During a Recession, Think Radically | Big Think

During a Recession, Think Radically

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There’s no better time to innovate than during tough times, says management guru Gary Hamel, especially because the best ideas often require the least financial investment.

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Gary Hamel:

Over the past twenty years, Hamel has authored 15 articles for the Harvard Business Review. He has also written for the Wall Street Journal, Fortune, The Financial Times and many other leading publications around the world.

Hamel's books, Leading the Revolution and Competing for the Future, have appeared on every management bestseller list and have been translated into more than 20 languages. His latest book, The Future of Management, was published by the Harvard Business School Press in October 2007 and was selected by Amazon.com as the best business book of the year.

Since 1983, Hamel has been on the faculty of the London Business School where he is currently Visiting Professor of Strategic and International Management.

As a consultant and management educator, Hamel has worked for companies as diverse as General Electric, Time Warner, Nokia, Nestle, Shell, Best Buy, Procter & Gamble, 3M, IBM, and Microsoft. His pioneering concepts such as "strategic intent," "core competence," "industry revolution," and "management innovation" have changed the practice of management in companies around the world.

Hamel speaks frequently at the world's most prestigious management conferences, and is a regular contributor to CNBC, CNN, and other major media outlets. He has also advised government leaders on matters of innovation policy, entrepreneurship and industrial competitiveness.

At present, Hamel is leading an effort to build the world's first "Management Lab." The MLab is a pioneering attempt to create a setting in which progressive companies and world renowned management scholars work together to co-create "tomorrow's best practices" today. The goal: to radically accelerate the evolution of management knowledge and practice.

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TRANSCRIPT:

Question: What’s the secret to innovation?

Gary Hamel: Today everybody knows that innovation is important and in a downturn, it's more important than ever before, because the only way that you can kind of maintain your growth trajectory, the only way you can outperform your competitors in a downturn, is if you're out innovating them. And the good news about innovation is that there's very little correlation between investment and return. There are companies that have ploughed a lot of money into some new technology. Think of all the money the auto companies have put in over the last few years into fuel cells. It may or may not pay off. I think of Motorola with their big satellite phone project a decade ago, Iridium. You could invest a lot of money in something and have almost nothing to show for it.

On the other hand, there are a lot of examples where people have come along with fundamentally just a new idea, a new concept, and it was so powerful, so intriguing, it takes off with very little investment at all. Facebook, for example. I don't know what it took to start Facebook as a company, but it's probably a decimal point in the average Fortune 500 organization.

So that's a great thing. I mean, innovation is much more about the quality of the idea and its power. In fact, the more truly innovative an idea, usually the less money you need to blow it into the marketplace because it's going to sail with its own momentum. People are hungry for the thing, it creates new value, meets new needs. It's going to be easy to sign on business partners who will help you to defray the risks and so on.

So rather than thinking that a recession is somehow toxic to innovation, a recession is a perfect time to turn up the heat in the organization, to really be asking people for ideas that are more radical. Not necessarily more risky, not things that require more investment, but things that really do have the power to change customer expectations, industry economics, have the power to change the basis for competitive advantage. We need those ideas more in a recession than in any other time.

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