I would be hard pressed to recall a conference, seminar or corporate material I have read in the last few months that doesn’t tout the miraculous change of some company’s process or widget. It appears that many organizations have jumped on the recessionary band wagon with the intent of using the moment to peddle their wares. I strolled through the vendor area of this year’s Law Firm Financial Management Conference and spoke with a few vendors, as I was introduced to their latest offering. I was then given canned pitches of how their offering would make a difference in my practice.
It wasn’t until I was saturated with these presentations that I engaged a sales manager in an introduction to macroeconomics. As I proceeded to explain the complex web of global economic dynamics and how a ‘quick’ fix of a $25,000 piece of technology greatly missed the mark of remedying not only my organization, but the global economy as a whole, I could see the glazed look become part of his demeanor. As I ended my soapbox rant with the idea that no small fix is sufficient to remedy a wallowing economic system I realize that to move beyond our current economic circumstance, something significant needs to happen.
From a cursory review of much of the economic thought of the day, it has become blazingly clear to me that what the global economic superpowers need now is a significant jolt to the economy; almost a radical “kick-start.” Continuing along as we have with small local changes only drip-feeds the economic engine to continue along its path; granted its path is slowly making a turn around. However, this turnaround according to the literature is 5 years in the making. With that said, the some of the current literature professes the US unemployment rate will continue to hover in the 10% range and prime lending rates will continue to be at an all time low.
The ‘kick-start’ must be significant enough to jolt the economy back into a positive momentum, somewhat like a strong earthquake. To make an analogy, most earthquakes although significant in attracting attention only a few have reached ‘significant’ proportion. One such quake recently occurred in Chile. According to Richard Gross, a geophysicist at NASA's Jet Propulsion Laboratory, the 8.8 quake was enough to shift the earth’s axis by 3 inches, resulting in a 1.26 microsecond shortening of an earth day. Previous to this was the 2004 earthquake off the coast of Sumatra that again moved the earth’s axis. Before this, it was in 1964 when an earthquake was enough to alter the length of a day. These were ‘significant’ jolts!
It was from the January 15, 2010 Harvard Business review that cited a recent Ernst & Young study on innovation, that leads me to believe that our ailing economy hinges on something ‘big’ happening. The article presents survey statistics of companies in the $5M to $5B range and how there is simply a lack of big idea innovation in these organizations. I am beginning to believe that our small innovations represent only tiny blips on the heart beat of the economy. These small innovations get swallowed up in the volatility of consumer sentiment with each passing day.
This “kick-start” innovation must not only be large, but it must be radically different than any other offering currently present. In addition, its appearance in the marketplace must also be innovative; otherwise its true value will get diluted. For many organizations, this concept of radical innovation is nothing more than repacking the old bag of goods in a new wrapper or modified business process under the guise of ‘innovative strategy.’ Sadly this ‘bag of tricks’ simply won’t cut it any longer, as a viable strategy; I believe that “strategy” is probably the most overused word in business. In my experience with many organizations in several different markets, business strategy is not much more than the documenting of historical tactical approaches. Chan and Mauborgne in their book Blue Ocean Strategy, support this belief of strategy in saying “…a closer look reveals that most plans don’t contain a strategy at all but rather a smorgasbord of tactics that individually make sense but collectively don’t add up to a unified, clear direction that sets a company apart.”
With the lack of corporate innovation and a ‘mish-mash’ of bringing mediocre ideas to the market, it is no wonder that the economic engine continues to sputter and will for probably the next decade; if not longer. Our only hope – an 8.8 or higher jolt with innovation!