How to Innovate

By Kevin Taylor

Enter the words ``recession" and ``innovation" into your search engine and two things are immediately clear. There's an army of people writing about these topics at the moment, and most of the sites that rank the highest tend to discuss the biggest or worst innovation ``mistakes" in an economic downturn.

What's most interesting about these search results, however, is that while the message is clear ― innovation is important, even in a recession ― few people, it seems, are realigning the discussion to be a more useful analysis of what innovation can do for a business during a downturn.

The danger lies in the fact that we are directing our discussion toward the wrong place. The fear that companies are unaware of the need to sustain innovation during tough times is misplaced. Leaders of successful enterprises know the value of innovation all too well.

Unless you want to compete purely on the basis of price, the ability to offer innovation is the one genuine competitive edge left. Innovation is therefore the driver of performance, growth, and share price strength.

Even a quick glance at history demonstrates that businesses have always innovated their way through recessions. The first postwar recession in the United States, between November 1948 and October 1949, saw the development of the cell network for mobile phones and also one of the most important inventions of all time, the transistor. Both originated in AT&T's Bell Labs.

A year later, the world's first citizens' band (CB) radio service became available in almost 100 U.S. cities and along major road corridors. Today, based on these technologies invented during that recession, there are about 3.5 billion cell phones in service across the world.

The year 1958 saw another acute decline in the GDP of the world's foremost economy but it also saw the invention of the laser, ubiquitous today in medicine and telecommunications.

Further examples include the invention of the Graphical User Interface, the Ethernet, and the TCP/IP protocol amidst the first energy-related recession, in the 1970s.

The economic crisis in the 1980s spawned the first Microsoft-driven PCs and the Commodore 64, which practically invented the concept of home computing. And the last recession, earlier this century, was when Apple launched its iPod, which has transformed the entire music industry and the way we consume songs.

You get the picture. Businesses don't necessarily need to be warned of the ``dangers" and ``mistakes" of pulling the rug out from underneath innovation. What organizations need is help understanding how to be one of the AT&Ts or the Apples from the above examples.

Good innovation isn't easy even in the best of times but maybe the problem maybe within businesses. Companies have a tendency to employ certain types of people, who often hold similar values, and encourage them to see the world from a particular perspective ― not always conducive to driving game-changing innovation.

Can a company truly think "outside of the box" if doing so might violate its values? Sometimes it takes outsiders to point out the contradictions, which may explain the recent move toward ``open innovation" and open-source software development.

Many forward-thinking businesses have embraced this model, including the likes of Shell, Boeing, Unilever, Philips and BT. Open and collaborative innovation sees businesses innovate together with their customers.

This helps businesses which share a supply chain to overcome key business challenges, unlock hidden value, and drive commercial performance. By embedding innovation within the fabric of a business relationship, the challenge is then tackled by two heads instead of one.

There are no hard and fast rules, but one ``absolute" is that, in the modern world, technology forms the enabling infrastructure for innovation, sometimes in surprising ways.

Take fishermen in Kerala, in southwestern India, who now use their mobile phones to compare local market prices so that they don't waste the fish they have caught and get the best possible deals.

With that in mind, we can begin to build a framework to help any organization or team take their ideas further. Step one: go social, as advised by leading economist Joseph Stiglitz.

The Internet and new collaborative tools, which take their cue from social networking sites but are now showing their value in enterprise, make idea-sharing and development cheaper, more powerful, and more straightforward than before. Use them to unlock the value within your network.

Step two: stay global. The signs are that companies weathering the economic storm the best are those with global operations. They are connected to more markets, including those whose growth may have slowed, like India, China, and Russia, but are still showing encouraging numbers.

These consumer markets are often less mature, which can make innovation quicker and more rewarding. These companies are also culturally diverse, providing wider sources of inspiration for truly disruptive innovations.

Three: harness the cloud. Using the power of Internet and social networking technologies requires a reliable and powerful IT platform but may also represent heavy investments in infrastructure. Cloud computing enables you to pay for the services and applications you need, without having to buy the hardware to host it all.

Clearly, these are just three ideas rather than a full-proof strategy for innovation, but regardless of the industry, the sooner we start talking in terms of practical solutions for using innovation to beat the recession, the sooner we might all see progress.

Kevin Taylor is managing director of BT Asia-Pacific.