Jon Foster-Pedley tells us why it is not the recession.

The greatest risk for businesses is not the recession, but their response.

Many companies today are becoming paralysed as the business environment gets tougher -complexity can create paralysis as the road map isn't clear any more.

When you're going through hell, it's best to keep going. The answers lie in action. It is in action that companies break the patterns, discover new fields and markets, and start to experiment with new thoughts and solutions.

There is caution, and this necessary at times, but there is also a great risk in too much caution. At the end of the day in a competitive marketplace, if you are not innovating and differentiating yourself, someone else will be doing it to your detriment.

Faced with uncertainty, there is a risk that businesses here in South Africa, as with firms globally, will become overcautious, put innovation in the deep freeze, and as a consequence, limit growth opportunities.

The latest global innovation survey by Business Week, released this April, shows that this doesn't have to be the case. Innovation is far from impossible in a tough market - many companies are finding new ways to innovate in a tougher environment and the leading firms in the innovation stakes are approaching the present with ambition, optimism and a determination to shift their game up a gear.

Vijay Govindarajan and Chris Trimble, of Tuck School of Business in the US, point out in the feature that, "it is a tough time to think big. How do you make innovation happen? The details can be difficult, but the starting point is simple. Innovation is inspired by ambition (and) begins with optimism."

It is an ideal time for businesses to end any finger-pointing on why things may not be going well, take a collective deep breath and reassess the landscape open to new ideas and possibilities.

So what are some of the strategies being employed by global companies today to bolster innovation?

Procter & Gamble (No. 12 in the latest Business Week innovation survey) and Vodafone (No. 25) are teaming up with outsiders to share costs and embarking on "open innovation" (collaborating with partners to solve business problems). "We were a bit naive thinking everything could be done in-house," says Vodafone Chief Executive Vittorio Colao in Business Week. Now, he says, "the only way to create a fertile environment for innovation is to have open platforms and leverage them."

This is evident in Vodafone's new web portal called Betavine, which any developer can use to create and test mobile applications. Through it Vodafone gets the inside lane on the latest trends and is able to ensure that exciting new software applications are compatible with its network.

"Smart companies have found that open innovation helps them reduce costs while preserving growth options for the future," says Henry Chesbrough, executive director of the Centre for Open Innovation at University of California-Berkeley's Haas School of Business, in the survey report. Vodafone is also innovating in other areas, such as the use of mobile phones as medical tools, and collaborations with other companies like Dell to design laptops and low-priced netbooks with built-in wireless broadband access.

BlackBerry maker Research in Motion (No. 8 in the Business Week rankings), is actually increasing their R&D staff now and also looking at the healthcare market. Co-CEOs Mike Lazaridis and Jim Balsillie are looking into hospital communications with companies such as Cisco and IBM who are already in this space, and into companies that supply health-care equipment.

Tata (now ranked at 13 in the survey) is another firm forging ahead with innovation and its approach is through intragroup cross-pollination, sparking ideas through internal consultation and sharing. It has designed and launched the $2 000 minicar, the Nano, and is developing a follow-up, low-priced electric car, amongst other products. Tata also sponsors annual awards for the best innovations, as well as a prize for entrepreneurial employees in India - this year they expect 1 000 submissions. Says Murali Sastry, Tata Chemicals' chief scientist, in the survey: "The innovation bug has hit Tata - and India."

This is an interesting point on the opportunities opening up for developing countries, including South Africa. In a recent report by the Boston Consulting Group (BCG) and Wharton School of Business, the authors argue that the crisis in the developed markets has accelerated the move to developing markets because they are lower-cost and now have a track record. They note that the changes afoot are redefining the innovation landscape in China and India in particular.

Is there a secret ingredient to becoming an innovative company? Well no. But there are clear ways in which to increase innovation and new disciplines to practice. You need to create the foundation for "daily practice" that can deliver innovation. While many organisations have people who are very creative, everything does not come together to create a movement. To create an energetic innovation movement (E) you need to focus on MC² :

Making Meaning - a leader of innovation must always, always focus on keeping the purpose and vision on everyone's minds, showing the meaning of work and the larger purpose. 

Caring Consistently - Irvin Yalom, professor at Stanford School of Medicine noted that people's engagement and motivation continued to climb, the more focused attention, respect and empathy they received. And engagement and motivation are the fuel for action.

Committing Courageously - innovation means entering new territory. The outcomes are undefined and mistakes may be made. Nobody creates something new unless they are prepared to make mistakes. The art is to learn to catch them early.

It is not enough to simply have brilliant and talented people and ideas - this must be complemented with competent management and discipline on the business side, or the best ideas can end up with spiralling costs or in the business waste bin. Or even worse, a competitor may usurp your product or service with sharper management and a smarter strategy.

Ambition and optimism are not easy in tough times, but such survival and success demands it, and this is why the role of managers and leaders at all levels is so critical - the first important step to building a more innovative business is learning how to effectively become more innovative in one's own work, life and strategies, as well as gaining a grounded and balanced view of how to assist one's organisations to be more original and dynamic. Your first innovation needs to be on yourself.

This is one of the most important messages for businesses today. Those that hear it and respond creatively to their challenges with ambition and optimism will emerge the market leaders of tomorrow.

*Jon Foster-Pedley is director of the creategy short course at the UCT Graduate School of Business in September (abrahams@gsb.uct.ac.za). He is a faculty member of the UCT GSB and teaches at business schools internationally where he is a visiting professor in innovation, creativity and strategy.

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Biggest threat to South Africa is CRIME A 15 month old baby is shot because her sister doesn't have a cellphone - whos wants to invest in a country with a failed law system and ineffective plice force ? by Thabo on July 08 2009, 14:21 Find this comment inappropriate? Report it

The greatest obstacle to business is CRIME A 15 month old baby is shot because her sister doesn't have a cellphone - whos wants to invest in a country with a failed law system and ineffective plice force ? by thabo on July 08 2009, 14:23 Find this comment inappropriate? Report it

Well said, its tine that we bring back the death penalty - a few rotton apples screwing up the system for everyone by @Thabo on July 09 2009, 08:23 Find this comment inappropriate? Report it

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