Saturday, February 18, 2017

Innovation Loves Stability: how to Thrive in Trump’s America

Innovation is often seen as synonymous with change and disruption.  It follows logically, that to spawn innovation, you want an environment that is dynamic and ever-changing.  However, in creating an organization that steadily and reliably creates disruptive innovation, I will argue that the opposite is true.  Innovation loves stability.

Stable governments create thriving economies.  In order for businesses to develop products, they need to believe that the world two years from now will be similar enough to the world today in order to make that bet.  Stability provides trust in the future which allows lenders to finance business ventures.  Truly innovative products and services can take a decade to bear fruit, and a government which provides the stability to allow those companies to invest, will reap the rewards.  Constantly shifting tax incentives forces companies to take a short term view and focus on safe bets.  Innovation grinds to a halt.

Boy Scouts Win

“Be prepared” is the Boy Scouts’ credo, and it should be yours too.  Our intuition tells us that great innovations occur during times of great thrash.  Wars, while horrible, create great innovation.  But look a little closer.  Inventing new technologies takes time and technological infrastructure.  Times of great change provide the market need and opportunity, but the groundwork for the innovation was laid years and sometimes decades ahead of time.  When the world is changing too much, people hedgehog and go to their strengths.  For the prepared, that strength is the pipeline of innovative technologies that have already been sown and are now ready to be reaped.  In times of stability, the innovation is created.  In times of chaos, the innovation is leveraged, scaled, and monetized.

How to Succeed During Times of Instability

Our current world, and Trump’s America in particular, are showing signs of increasing instability.  How can you, not just survive, but thrive?  When everyone is running one way, try walking calmly in the other direction.

As mentioned before, instability will incentivize short term thinking.  This is true for large company R&D, venture capital, and for those who rely on direct government funding.  There will be a rush towards quick wins and sure bets.  However, many companies are not fully reliant on short term government funding.  Those should realize that they have a huge advantage.  There will be a gap arising in long-term bets, and with this lower supply, demand will eventually increase.  This means that in this coming time of instability, for those who have cash to spend on longer term R&D, the value of each dollar spent will actually increase.

Creating Trust in Your Organization

Let’s bring this down to the individual level.  You have a team that you want to be innovative.  How do you do this?  A common misconception is that you should “keep them on their toes” and keep them uncomfortable.  But be careful.  Fear motivation will force short term innovation.  This is good for harvesting the fruit of previous work to get a quick win, but is unlikely to create sustainable innovation.
What an organization really needs to do is to create trust. Don’t force your innovators to think about politics and about losing their jobs in the next six months. There is a conservation of conservatism at play here. People without any stability in their lives will seek stability. Those with lots of stability will get bored and seek thrills. Giving your innovators stability will allow them to take more mental risks and think outside the box. To keep the pace up, you can set short iterative milestones and use competition to generate positive excitement rather than fear. Do this right, and you’ll create a sustained pipeline of innovation that you can tap when you need it most.