Innovation in a recession is the overall theme of this year’s Most Innovative Companies survey that BW did with BCG. Delving through the the Q&A with Amazon’s Bezos, the video of P&G’s A.G. Lafley and stories on GE in India, HP labs and Nintendo, I’m culling 5 innovation lessons for people dealing with the current economic downturn.
Here are the innovation lessons.
1-Don’t cut innovation investments to cut costs and save money. This is the classic mistake in a downturn. As Lafley and Bezos point out, innovation is the way to give more value to consumers and bolster pricing in tough times. And as Apple shows, innovation in a downturn prepares the way
for new products and services in the economic recovery. It's the way to pick up market share.
2-Innovate outside the US (outside your home base). GE's reinvention of the electrocardiograph in India to create a $1,500 machine that can be carried from village to village in a back-pack opened up big new markets all over Asia. And it gave GE new capabilities to import back to the US--and Europe and Asia.
3-Business model innovation may be more important than product or service innovation. Tata made it to the TOP 25 Most Innovative Companies list ( (No. 6) because it changed the way it made and sold cars when it created the $2,500 Nano. Using auctions for parts, modular constuction and garages for assembly remakes the entire auto model.
4-Innovation can bring old companies back from the dead. General Motors was No. 18 on the Top 25 list thanks to the Volt electric car and other efforts. It's brand image is clearly much improved--now all it has to do is bring out the car.
5- Innovation is a social system, not a one-off magical moment. View the Lafley interview. He talks about innovation being about culture, organization and leadership, not about a single brilliant scientist or engineer. We have too many CEOs talking about innovation but not implementing it.
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