Recession + : Why Innovation is InescapableKPMG Global Tax Event 2009

Charles Leadbeater

Leading Innovation

Now is a bad time for innovation

No spare resources Consumers looking for value not style State capitalism, regulation, nationalism Excessive innovation of the wrong kind got us this mess Batten down the hatches, weather the storm, don’t take risks

Leading Innovation

Yet innovation is also inescapable

Crisis drives improvisation, breaking old routines Incremental innovation = adapting to changed environment Shifting to permanently lower cost business models Innovation in finance = state ownership and beyond Age of the unthinkable - state owned GM - is not the time to stop

thinking

Leading Innovation

Why strategic innovation is inescapable

Recession +

Leading Innovation

Why strategic innovation is inescapable

Recession + other factors already in play drives strategic innovation

Leading Innovation

Why strategic innovation is inescapable

Recession + web = no media business has guaranteed business model

(Web = greater transparency & unpredictability = more open governance)

Recession + China and India = shift east in demand, money

Leading Innovation

Why strategic innovation is inescapable

Recession + green agenda + China = challenge to manufacturing

Recession + government debt = public services at lower cost

Recession + demography = new markets among the young old

Leading Innovation

Why strategic innovation is inescapable

Recession alone will drive innovation especially to lower cost models

But Recession + will open new markets, create new business models

New needs, organisations, technologies combining

Who in the 1930s believed in the American Dream of the 1950s?

Leading Innovation

Yes but…

We’re tax people, what has all that got to do with us?

Leading Innovation

Innovation : Myth and Reality

Myth: innovation is all about specially talented people working in special places, dreaming up creative ideas, out of the box

Reality: innovation is all about combining the talents of lots of people, often borrowing and developing the ideas, collaboratively in the cause of solving a difficult problem

Leading Innovation

Combination and conversation

The best way to have a new idea is to borrow it Combining two existing ideas in a new way That comes through collaboration and conversation Invariably creative conversations include clients Services innovation = creating solutions with clients as well as

for them Think With

Leading Innovation

Thrive on curiosity, crisis and challenge

Curiosity - follow your nose, find space to keep learning Crisis - breaks down barriers, takes people out of the box Challenge - welcome constructive challenge and give it

Be confident enough to risk asking stupid questions The question you ask often determines the answer you get.

Leading Innovation

Ideas are never enough, commitment counts

Having good ideas is just the start, developing them is difficult

Coping with, admitting, learning from failure Learning to assemble teams of different skills The swimming pool test