Good Riddance to Tired Biz Memes

If there’s one thing that really raises my blood pressure, it’s people misusing the word “innovation” to describe any and all kinds of newfangled change. In the business journo world, that usually applies to PR representatives who call to tell me that their client’s new product/venture is innovative just by virtue of being new. There’s a subcategory of these people who think anything that uses the Internet is innovative by definition. But innovation is more than just a new way of conceptualizing; it’s that new concept applied, successfully, in the real world. A new idea that is unworkable, or turns into a bad idea on contact with reality, is not innovation.

BusinessWeek’s Innovation expert Bruce Nussbaum is normally pretty sound on this point. He called President Obama out early in the transition for conflating technology investments with “innovation.” But then he misapplied the innovation label to praise Secretary Hank Paulson when Paulson began flip-flopping between his initial plan to create a “bad bank” for bad assets and the British strategy to take big stakes in existing banks to help them deal with bad assets. Yes, Bruce is right to argue that innovators must have the freedom to change their minds and optimize their ideas as they learn more information; that is Design Strategy 101. But that’s not what was happening at Treasury: what had Paulson changing his mind was not new economic data, but the changing office politics of his department. Calling pillar-to-post behavior innovative cheapens the term.

No surprise then that Nussbaum now feels innovation is a dead concept, killed by its misapplication and “overuse.” His proposal for a new concept? “Transformation.” I like it because I think it carries the practical side of new ideas on its sleeve. Innovate is an intransitive verb, but transform is a transitive verb. You innovate, period but you transform something, which means the USE of the new idea is baked into the concept.

Meme cleanup may be the new meme these days: TechCrunch says it’s time to stop calling everything digital “Web 2.0.” I’m guilty of misuing that label; consider this post my promise to stop.

Now What?

It may be speaking way too soon, but I’m betting that the panic phase of this financial crisis is over. It will get worse before it gets better, but at least most of the experts and analysts I’ve called are starting to agree upon how long it might be (a year-ish downward, then a slow recovery into 2011 is the prediction I’m hearing). So imperfect as it was, the enormous infusion of cash into the banks across the world has addressed the immediate doom.

Now the real challenge. With Alan Greenspan of all people saying uber-deregulation might have had “a flaw” (or two or three hundred?), it’s time to rethink the long-term system. I’ve suggested before some reflections on how to fix the public sector regulators and recruit smarter people to those roles. But what about a financial industry that equates “innovation” with unsustainable assets (those mortgage bundles) and irresponsible risks?

Interestingly, the best reflections on that problem aren’t coming from financial experts (who remain stunned by it all) but from design blogger Bruce Nussbaum (full disclosure: He’s a former boss of mine). Nussbaum says the future of capitalism will be a lot like the ZipCar–based on bottom-up, collaborative growth instead of top-down, proprietary models. His BusinessWeek colleagues make the point that even Web 2.0 (collaborative and bottom-up by default) will have to change in the ZipCar world–the techies too have been hooked on “irrational exuberance” before.

I’ve got my usual bones to pick with the collaboration theory–how is it capitalism if you aren’t motivated by ownership; how do you incentivize sharing–but overall, I think Bruce is right. So, as a Halloween gift, no long diatribes. Just an encouragement to read Bruce’s blog.