Monday, November 3, 2008

Don't Forget the Big Picture - Innovation Shouldn't Be a 4 Letter Word

A few weeks ago we posted on a recent article with an interview with Judy Estrin, former CTO of Cisco Systems, as she discussed her new book, “Closing the Innovation Gap," as well as other topics of re-engaging the innovation process in companies and other institutions especially in regards to meeting the economic changes and demands that must be faced. Well I came across her again as she was cited in a recent article in NY Times, It's No Time to Forget About Innovation.

Now I've been reading quite a bit lately on message boards and discussion forums including our LinkedIn group where there is a great deal of discussion about the state of innovation within companies. Clearly senior managers are facing an economic situation that is forcing them to make the necessary budget cuts to weather the storm. But as this NY Times' article point out there is often the danger that budgets will focus on cutting inefficiencies that are unable to produce short-term results. Unfortunately the very nature of the 'Fuzzy' Front End of Innovation is that it can appear to outsiders as inefficient path; from concept, to development, to market, to reaping profits hand over fist.

Senior managers may talk quite a bit about the importance of investing in the future and innovating to meet the future needs of their markets. But in an economic climate as this, too often the knee-jerk reaction is to cut areas that do not have the short term results that are needed to bolster the business. The article cites a cadre of innovation experts about the importance of balancing the short-term needs of the business with the long-term strategy that relies heavily on innovation and R&D. Judy Estrin discusses some critical elements companies should develop and foster to ensure that their innovation process is not damaged during this economic downturn:

She suggests instilling five core values to entrench innovation in the corporate mind-set: questioning, risk-taking, openness, patience and trust. All five must be used together — risk-taking without questioning leads to recklessness, she says, while patience without trust sets up an every-man-for-himself mentality.

In an era of Six Sigma black belts and brown belts, Ms. Estrin urges setting aside certain efficiency measures in favor of what she calls “green-thumb leadership” — a future-oriented management style that understands, and even encourages, taking risks. Let efficiency measures govern the existing “factory farm,” she says, but create greenhouses and experimental gardens along the sides of the farm to nurture the risky investments that likely will take a number of years to bear fruit.

“I’m not suggesting you only cut from today’s stuff and keep the future part untouched,” she says. “You have to balance it.”

Balance. That is at the core of many of the quotes from this article. Innovators do understand the necessity of a business to make the necessary cuts in order to survive, but at the same time, they have to stress to senior managers that without some investment in the innovation process during a downturn then the business risks missing opportunities it will need to develop once this economic climate has improved, in order to grow and expand; otherwise it will have survived only to remain stagnate and underdeveloped or worse as competitors take market-share.

There is certainly no easy answer, even when one says it is important to Balance all of these elements. But in the political process of shaping budgets for 2009 and beyond, hopefully everyone at the table will consider the repercussions of every cut, especially as it relates to their innovation and R&D areas of their companies.

2 comments:

mng said...

I heard Judy Estrin speak at U.C. Berkeley's College of Engineering last week and thought she was right on target with her ideas and principles regarding innovation - very impressive speaker. I hadn't read her book yet, but I'm now looking forward to it. She also talked about the importance of an 'innovation community' between researchers, developers, and applications - the users of new products & services. At a time when budgets are especially tight, I think it's important for companies to look at their network, existing and new relationships, with a view toward more collaborative opportunities.

Marcello said...

If you stop letting your children go to school then you must have a real good reason to do this.
You ask them to wait and stay behind and you're hoping they will catch up in the future.
Some do, lots of them don't.
For innovation it's the same.
It's your choice because you are in the position to make decisions.
But remember that children have the future, for innovation it's the same.

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