The current economy: an ideal environment for disruptive innovation
Here’s an excellent article by Jim Carroll concerning the opportunity for disruptive innovation provided by the current economy. This is related to our concept of The Innovation Imperative — the realization that those companies which will thrive in the future will be those who are the most innovative today. You can find the original post of Jim Carroll’s article here: http://www.cognos.com/newsletter/decisions/st_090130_01.html .
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.
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.
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.
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.