The economic shocks that reverberated through the economy a year ago could easily have marked the end of the nascent "Innovation Movement." After all, how could companies prioritize developing innovation programs in the face of very real questions of fundamental survival?

A year later, it is clear that innovation has never been more important. And, in a strange way, the scarcity forced on many companies has been a hidden accelerator of efforts to systematize innovation.

Certainly companies like General Motors faced such critical operational issues that innovation efforts had to be de-prioritized, if not shut down. Arguably the struggles of these companies highlighted how very important it is for companies to get ahead of the innovation game by investing in innovation before they need to invest in innovation.

More and more executives have come to terms with the fact that the "new normal" of constant change necessitates developing deep competencies around innovation.

The increasing pace of change is not really new. Long-term research by Innosight Board member Dick Foster shows how the pace of "Creative Destruction" has been accelerating for some time.

One simple way to demonstrate this increase is to look at the turnover in Standard & Poor's index of leading U.S. companies.

The S&P index goes back to 1923. Foster's research found that in the 1920s (when the list contained 90 companies), when a company got on that list, it would stay on for about seventy years. That meant that people who joined an S&P company might be joining the same company their parents worked for and might expect their children to work there as well.

In the 1960s, a company that entered the S&P index could expect to stay on it for about 40 years -- long enough for one career at least.

Today, a company that enters the S&P 500 index will stay on it for less than 20 years. That means if you join an S&P 500 company today, it most likely won't be an S&P 500 company by the end of your career because it will have failed, shrunk, or been acquired.

Increasingly, companies that buck the trend and last 30 or more years will do so only by mastering the ability to perpetually transform themselves. As Foster notes, "It's an entirely different world where the balance between continuity and change has moved to change."

Companies that continued to focus on innovation in the midst of the downturn, such as Amazon.com, IBM, and Procter & Gamble, are very well positioned to create substantial distance between themselves and their competitors. Their success will provide further fuel to arguments that innovation isn't a nicety, it is a necessity.

The good news for companies evaluating their innovation investments is that innovation is one area where less truly is more.

For example, time and again resource-constrained entrepreneurs have won disruptive battles to transform existing markets and create new ones against large companies with hordes of talented employees, great brands, and deep pockets.

The root cause of large corporate struggles, ironically, is abundance. Too much patience. Too much investment. Too many people. Abundance leads companies to lock into bad strategies early. It leads to overly slow decision-making processes.

Strategy can't be scheduled. Making decisions on a quarterly basis when new information comes in daily consigns companies to miss the innovation mark.

Constraints are innovation enablers. Small teams are faster than big teams. Teams with tight budgets make decisions more quickly than teams with loose budgets. Tight milestones force teams to address critical assumptions early, facilitating the re-direction that typifies the entrepreneurial process.

Innovation-seeking companies have two choices. One is to "outsource" innovation by developing world-class expertise in investing in and acquiring emerging disruptive businesses. For a long time Cisco has demonstrated the power of developing this expertise.

Of course, following this approach requires sometimes paying substantial acquisition premiums. And it denies companies the important process-based learning that comes from organic innovation efforts. Remember, failed efforts often are the springboard to future success.

The second choice -- and my admittedly biased preference -- is to develop deep competency around organic innovation. This kind of competency comes from treating innovation like a discipline with six, interlocking components;

1. An innovation strategy that details targets, tactics, and required resources
2. An innovation process that iteratively spots and shapes new growth businesses
3. Structures that support the nurturing of innovative ideas, providing a "safe place" for innovation
4. Supporting processes that helps ensure that companies don't succumb to the "sucking sound" of the core
5. A common language that helps build corporate alignment
6. Metrics that help senior leaders appropriately track their innovation efforts

These efforts need not require massive investments. In fact, a far better approach is to treat the creation of an innovation capability like a startup venture. Give a small team a small amount of money to address critical organizational uncertainties. Invest more only as the team learns more, demonstrates success and adapts its strategy based on "in-market" learning. Ensure that senior leaders "lean forward" and role model the importance of innovation.

There are ample tools in the academic literature and in the accumulated experiences of early corporate adopters to accelerate this journey.

As an innovation practitioner, I am grateful for the 2008 crisis. Rather than killing the innovation movement, it forced a scarcity mindset that will do the innovation movement much good. I suspect that history will ultimately judge 2005-2010 as the years where the innovation movement really took an important step from the fringes of the corporate world towards the mainstream.

When my friend Richard asked me to join him in training for a triathlon, I carefully considered his request. For about a second.

"No way."

"Oh, come on. Why not?"

"Because I've raced triathlons before. They're painful. It takes me a week to recover. And for what? It's . . ."

"Wait a second," Richard interrupted me, "Do you actually try to your hardest to win?" He laughed. "Peter, last year there were 57 people in my age group. I came in 56th. Right before the guy with one leg." Then he looked me up and down, "You know, we're not the kind of guys who win these races."

"So why do you do it?" I asked

"It's fun."

Research published last year in the Annals of Behavior Medicine showed that the harder people exercise, the less pleasure they feel during the exercise and the less likely they will exercise routinely. As Panteleimon Ekkekak, one of the authors of the study, recently said in the Wall Street Journal, "Evidence shows that feeling worse during exercise translates to doing less exercise in the future."

Obvious, right? We tend to do things we find pleasurable and avoid things we find painful. So why don't we incorporate that principle into our organizations?

"Look," a senior leader complained to me about one of her colleagues, "he's an adult. I tell him to do something, he should do it. I don't care whether he wants to or not. It's his job. It's why he's paid."

But that's not how things really work.

Everything I've seen in organizations confirms a simple rule: people do what they choose to do. And if you want people to choose to do something, make it fun.

Marc Manza is the Chief Technology Officer of Passlogix, a client of Bregman Partners and a software development company I've written about previously in this blog. A few years ago, Marc had a problem. Passlogix's software was conflicting with an older, unsupported version of Sun Microsystems software that some of their clients were still using. Marc tried to work with Sun to fix the problem but Sun wasn't interested; they told Marc to tell his clients to upgrade to the newer version of Sun software.

So Marc had his team work on a fix. But it was complicated, and two years later, at a cost Marc estimates in the tens of thousands of dollars, the problem remained unsolved.

Then one day he had an idea. He went to a local electronics store and bought a Nintendo Wii, placed it in a central, visible place in the office. Then he made an announcement: The first person to solve this problem wins the Nintendo. And he added a rule: you have to work on the problem on your own time, not on company time.

It took two weeks.

Marc took a boring project working on a legacy system and made it fun. Cost to the company? $250.

Since then he's given away iPods, Xbox 360s, PlayStation 3s, and a netbook. Fun competitions that solve real problems are a great way to boost morale and keep people engaged, especially in somewhat depressing times. Two rules:

1. Focus on real work problems and opportunities. A company picnic might be fun but it doesn't achieve the same impact. Instead, make the work itself fun.


2. Money isn't fun. When Marc put a $1,000 bounty on a problem, it failed. The cash could have bought four Nintendos but it was less inspiring. You can parade around the office with a box in your arms as a badge of honor but who would walk around waving a check? Getting paid for something transforms fun into work. In fact, make sure the prize you offer is worth no more than a few hundred dollars.

Special projects that require creativity to crack are the most fun to attack. Figuring out how to get the attention of a new prospect who won't return calls. Solving a product issue that consistently annoys customers. Finding a new way for managers and employees to communicate without relying on the dreaded performance review.

But mundane tasks can be made fun too. Take the anxiety producing cold call. What if you started a running list (with a prize for the monthly winner?) of the most obnoxious responses you hear? That alone could turn angst into excitement.

Fun doesn't require a competition. When I was waiting tables as a college student I spiced up the job by serving each table in a different accent. It took all my focus to remember which accent went with which table. Silly? For sure. Fun? Much more so than simply taking an order.

Here's the thing though: you can't fake fun. Which means you have to go into your work ay with a sense of amusement. It's a lens through which you view the world. We all know people who slip easily into laughter and make jokes even as they work hard at something, seemingly unburdened by the threat of failure. And when they do fail, they laugh and keep going. It's contagious. Which is why it's such a critical leadership quality.

Fun keeps people motivated, and that eventually translates into performance. Richard recently called me to tell me he came in 120th out of 200, a huge improvement over previous races. "And they all had two legs," he told me laughing. "Wanna join me for the next one?"

Sounds like fun.