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What happens to innovation in your company during difficult economic times? Are the programs reviewed? Are they cut? Or are they given a redoubling of focus? Think, for example, to projects that aim towards service innovation over product, manufacturing or other kinds of innovation. Which project survive and which are allowed to whither?

It strikes me, that in a time of financial crisis and global uncertainty, focusing on service innovation (and its management) may well assist businesses navigate the crisis, but also, importantly, position them for competitive success as the economy recovers. But as Bruce Nussbaum in Business Week suggests “the failure to employ the methods of innovation and design thinking to the current financial mess is prolonging and deepening the crisis”. That is, we cannot continue to apply old-thinking solutions to newly emerging (and confounding) business problems.

Of course, the trouble is often defining innovation. The Australian Business Foundation has recently published Inside the Innovation Matrix, containing a series of papers that focus on the human dimension of innovation which, while the “least secret ingredient in successful innovation”, is also the “least well understood”. 

One of the papers caught my eye, particularly in relation to the power of communities and informal networks. John Steen, Sam Macaulay and Tim Kastelle discuss the way in which “social network analysis” can be used to assess, manage and measure the effectiveness of innovation networks. And with the global economy facing a systemic failure, innovation networks may provide a comprehensive, flexible and responsive model.

They investigate two network models:

  • The Ego Network: the localized objects and “actors” that a person is connected to
  • The Global Network: all the “actors” and their ties within a system

The ESME project is an interesting example of how these two networks can be activated simultaneously to achieve an outcome. The ego network is activated to source and connect participants and then, as the idea moves from concept to implementation, the global network kicks in to help align business thinking with a diversity of viewpoints. The simultaneous activation of these networks redoubles the focus on innovation and accelerates it towards a result.


The same process can be applied to smaller networks within an organization/business unit – allowing for “faster failure” as well as accelerated success. By continually feeding lessons learned back into the innovation process and pruning the weaker projects, companies will, as Scott Anthony suggests, have the “greatest chance of emerging from today’s troubling times as viable competitors”.

As Puneet Supal explains, “successful innovation [in companies] … is tied to their business processes and the significance they place on the business process perspective”. So when considering your innovation portfolio, think about where you can spend a little to gain a lot. Look again at the networks and the people who drive them, and you might find unrealized value lurking.

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  1. Former Member
    Hi Gavin,

    The term INNOVATION NETWORK has the potential to ride the current “not so rosy times” in the business. I can already see that people are realizing this and some of them do believe that when the going gets tough it is better to get together and figure out a solution. But when it comes to cutting costs, business sometimes are very very reluctant to spend on anything new. 

    1. Former Member Post author
      Thanks Avik … indeed, cost cutting comes into play here. The best thing about active innovation networks is that they can also drastically reduce the risk profile of your innovation projects by attracting diverse, expert opinion. Small investments can pay off in very big ways.

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