Innovation at Risk

Exaggerating design's ability to drive new growth sets the stage for a backlash, especially during leaner times

by Lara Lee

Business management trends follow an interesting pattern—they track economic cycles. When times are good, the focus is on growth, creativity, and innovation. As the economy slows, attention turns to cost-cutting, productivity, and process control. Psychologically, this makes sense. Humans are programmed to hoard resources in uncertain environments—it's how our ancestors survived the ice age.

This cyclical pattern suggests managers believe profitable growth is impossible in a sluggish economy, so they focus on bottom line management until times improve. But profitable growth is exactly what successful innovation delivers. So why dump innovation when the economy decelerates? Wouldn't we all prefer profitable growth to just growing our profitability?

Design Thinking Is Not Enough

The economic wheel is turning. Companies such as General Electric (GE) are already shifting away from innovation toward portfolio restructuring aimed at incremental growth. Others, such as Motorola (MOT) and Whirlpool (WHR), are refocusing their innovation efforts through the lens of design. There's a belief in some quarters that design can keep innovation relevant—that applying design thinking to our biggest business problems will deliver sustainable growth. "If we can just get business people to think more like designers," the argument goes, "we'll get them out of their linear, analytical boxes and inspire them to generate novel, customer-centered solutions that will drive new growth."

The problem with this thinking is twofold: First, it paints businesspeople who aren't designers as uncreative and inattentive to customer needs. Worse, it runs the risk of overpromising what design thinking can deliver, which is a surefire way to undermine the role of design, and innovation, in creating new business value.

We've Been Down This Road Before

Consider the fate of strategic planning. In the 1960s and 1970s, strategic planning ruled the roost in the business community. Companies flocked to build strategic planning capabilities, and business schools scrambled to teach the new discipline. Strategic planning was hailed by consultants, academics, and newly minted MBAs as the foolproof path to sustainable growth, bridging the divide between performance management and business planning. Strategic planning groups sprang up in every business unit, and corporate bureaucracies were created to coordinate all the new planners.

Unfortunately, this zeal for strategic planning was based more on theory than on proven business results. Once it was revealed that most companies did just as well with or without strategic planning, CEOs fought back. Jack Welch led the charge at GE, and other leaders followed. As BusinessWeek reported in 1984 "scores of planners have been purged." Strategic planning as a practice became widely viewed with suspicion, a sentiment that lingers in many corporations.

Does this mean that strategic planning provides no benefit? Of course not. It was overzealous belief in the power of a single solution that left many companies ill-positioned for the economic challenges of the 1970s. Overpromising the impact of any particular discipline almost inevitably leads to its subsequent marginalization. This is the risk inherent in the current trend equating design with innovation.