Innovation in Turbulent Times

Innovation in Turbulent Times
Darrell K. Rigby, Kara Gruver, and James Allen
Harvard Business Review, June 2009

During a recession, when many companies face declining revenues and earnings, executives often conclude that innovation isn’t so important after all. Better to focus on the tried and true, they think, than to waste money on untested ideas.

However, innovation is both a vaccine against market slowdowns and an elixir that rejuvenates growth.  Imagine how much better off General Motors might be today if the company had matched the pace of innovation set by Honda or Toyota.  Imagine how much worse off Apple would be had it not created the iPod, iTunes, and the iPhone.

What’s the secret to successful innovation in a down economy?  In “Innovation In Turbulent Times,” in the June 2009 Harvard Business Review, the authors, all partners at Bain & Company, assert that when resources are constrained, the key to growth is pairing an analytic left-brain thinker with an imaginative right-brain partner.

They point to the fashion industry as a model.  Every successful fashion company reinvents its product line every season.

It repeatedly brings out products that consumers didn’t know they needed, often

sparking such high demand that the previous year’s fashions are suddenly obsolete.

A fashion company that fails to innovate at this pace faces certain death.  Understanding that, fashion companies have refined an organizational model that ensures a constant stream of innovation, whatever the state of the economy.  At the top of virtually every fashion brand is a distinctive kind of partnership:

  • One partner, usually called the creative director, is an imaginative, right-brain individual who spins out new ideas every day and seems able to channel the future wants and needs of the company’s target customers.
  • The other partner, the brand manager or brand CEO, is invariably left-brain:  adept at business, and comfortable with decisions based on hard-nosed analysis.

The authors call these alliances “both-brain” teams.  Both-brain teams have led to many innovations in other industries.  Consider three examples:

  1. The former track coach Bill Bowerman developed Nike’s running shoes; his partner, Phil Knight, handled manufacturing, finance, and sales.
  2. Howard Schultz conceived the iconic Starbucks coffeehouse format, and CEO Orin Smith oversaw the chain’s rapid growth.
  3. Apple CEO Steve Jobs has always acted as the creative director and has helped to ...