The current economic meltdown requires no introduction: corporate and consumer spending is shriveling under the credit squeeze. Inflation is high and growth is low.
To most organizations, this looks like an imprudent time to invest in new ideas -- new products, new services, or new business models. That is discretionary spending, to be postponed for now, in expectation of a brighter day.
Product development is not the only victim of economic hard times. Many companies will assume a possum position, even in their basic branding and marketing activities. Forecasters of ad spending have revised their estimates down for 2008 by as much as much as 4 percent. Their predictions for 2009 are dimmer still.
So how does it make sense to initiate a new dialogue about innovation now?
The shortest answer is that innovation is no stranger to adversity. Even in the best of times, innovation stubbornly refuses to conform to conventional wisdom and its entourage of preconceptions, consumer research, and time-tables.
This is not a unique idea. Great organizations are in a state of continuous launch, to remain relevant to the ever-shifting desires of stakeholders, to secure strategic advantage over competitors, to justify their stock prices and, sometimes, to just plain survive.
Amid the gathering storm, the breaking point for me came on September 14th. Hurricane Ike finally came to rest, after wreaking devastation for nearly two weeks. Its options exhausted, once-proud Merrill Lynch announced that it was selling itself to Bank of America for a song. And one of my dearest friends in the world -- a 35 year-old man in his prime, running two successful businesses and providing for a family of three -- was diagnosed with leukemia.
It was this last development, one so visceral and close to home, that shook me most, and snapped my mind to attention. With all hell breaking loose in the streets of New York, I sat in a hermetically-sealed Brooklyn hospital, at the foot of my friend's hospital bed, staring mortality in the face and trying to grin back. On that day, we did not know the specifics of my friend's prognosis. In its many forms, leukemia can be managed for a lifetime or be an almost immediate death sentence. Friends, family and medical staff passed through the room continuously. In a rare private exchange, my friend and I agreed that only one thing was clear: My friend would have to fight, and all of us who loved him would have to fight with him.
We must combine a sober understanding of the alternatives and an unshakable conviction that we'll beat the odds.
The next day, I made a quiet commitment to myself to do something I had long intended: Launch a blog about innovation -- a place to record my thoughts and ideas, and spark a conversation around the quest for new things with enduring value.
I know that I will be in good company with my efforts. Many companies that are now household names were founded during economic down-turns: GE was started during the market panic of 1873, Disney during the recession of 1923-4, Hewlett Packard during the Great Depression, and Microsoft during the recession of 1975. More recently, eco-cleaning products company, Method, emerged from the burst dot com bubble.
The much-loved Apple iPod got its start in the dark days of 2001.
Procter & Gamble famously redoubles its product development and marketing efforts during economic hard times. Iconic brands like Camay and Ivory were born out of the Great Depression, carried by strategic investments in radio advertising, starring in the very earliest soap operas.
And, as the mood on Madison Avenue turns ever more sour, it is instructive to remember that, in the seven economic slumps since 1960, advertising spending only actually declined three times, and never by more than about 5 percent. The industry invariably bounded back, continuing on its inexorable rise, to grow a cumulative 2,800% over those 48 years.
Times like these have a leveling effect, putting start-ups and established enterprises on more equal footing, imposing greater discipline on both. Goals must be precise. Investments must be incremental. Failure is to be expected, and so the best-laid plans must assume that multiple attempts will need to be made to attain an objective. This is no time to bet the farm.
Then again, as I hope to explore in this blog, it is never the right time to bet the farm. Strategically, there is never a killer idea.
But that won't stop many of us from trying to think of one. Someone told me the other day that 75% of human consciousness is comprised of thoughts of the future. True or not, there is no doubt that humans have an insatiable appetite for dreaming. Some of us also have the gumption to translate those dreams into new realities -- to give substance to the shadows cast by sparks of insight. These are the people whom I hope will be attracted to this blog.
I am happy to report that my friend has been diagnosed with a form of leukemia that is relatively manageable. He is fighting it successfully, and re-engaged with his normal life.
I can't think of a better moment to begin this blog.
Copyright 2008, John Hearn
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