| | A new report, entitled
The Innovation
Culture, warns
businesses not to
abandon their innovation
efforts during tough
economic times. With
speculation of an
economic slowdown enough
to bring some
organisations' R&D
investment to a grinding
halt, Arthur D. Little
has warned businesses
that, even when times
are tough, cost-cutting
should not begin with
innovation capacity. The
report recommends a
renewed focus on
fostering an "innovation
culture" as a practical
way for companies to
ensure they get value
from their innovation
effort more quickly, and
manage their investment
wisely during an
economic slowdown.
Remaining dedicated to
innovation despite
short-term market
conditions is certainly | |
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| | not always easy, but has
been a proven success
factor behind e-commerce
company Amazon, Google,
and Research in Motion –
developers of the
Blackberry.
Innovation sounds
like a great thing to
invest in when business
is booming. But when
times start to get
tougher, as they seem to
be at present, the case
for investment suddenly
becomes much more
difficult to make and
even the most
well-intentioned
businesses can see their
innovation efforts
reaping less reward. The
report finds that
despite giving lip
service to the critical
role innovation plays in
their businesses'
success, evidence shows
that as economic times
get tough, senior
management’s reaction
may inadvertently lead
to the creation of an | |
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| | innovation-stifling
culture. Specifically,
the report points to
managers' increased risk
aversion, tendency to
focus on the short-term,
and insistence on
air-tight ROI, as having
potentially devastating
effects on a company's
innovation culture. The
report goes on to offer
business leaders
practical advice on how
to ensure they are
encouraging a culture of
innovation – through
both words and actions –
despite signs of a
looming economic
slowdown.
"Recession fears have
been the death knell of
many potentially
brilliant R&D projects
over the years, and as
CEOs consider how they
will respond in order to
keep their business
models sustainable
through a potential
downturn, we need to
make sure innovation | |
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| | investment is part of
that solution," said
Rick Eagar, director of
ADL's UK Technology &
Innovation Management
Practice. "Recession
fears aside, research
has shown that
successful innovation
relies on an
organisational culture
made up of a set of
unwritten rules that
equip staff and
management to innovate
because of, not despite,
limited resources."
According to ADL's
study, during a downturn
innovation can provide
just as much value as
during growth periods.
But leaders will only
achieve the most impact
for their innovation
efforts if they foster a
corporate culture that
supports the
organisation's
innovation goals. The
report offers leaders
five strategies to
ensure they are | |
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| | fostering the right
culture for innovation:
1. Identify your
firm's "unwritten rules"
and understand how they
relate to innovation
behaviour;
2. Proactively
address common barriers
such as risk aversion
and short-termism;
3. Make sure your
behaviours align with
your public declarations
– and vice versa;
4. Recognise that
your opportunity costs
and the costs of
experimenting have now
fallen, and make the
most of this;
5. Explore what you
can achieve in
partnership.
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