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Can businesses learn from each others secrets?

A man covers his mouth to whisper to another man.

Story highlights

  • Businesses are learning from each other by exchanging ideas and processes with companies in other industries
  • The hope is that sharing information and knowledge may lead to mutual progress
  • Experts say innovative businesses often find ways of doing things differently by applying parallels from other industries

It is Friday morning and the collection teams at 1-800-Got-Junk, a North American waste removal business, are out hauling garage clutter and office cast-offs on to pick-up trucks. Items that are salvageable will be recycled or reused; the rest will be chucked. Back at Got Junk's Vancouver headquarters, a tour party is engaged in recycling of a different kind: the recycling of ideas.

1-800-Got-Junk invites other organizations in for a privileged view of its inner workings. Rhys Green, who manages Got Junk's call-center operations, says he and his team have grown used to the fortnightly tours that file past their desks, sometimes stopping to ask questions or eavesdrop on a call. Visitors respect that they are working, he says, and it is nice that a junk business is considered "cool enough" to visit. The only time having an audience intrudes is if the pace starts to slow. "Having people wander around, when [things are just ticking over] can be a little awkward. You kind of think: do I look busy enough? That can be a little strange."

Mr Green's team are not alone in this; 1-800-Got-Junk is among a growing number of entrepreneurial businesses that host visitors from other companies, often from different sectors, in search of fresh ideas.

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Learning by observing does not have to be expensive, say proponents − even bootstrap businesses can organize affordable visits, since they range in cost from nothing to serious money. Zappos, the online shoe retailer, runs free tours and sells add-ons that go from $50 question-and-answer sessions to three-day forays into its quirky culture. Labeled "boot camps", these include a meeting with founder Tony Hsieh and "No Title" Fred Mossler, and weigh in at $6,000 per person. Three and a half days of workshops and behind-the-scenes tours at a Disney resort, run by the Disney Institute, Disney's professional development arm, costs about $4,200.

Observing other businesses' ideas in action taps into the theory, set out in studies and books such as The Innovator's DNA , that businesses thought of as highly innovative often find ways of doing things differently by applying parallels from other industries.

    Sharing knowhow may help open doors. At 1-800-Got-Junk, tours are free and sometimes businesspeople have come in for a couple of days as guests. Brian Scudamore, who founded Got Junk in 1989 and expects turnover of $127m this year, says the ideas that visitors share with his business make the effort worthwhile. "Someone on a tour said: 'Do you guys do affiliate marketing?' At the time, I didn't really know what it was, so they got their marketing team to walk us through the process and the results have been fantastic."

    David Braun, founder of Capstone Strategic, a US-based mergers and acquisitions business, confirms the value of this approach from the observer's perspective. Five years ago he decided his founder-led company must become "more collegiate". Rather than look to other professional firms for exemplars, he persuaded Mr Scudamore to let him be a fly on the wall at Got Junk. The ideas he took away, such as "huddles" -- holding short stand-up meetings, where everyone swaps news − are now central to Capstone's culture. "Observing gave me ideas that I wouldn't have got from networking with other executives over lunch," he says.

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    Even bootstrap businesses with scant working capital can ask a customer or supplier for permission to go inside their operations on a study tour. As Phil Anderson, a client director at Ashridge Business School, notes, calling in a favor is easier than cold calling and the potential for collaboration is often greater.

    When Algy Trotter spent one morning a week in November 2010 at Addison Lee, a London-based private hire car business, his aim was to pick up insights for PrivateFly, an online booking service for private aircraft. The start-up was a client of Addison Lee. As operations director, he wanted to observe the latter's use of the latest technologies, such as GPS and data analysis. However, the liaison also led to the two companies launching a private jet service under the Addison Lee brand, provided by PrivateFly. "Seeing how often private airports popped up on the booking screens made the opportunity clear," Mr Trotter says.

    "As an observer, your job is to be stimulated, not judge your hosts, or work out how every bit of the motor fits together," says Matt Kingdon, co-founder of innovation consultancy ?What If! However, visitors should be aware that, as is the case with all hosts, companies may be tempted to show off, even when they promise warts-and-all frankness.

    It is with regard to the stories told by hosts that visitors may need to be most on their guard. Adam Morgan, founding partner of innovation consultancy Eatbigfish, points out that once a company's speculative initiatives succeed it is sometimes quick to forget the blind alleys and internal battles the instigators had to fight along the way. As an antidote to "revisionism", he recommends talking to frontline workers and, if possible, tracking down the originators of disruptive innovations to get the real story. If you plan to replicate something, he says, "you need the gritty learning on what it takes to get from A to B", not the airbrushed version.

    Mr Morgan is also a believer in "wild card" link-ups, which he says are often more valuable than collaborations where the parallels between two parties are immediately obvious.

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    That might suit the hosts in particular. At Gold Medal Service, a New Jersey-based home services company that expects to turn over more than $22m this year, competitors are not welcome after an employee so impressed a rival taking its tour that it offered him a job. "Now, we don't let in companies that compete in our backyard," says co-founder Mike Agugliaro.

    Mr Scudamore is wise to the potential for skulduggery − but also pragmatic, taking the view that "there is more to gain from sharing than being secretive". He says: "If a competitor wants to find out information, they will find some way." Besides, he adds, "most of the ideas people get from us are ideas that we've got from other people".

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