A recent post on VentureBlog called "Innovation Doesn't Take a Vacation in an Economic Downturn" motivated me to share some of my thoughts on innovation in an uncertain economic climate.
The economic realities of today mean that businesses must deleverage and spend within their means, while continuing to innovate, bringing new products to market, and growing market share. This seeming contradiction of "do more with less" seems impossible in the highly structured monolithic organizations we have built in the past.
Every day, new proof points emerge confirming that "Open" Innovation is game changing: delivering better innovations, faster cycle times, and improved economics. Many forward thinking organizations (e.g. P&G, as profiled recently in Mechanical Engineering Magazine) actually embraced "Open" in the good times and have created sustainable competitive advantage for themselves, impacting both top and bottom line results. These organizations moved cultural and political mountains, throwing out the destructive NIH thinking of the past. For these businesses, "Open" Innovation will pay enormous dividends in these difficult economic times.
What about all the other organizations that must now think differently in order to survive? They continue to cling to dated ideas that they must invent, control, and own every aspect of their existence. They have erected legal, cultural, and political roadblocks to engaging the rest of the world in their businesses and are now paying the price. They desperately need "Open" Innovation, but will react to this economic crisis by "hunkering down" and will miss the opportunity to really change.
Therein lies the conundrum: they must learn to be "Open" at precisely the same time their businesses have the least will to think differently. Here is my message for these organizations: This is not the worst time, this is BEST imaginable time for change. Companies should be driving "Open" in all its forms (customer, markets, partners, crowdsourcing) with urgency and conviction. ORGANIZATIONS DO NOT CHANGE UNTIL THEY HAVE TO CHANGE. We are faced with unparalleled opportunity and need to rethink and reengineer the fundamentals of our businesses. The smart approach is to use this crisis as the call to arms and to drive real institutional change. Businesses that act now will emerge stronger in more ways than one. A CRISIS IS A TERRIBLE THING TO WASTE ... make this crisis count.