The Year of the Cockroach

According to the Chinese calendar, 2002 was the Year of the Horse. From the perspective of American business, it was more like the Year of the Cockroach. Faced with the aftermath of a terrorist attack, a declining stock market, uncertain prospects for company profitability, a spreading stain of corporate scandal, and the growing likelihood of a war with Iraq, most corporate leaders -- make that "leaders" -- have done their imitation of the insect most likely to survive a nuclear blast: Find a small crack in the economy and crawl in for safety. There is, after all, an undeniable logic to this duck-and-cover approach to business. You cut your head count, cut your marketing budget, cut your R&D expenses, cut your IT investments -- cut your losses. The problem, of course, is that you may also cut your own throat.

Because the real question -- the question that prompts even the Cockroaches to come out of their cracks long enough to ask -- is, "What's it going to take to kick-start some growth?" Even the most devoted Cockroach knows that the only way out of the current economic doldrums is through new growth. So from the presumed safety of the cracks in the economic sidewalk comes this baleful question: How do we get some new growth started?

The problem is, we all know the answer. Even the Cockroaches know the answer. In fact, every time anyone asks the question, the same answer comes back: If you want to grow, you've got to innovate. Dare to think differently. Come up with a new idea, a fresh take, a unique offering. Then execute it with discipline, tough-mindedness, and seriousness of purpose. Outthink and out-execute the competition. Take a smart risk, then make it pay.

The evidence that innovation works is scattered across the economy -- and packed inside this issue. It's inside the millions of games produced and sold by Electronic Arts, the foremost video-game company in the world. No Cockroach strategy here! These guys represent the ultimate combination of passion and performance. It's in the shopping malls and on the retail streets of America, where Anthropologie's smart, sensual, and sociologically sophisticated stores have found the market's sweet spot. Here's a company that sells a sensibility -- and trusts its own instincts and its innate understanding of its customers' lives to create a shopping experience that's fresh, alive, and growing.

And, as strategy thinker Gary Hamel so powerfully states in this issue, it's in the inner workings of all companies that take on the challenge of the times: to make innovation an everyday part of their operations. Radical innovation is found in all industries and comes in all sizes, shapes, and forms -- from Starbucks' in-your-pocket debit card to Southwest Airlines' out-of-the-box economic model.

How do we start to grow again? The answer is out there -- and in this issue. The real problem is, the Cockroaches don't like the answer. Don't like it, don't believe it, or just don't trust it. So as we end 2002 and get ready for 2003, we're going to make it as simple as we can: Me-too won't do. If you want to grow in 2003, you've got to master the art of serious innovation. That's the way the real leaders play the game.

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