An open letter to the punks who run corporate America...
Starting Monday afternoon as the markets began to close in London, Munich, Shanghai, and Tokyo, trembles of a pending market slide became louder and louder here in the US. The FTSE Index on the London Stock Exchange reached a low point not seen since 9/11, and then Tuesday morning when the Dow lost approximately 500 points in its first hour of trading, CNBC and other Hollywood-style financial news networks had the time of their lives. Our pain is their (advertising) gain. They went on all day today as if Noah just rolled into town in his Ark with a six-pack of Bud Light and a case of hard LA porn.
But what really is going on? How many of the managers moaning out there today actually have any meaningful positions in the market anyway? “Oh shit, my 401K is down $67.42 today... I can't take the pressure.” Fuck you! That's not what you are crying about really, so get over it.
What is really going on is that, while stock and real estate prices come down to reality, gravity sets in and liquidity for acquisitions and growth through acquisition is now gone. That became clear over the summer when the private equity frat party was closed down by the dean.
Get over it
Those companies that actually want to grow on a regular basis don't need the kinds of super cheap capital many managers became addicted to. Effective innovation and growth through innovation results first from a point of view, an attitude, that is grounded in design thinking. It is a way of looking at constraints, and using those constraints to identify what the pure problems are—either for consumer experience or internal process improvements—and creating solutions for those problems. Innovation based on design thinking is research-grounded and opportunistic, but NOT expensive. The recent Global Innovation study published by Booz Allen Hamilton in Strategy & Business details how faint the correlation is between big spending on R&D and actual innovation.
So, while the majority of managers interviewed in a recent Business Week/Boston Consulting Group survey identified ‘internal growth through innovation’ as a top strategic priority over the coming 5 years, very few companies (with the very notable exceptions of P&G and GE) are actually doing anything about it. And now that capital markets are running dryer than they have in years, the easy money to throw around on R&D is vanishing as well. So now you no longer have easy money to waste on innovation efforts that are doomed for failure anyway.
Get your addicted ass on the cluetrain
If you senior managers actually want to grow (through internal growth, differentiation, and innovation) as you say you do, then now is your time. Stop whining about the $249.65 that the market slide has knocked off your IRA, negotiate a performance-based compensation structure tied to the creation of new markets and new businesses, start thinking like a designer who loves constraints, and just fucking get on with it... This market slide has NOTHING to do with whether or not your business slides.
If you want to take action, which I seriously doubt many of you do, then fucking have your (lumbering and dithering) organization look into the mirror and ask itself whether it has the guts/balls to actually learn how to grow through differentiation and innovation?
(And for those 5 or 6 American companies out there who dare to do this, I have a recommendation. Have your employees—every one—take the Innovation Acid Test and see if you pass. We'll talk more about the test later.)
The Butcher
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