12 Dec Innovation ethic: Koulopoulos sees positive signs in corporate America
Editor’s note: There is broad disagreement about where the American economy is headed, especially the latest quarterly growth at a robust 4.9 percent, and with some predicting imminent doom because of the sub prime mortgage crisis. If the economy does back track, what will the impact be on corporate spending and commitment to innovation, especially with economic competition from China and India showing no signs of abating?
WTN caught up with author and futurist Tom Koulopoulos at our recent innovation workshop in suburban Milwaukee. In this Visions interview, Koulopoulos says companies that “get innovation” are taking some promising steps to embed the innovative process into their organizations. Trouble is, only about 15 or 20 percent of America’s corporations can identify the core competency around which Koulopoulos believes they should innovate.
WTN: Companies tend to kind of pare back on certain investments, things like advertising, if the economy goes south. Even within innovative companies, what is the impact of a slowdown on the resources they apply to innovation?
Koulopoulos:: One way to look at it is to think about how many resources or quantity they put on it, how many dollars they invest in it. Another way to look at it is to say they have a resource that is dedicated to it. What I am seeing, and this is surprising even me, I’m seeing more companies actually putting people in positions of authority with respect to innovation. They are not necessarily new people, they are folks that are already on staff, but they are also carrying that badge.
I recently did a search on my own database of 20,000 contacts to see how many folks were now carrying the innovation title, and I was astounded. I have 3,000 people out of 20,000 that had innovation in their title somewhere. Five years ago, it would have been nowhere to be found. Three years ago, there would have been maybe a few dozen with that word in their title.
So that I think is an indicator, and these are not R&D folks, engineering folks. So one way to approach the question is to say companies are getting smarter. They are becoming more innovative about how they innovate, so rather than throw more money at it and just throw more people at it, they are creating a point of responsibility for innovation. I think that’s often a good starting point. I think that’s often enough to get you going down the right path.
That responsible person can now begin to track and measure the impact of innovation. Once you track and measure the impact, now I don’t care how tight the organization is, if you can show ROI, we’ll invest in it.
WTN: The value becomes more transparent?
Koulopoulos: The value becomes more transparent, it becomes apparent. Up until now, we’ve just accepted that innovation is one of these soft and fuzzy things that can’t really be measured – we’ll measure other things. So once you begin to measure that, investment in it will follow.
WTN: So you don’t necessarily think a slowing economy will lead companies to cut back either time, money, or personnel.
Koulopoulos: What I’m seeing is the opposite affect. I’m not seeing companies invest any more or less in R&D. There is this traditional notion of R&D as the only innovation engine. R&D is not the only innovation engine. So I am seeing cutbacks in R&D in several companies, but I’m concurrently seeing new positions – chief innovation officer or innovator of some sort – for whom it is the responsibility to nurture, to measure, to otherwise track innovation efforts. I’m seeing that increase in part because as the belt tightens, we’ve got to figure out ways to do what we’re doing – faster, cheaper, better – despite the belt tightening.
I’m talking primarily about the big corporate environment. I think in smaller companies, what you tend to find is that the innovation title doesn’t need to be carried by anyone necessarily. It’s more of a natural part of what the company does, and it is the tacit acceptance that in a smaller company, we’ve got to invest in it to compete with the larger companies. It’s the larger companies that I think this really applies to, and they are the ones that are cutting back on R&D, by the way. In a recession, that’s going to happen. They are going to cut back on R&D, but they are also going to find creative ways that they can squeeze more out of their existing resources.
WTN: You’ve indicated that organizations should innovate around their core competency. What percentage of corporate America would you say actually understands what their core competency is?
Koulopoulos: In my experience, and this is going to sound dismal, but in my experience, if you ask corporate execs, “tell me what your organization’s core competency is” and pin it down to a few sentences at most, the minority, maybe 15 or 20 percent, will come up with a clear, crisp answer. I’m probably being generous. It doesn’t mean the rest don’t have a core competency, it means that they haven’t articulated it. They haven’t advertised it internally. I think it’s a real liability, not to have done that.