How Fertile is the Current Climate?

Personally I dont think that follows. Innovation in a recession is every bit
as important, and as likely, as in a boom time.

Interestingly, the seeds of the current recession were sown in innovation.
Particularly in London and New Yorksmart people came up with complex solutions
to business problems. People had risks they wanted to syndicate to make progress
in their everyday lives, and they came up with complex derivatives. The problem
was that the innovation ran well ahead of corporate governance in financial
systems. As a result we sowed the seeds of todays catastrophe: peoples
inability to pay their debts crept into the lending market for the best part of
a decade, before it came crashing down.

When things go terribly wrong people find new ways to think about the world.
Victor Hugo came up with a simple phrase in 1852, necessity is the mother of
invention. When you really need to, you create new ideas, you find new ways of
dealing with things and you move forward. In that way, every recession is like a
forest fire, it clears from the undergrowth the things that are holding back the
development and allows new seeds, new ideas to grow and to prosper. Were at
that classic stage of the recession where everyone has become very glum and
youd think the world is going to come to an end. It happens in every recession.
But of course the world wont end; well have a tough couple of years, some
companies will go under, but human society will grow and prosper, because we are
natural innovators and we find new ways of doing things while responding to
challenges. Innovation varies across the world; Europe lags behind with US and
Asia in the clear lead. In Europe we have a falling working population, which
will be the case for at least the next twenty years, given birth patterns. Im
confident that well soon realise that despite recessions or booms, our economic
development will come from our ability to collaborate globally. Well need
brains, resources and capabilities from around the world in order to innovate.
The development of the European economy will depend on global collaboration.

Exemplary Innovations

Looking at examples of innovation, a well cited one is Apple. Steve Jobs
describes the company as not the richest guy in the graveyard. Microsoft has
much more money, theyre a more powerful company. But its worth thinking about
why Microsofts latest advertising campaign is so ferociously attacking Apple.
Really quite a small company, compared to Microsoft with their enormous strength
and domination of the desktop. Its not because Apple has been doing enormous
innovation around the desk top. It started with the iPod. Looking at the MP3
player, if youd have asked me early on who was going to win I would have said
Sony. They had all the assets to win and yet Apple took their own ideas in
technology and came up with the iPod. Then they moved on and came up with the
iPhone. It has been extraordinarily successful and its beginning to reshape the
mobile phone industry. Neither iPod nor iPhone were early innovations but Apple
took the game on into iTunes, which is an example of true innovation. Digital
music was effectively a break-through that Apple used to pull together peoples
personal lives and interests, and the result of that was they suddenly began to
gain benefits back in their core market. All of those personal devices and
personal information worked so easily with Apples desktops and laptops, so all
sorts of people began to use Apple hardware and hence Microsofts advertising
campaign. Theyve concentrated on the things that theyre very good at: digital
mastery, design and ergonomics: they research and spend millions with customers
working out how to make devices easy to use. These are lessons for us all.
Theyve leveraged their core skills, taken them into completely different
markets, but brought an enormous benefit back to their core business.

We sometimes mistake an Innovator as the first to innovate but in reality
its not. Take Google for instance. There were search engines before Google, but
Google reshaped the online advertising market. They took the idea of talent and
creating creative space to the limit. They searched the world for the smartest
and most talented people and gave them a working environment to think big
thoughts in a ruthless way that Ive not seen any other organization do. They
have a particular take on the world and are driving relentlessly toward their
vision.

Looking at examples from Asia, who in the western world would want to build a
$2,500 car? What would it do apart from cannibalize your revenues? Sitting in
India, where people cant afford anything else it becomes an absolute necessity.
If I want to grow the business, I need a car at that price, therefore I make
one. You innovate through price points. Bharthi, the telecom provider,
originally talked about making money from mobile users who pay $10 per month for
everything. In Europe, we thought that was a crazy idea. Of course theyve done
just that and theyre one of the fastest growing companies in the world. They
routinely add a million subscribers per month. Their way of doing it takes core
and non core thinking to an absolute extreme. Most of us would struggle with the
thinking that if you want to grow very fast, with low price points so you can
make money from very low usages, you need to concentrate on what you really want
to do. They do two things: marketing and customer care. They have a network, but
they dont own it or build it, they have IT, but they dont own or build that.
They outsource virtually everything apart from acquiring and looking after
customers.

New, and Fascinating

Some things are new. Completely fascinating is Hondas new Hydrogen cell car
which is causing a steam in the automotive industry. In a world of rising energy
costs and fuel emissions this steam-driven car emerges as the vision of the
future. The fuel cell has been the holy grail of eco-motoring because it
produces a smooth, almost silent ride with zero emissions. In a couple of
months time the Americans and Japanese will be driving the first of these
Hydrogen cell powered cars. This is truly a landmark in new car technology and
innovative thinking.

Most of the innovation is incremental innovation that companies drive forward
with their customers. Nokia put out this fantastic piece of software called the
Sports Trackerover a million people downloaded, people used it for everything
from ballooning to motorcycle riding, and social networking, with runners taking
photos of their running route. This is an example of the collaboration between
Nokia and customer being so effective. This chimes in with our philosophy of
innovation.

Standing Still is not an Option

In this environment, standing still is not an option, however, and you have
to respond to the new reality youre in. In the short term in our day to day
lives, our R&D budgets are under threat; we question the new projects in our
mind: can we afford them? Are they the right thing to do?

The speed of delivery of benefits becomes more important. The Return on
Investment question becomes more important. Thinking about the small changes
that can produce the big results becomes more important. Some of the long-term
things perhaps go on the back burner. But innovation around process, new
products, new services has to remain alive and well in companies which are
planning for the upturn as we go into the downturn. Our vision is together we
spark new possibilities for the future. Together is the keyto quote Curt
Columbus the space where innovation is possible is the space between people.
We are relentlessly focusing our culture on creating a company that collaborates
with its customers and their partners to deliver innovative solutions that help
our customers win. Mastering the ability to work with others is at the heart of
our strategy.

The author is Andy Green, CEO, Logica

maildqindia@cybermedia.co.in