Recession opportunity

I'm posting this as a reblog from my personal hero and innovation guru Phil Mckiney. You can find him at Killer innovations Phil is the CTO for one of the top 20 Innovation companies in the World, so it is interesting to to get his views on the opportunity that the Credit Crunch opens up, to people with a vision. I'd only add that I think it applies to NGO's, NFP's and indeed any organisation. In fact never have innovation champions and active management been more sorely needed.

'With the recent economic downturn, the world is changing. More and more people are waking up to the new reality that they don't understand the fundamentals of the new economy.

What drives share price? What has changed?

What makes up share price? Over the last twenty years, we have seen the decreasing role of book value (machinery, buildings, etc.) on the overall market value for public companies. What is replacing book value is the value attributed to intangibles (ideas, innovations, management teams, etc.) In 1978, market value for US public companies was 95% of the book value. Twenty years later, book value was just 28% of market value while 82% was made up of intangibles.

Not all intangibles are equal. I would argue that intangibles that don't ultimately create value (e.g. the skill to create complex financial instruments such as re-packaging mortgages did not create any value) should be valued at or near zero. Investors believed in the value of these intangibles to later find out that there wasn't any real value being created. What was missing was increased transparency of the value attributed to the intangibles.

So is there a bright spot in this economic downturn?

One look at intangibles tied to innovation is the the Innovation Index(1), a weighted stock price index of the top 20 innovators in North America. The Innovation Index fund returned 66% in 2007, and returned 174% over the previous five years (2002-2006). By comparison, the S & P 500 returned 28% the NASDAQ returned 34% and the Dow Jones Index returned 30% thru December 31, 2007. More recently, the Innovation Index Fund is up 9% in 2008 through September 19 (per there blog site). I haven't checked recently but I'm sure it hasn't been completely immune to the most recent market issues.

How does the Innovation Index select companies that create real value from innovation?

Keep in mind that this one of many ways to look at the value from ideas/innovation but the The Innovation Index lists their criteria as:

Rankings of world’s top innovative companies as published by BusinessWeek and Boston Consulting Group
Rankings of the top Innovators as published by Forbes, Fortune and other business publications
Analysis of revenue, earnings, cash flow and management performance
Assessment of the tangible value of the Innovators including their brand value
Historical analysis of launched innovations – products, acquisitions, pricing, distribution, business model, services, process – and their impact on current and future revenue and earnings growth
Analysis of planned market innovations and potential revenue growth
Independent analysis by S & P, Zack’s, Barron’s, IBD and related resources
Complete analysis of the Innovators’ customers, competitors, environment and macro-economic factors that could impact their growth and stock performance
Wherever possible, interviews with key members of the management
As the economy churns (thanks to the global marketplace), investors need to put a higher premium on the capacity to translate ideas into innovations. Some organizations may make the disastrous decision to cut-back or stop their investment in innovation at exactly the wrong time such as this economic downturn. Those that cut innovation may never recover when the market comes back.

How will this play out in the economic recovery?

In this new world, the winners during the economic recovery will be companies with an innovation culture, an established methodology to create and capture ideas along with a creative labor force that can translate the best ideas into innovations.

Are you posed to be a winner? If not, now is the time to get ready ...

Painting the picture

A few of my clients, and myself included are going through some curious times, trying to evaluate the direction and plan their next steps, reacting to the current financial crisis - or maybe is it an opportunity to do something different?

The beautiful question is here to help and today to HELP people imagine what they need to become in order for their goals to manifest. Today that means to ask questions that will help them ( and me) imagine in detail what they want to acheive


1. What will this decision look like in 10 years?

2. For your life to be perfect, what would have to change?

3. What kind of person do you definitely NOT want to become?

4. Is this experience helping you become the best version of yourself?

5. If you pursued this dream, what would your life look like in 30 days?

6. What would REAL fulfillment look like in this area if you were truly living your life purpose?

We need to position ourselves in the future to EMPOWER people to speak from the future, then look back to identify the steps that led there.


1. How do you want the world to know you 3-5 years from now?

2. What three things can you do TODAY to increase your freedom tomorrow?

3. Look ahead six months: standing there, what decisions would you make today?

4. What three small acts you could take today to prepare for the life or work that you’d like?

5. What steps need to be taken to make you feel like you’ve achieved a Return on Investment from this new endeavor?

6. What has to happen in the next year for us to be able to look back and say, “That was best possible use of our efforts”?

Then we need to ask questions to INSPIRE people to paint a compelling, detailed picture of the desired future and make meaningful strides toward it.


1. What would your life look like right now if you were truly healthy?

2. If everyone did exactly what you said, what would the world look like?

3. What are the essential features of the world you want to live in so you can be your best?

4. When you imagine living the life you want, how do you see yourself starting your day?

5. What would REAL fulfillment look like in this area if you were truly living your life purpose?

6. What if, overnight, a miracle occurred, and you woke up tomorrow morning and the problem was solved – what would be the first thing you would notice?

There is nothing more powerful than a question

There is nothing more powerful than a question.

A question can ENABLE learning.
A question can PREDICT the future.
A question can EXPLODE people’s brains.
A question can CRACK open a new world.
A question can ENLIST your creativity.
A question can SEND you off to the races.
A question can CUT deeply, yet playfully.
A question can VISUALISE ideal conditions.
A question can EMPOWER others to turn inward.
A question can FORCE you to confront yourself.
A question can FUNCTION as that little nudge, push, tipping point or last straw you needed.

In my experience as a writer, speaker, coach and entrepreneur, the most important moments in my career have revolved around asking myself specific, profound questions.

Questions that shifted my paradigm.
Questions that changed my business model.
Questions that doubled and tripled my annual income.

In the coming posts I'll share with you the the questions that I think are the most important, so set up your feed, book mark and please just pay it forward.

Take care out there