Rethinking Innovation: Is now the time to forge ahead?

By Jim Carroll

Given the economic challenges that swirl around us and the rapidity with which the events of the fall of 2008 unfolded, a unique and challenging mindset seemed to quickly envelope many organizations: corporate idea factories were turned off, and innovation paralysis settled in.

The result is that we’re not just in an economic recession – we’re entering another idea recession, similar to what occurred with the last downturn starting in 2001.

Yet in allowing this to happen, many organizations are missing the fact that an economic downturn provides a great opportunity for innovation. After all, companies like Burger King, Microsoft, CNN and FedEx all started up during a recession.

Recession a perfect opportunity for “disruptive innovation”

In November 2008, right as events were at a fever pitch, Wharton Universities Innovation and Entrepreneurship group released a provocative article strongly suggesting that a recession provided the perfect timing for “disruptive innovation” – that is, stepping into an industry and rewriting the business model so as to achieve significant growth. Think of Steve Jobs and the iPod – which he first released during the recession of 2002.

So what do organizations need to do?

Move past the “shock” and “denial” phases

First, move to the “acceptance” stage earlier. I began to relate the fast-paced events of the last few months in the context of the “stages of economic grief,” an emotional reaction that seems closely related to the “stages of bereavement.

Events happened so fast that many organizations still find themselves in the “shock” and “denial” phase. They will be the innovation laggards, and will only be ready to innovate once the market and industry recovery is underway. However, that may be too late.

Then there are the innovation leaders who are prepared to innovate despite the uncertainty. They are prepared to keep their idea factory running – maybe not at full tilt – but running nevertheless.

These leaders know that despite the vast sections of the economy in stress, there are still plenty of opportunities for innovative thinking. They know there are still growth markets; and opportunities for marketplace, distribution channel, and operational innovation.

Innovation leaders are aware that ongoing change in consumer behavior also means that there continue to be new ways to brand, grab customer mindshare and forge unique and distinct relationships.

There are plenty of opportunities to turn ideas into innovation. It all depends on where you want to place yourself on the scale of the seven stages of economic grief.

Bold moves and integrated elements

The key decision is whether now is the time for innovation, and if so, how to move. It is critical that organizations begin to undertake a series of bold actions that re-orients them to face these future challenges. This series of actions should include several integrated elements:

• Undertake a regular number of experience-focused projects aimed at boosting the “experiential capital” of the organization.
• Identify specific areas of capability weakness, product line, skills or structure that should be addressed through specific.
• Articulate key opportunistic strategies through a variety of risk-oriented initiatives and align the organization to explore those strategies.

These actions should aim to develop needed capabilities and realign the corporate mindset away from the current risk-adverse culture towards re-orienting the organization for the future.

The greatest mistake that any organization can make right now is to avoid action. Inertia – real or implied – establishes a culture of inaction, and that can lead insurance organizations down another slippery slope.

Clearly, that’s why today, innovation isn’t an option, it’s critical – because it is the key method by which we can gain traction.

About the Author

Jim Carroll has proven himself as one of the world’s leading futurists, trends and innovation experts, with a client list that includes the Walt Disney Organization, Motorola, Nestle, the BBC and Caterpillar.

Jim is internationally recognized for his cutting-edge insight, having been named by BusinessWeek as one of four leading sources for insight into creativity and innovation. As an author, columnist, media commentator, and consultant, Jim is completely focused on creativity and innovation. His insights appear in his books Ready, Set, Done! How to Innovate When Faster is the New Fast and What I Learned From Frogs in Texas: Saving Your Skin with Forward Thinking Innovation.

“What will it take to turn things around?”

“When the ‘recovery’ begins, will we be ready?”

Common questions these days. We all want to believe that  things will be “good” again, the way they used to be, when we all (or at least most of us) had our jobs and credit flowed freely and real estate was a surefire investment. People actually bought things, all kinds of things, and for the most part we felt reasonably secure.

But rather than, “How do we get back to where we came from?” perhaps a more valuable question to ask is “Where do we go from here?”

At lunch today with a senior executive from a top TV network, we discussed this very topic. So many people out of work. What jobs will they go ‘back’ to? So many organizations changing the way they do business. What will business look like in the year ahead? To assume that tomorrow’s landscape of opportunity will bear any more than a remote resemblance to that of the past is simply naive. Many of those who are currently displaced will never return to their former positions. Many business sectors that once flourished will never recover, or will at least remain out of favor for a very long time. Even real estate, as an investment, will be reconsidered.

The motivational book, Who Moved My Cheese? An Amazing Way to Deal with Change in Your Work and in Your Life (possibly the most I ever paid per word for a book in my life) took a somewhat whimsical look at this very issue — over a decade ago, when the last bubble was preparing to burst, the Internet bubble. The fabled mice that ultimately survived the much maligned cheese removal eleven years ago are the same variety who will flourish in 2009 and beyond.

The innovative ones.

Adaptability is a form of innovative thinking. (I’m sure this will be covered  in greater detail in a future post.) It requires creativity, flexibility and the ability unhook oneself from the past. In order to innovatively adapt, one must operate from a perspective of possibility rather than limitation: explore the potential in a given circumstance, rather than focus on the challenges.

I sometimes think this way about my hometown of New Orleans. Katrina was the cataclysmic event that transformed the city forever. People talk of it “coming back;” but it never will, at least not in the way we think of coming back. It will be something different, maybe “better,” maybe “worse.” It will retain some of the beauty and personality and characteristics of its former self, and take on other entirely new attributes. The city and those in it will innovatively adapt.

The world around us is no different.

Be innovative. Work within the context of your environment and the opportunities it presents. And when things “come back,” wherever they come back to, you’ll be right there with them.

However, history and nature teach us that fear in the face of adversity is weakness, a severe disadvantage that eventually takes one down its own path of destruction.

To anyone able to maintain a clear perspective in the current maelstrom, it’s glaringly obvious that cutting staff, resources, capabilities, training, services — vision — can only result in cutting something else that is crucially important. Present and future success.

Obviously when revenue is diminished, something has to give. But the only rationale response to our present situation is to operate from a perspective of opportunity. Not “How can I stick it out and survive?” but rather, “How, given current conditions, can I innovatively capitalize on my circumstances, healthily sustain and prepare for future opportunities?”

It’s a matter of perspective.

Operate from fear, and perish. Innovate , and thrive.