Can innovation help your business survive tough economic times?
If you were to type “innovation and corporate problem solving” into a Google search enquiry you would quickly find your answer. Innovation is probably the most important area that needs your attention because it will not only help you survive, but prepare you for the recovery. Faulty decisions in tough times can be fatal decisions. Evaluation of ideas is as critical as the ideas themselves in normal business times, but in tough times the evaluation process can often be more important.
Does your business have a formal Innovation Program and a structured Problem Solving and Decision Making Process?
In the late 1980’s and the early 1990’s when the last tough economic cycle was raging and business’s were failing I saw many businesses fail because they did not have a formal problem solving and decision making process.
One of the classic cases of this is when businesses borrowed offshore in Swiss Francs because the Swiss interest rates were much lower than those in most other countries. Many of the businesses that borrowed in Swiss Francs did not have a structured problem solving and decision making process when they considered taking out these loans. If they had gone through this process themselves or used a decision analysis consultant they would have realized the danger of their home currency weakening against the Swiss Franc and the amount of the loan increasing in their currency. This did in fact happen and businesses in a wide range of industries failed because of the increasing value of the debt owed. Although there was a number of court cases about this issue the real crux of the matter is that a potential problem analysis would have picked this issue up and risk management strategies could have been put in place before going ahead or an alternative strategy could have been chosen.
Problem Solving and Decision Making Results in Action
There are a number of providers in this area. The one that I have been trained to use and actually used on an operational basis is the Kepner-Tregoe system.
In the next post I will look more closely at what the Kepner-Tregoe system does and how it supports innovation in the business community.