I’m reporting from the Center for the Polyurethanes Industry’s Technical Conference in Nashville, Tenn. The event’s keynote speaker Monday morning was Jim Carroll, a leading futurist and strategic consultant to Fortune 1000 companies and professional organizations, who discussed the perils of ignoring innovation during an economic downturn and the role polyurethane can play in innovation and product applications.
The world is changing rapidly — digital cameras are obsolete within six months of coming to market, data is multiplying, taking new forms and requiring more attention and management daily, roughly two-thirds of all kindergarten students are destined for a career that doesn’t exist yet, and, for many college freshmen, half of what is learned that first year is obsolete by the time they graduate.
Those examples were Jim Carroll’s way of demonstrating one-half of the rapid change that prevents companies from embracing innovation. The other half, of course, is the economic downturn and uncertain, if not stalled, recovery. But when times are tough, innovation is what will save companies, he says, especially in today’s dynamic of “fast” companies trumping “big” ones.
Today’s pessimistic attitude toward the economy has two misguided elements, Carroll says. The first is that survival excludes innovation because of “short-term volatility,” forgetting the Bill Gates adage of “We always overestimate what will change the next two years, and underestimate what will change the next 10.”
The second flaw is in thinking that today’s recessionary climate is unprecedented and unable to be overcome. Carroll notes that he has been through seven recessions and expects several more before he retires. Since the 1970s oil-sparked downturn, he says, recessions have had this in common:
- 60% of companies “barely survived”
- 30% of companies failed
- 10% of companies adapted, were ready to strike when the recovery came and became “breakthrough performers”
Both flawed modes of thinking lead to what Carroll terms “aggressive indecision,” where volatility is considered “the new normal” and innovation is “on the back-burner.” The truth, he says, is that American manufacturing has aggressively adapted in recent years, gaining agility and flexibility in production, planning, logistics and delivery, which opens new opportunities, preserves business that might otherwise go overseas and, in one example, actually regains business that had been diverted to China.
Innovation, thinking positive and staying strong sounds great, but it’s only a first step. In practice, he says, companies know that today’s climate demands aggressive, crushing competition on price, which is sometimes impossible to overcome head-on. Instead, he says, some companies refuse to play that game, instead retailoring themselves and their products on adding value, exploring specialty offerings, customizing production, delivery and aesthetics.
Fortunately for the audience at CPI, polyurethanes are a natural avenue for this approach; Carroll notes polyurethane’s importance to wood-fortified bicycles in California, quickly assembled customized homes for senior citizens and others, Apple’s world-famous products, among others.
Innovation in the workforce
Finally, Carroll says, the workforce must change to embrace innovation. Everyone is responsible for new ideas, overcoming institutional skepticism and inertia, and seeking cost efficiencies, new markets and “revenue where it didn’t exist before.” Hiring and management must also change, he says, if manufacturers wish to attract the skilled labor they desperately need — embracing flexibility in thought, processes, hours and location.
Baby boomers ask “What do you do for a living?”; today’s young workers ask, “What do you like to do?” says Carroll, and that fundamental difference in approach must be incorporated in any corporate innovation efforts.