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Virgin may well ultimately succeed with its superannuation fund. The company continues to be a flipstar precisely because of its willingness to continue taking chances to enter and create new markets, and its successes far outweigh its failures. Richard Branson's R&D process is reportedly to listen when someone brings in an interesting idea and then put that person in charge of developing it. But here is a case that shows that your innovations have to be in line with the fundamentals of your own brand identity. So far, that is not true of the Virgin superannuation fund, at least not in my opinion.

Given the mention of Macquarie Bank as we talked about Virgin, I thought it useful to include an example of going out on a limb in your employment proposition.
Everyone
is talking about work–life balance, so much so that companies traditionally known for punishing hours are starting to talk about work–life balance (even when it is a lie) when trying to recruit good talent. Not Macquarie Bank. Sure there may be some discussion of this at the HR level, but when you are being interviewed by a director at Macquarie, he or she will tell you in no uncertain terms, 'Say goodbye to your friends, say goodbye to your family. You are not going to see them for ten years. But when you do, you will be rich! Interested?'

Having worked with Macquarie and knowing some senior people there, I can tell you that this is not entirely true. The people I know don't feel at all like they have sacrificed anything to be at Macquarie. They feel as though their work is an integrated part of their life, and they love how Macquarie celebrates success, develops its people and promotes from within. Most of all they love that they are given 'freedom within boundaries', to steal an old Macquarie phrase. Macquarie Bank gets more unsolicited applications than any company I have worked with in Australia (not as many as Google in the US, but a lot by Australian standards) and very low attrition rates. Phenomenal when you think about how 'off trend' their positioning is.

It is not surprising really that Macquarie would carve its own path in the employment landscape because they have a worldwide reputation for innovation in deal-making models and banking in general.

In the US consumer financial services market, Prudential Financial has shown how even a giant company can be a flipstar.When the technology bubble that burst in March 2000 was still expanding, Prudential's competitors such as Fidelity were all doing advertising campaigns that emphasised dramatic growth in wealth. But Prudential was sending a different message: grow and protect your wealth. This was in keeping with Prudential's 'rock-solid' brand identity and its long-time logo featuring the Rock of Gibraltar.

Refusing to follow the herd of competitors, Prudential kept its eye squarely on affluent baby boomers who were middle-aged or nearing retirement. When the tech bubble finally burst, the company's 'grow and protect your wealt?' message resonated even louder with the most desirable customers. It also resonated with the competition, who all migrated sooner or later to a copycat positioning with some variation of the 'grow and protect your wealth' promise to customers. Prudential was a flipstar because it took a divergent path from the competition. Then the market flipped in the direction Prudential was already pointing and the competition had to flip their messages. But the copycats' messages don't resonate with customers like the original flipstar's do.

KEEP EXPLORING

Going out on a limb is not something you do once. Suppose you fall and never take another chance? Then you'll never get anywhere exciting. Flipstars go out on a limb many times in the course of their careers or their existence as companies. Richard Branson and Steve Jobs are the guiding risk-takers at Virgin and Apple respectively, and all four are flipstars.

Chapter 7, 'Action Precedes Clarity', speaks about the importance of risk-taking in terms of an action orientation in general. A key element in a successful action orientation is contact with fringe areas within society where new ideas percolate. Many, if not most, of these ideas will turn out to be fizzers, or just a case of old wine in new bottles, but a few of them will set an agenda for the centre. They represent the future of the mass market in embryonic form.

This is why Nike assiduously tracks trends within minority urban communities, striving to identify what suburban consumers will later buy in even greater quantities. Retailers such as Uniqlo in Japan, Sportsgirl in Australia and Target in the US do the same to maintain a hip, cutting-edge identity in customers' eyes.

Nike has become such a big company, with 2006 revenues of US$15 billion, that it is easy to forget that it started out on the fringe. In 1962 University of Oregon track and field coach Bill Bowerman visited a fellow coach, Arthur Lydiard, in New Zealand. Today movie fans across the world know New Zealand as the place where Peter Jackson filmed the
Lord of the Rings
trilogy, but in 1962 the country was definitely on the fringe of awareness for most North Americans and Europeans.

Bowerman was fascinated to observe that many people in New Zealand regularly engaged in an activity they called 'jogging' for fun and fitness. Even though Bowerman was an ex–competitive runner and coached runners, he had never seen ordinary people running for pleasure. He joined Arthur Lydiard's jogging club for outings, kept jogging on his return home and legend has it took four inches off his waistline. More important, he had witnessed a fringe activity that he thought had enormous potential for an increasingly health- and fitness-conscious population in the United States and elsewhere.

Back in the US, Bowerman teamed up with cardiologist Waldo Harris to write a twenty-page pamphlet titled
Jogging.
The pamphlet morphed into a book that sold over one million copies. It also gave impetus to a handshake deal between Bowerman and an ex-athlete he had once coached named Phil Knight. Their enterprise, Blue Ribbon Sports, was eventually renamed Nike, and the rest is history, as they say.

Let me highlight one milestone in that history, the 1978 signing of tennis bad boy John McEnroe to a Nike endorsement contract. Now those with long tennis memories might say that Nike would have gone after Björn Borg if he hadn't already been signed to Fila. But I doubt it. Picking a renegade from the mainstream like McEnroe has typified all of Nike's marketing, right up to the present, including its controversial 1987 use of the Beatles song 'Revolution' in an ad (Nike apparently had the permission of EMI/Capitol Records and John Lennon's widow Yoko Ono, but not that of Apple Records and the other Beatles), its 2004 Chinese martial arts–themed advertising featuring NBA superstar LeBron James (some thought it was racist), and the 2005 use of a slightly modified but easily identifiable Minor Threat album cover in a promotion for Nike skateboarding shoes (easily identifiable by Gen Y, that is).

Consistently innovative companies like 3M recognise the need for regular visits to the fringe. There is a longstanding mandate at 3M that research staff should spend 15 per cent of their time on whatever interests them. Most of what results from this are hare-brained failures, but it also gave 3M the Post-it note, structured abrasive belts, new lenses for computer monitor manufacturing and other products. Following much the same practice, although it credits Stanford University's PhD program in computer science as inspiration, Google got its Froogle shopping service, Google Earth and Gmail from this practice. 3M goes so far as to arbitrarily demand that a certain percentage of their revenues in a set number of years should come from products or services that currently do not exist at 3M.

UNIQUE

Learning to innovate on the fringe and then carry the fruit of your innovations to the mass market makes you unique. Though all of the companies we've looked at in this chapter are not without competition, they each have distinctive brand stories that can never be mistaken for those of competitors.

It is possible for several companies in a single industry to be unique in customers' eyes. Think of the luxury automobile market, where BMW, Ferrari, Lexus, Mercedes-Benz and Porsche each have unique brand identities and tell unique stories to customers.

I mentioned the example of Generation Y and my work at the start of this chapter. Very few people were talking about Generation Y when I decided to publish my research in this area. Sure there were sprinklings here and there, but nothing beefy. More than one person told me I would need to position myself more broadly than Generation Y, and even though I had some expertise in other areas, I knew this would be bad advice. To become unique you really have to go out on a limb.

I took action. By action I mean I spent three years (seriously) writing a book, even before I had a publisher. I knew this generational shift was a cause of many challenges facing businesses today, both from a staff and a customer point of view, and I knew over time businesses would come to recognise that.

They did, and the result for me was a very successful (meaning fun and profitable) consulting business that takes me all over the world and has allowed me to work with some of the most powerful businesses and people on the planet. Through my work in this 'focused' area I have been able to build my expertise in other areas, and here is my latest piece of work. That act of branding a new idea and making it very profitable will be the topic of a book I intend to write soon. But for now, back to this chapter's
flip
.

Of course I am not the only person in my category anymore, and there are plenty of me-too's in the market. The truth is I was not the first into the market either, but I was the first to be focused primarily on Gen Y and I was able to tell a story that people remembered and passed on, and this rising tide has raised all of our ships.

Peter Switzer, a well-known finance commentator in Australia, is changing the way financial planning is done. Switzer Financial Services offers investment advice but makes a point of taking no commission and having their consultants paid by the hour to ensure absolute impartiality. Any commissions paid by the institutions that receive investment at their advice are actually
paid back to the client.
This is a Virgin-like assault on the margins of the financial planning sector.

Even though Switzer is not the only advisory business with this fee-for-service model, it is certainly a fringe model in the industry. Gaining in popularity, it goes against the productcentric, commission-driven model that has built this industry to date. Imagine it was you. Think of how your adviser buddies would have felt about you 'undercutting' their pricing model as you went out on your limb.Might I suggest that not only were they not agreeing with you, but there was no love out on that fringe either.

Interestingly enough my own advisers, Ark Financial, have gone in the other direction. They not only charge a fee for service, they also charge commission plus a yearly retainer. They are staking their positioning on what they call 'Beyond Wealth'. They regularly coach and educate their clients on how to enjoy their wealth, and get more out of life while at the same time helping to grow their finances too. It is more like going to see a life coach than just a financial planner. The point is both approaches are unique and both are being endorsed by growing numbers of customers.

Two other Aussie examples of companies that bucked industry wisdom and started whole new trends are Boost Juice and McGrath Real Estate.

As described on the Boost website, here is how Boost came to be. While accompanying her husband Jeff on a trip to the US, Janine Allis saw a hole in the Australian market for a healthy fast food alternative. Upon returning to Australia she developed a business plan and raised $250,000 start-up money by recruiting her friends as investors.

The first store opened in Adelaide in 2000, and since then more than 170 stores have opened throughout Australia, with the first international franchises in Chile, Indonesia, Kuwait and Singapore. With global revenue expected to exceed $100,000,000 in 2007 this is a pretty good achievement in just six years. So much of what Janine has done at Boost has been against the crowd. The staff are the most obvious. Unlike so many retailers, the staff at Boost more often than not are having fun. Boost deliberately hire some of the wackiest and weirdest people that apply. They want that kind of edginess in their stores.

Their PR activities have included giving away a franchise at Sydney's Manly Beach through popular local radio station 2Day FM. Not to mention Janine being the charismatic leader and voice behind so much of this PR activity. Instead of running a typical radio ad, Janine would instead give motivational advice to listeners, building the Boost story of a healthy lifestyle through proper nutrition. Although there has been some debate as to how healthy Boost juices really are, few could argue with their phenomenal success. It is cool almost just because it is different.

McGrath Real Estate is another of my favourite examples. During the property boom of the late 1990s and early 2000s John McGrath turned McGrath Partners into a force in the Sydney real estate market. They were amongst the very first agencies – along with Ray White Double Bay, Di Jones and others – to raise the bar in the industry. Their advertising was clean, modern and of the very best quality. Their signs used colour and images and matched the high standard of their print advertising. They moved away from private treaty sales and helped spur the auction culture that drove Sydney property prices to dizzying heights. They motivated vendors to do significant improvements on their homes before listing them for sale, including renovations and hiring furniture to make a better presentation.

This market leadership enabled McGrath Partners to charge a commission 1 per cent higher than the industry average, which on sales exceeding $1 billion is a handy, fullprofit premium. Today, many agencies have raised their standards, and with a flat market McGrath will need to become faster, better and cheaper, as well as easier and more inspiring to deal with if they want to continue to be a leader in their industry. Innovation never ends!

On the flip side, a longtime friend of mine in the real estate business, flipstar Pete Gilchrist, is going in the other direction. He recently established a real estate agency in New Zealand called The Joneses. It sets out to totally reinvent the way real estate is sold. Their biggest changes from the usual mode? A flat fee rather than commission, and team members with dedicated tasks rather than a single agent who does the whole thing end-to-end.