This week’s GDP figures confirming a deepening of the recession inevitably renew pressure on the government to justify its austerity programme, and there is no doubt that the same challenge will be put to business leaders. Tough times mean managers have got a harder job.
So what do we say to our customers and stakeholders when they ask us how we’re going to squeeze growth out of a tough financial climate? The hackneyed answer is something about being ‘more agile’ and ‘innovative’. That’s corporate jargon and it sends most people to sleep. But when I ignore the cliché and look at the idea behind it, I actually believe it makes sense.
Large businesses can be guilty of getting caught up in their own processes, meaning good ideas are quashed or ignored altogether. ‘Sit tight and ride out the storm’ is too tempting an approach when the economic seas are rough. But this recession and the austerity drive is set to go on for years, so jargonese words like ‘innovation' are important.
Here are three ways I believe businesses can innovate and get some growth despite the double-dip.
Don’t just trot out a new product – tweak the way you actually do business. Innovation isn’t just about products or services, but about making behavioural changes and introducing new ways of doing things. You need to frequently and deliberately challenge your established business model, scrutinise the way things are being done and rip them to shreds if you can see a better way.
Invest in innovation not by acquisition but by incubation – in other words, get a startup on board instead of just acquiring an established company as a new ‘wing’. This is nothing new in the digital services space. Plenty of companies are incubating start-ups and getting first refusal on their ideas. But more of Britain’s bigger companies in other sectors should be doing this and using the intellectual outputs as opposed to cash generation to grow their businesses.
Young people and their digital skills hold the key to getting innovation back. Young job seekers have skills that large swathes of workers don’t. They are digital natives. The blogger, the social media manager, the app developer – these three buzz jobs didn’t exist 10 years ago. Now is the time for young people to capitalise on the fact that they have grown up in a digital world. It is these skills that we need to help us pull the economy out of recession.
Innovation holds the key to growth, but to have any chance of succeeding all businesses need to look within their own organisation to examine what they could be doing to foster change. Innovation needn’t be daunting and ethereal - it can be wholly tangible. It is simply applying something new, and we’re all capable of that.
Mark Evans is chief financial officer for Telefónica UK