“The enterprise that does not innovate, ages and declines”
– Peter Drucker
The daily headlines and media drumbeat tells us that millions of Americans are unemployed, millions more are underemployed, health care costs have skyrocketed, incomes are squeezed, and now we have people camped out daily in New York and other cities protesting the unfairness of it all.
The irony is that I’m talking about the 1930s. The “occupations” were called Hoovervilles. Those shantytowns occupied parts of Central and Riverside Parks in New York.
Did the election of FDR resolve the crisis? Hardly. After a slow drop of unemployment for a few years, the economy was little improved by 1937 and unemployment had returned to record highs.
The ultimate contributor to solving the depression crisis was America’s ability to innovate. By that I mean the ability of entrepreneurs and business leaders to create new products and services that the world had never seen before.
This is a little talked about story, but here’s what happened below the radar in the 1930s.
The car radio was invented.
Men’s electric shavers were invented.
The first supermarket was introduced.
The first laundromat was introduced.
The technology for photocopying was created.
The best-selling game of all time, Monopoly, was rolled out.
And most importantly to me, Mrs. Fields chocolate chip cookies became a bestseller.
The story didn’t end there. Everyone knows that with the U.S. entry into World War II America’s industrial might responded in a way that the world had never seen before.
New technology was rolled out in tank warfare, shipbuilding, newer and faster aircraft, radio communication, and of course the mega invention of all time: the atomic bomb which ended the war with Japan.
Three years ago nobody talked very much about the role innovation plays in job creation. It’s taken a crisis for Washington and Madison to recognize that facilitating company growth through innovation is the long-term solution to this crisis.
Congress has been enacting legislation friendly to startups including reform of the patent laws to enhance the ability of entrepreneurs and inventors to get to market.
In Madison, the Legislature seems to be able to agree on one thing: we need venture capital in this state to help grow new companies.
In my investment network I see a wide variety of new deals every month. Those entrepreneurs are coming up with new approaches to doing business, new technology and new offerings in the marketplace.
But why should innovation be limited to startup entrepreneurs?
As a business leader you have a unique opportunity to help grow us out of this crisis.
This is not a time for continuing to do the same old thing in hopes of having a different result.
Meet with your management team and put in place a process for encouraging innovation and experimentation in whatever products and services you offer.
Innovation is not something that just happens, unless you’re Steve Jobs.
Here are a few recommendations you can put in place to do your part to drive innovation and new growth in this economy.
Begin by recognizing that creativity is not the same as innovation. As an example, you can invent a more efficient delivery of your products without creating a new widget. So pull your team together and ask: can we use our collective brainpower to find opportunities for improvement in the way we do business? Tell each member of the team they have a week to come up with one or two ideas. Ask them to study your competitors and determine if there are ideas they can learn from them.
Ask your customers if they have any ideas for improvement in your products or services? Record the suggestions and use that as a basis for the agenda for an innovation meeting.
Analyze trends. Never in the history of the human race have there been more tools at your disposal for your team to do their homework. Start with Google and don’t stop until you have a feel for what’s happening in your sector of the economy.
After that, your team should begin the process of prioritizing what they have learned and then begin to cost out the best ideas and experiment to see what works.
You will find your team energized by the process because it taps into the excitement that comes from imagining and trying something new and different.
Remember, as the chief of innovation at Dell, Jim Stikeleather, said, “The annals of history are littered with once great companies that collapsed because they protected a once successful business model that would become irrelevant. Innovation is the one and only defense against terminal decline for your company.”
I might add, innovation is the only defense for the entire U.S. economy.