I have written a number of posts dealing with the current financial situation and in those posts I have stressed the central role of job creation in getting the world’s economy on the road to recovery. I have also asserted that helping entrepreneurs with innovative ideas and a sound business plan is one way of creating well-paying, sustainable jobs. An article in BusinessWeek insists that “federal relief alone won’t sustain the economy. A new Cabinet position would help to sharpen the focus on the innovation needed in the U.S.—and worldwide [“Obama Needs a Secretary of Innovation,” by Thomas D. Kuczmarski, 11 February 2009]. Kuczmarski is not a journalist, but founder and president of Kuczmarski & Associates, an innovation consultancy based in Chicago. He writes:
“We are experiencing more than an economic setback. In effect, it’s an economic reset. This requires a reexamination of government, too. As President Barack Obama begins the hard work of running his new Administration and the country, I suggest that he include a new position in his Cabinet designed to sharpen the focus on changes needed to stabilize and revive the nation’s economy—a Secretary of Innovation.”
The language Kuczmarski uses reminded me of the arguments that Tom Barnett was making when I hired him as Enterra Solutions’ Senior Managing Director. At the time, Tom had his own consulting group known as The New Rule Set Project. Tom argued that the end of the Cold War had ushered in a new wave of globalization that required a new set of rules by which the global economy would function. He often used the term “ruleset reset.” Such “resets” maintain the best of the past, but adapt for the future. That is basically what Kuczmarski is arguing needs to be done. He continues:
“I often debate with chief executives about the importance of hiring a chief innovation officer. They often don’t see the need. They argue that innovation is everybody’s job. Or they confuse it with research and development and say it already is being done. My point—and it applies to economic recovery as much as it does to product development—is that innovation is a multidisciplinary and disciplined process that needs to be managed and led. If everybody is in charge, then nobody is, and little gets accomplished, if anything at all. Or worse—and this may sound familiar to anyone who has followed Washington—there is a lot of action based only on guesswork, not on a careful exploration of what really is needed. Now, in the midst of recession, companies need to innovate more than ever. Yet too many are choosing instead to hunker down, postpone investments in R&D, and avoid risk-taking until the market has stabilized. The companies that continue to build an innovation culture and make modest investments to keep the innovation pipeline full will be the ones that enjoy a big competitive advantage a few years from now.”
I use similar arguments when I talk with leaders in emerging market countries about Development-in-a-Box™. I try to convince them that investments they make now will position them better when the economy does turn around. I also encourage them to establish a business climate that supports entrepreneurial activities. Kuczmarski continues:
“The overall health of innovation in the private sector is ailing, and a good push from Washington to help get it going again will be tantamount to our future economic success. A recovering economy does not come from ‘relief packages’ but rather from the creation of businesses, products, and services that, in turn, create jobs and fuel growth.”
As I wrote in a post entitled Globalization and Recovery, “recessions feed on themselves because businesses shed workers creating fewer consumers which causes greater concern, less demand, and more layoffs. The key to ending the current recession is job creation. Legislators around the globe who are considering stimulus packages should ask themselves the same question about every piece of legislation they see: will this help create jobs? I know that many of the bills will include items aimed at saving jobs in dying businesses, but in the long run, those jobs are going to be lost anyway.” I believe that is what Kuczmarski is also saying. He believes that a government department whose main purpose is fostering a entrepreneurial sector would be good for the present and essential for the future.
“The Secretary of Innovation should be responsible for two major tasks. The first is to lead a systematic national innovation process, bringing this powerful strategy to bear on the government’s role in unclenching the lockjaw of this economic crisis. The second is to create a national innovation mindset, reinvigorating innovation in the private sector. Innovation is one of the most abused buzzwords of the past decade. It is a term with enormous appeal, suggesting (without having to deliver) breakthrough thinking and new ways of approaching problems. It implies action where, as we have seen time and again, none exists. How many times have you seen a reference in corporate advertising to “innovation” or heard an embattled CEO talk about his company’s innovations as if you could buy them by the dozen? Innovation is not invention, nor is it the result of a eureka moment. The innovation process, properly done, begins with research to identify needs, wants, and problems and then addresses them in a way that draws upon many different disciplines and functions. Innovation breaks through a business-as-usual mindset, revealing an array of opportunities with a high probability of success.”
Kuczmarski and I agree that innovation involves more than coming up with bright ideas. In a post entitled The Cult of Innovation, I wrote: “There is a big difference … between ideas and innovations. Ideas without actions are simply dreams and never result in that ‘head thumping’ moment. Innovations are ideas in action. All innovators know that the path between idea and innovation is a difficult and often long one. … Put into a mathematical formula, innovation = new X valuable X realized. If any of those parts is missing (i.e., = 0) then you can rest assured whatever you’re discussing is not an innovation.” In other words, an idea may be new, but not valuable and therefore not innovative. An idea may be new and valuable, but if it’s not realized it again fails the test of being innovative. Kuczmarski’s point is one that Thomas Edison made a long time ago. Edison famously remarked, “Success is 10 percent inspiration and 90 percent perspiration.” He also said, “Opportunity is missed by most people because it is dressed in overalls and looks like work.” Kuczmarski believes that a Secretary of Innovation could help stimulate some of the perspiration and hard work that is necessary to create the new product lines, companies, and economic sectors that will define the future. He also tries to allay the fears of conservatives that his suggestion would create another bloated bureaucracy.
“The process of innovation can have just as much to do with rebuilding a devastated economy as it does with rebuilding a product line. It needs someone responsible for leveraging the talents, skills, technologies, and capabilities that we have as a country. It is imperative that establishing the Secretary of Innovation not signal the start of a new bureaucracy. The model would be similar to the corporate CIO: the person responsible for assembling cross-functional teams in the search for breakthrough ideas so that innovation is seen as an organizationwide effort, not the product of yet another silo.”
When I started Enterra Solutions, one of the challenges I wanted the company to tackle was sharing information across organizational silos. One of the things that attracted me to Tom Barnett’s ideas was that he was arguing for greater governmental interagency cooperation, including the sharing of information. Kuczmarski is also arguing that artificial barriers must be taken down and that greater cooperation must be fostered. The Secretary of Innovation would, in effect, create an environment in which “the Medici Effect” could blossom. Frans Johansson, who coined the term, and others have argued for years that some of the most interesting and innovative work is accomplished when people from different backgrounds get together to solve a problem. Kuczmarski agrees:
“Problems in the economy are enormous. … We’d be better off if the new Administration employed a process that cuts across the sectors of government; by doing so, Washington could recognize that solutions to health-care and environmental issues would also solve many of the nation’s economic problems. … Beyond solving major problems within the public sector, the Secretary of Innovation would team up with the private sector to foster a national innovation mindset. The U.S. is, after all, an economy based on private enterprise. The day will come when the government backs off and business reasserts its leadership. With an innovation mindset, companies will be motivated to invest in technology, R&D, and new products and services. To help shift this mindset, our government might create tax incentives or perhaps national incubators in a number of cities to encourage the efforts of entrepreneurs. It might involve a U.S. Innovation Award program to recognize and inspire innovation across all walks of life. The program would signal the power of innovation, with an impact similar to that of the Malcolm Baldridge National Quality Awards. It is easy to talk about innovation in addressing the enormous challenges facing this nation. That is innovation as a buzzword. The Secretary of Innovation would help ensure that the full power of the innovation process will be used in the vital work of stabilizing the economy and for advancing innovation in the private sector.”
My biggest criticism of Kuczmarski’s idea is that it doesn’t address the 800-pound gorilla — money. I’ve seen many attempts to create an “innovation” entity (be it a czar, officer, chief, office of, group, etc.) that have fallen flat because those involved had no fiscal authority. If you want to know where to find power and authority, follow the money. A Secretary of Innovation with no power to divert funds, provide grants, or cancel programs would be a toothless tiger. Having said that, I nevertheless believe that Kuczmarski’s idea deserves to be explored.