As an avid reader, I always enjoy finding books that challenge my thought process and view of the world. My latest read, written by Harvard professor Steven Pinker, titled Enlightenment Now: The Case for Reason, Science, Humanism, and Progress did not disappoint. In the book Pinker delivers evidence-based facts on the betterment of our society in every way over the passing years. A positive take on all the seemingly negative news cycles that we see every day.
To elucidate on these concepts, he needed to expose readers to the second law of thermodynamics regarding entropy—essentially, the tendency of a system or organization to deteriorate back to a state of inert activity unless otherwise stimulated by some form of creative energy. Mulling over this concept I began to realize that all organizations require a certain form of creative energy to grow and become valuable. So for purposes of this blog, I thought it would be interesting to introduce a concept I am calling the “Creativity Coefficient".
The Creativity Coefficient is a range from -1 to 1, with 1 being thought of as complete and perfect creative energy, zero as a steady state system which has just enough creative energy to neither grow or decay, and -1 as a complete lack of creativity resulting in a retraction of growth or viability. For illustrative purposes, let’s apply this concept to some of world’s most well-known companies. Think of companies like Amazon, Apple, and Google as having a hypothetical Creativity Coefficient in the .4 to .5. range. Strong consistent growth with innovation driving their products and services but past their vanguard stages (i.e. they are at the top of the ‘S’ curve).
Startup companies that are building a new market, like SpaceX or Lambda School, have an even higher coefficient of around .6 to .8. Their Creativity Coefficient is elevated by driving new consumer segments and changing the way we think about commercial space travel or higher education’s value proposition. Contrast that with Sears, which would be around -.8 or -.9 as the company failed to innovate and steadily declined down the value chain towards its recent bankruptcy. With that concept in mind, I am going to apply the Creativity Coefficient to Citisoft and the reasons behind why I believe our consultancy has steadily climbed in rankings over the past decade and will continue to do so in the years ahead.
The Brand
Citisoft has done three things remarkably well in this space. First, we continue to iterate on the look and feel of our digital presence. We have made it easier than ever for our clients to digest and navigate a simplified view of our value proposition. It embodies the simplicity of our message yet focused nature of the work we do. In a sense, if you were in to judging books by their cover (not necessarily recommended, but we all do it), then our website is our cover and it does a really nice job of capturing the firm’s ethos. Secondly, we have strong “network effects” which can be measured in two parts: 1) clients, after leveraging our services for the first time, re-engage with us on additional advisory and delivery work and 2) clients that come to us via referrals based on the reputation of our work with existing clients. Network effects are powerful and I would assert that if your network effects are weak you will be one and done in this business. On average, Citisoft enjoys an impressive network effect of around 90% with our client base, which has driven our growth rate steadily over the past several years.
Lastly, we bring thought leadership to the market in the form of our whitepapers and blogs. Sharing content is one of the most powerful drivers of creativity both within our organization and for our clients. Fresh ideas spurn a new way of thinking, and Citisoft has reaped the rewards of consistently being called upon to help our clients implement a new course of action after having read one of our papers.
The Team
Citisoft prioritizes hiring based on a person’s ability to elevate the overall firm and not to fill a specific project need. Since my time joining the firm over 6 years ago, we have brought in some of the brightest minds in our industry. We look for the person who through learned experience challenges the status quo and elevates our service offering on behalf of our clients. While there are many factors at play when bringing in fresh talent, the key hurdle all must pass is predicated on one core question: Are they smarter than us? The creative lifeblood behind what we do is brainpower, so raising the firm’s IQ is fundamental to our hiring process. Our recruitment of talent ensures that we are continually stirring up new ideas, never allowing sediment (underperformers) to settle at the bottom of Citisoft’s cup.
The Product
Citisoft’s product is the solutions we deploy for our clients. What’s unique about Citisoft is the approach we take to solving these client challenges. While experience from prior projects are part of the thought process, Citisoft does not rely heavily on prior deliverables when laying out new client solutions. Each issue is different and leaning on the past can lead consultancies down a path of designing a less than optimal solution that better suits a similar but albeit different problem. The delta Citisoft extracts by taking a clean look without the constrained thinking of prior experience, provides the most valuable path ahead. The measure for Citisoft at the end of each project is ensuring our clients have unlocked more of their value chain via the implementation of new technologies, operating structures, and/or the adoption of a multi-year strategic roadmap. Successfully doing so not only increases Citisoft’s network effects but more importantly raises our client’s Creativity Coefficient—a positive feedback loop that we have continued to build upon over the years.
At Citisoft we are constantly seeking to raise the Creativity Coefficient across our brand, team, and product. It is critical that all asset managers, technology vendors, and service providers assess their own Creativity Coefficient as well. Firms should consistently evaluate whether their culture is one that fosters innovative thinking or allows entropy to settle in. When an organization surrounds itself with intelligent employees and consulting partners that challenge sedentary thinking, the Creativity Coefficient elevates naturally, and the seeds of future growth are planted for the company. Citisoft has embedded this philosophy in our DNA and we are committed to do the same for our existing and future clients.
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