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Wednesday
Jun092010

Innovation as an economic turnaround strategy

After months of cutbacks, reductions and layoff, is your organization ready for an economic rebound? Emotionally? Probably yes.
Strategically? Probably no. Managing in a downturn requires the most from the least. Efficiency is king. Innovation, strategic visioning? Minimized or eliminated altogether. Your decision clock is ticking.

Effective management is a process of setting goals, executing strategies, defining measurements and assigning accountability. Periodic reviews measure progress against expectations. We adjust as necessary, trim where possible, sharpen focus overall. Under normal circumstances, this is a responsible management process. It’s based on action and reaction or cause and effect predictability. It is driven by patterns – logic, historical market activity, etc.

Management is the art of maximizing the present. Innovation is the art of maximizing the future - giving form to the invisible. Management and innovation are not the same - not measured the same and not valued the same.

Our current economic state is a product of discontinuous patterns and unsustainable decisions. Predictable rhythms are being constantly interrupted, confining our focus to tactical issues. Long term opportunities seem less immediate or important. Put out the fires first. Focus on the end of the quarter. Worry about the future later.

That approach is fatal. It pits the principles of management against the ultimate needs of the organization. The clock continues to tick.

The common assumption is that an economic rebound will bring a return to recognizable patterns. I believe that assumption is wrong. Your organization is running leaner. So are your clients, customers and vendors. New thinking, born of necessity has encouraged innovations from unexpected places (see: Blue Ocean Strategies).  These are the ones that explode in your face.

The time bomb of the next renaissance is ticking. The opportunities for new (maybe more sustainable) products, services, collaborations, ideas, processes, paradigms may not be the ones you're looking for, but they are real and someone is capitalizing on them. 

The time to shift from short term tactics to longer term strategies is now. To wait until the rebound has clearly taken hold will be too late. You’ll be standing flat footed as your competitors reap the rewards of making strategic decisions now.

Dartmouth Professor, Vijay Govindarajan, says management can be reduced to three boxes: Managing the present, Forgetting the Past and Creating the Future.  He explains, most organizations focus on the first box and call that strategy. It is not. Strategy is about the other two boxes. Strategy is about leadership in 2030, about initiatives you undertake now to assure relevance in 2030. Preparing to address competition for the future IS strategy.

Creating the future does not mean ignoring the present. You have to stay in business first or there is no future. But, you absolutely must maintain fucus on the future. If you lose sight of it, you have no room to turn around.

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