Time to Get Innovative

There's a lot of buzz out there about the impact that this most recent economic downturn will have on innovation. Historically, great innovative ideas have traditionally gained traction as an economy comes out of a recessionary period. That means, of course that the brainstorming, development and initial launch happened during the downturn itself.

A New York Times article, cautions now, It's No Time to Forget About Innovation and like many in the field, we agree. Yet, frequently, those groups with little to show for themselves, i.e. no sales associated with the group and no direct P&L responsibility seem often to be the first areas cut. Rather than look forward when cost cutting is required, most companies look to dissolve those business units that would cause the least harm to the present operations to the company.

In a short sited way, this makes sense. Often companies that create business units focused on innovation that operate in their own silo. As we said before, this does not take advantage of the inherent creativity that abounds within the various operating units themselves and... is tempting to cut during downturns.

The fact is, innovation is inefficient. Hours and days of brainstorming often result in few if any workable ideas. Thousands of engineering dollars spent doesn't guarantee a real success. Innovation is, in some ways, a model of inefficiency. And there's the rub.

Wild market gyrations, frozen credit markets and an overall sour economy herald a new round of corporate belt-tightening. Foremost on the target list is anything inefficient. That's bad news for corporate innovation, and it could spell trouble for years to come, even after the economy turns around.

As creative pack up boxes and head out the door to home based sites and coffee shops, they take their innovative ideas with them. This is, perhaps one of the reasons innovative ideas often come from entrepreneurial ventures. And in bad times, the ranks of entrepreneurs swell and those lone operators often have time on their hands for the inefficient task of innovating.

David Thompson, chief executive and co-founder of Genius.com Inc., based in San Mateo, Calif., says that innovation "has a bad name in down times" but that "bad times focus the mind and the best-focused minds in the down times are looking for the opportunities."

All of this speaks to the issue of managing innovation in a downturn, especially for large corporations invested in producing short term profits, or at least limiting losses, for their shareholders. How to keep the innovative minds in a company from going out the door is an issue faced by most companies in this economy.