Harvard Business Publishing

I agree that this is going to be a year that will be regarded as game-changing. Social media is changing the entire landscape of the Web, and I believe that '09 will see a number of players emerge as true powerhouses (with actual revenue streams) and lots of smaller companies falling away. great post!

If our current business system is so great, why do we have the problems that we are currently experiencing?

What businesses need now is a business-system reinvention so that organizational-healthy policies are created and there is a generic business system that orchestrates scorecards, strategic planning, and business improvement. This 21st century governance system needs to help organizations move toward the achievement of the 3 Rs of business; everyone doing the Right things, and doing them Right, at the Right time.

In a 9-step process for achieving this governance orchestration, strategy creation is step #5, not step #1; i.e., after structurally evaluating 30,000-foot-level value chain metrics and blending analytics with innovation.

Great article. 2009 is a scary time for people but anyone willing to take a deep breath and a hard swallow, will come out of this in full force. I suspect that Jeff is right about some really big (and positive) things happening as a result of this recession. Keep up the great writing Jeff.

The old (but wise) saw, "The men who manage the men manage the men who manage the machines, but the men who manage the money manage the men who manage the men," remains true enough.

But now we must ask as never before, who manages the men who manage the money? In 2009 answering that question is the only economic engine that will matter.

So how are you managing the men who manage your money?

While I agree with the sentiment that 2009 will bring unprecedented innovation, I don't agree that this is more than a correlation for the present and past periods cited.

The great innovations came not from a desire to overcome recession, but from the desire to meet human needs. Recessions/panics do create an environment conducive for innovators to be taken more seriously, since these human needs aren't being met by the shaken system and that the charlatans have been swept out with the tide.

@scottyhendo

Plato asserted, “Necessity is the mother of all invention.”

It seems his maxim continues to hold true in the harsh realities of 21st century economic upheaval given Stibel’s interesting historical survey.

Stibel asserts, “2009 is shaping up to be a trigger for an unprecedented surge of innovation that may be one of the most important turning points in the last 100 years… Times of economic contraction create dislocation in free markets. Smart entrepreneurs recognize this market opportunity and create ‘engines of change.’”

In one sense you may have experienced great pain this past year in terms of job loss or undermined financial security. In another sense, your need may strangely force you (free you?) to search out, spot and act upon opportunities you would not otherwise have noticed or done.

How might we develop eyes and ears for unearthing and creating our own opportunities in this time of dislocation and upheaval?

On your side,

- Karl Edwards

I’ve noticed the opposite is true as well. Invention is often the mother of necessity. Don’t believe me? Try living without your mobile phone.

I wholeheartedly agree and have a personal story that at a micro-level may explain the phenomenon of increases in innovation in bad economic times.

I've been fairly happily employed in the high-tech industry for twenty six years but recently lost my job and hadn't been able to find another.

I've always been an innovative engineer - seeing the world as a series of problems seeking solutions, many of which I've tinkered with over the years. But with the comfort of a well-paying and interesting job working on other people's solutions, developing some of MY solutions to the point of commercial viability just wasn't worth the risk.

After many months with no job offers, it became clear to me that my odds of finding another job were lower than my odds of successfully starting a new company to commercialize one of my best solution ideas. So a few months ago I decided to go-for-broke and spend all my time and remaining money developing this business idea. While it's been a lot more work than any job has ever required, this new company and product really IS taking off.

Had the economic situation been better, I'd have never faced the risks involved in starting a new venture. When you have no better options, innovative risky ventures start to look pretty good. I suspect thousands of other people now find themselves in exactly the same situation. Add us all up and some very innovative things will come out of this economic downturn.

Great thoughts. Hamish brings up an excellent point (and a great personal case study) about one of the primary reasons downturns spawn innovation. It is only natural to fall into a comfort zone when all is good. Worse, it is human nature to be risk adverse. So when times are good, very few people or companies are willing to take the risk and try something new. Everyone always feels that mistakes are too costly to make when things are good.

But when things get bad, the mantra turns to “the greatest mistake a person or company can make is to be afraid of making one.” Wouldn’t it be nice if we all thought that way, all the time?

There is a reason startups are a young person’s game: the older you get, the more you have to lose. But when times get tough, people increase their risk profile, if for no other reason than they have less to lose and few alternatives. That is why—as Scott pointed out—Plato mused that “Necessity is the mother of all invention.”

Best,

Happy New Year Jeff!

Some interesting history in this post. Let's hope 2009 will be a year of innovation not just in technology, but also in corporate culture. Nearly a decade into the 21st. century, now isn't the time to be doing things by the playbook of the 20th. century.