I want to acknowledge my co-author and esteemed colleague, Dr. Larry Rottmeyer, for his collaboration and insights on this special edition blog.
We continue to be shocked by the U.S. narrative that once the country starts opening the economy, there will be a tremendous surge in economic activity – pent up demand. While we yearn to go back into a local restaurant, the magic wand isn’t going to fix the structural problems with our economy or the significant direct and collateral damage done. We are facing some daunting structural economic problems and strategic uncertainties.
While the term “Great Recession” is commonly used to describe a severe, prolonged economic downturn, the Great Reimagination is a term we coined to describe the road to recovery and the likely innovation vaccine required to fix the economy. This recovery can only be shaped by substantial human and social capital investment, widespread learning, rapid experimentation, heavy doses of intellectual curiosity, and tolerance for lots of failures in growing our innovation pipeline and capacity.
We have to invest more in ‘true’ innovation. This sounds simple, right? Well, most larger companies managing their Wall Street earnings are likely to hedge their bets – investing in incremental innovation, milking their existing products, and closely monitoring expenses. Buying startups may be considered, but only after key risks are mitigated and milestones met. R&D expenditures are not a proxy for innovation.
The stark reality is that every U.S. business will need a hard reset. No one expects that it will be business as usual. Many industries will change forever. Actually, many of them already have changed. Even if we turn the light switch on, the lights might not turn on.
Consider these realities:
The case for startups is strong. However, to rebuild the startup machine (that is responsible for all new net job creation in the U.S. for many decades), we will be entering a period of great reimagination.
This period of reimagination will require innovation mindsets coupled with a new set of tools, innovation capabilities, resources, and key competencies. Emerging startups can take the lead here. Many larger companies are only marginally good at innovation. Large structures resist change and creativity. Most innovations will come from agile, smart disrupters – startup ventures. These leaders have a passion for making a difference or creative problem-solving. They will lead the way. They always have. They always will.
At first blush, today’s reality may appear bleak. Startups and existing microenterprises were unhealthy financially before COVID19 and are even unhealthier after COVID19. Liquidity and cash crunch have been a persistent problem. Financial distress does not necessarily create conditions for innovation. However, innovation – in the form of new ventures, applications, products, work methods, channels, and so on – can be born out of this crisis. It is the result of prudent and methodical business model work – customer discovery and validation coupled with passionate, determined, and capable doers wanting to be entrepreneurs. The best thing from the pandemic would be a new crop of visionary and empowered entrepreneurs.
Remember this: the vast majority of entrepreneurial activities and initiatives resulting in sustainable and successful startup ventures have been motivated by opportunity, not necessity. Opportunities are ahead. Many are already here.
Each of us will need to be more innovative and entrepreneurial. Are you reimagining your possibilities and opportunities? Let’s get started. Bold determination and fast action start now.
