On Internet Business

Innovation for business survival

Posted by Michael under Business Growth

Over at Real Business, there’s an article about the role of innovation that’s worth considering in the current demanding economic climate. Quoting Carl Schramm, head of the Kauffman Foundation, it suggests that surrendering to imperatives can be the best way for a business, a country or an economic system to cope. It’s an heretical idea, the antithesis of what economists do and yet we know from decades of hard evidence that ‘planned economy’ is a synonym for ‘stagnant system’  Schramm’s argument is disruption and change are natural and innovation is their solution – not to ‘master’ change by overriding it but to manage it by riding it.

This feels wrong to established businesses: the ‘big beasts’ that have the power to influence politicians and to lobby decision-makers, but it’s worth examining. Propping up the status quo, as the Real Business article puts it, is futile. And if we believe that we live in an evolving world, where businesses, like organisms, find a niche and use survival skills to remain in it successfully, then the ‘ride the change’ approach makes more sense: it drives improvement by offering a range of ways to change things, some of which will work better than others and will therefore become the evolutionary norm. It changes the balance between risk and reward by making the facing of risk its own reward because of the value of innovation, while the current economic paradigm tries to hold by risk by focusing on the rewards already gained in the status quo system.

And it would mean that instead of total melt-down, big business had the chance to evolve from within in a crisis, by embracing innovation at all levels, not just top down, by rewriting the business DNA at the departmental level. Imagine a Royal Mail that delivered post on skateboards in cities, or a jobcentre that skyped interviews with claim benefits … by allowing innovation to flourish internally, huge organisations could evolve where they needed to and keep working structures as they stand.

Could it ever happen? In some firms it’s already standard, but for most of the big beasts, it looks like they will have to go the way of the dinosaur, and make way for smaller, faster-moving business entities.

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