Silver lining

When a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully, said English essayist Dr Johnson in 1777. While, hopefully, no-one should need such a dim prognosis to focus and trigger action, recessionary times such as these do have a habit of throwing up some surprisingly positive activities.

Indeed, it has been noted that many famous product and service innovations were actually launched in years not when everything was rosy and money flowed freely from open wallets, but in tough times of unemployment, slashed budgets and generally low confidence all round. Examples include McDonald’s fast food restaurant concept (1948); Sony’s transistor radio (1957); Procter & Gamble’s Pampers disposable diapers (1961); the IBM PC (1981); and perhaps the most famous innovation of recent times, the iPod, which was launched in 2001, less than two months after 9/11.

According to the president of US innovation consultancy Innosight, Scott Anthony, whom I met during his recent trip to Asia, “abundance” is actually the root cause of many corporate struggles with innovation, as too much time or money encourages companies to persist with flawed strategies or to create overly complicated solutions out of sync with actual customer needs.

Meanwhile, “scarcity”, as Anthony terms it in his book (“Sliver Lining – An Innovation Playbook for Uncertain Times”) is – perhaps counter intuitively – a good thing for innovation, as corporations are forced to figure out how to do more with less, and the discipline that comes with bad times imposes sharper constraints that inspire creativity.

As I gathered from our discussion, there is still much misunderstanding about innovation. Rather than being a eureka! moment or the exclusive preserve of US technology outfits (think Steve Jobs, black turtleneck, one more thing), innovation is a process, a skill, a discipline, and so can be mastered, managed, and measured.

In fact, one of the most innovative companies on the planet is Procter & Gamble – surely about as “old economy” as you can get. It has put in place structures and systems and taken a strategic approach to managing innovation activities such that in the midst of the worst recession in living memory, it is set to launch more new products than at any time in its history.

And while Asian companies have traditionally been followers (do it better) rather than innovators (do it differently), Anthony believes that with pent-up entrepreneurial energy mixing with constrained environments, “the next generation of great innovation will be coming out of Asia”. So let’s start thinking – differently.