BQF Innovation

Here is an interesting article on the BBC site featuring Martha Lane Fox.   She addresses the question how can we survive a global downturn?  And she quotes Frank Lloyd  Wright’s marvellous words, ‘An idea is salvation by imagination.’

She says, ‘All the headlines talk of businesses cutting enormous numbers of jobs and scaling back investments.  Although much of this is sensible, new ideas must be supported and there are still opportunities to be found. Web businesses are growing and the move from offline to online is continuing apace.  The web gives power to customers in times where value becomes so important, as they can compare prices, build their own packages or get a depth of information that is impossible through other channels.

The web shakes up normal business models and any company ignoring this shift does so at its own peril. For me, a pound invested online is far more effective than one spent offline in this harsh consumer climate where you need to be able to track impact carefully.  Making the most of these opportunities requires some flair and some risk taking.’

She adds, ‘I always challenge my team to think ‘yes’ before they think ‘no’ to a new idea.’  Great advice from an internet advocate!

Paul Sloane

What are the key characteristics of a corporate culture that promotes innovation?  And those that inhibit innovation?  These were the topics we discussed in a workshop I facilitated yesterday for the Global Business Partnership Alliance.  We discussed a number of issues.  We conducted a survey among attendees and these were the main issues in the order in which they were a challenge.  The first item was agreed to be the biggest problem in setting a culture for innovation and so on:

1. Internal communication - overcoming silos.
2. Allowing failure and eliminating a blame culture.
3. Allowing anyone to challenge anything.
4. Developing a positive attitude to change - overcoming fear and complacency.
5. Developing a positive attitude to risk management.
6. Empowering people to try new initiatives without explicit approval.
7. Welcoming ideas from outside the organisation - eliminating ‘not invented here.’
8. Encouraging new ideas.

We discussed what various companies did to tackle these problems and generated some novel ideas.  One of the most radical was the idea of a ‘Shadow Board’ which would get the same input and agenda as the main board.  It would come to its own conclusions and could then challenge the thinking of the executive team on strategic issues.  In a constructive way it would become the ‘Official Opposition’ and so legitimise a positive debate within the organisation.

If you have any thoughts on this notion or the list above then please add your comments.

Paul Sloane

In this article in Businessweek Sami Mahroum says that ‘during economic downturns, innovation is the single most important condition for transforming the crisis into an opportunity’.  He argues for active government intervention to boost innovation.  ‘In the short term, governments need to provide support to small companies to help them manage the crisis and continue to develop their portfolios of products and services. The British Innovation Advisory Services model, where government-supported consultants are paid for and loaned to companies, is one example of the type of thing that governments can do. Another is the Dutch voucher system, under which the government gives vouchers to small companies, allowing them to source the expertise (mostly consultants) they need from public research institutes. Some 80% of such voucher-supported projects otherwise would not have been undertaken. This type of support is critical to help many small, successful companies get through the crisis.’

‘For the long term, governments should do four things so their countries can emerge from this crisis as winners:

Inject capital. Inject new funds to fill the gap in any serious downfall in private investment in strategic science and technology (S&T) areas such as nanotechnology, alternative energy, health and life sciences. This is what the South Korean government did when the country was hit by a major economic crisis in the late 1990s. Two years later spending on R&D exceeded pre-crisis levels, and Korean businesses did not have to play catch-up when the economy bounced back.

Think Global. Encourage leverage of international investments in S&T programmes from nations and regions that have the cash such as China, the Gulf, and Japan. The Japanese are looking to expand globally, the Chinese are hungry for knowledge transfer, and more recently, small, rich Gulf countries have allocated billions of dollars to spend on science, technology, and learning programs. Expensive long-term S&T programs can become new platforms for multilateral collaboration.

Focus on Public Programs. Maintain and expand levels of funding for public S&T programs. This should help keep a country’s knowledge base expanding. When Finland was hit by a massive economic crisis in 1990, after the collapse of its main trade partner, the Soviet Union, its government’s expenditure on R&D and education in all sectors increased. Ten years later, Finland emerged as one of the most competitive and innovative countries in the world. In Sweden, a major economic crisis in the early and mid-1990s saw the number of people engaged in R&D activities increase by about 20%. Swedish businesses emerged from the crisis with global leadership in sectors such as telecom and machinery.

Support Talent. Governments should create big seed capital funds to support the newly created army of potential entrepreneurs composed of highly skilled people made recently redundant in specific sectors.’

There is a real danger that in this recession we will see governments borrow money on a large scale and spend it on consumption rather than invest in infrastructure and innovation.  Mahroum’s views are a useful input to the debate.

Paul Sloane