Innovation in a Crisis Economy
I recently spoke at a marketing conference in Athens, Greece.Predictably, the conference theme was creativity in the face of
austerity. Although the mood was dour, it was fascinating to hear
delegate perspectives on what would heal the economy.
I asked many for their take on green innovation. Most thought it
was a luxury for more prosperous times. Few made the connection
between sustainability and cost savings, although they knew the
story of Wal-Mart’s rise to green fame with eco-efficiency.
That said, I unearthed some great innovation stories, like the
imaginative (and popular) subsidies
target=”_blank”>Piraeus Bank was offering customers for
everything from solar power to organic farming.
There were also rumblings that ‘old school’ public officials
were being drummed out in favor of younger, more innovative
thinkers. But on this front, the opinions seemed to reflect wishes
more than facts.
The feeling overall was surreal. Although everyone sensed a
pending emergency, nobody could paint a picture of the future or
see the innovation opportunities the coming upheaval might
bring.
Greece’s situation is anything but unique. Ireland has signed up
for EU bailouts, with Spain and Portugal on the brink. Closer to
home, Detroit’s demise and reinvention has been the subject of a
yearlong reportage by TIME Magazine. Throughout North America,
there is an incredible sense of uncertainty. What will the new
normal be?
Less is more
Necessity is the mother of
invention!
Desperate times breed desperate measures!
Diamonds
form under pressure!
If these old saws are to be believed, innovation should
accelerate in bad economies.
After all, teams with tight budgets and tough goals make
critical decisions more quickly than teams with abundant resources
and no pressing agenda.
Recessions are also wonderful for clearing the forest of
competitors. Large, cumbersome companies fall, while small wily
upstarts gain ground.
And recessions lead to rethinking. When the status quo fails, it
makes you question your beliefs. Should my product even be a
product? Or should it be a new business model, or service?
The examples of recession success are legion. Instead of boring
you with them, I’ll simply guide you to some examples that will
make every recession-weary entrepreneur smile.
target=”_blank”>Lessons from Detroit
While it’s too early to say how economies like Greece and
Ireland are going to react to austerity, Detroit provides a
successful example of radical rethinking.
As TIME writers target=”_blank”>Daniel Okrent and Steven Gray
write “Detroit once thrived on bigness, but now it has to
leave that idea behind. The secret of Rust Belt urban revival:
smaller is better. If you want a healthy, bustling city, huddled
masses are better.”
Necessity has forced Detroit to abandon sprawl - servicing vast,
deserted suburbs simply isn’t viable. Instead, the city is focusing
on building density. Tighter, interconnected communities that are
easy to navigate on foot are bringing a flourish of small business
with them.
And big business. Drawn by Detroit’s reinvigoration, Quicken
Loans chairman Dan Gilbert moved 1,700 employees into downtown
Detroit. Gilbert is now considering moving his business incubator
Bizdom U there as well.
Detroit’s rebirth warrants a closer look for more than economic
reasons. Abandoned suburbs are quickly turning into green
corridors, with the promise of urban agriculture. And smaller live
/ work hubs mean less cars - and a healthier pedestrian
populace.
Of course, the transformation is messy, and there are
casualties. School systems need to be overhauled to draw young
families. And people isolated in the suburbs can’t simply be
abandoned. But Detroit is proof that innovation does flourish in a
crisis economy.
Innovation Learnings
There are consistent innovation themes that can be seen in
examples like Detroit.
For example,
target=”_blank”>the key to innovation is getting outside your
personal comfort zone, your status quo, your jar. Outsiders have an
incredible power of perception when it comes to spotting root
problems, consumer needs, and potential solutions. It’s one of the
reasons clients turn to us for solutions, instead of working
exclusively with in-house innovation teams. It’s also the reason
companies like P&G mandate 50% of their innovations come from
outside sources.
Another learning is that innovation needs champions as much as
great thinkers. Working in green business innovation, I have seen
again and again that the mandate for change needs to come from the
top. Otherwise, challenging new ideas will be killed by the
defenders of the status quo, and progress log jammed.
Finally, innovation should not be expected to turn a crisis
economy into a utopia. In fact, idealists and utopians are often
the
target=”_blank”>worst agents of change. A crisis can’t be
solved through social engineering - instead, the process involves
co-creation, brainstorming and support from a wide swath of
constituents. Yes, it could get messy. But economies and
communities are living, organic things…not intellectual
theories.
Marc Stoiber is VP Green Innovation at Maddock Douglas, a
leading North American innovation agency. He has a wealth of
experience building brands, and is passionate about innovation and
sustainability. This article appears also in
target=”_blank”>Huffington Post and is reproduced here with
the kind permission of the author.
You can return to the main Market News page, or press the Back button on your browser.
