Q&A with Economics Guru Todd Buchholz on Innovation during Shaky Economies
Todd Buchholz is a former director of White House economics policy, the CEO of educational startup, Sproglet, and an all-around mover and shaker in the economics policy world. He is keynoting at a number of Avaya Evolutions conferences this spring, including the Avaya Evolutions San Francisco show last month. Below is a transcript of our conversation, which focused on the need for innovation in all economies, but especially today.
Photo by Andres Larranaga/Avaya
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What did you talk about at your Evolutions keynote?
Buchholz: Well, let’s face it. The economy is very confusing to everyone. I think the President of the United States is probably as confused as the Federal Reserve Board Chair, as every investor, every business person. So what I try to do is kind of make sense of how to think about interest rates, where they are, the debt situation, and how Wall St. is looking at the world right now, and also to give some advice to folks on how to succeed in business even if the economy is pretty darn tricky.
I think the economy is getting better, but at a very slow pace. And there’s little reason to think things are going to pick up. At the same time, that doesn’t mean that we as business people should be despondent, because there are still huge opportunities for us and what we need to do is (a) pick the right partners to do business with and (b) differentiate ourselves. Show that we have something different to say or to sell, and that can allow us break out from the pack and create some profit margin even in a climate that isn’t very friendly to prices.
So if you’re just hanging out and doing nothing, you’re just going to wither on the vine, right? You have to make some strategic investments when times are tight.
Buchholz: You have to be hungry for innovation. You just think about it this way: if you were literally hungry during the day, you’ll go to some buffet and you’ll seek out some food and say, “Well I haven’t had that before, but I’m going to try it because I’m really hungry.”
(laughs) Not if you eat at the buffets near my house.
Buchholz: (laughs) Well I won’t be dropping by. And if you’re not hungry for innovation, it doesn’t come. There are companies called Kodak, Polaroid, and others that were on top of the hill, on top of their game, it seemed, for decades, but you can’t stay on top of your game and on top of the hill unless you’re looking to create innovation within or acquire it from others.
I think there are examples of a lot of companies that get so big they dominate a market, they dominate technology, and I think, maybe it’s just laziness. They lose their drive. They lose their energy. They lose their focus on innovation. And they get to a point and they stop.
Buchholz: That’s right. I read a book called “New Ideas from Dead CEOs”, and I talked about General Motors. I also did a more recent book called “Rush”. General Motors obviously was a great, conquering company in the United States and around the world. And then sometime in the 1970’s, they got lazy. You used to be able to distinguish a Pontiac from an Oldsmobile from a Chevrolet in the 1940’s and 50’s and 60’s. In the 1970’s and 80’s, you couldn’t tell the difference between a Buick Regal and an Oldsmobile 88, or even the Cadillac. They were basically the same steel stamping, and all they did was change the crest on the front. Well, they lost the desire to distinguish within themselves. You also need competition within an organization. If everyone is just sitting around getting along, and no one is willing to be a standout, then the company itself will not stand out.
So I’m the only guy that podcasts inside Avaya, so I have a secure job then, right? (laughs)
Buchholz: You have a secure job, (laughs) but someone may come along with smaller microphones.
(laughs) Certainly a better looking host.
Buchholz: (laughs) Well that’s why you and I both do radio and do so well at radio.
Got a face for radio, absolutely.