra was an obvious choice because the majority of women wear a bra every day and the cups are already in the shape of a facemask. She added a few design features to give the bra the extra functionality, including shoulder straps that easily convert into adjustable head straps, flex inserts along the top rim of the cups which mold tightly around the nose and bridge area, and an inner liner/filler that acts like a butterfly valve during inhale cycles.

Dr. Bodnar took out the Ig Nobel Public Health Prize last year with the Emergency Bra. The Ig Nobel Prizes honor achievements that first make people laugh, and then make them think. The prizes are intended to “celebrate the unusual, honor the imaginative – and spur people’s interest in science, medicine and technology.”

When accepting the award Dr. Bodnar said, “isn’t it wonderful that women have two breasts, not just one? We can save not only our own life, but also the life of a man of our choice next to us.”

Dr. Bodnar points out that the Emergency Bra doesn’t compromise in terms of aesthetics, shape, style or comfort when compared to traditional bras and she has now announced the commercial availability of the Emergency Bra. Currently only available in red, it sells for US$29.99 in sizes from 32B to 40C.

While it’s good to be prepared, ladies should probably avoid advertising the fact they’re wearing an Emergency Bra, lest teenage boys are tempted to start a fire or instigate some other kind of event that will result in the woman having to rip her bra off.

(Via Gizmag)

Airborne, Disasters, Emergency Bra, Filter, Innovation, Technology

by Peter Bregman

I was stuck. Not in the I have writer’s block or What next action should I take? kind of way, but in the literal sense. I was riding an ATV (All Terrain Vehicle), which looks like a motorcycle but with four huge, balloon-like nubby tires, and I was stuck in mud, with my two rear wheels spinning hopelessly in the glop.

What surprised me is that my two front wheels were solidly planted on dry land, just sitting there, motionless and unhelpful.

I looked ahead at my friend Joseph who had made it through the mud with ease on his ATV and who owned the one I was on.

“Hey Joseph,” I yelled over the roar of the motors, “are ATVs only two-wheel drive?”

“Yours is.” He laughed. “Most were, until a few years ago.”

That struck me as more than odd. I mean, even my minivan is four-wheel drive. Why would anyone make an All-TerrainVehicle — whose main purpose is to travel through rocky, muddy, slippery woods — that’s only two-wheel drive?

The answer, I discovered, is simple yet profound: ATVs evolved from motorcycles, and motorcycles are powered solely by their rear wheels.

If the ATV had been derived from a Jeep — a scaled down, minimalist, sit-on-top version of a Jeep — there’s no question the first one out the door would have been four-wheel drive. And far more suited to the task of an ATV.

Which got me thinking: if you want to be original — to really think out of the box — you might be better off starting from a different box than you’re in.

But that’s easier said then done: how can we escape the confines of our own history?

Michael Newcombe is the general manager of the Four Seasons in Dallas. I wrote about him in The Real Secret of Thoroughly Excellent Companies. The recession has hit the hospitality industry hard since I wrote that post and yet, when I stayed at the hotel recently, I was pleasantly surprised by how little the downturn seemed to affect the hotel’s atmosphere. The quality of everything was impeccable, the staff were warm, and morale seemed high.

So I sat down with Michael again, this time to discuss how he’s managed to keep morale high in the midst of the downturn. What I learned was a lesson in out-of-the-box thinking.

In the hotel business, jobs are specialized: maids clean the rooms, golf attendants prepare the golf carts, and gardeners do the landscaping. Historically, in a downturn, you cut each of those positions to the minimum necessary to keep things moving at normal demand.

But demand is rarely normal. During a golf tournament, you need more golf staff; during a corporate event, you need more dining staff. When there’s a spike, the skeleton staff in a particular area get overworked, and performance, as well as morale, suffers.

Entering this downturn, there were two things that were most important to Michael and his executive committee: remaining fiscally responsible and maintaining a high-quality guest experience. So their goal was to reduce staffing costs while keeping morale high — an almost impossible combination. Almost.

That’s where they got creative. Rather than following history, they started from their goal and worked backwards, questioning everything else.

Which is how Michael and his executive committee decided to ignore the silos. They focused on retaining their highest performing core staff — the ones who’d been with the hotel for 15 to 20 years — no matter what department they were in. That left gaps in certain departments. Then, they aggressively cross-trained their core staff. The people in laundry learned to clean golf carts. Housekeeping learned to landscape. And room service learned how to work in the restaurant.

Initially there was some resistance as people moved beyond their comfort zones, but they quickly adjusted. They were happy to maintain their hours, increase the diversity of their work, and learn additional skill sets. Instead of dipping, morale soared.

Michael didn’t evolve his model from current practices. He broke the mold by questioning everything in the service of his objective.

Which, it turns out, is a powerful model for creativity: think backwards from where you’re going, rather than forwards from where you’ve been. Identify the objective that’s most important and then question everything else, especially standard practice.

My brother and his wife, Drs. Bertie and Rachel Bregman, started Westside Family Medicine in New York City, a unique practice that offers patients a lot of individual attention. I know because they’re my doctors. Their practice is growing fast, and they’ve expanded from a single office to two, and are considering opening a third.

The volume of calls into their offices had skyrocketed and they were concerned that details might fall through the cracks or patients might receive inconsistent support from office staff. Also, the peaceful and patient-focused atmosphere in the office was at risk with all the office staff, schedulers, and insurance negotiators buzzing around in the background. Their goal was to continue to grow their practice without losing the essence of the personal high-quality service, which is what had stimulated their growth in the first place.

They worked backwards from that goal and questioned everything else. Rachel, with four small children (and one more on the way), spends a lot of her time at home. So they created a centralized call center in their living room, where Rachel could oversee and train all schedulers and insurance staff. This freed the receptionists at each office to focus entirely on patients while keeping the office environment peaceful. And while the call center will almost certainly outgrow their living room, the system could easily scale to any number of sites.

Perhaps this isn’t so innovative if you’re a credit card company, but a doctor’s office? That kind of out-of-the-box solution happens when you think backwards from your goal.

(Via HBR)

Communication, customer service, Cutting costs, Innovation, Leadership development, Managing yourself