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Crisis-Driven Innovation Explained

Prof. John Bessant: “I first wrote this blog as the basis for a talk in the UK last year when the only ting worrying us was the ‘crisis’ of Brexit.  Now we’re facing some much more serious challenges – and yet the inventive responses from communities trying to think outside the box suggests that the core themes do hold up.  And may offer us some hope during these troubled times. You can read the original article here.”

Listen to the podcast about Crisis-Driven Innovation with Prof. John Bessant.

Imagine you’re flying over the Sahara desert.  Your plane runs into a sandstorm, the engines splutter and then die, one by one until there’s just the sound of sand rasping against the windows.  The nose dips, you feel a dreadful lurching in the pit of your stomach, the world outside the windows turns black, and you crash.  Miraculously no-one is hurt.  But the plane is smashed, the radios destroyed and your last known position was over 100 miles from anywhere. What do you do?

Fortunately this isn’t real – it’s the plot of a novel called ‘The flight of the Phoenix’.  But it does offer a powerful reminder of the ways in which human creativity can get us out of trouble.  In this particular scenario there is just enough of an airframe left, plus a trickle of fuel and one engine which could be coaxed back to life.  The plane had carried a strange mixture of passengers with different skills and experience,  including an old man who used to design aeroplanes. To cut a long story short, they manage to assemble a new aeroplane which just holds together long enough for them to fly back to safety  – the ‘Phoenix’ of the title.

That might be fiction – but we don’t have to look far to see similar stories playing out in real life. Crisis provides a trigger for innovation, not least because doing nothing is not an option even if conventional solution pathways are blocked. For example:

When Haiti was hit by a devastating hurricane in 2010 much of the city of Port-au-Prince lay in ruins. Within a very short time aid workers and locals began to piece together makeshift solutions to their problems, using resources such as mobiles phone and a cellular connection. Solutions co-created and diffused included:

  • creating an ‘instant’ banking system across which aid agencies could distribute cash to buy food, medicines and other essentials
  • open street mapping to provide up-to-date information about affected populations, damaged infrastructure, key emergency locations, etc.
  • reuniting displaced persons using the phone network as a database and communications centre
  • deploying 3D printing to quickly produce badly needed spare parts for hospitals – and mobilising an army of online volunteer designers to supply the key software
  • providing translation services to render urgent information in regional dialects – again with the help of an international network of volunteer translators

Back in 1943 at the height of the war a small team at Lockheed’s Burbank factory were given the apparently impossible task of designing and building a jet aircraft within six months. They’d never built a jet before so there were no designs to work from, the technology was unknown, the only engine was in the UK and wouldn’t be available to them to experiment with until near the end of the project – and the factory was already working flat out on producing bombers for the war effort.  Kelly Johnson was the manager appointed to run this project and one of his first tasks was to rent a circus tent to work in because there was no space available for his team!  Time was of the essence – the Germans were already flying their Messerschmidt 262 fighter at speeds twice that of allied aircraft and had been working on jets since 1938.  Yet despite all these barriers his ‘skunk works’ team achieved their target with weeks to spare, producing and safely flying the Shooting Star.

Toyota wasn’t always the great car-maker we know today. Back in the post-war years Japan’s slow and painful recovery was hampered by resource shortages, its physical infrastructure still severely damaged and skilled labour in very short supply. All of this on an island economy which had to import most of its key industrial resources. The stuttering local car market was small and fragmented; under these conditions it was impossible to run a car factory in the profligate style associated with mass production.  Working under these constraints forced experiments towards a radically different approach to manufacturing emphasising reduced waste at every stage.  From these unhappy beginnings (and a long learning process) the idea of ‘lean’ was born, one which went on to become one of the most powerful process innovations of the twentieth century.

Crisis also plays a role in the world of the arts. For example, every time the Royal Shakespeare Company performs it faces the challenge of short time scales and the need to find something new in a repertoire limited to 37 plays.  And it has to take into account that they have all been performed many times over the past four hundred years.  Their challenge – which audience numbers and critics reviews regularly suggest they succeed in – involves finding new ways to push the edges of the audience experience.

Something is going on here which is clearly not about having lots of resources  – instead it’s often the shortage of them which forces a different mind-set.  It’s also about roadblocks – the obvious way ahead is impassable and so we need to find a new route.  Crisis triggers a different kind of search, one with a number of important characteristics:

  • Ends not means drive the process – the presence of a challenging vision compels innovation, even if the ways of reaching the goal are unclear
  • Extensive search – because the normal pathways may be blocked the search for solutions pushes out into new and unfamiliar territory
  • Reframing – being able to see the problem from a fresh perspective
  • Creatively combining – improvising solutions from what is available, often in novel configurations
  • Experimental learning – improvising and building on what emerges, early prototyping, fast intelligent failure
  • Tolerance of imperfection and incremental continuous improvement towards an optimal solution

Crisis provides a trigger for thinking differently.  There’s a clue in the etymology; the word comes from  the Greek and  means ‘turning point’.  Not necessarily a negative thing but a change in direction.  The Chinese characters for crisis capture this well; the word is assembled from two pictograms, one for ‘threat’ and the other for ‘opportunity’.

Psychology tells us something about why crisis can provide a useful trigger.  Human beings have evolved as problem-solvers – but we’re also rather lazy.  Faced with a challenge our first response is to search our repertoire of existing solutions and try to pull one off the shelf.  We might need to adapt it a little but we generally like an easy ‘plug and play’ strategy.  But if that doesn’t work we engage in an active search for something new.  We might feel annoyed, frustrated, might even  grumble about the work we’re being required to do – but the chances are we will eventually end up with a new solution.  This isn’t just a feeling; research shows that the brain is actively forcing new neural connections and pathways during the search process.  In studies at the University of Amsterdam it appears that obstacles and constraints actually help the creative process.

So sometimes creativity doesn’t flourish as well as it might in comfortable resource-rich  environments.  It seems to thrive under difficult conditions; as Google (and many other organizations) has come to recognise, ‘creativity loves constraints’.  One reason our thinking often stays inside the box is that it’s very comfortable there!

That’s where crisis comes in – it forces us to move, not least because the ‘normal’ trajectory is blocked off in some way and we have to follow a diversion.  Necessity becomes a rather harsh Mother of invention.

Research on problem solving not only helps us understand this challenge but also suggests ways in which we might break out of the comfortable box.  For example, Carl Duncker’s famous candle experiment reminds us about ‘functional fixedness’; we make assumptions about what we can and cannot use.  Given the problem of sticking a candle to the wall to provide illumination and supplied with only drawing pins and matches, many solvers fail to see that they might be able to make use of the box in which the drawing  pins or matches are supplied.  Similarly Gestalt theory teaches us that we are pattern recognisers – and sometimes seeing alternative patterns is hard work until we receive a nudge.  Think about those 3D pictures which take time to reveal their ‘hidden’ content, or familiar brain -teasers which remind us of how focusing on one pattern blocks out our ability to see an alternative.   Or the phenomenon of mindset – einstellung –  which means we often try to apply familiar solution approaches to unfamiliar situations.  Essentially it’s a reminder that ‘to a man with a hammer every problem looks like a nail’ – and that there might be alterative tools we could use.

So how might we use some of these insights and construct a toolkit to help our organization use crisis as a way of triggering radical innovation?  Here are five possible pathways to explore:

Build a compelling vision

A familiar theme in change management is the role played by burning platforms. They focus the mind wonderfully on the need to change and the direction we should take.  Of course the trouble with burning platforms is that they are hot; the trick is to avoid getting burnt.  This is where simulations and thought experiments can play a role.  Creating a compelling vision to focus attention while still giving us room to explore.

One way of doing this is through the use of ‘futures’ techniques like scenario planning.  Scenarios are rich narratives – stories, – in which we can explore challenges and work out our responses – safely.   Shell’s pioneering use of this helped them think the unthinkable and prepare for it in the context  of major oil price shocks.  And there’s a famous paper describing how Hyundai used ‘crisis construction’ as a tool for breaking the dominant and comfortable thinking pattern within their automotive division.  Jack Welch’s famous challenge given to his divisional managers at GE when trying to get them to come up with radical innovations around an internet strategy offered a powerful version of this approach.  He simply asked them to think like entrepreneurs looking to ‘destroy your business’!

Reframing

Offers another valuable tool – seeing the problem through different eyes, redefining it in ways which open up new directions. Entrepreneurs are skilled at this, looking at an existing business model and figuring out ways to upset the apple cart.  Not for nothing did Joseph Schumpeter, the godfather of innovation studies put ‘creative destruction’ at the centre of his thinking.  His gales have blown through an uncomfortably large list of sectors with disruptive results – think low cost airlines, music distribution, city mobility or accommodation, for example.

The trouble is that reframing, thinking like an entrepreneur, is easy enough to talk about but, like that alligator-filled swamp, hard to focus on when their teeth are snapping at your ankles.  In particular reframing for established organizations often means letting go of your past, leaving behind historical models which have served you well

Take the imaging industry – one which certainly experienced a crisis (= turning point) with the arrival of digital photography.  Kodak’s well-documented story is one of an organization incapable of letting go and reframing fast enough, despite having some powerful cards including the first digital camera and a sheaf of patents around the technology) in its hands.  By contrast Fujifilm made a more successful transition, using its new eyes to see where else its core knowledge base might be deployed.  Coating surfaces with precision at micro-scale is a valuable capability in fields like cosmetics and healthcare, sectors in which Fujifilm have become significant players.

Creatively combine

Try reusing elements from one place in a different context. Bricolage is a phrase used to describe the ways in which entrepreneurs make use of anything available to them to create new solutions – very much what our passengers on the ‘Phoenix’ did.  This ‘scrapheap challenge’ style of flexible thinking underpins many examples of ‘frugal innovation’, an approach which looks to simplify and combine as a source of innovation.

Take the case of Dr Venkataswamy and the Aravind Eye Care System. His radial approach to developing low cost reliable cataract surgery for the poor in rural India borrowed ideas from the world of fast food and manufacturing. The model works – the average cost of an operation is $25 and it is  delivered it using largely unskilled labour trained in narrow focused areas.  Forty years later and millions of people around the world owe their sight to his innovation; his ideas influenced Devi Shetty and others to pioneer similar approaches to operations as complex as heart by-pass surgery, again massively lowering the costs without compromising on the safety element.

By definition he wasn’t going to find his answers in the world of healthcare; instead he found parallel versions of his problem in widely different fields and then adapted the solutions.  This idea of ‘recombinant innovation’ was also one which served Thomas Edison well in operating his ‘invention factory’ way back at the turn of the twentieth century.

Experiment and fail

Innovation is like making omelettes – you can’t do it without breaking eggs.  Organizations like Pixar with a reputation for repeating the innovation trick don’t do so by accident – they are built on a culture of experiment.  Successful entrepreneurship involves a strong element of play – but it also requires a safe environment – a playground. That’s where the idea of ‘innovation laboratories’ comes in.

Essentially a lab is somewhere where controlled experimentation can happen, risks can be taken and intelligent failure can operate.  Innovation labs have become increasingly popular but there is a risk that many  of these are little more than a trendy environment, some soft cushions  and a slogan.  To make them work requires appropriate facilities, methodologies and catalytic facilitation; we’re only now beginning to understand the key characteristics of such powerful innovation spaces.

Prototype

One key role which labs play is to provide environments in which different players can gather together around prototypes. Prototypes are essentially boundary objects, making ideas visible in their early half-formed state and providing an opportunity for different people to shape and adapt them.  And a powerful source of such prototyping input comes from users; research shows consistently that they offer a rich source of early stage innovation ideas.  For many of them the frustrations of their particular situation – their ‘crises’ – drives them to create early prototypes which can provide the basis for developing radical solutions.  In similar fashion, finding ‘extreme users’ who try to solve problems under crisis conditions can provide some powerful new insights  into mainstream markets.  Extreme users have to be active experimenters, tolerant of failure because that’s the way they learn about what might work.

It’s a tricky world out there and we’d all rather avoid crises, have a quiet life.   But given that they are going to happen – and that innovation actually flourishes in such a context – it might be worth rehearsing some of these skills to help exploit the next one.

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