One of the perks of being a global advisor with deep roots in the Midwest is the advantage it provides in terms of helping me better see the rich contrast and unique ways each region is predisposed to building value. We all see things through the lens of our formative experiences, and after three decades at a Fortune 50 firm here, I have had a chance to see business in more than 20 countries and 12 unique business models.
Much like a well-stocked bag of golf clubs, these contrasts and practices I have seen across cultures each has its own application, strengths and weaknesses. By choosing the club wisely (i.e., choosing a best practice from a region), we can activate value – the goal of all innovation efforts.
Recently, I have noticed that there is a bit of Silicon Valley backlash (links here and here). This set up one of those unscripted and surprisingly fresh discussions with a West Coast client when we started to riff on something I’m calling the “Midwest Way.”
As we closed out the discussion, I couldn’t let go of the idea that there is a lot here for firms outside the Midwest to borrow. So, let me describe what the Midwest Way is, what it does best and how you might activate it in your work.
So what marks the “Midwest Way?”
People (and therefore businesses) in the Midwest tend to be:
- Frugal
- Skeptical
- Resourceful
- Predisposed to learning by doing (quick to experiment)
- Sociable (in general they like people)
- Persistent (tending toward stubborn)
- Interested in self funding their organic growth – a lot
How do these perks create advantage?
These unique attributes equip Midwesterners for what we call the “decade-long, overnight success story.” When you go deep on the statistic, you find that what the business press fondly reports as a breakthrough (occuring in the last 24 months), truly has its roots in thinking that is over a decade old. The attributes described above lead to sustained and persistent discovery which benefits business based in settings that yield to deeper experimentation and solution discovery. This is why industries like food, logistics, manufacturing, materials and energy have been incubated in the Midwest.
This “long wave” value is fueled by insight, hard work and pivots – and is built into the culture and history of firms here. For example, one of the marks of a firm following the “Midwest Way” is to hold off investment capital for as long as possible. By doing this, you wind up only seeking investors when you have a proven business model,which takes a huge amount of risk off the table. This meticulous attention to cash eventually yields some outstanding balance sheets.
One other advantage of developing the workforce at the pace of real economic growth is that the culture is built in real time – and is very consistent at the core. This is particularly true in many small to midsize firms that are almost indistinguishable from their host communities.
What are some examples?
This culture has birthed some amazing firms. The list is long, but includes well known names such as Kohler, Rockwell Automation, AO Smith and Badger Meter, as well as larger private companies such as Schreiber Foods, Acuity and Epic. And yes, there are some pretty cool startups that were founded here, too: see Breakthrough Fuels, Viroment and RSVtea.
The secret it out. Steve Case visited Green Bay last year on his Rise of the Rest tour. Microsoft has invested in technology incubation and education. Forbes noticed too.
Six ways to “borrow” the best of the Midwest:
- Be incredibly curious about root customer needs. I notice that my clients in the Midwest are naturals at solving real problems – at a very practical level. For example, some of the most innovative work in solving the health care crisis is being done in smaller cities and communities.
- Borrow liberally from one another’s best practices. When the community’s quality of life and local economics are the driving factor, people are motivated to share their learnings more quickly. You’ll find this in the rich “meet up” groups in many Midwest innovation zones.
- Make technology investments “carry a lunchbox” (practical and effective). Those of us in advisory roles smile at what we call the “Aeron Chair effect.” In other words, those firms that invest in window dressings and not areas that accelerate their business model. If you are working with a Midwest firm, be ready to be asked for an airtight set of measurable benefits.
- Scale carefully, keeping investments proportional to real commercial activity. Much of the work I see on emerging value propositions, be it in startups or firms, is self funded from earnings. This drives a very judicious use of growth capital.
- Collaborate by building thought leader circles outside your normal connections. There is a very natural set of social circles that develop in Midwest communities, which are typically more open than those on the coasts. When networking in the Midwest, it is not uncommon to have a candid and direct discussion with thought leaders without the overhead of “gatekeepers.”
- Ask a lot of your team, and in turn take care of them. It may be cliche, but people who are used to borrowing money to plant something in the ground, and then work 24/7 to get it into the barn, have a great work ethic. Less well known is that they have a deep play and community support ethic as well. In business, this means acknowledging seasons of very hard work, while providing strong support.
There is no doubt that my decades of experience living and working with people in the Midwest has informed a great deal of the value I bring to clients in my current work. I’ve had the privilege to hone my leadership in the Midwest while scaling a new venture, delivering profitable turnaround strategies and leading several incubation ventures.
If it’s time to bring some of that long wave value building to your venture, I’d be happy to talk. Please give me a call at 847-651-1014 or use this link to set up a 20-minute, (no-strings-attached) consult.
