Innovation Inspiration: Is now really the time to innovate?
09 Jan 2009|Added Value
As the dust refuses to settle from the global financial crisis, the temptation is to batten down the hatches. Focusing on value creation – or just survival – by exploiting existing assets and equities intuitively makes sense.
However, several commentators beg to differ. Clayton Christensen, from Harvard Business School, believes that breakthrough innovation is more likely to occur at times of greatest disruption. Why? Because we are forced to fundamentally re-think the way we do business.
Nor is Dr Christensen convinced that a tightening of financial resources will be a bad thing for innovation. His research suggests that 93% of all innovations that were ultimately successful started off in the wrong direction as people were given the money to pursue the wrong strategy; and that faster, smarter innovation increases the probability of commercial success.
Read More: How Hard Times can Drive Innovation
David Hieatt, founder of UK clothing company Howies, shares Dr Christensen’s scepticism around big budgets. For a company of his size, budgets are tight – which in his view forces you to make brave decisions, and in difficult times he argues that a brave idea will stand out even more in a sea of sameness.
Drawing on an analysis of lessons from the Great Depression, Tom Nicholas from Harvard Business School argues that even the worst crises can create huge opportunities. He points to the rise of entrepreneurial start-ups such as Hewlett-Packard and Polaroid in the 1930s, as well as DuPont’s creation of neoprene and nylon.
Read More: Innovations Lessons from the 1930s
Nicholas also highlights the economic forces of ‘creative destruction’, as described by Depression-era economist Joseph Schumpeter, and the enormous economic opportunities produced. This topic is picked up in a McKinsey interview with Richard Foster, author of ‘Creative Destruction: Why Companies That Are Built to Last Underperform the Market – and How to Successfully Transform them.’
Foster argues that industry incumbents tend to focus in times of crisis on operations and as a result under perform the market: these organisations will find themselves challenged by a new generation of leaders.
By Jonathan Hall, CEO Added Value France
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