A glimpse of light in the darkness? Image: Flickr/ Adam Carter

In every crisis there is an opportunity. In business schools we often talk about creative destruction being key to social progress in a capitalist system. What happens is the incumbent large firms become overly bureaucratic and stuck in their ways. Then a new technology comes along, such as a quartz watch, or a digital camera, and these firms and their comfortable bosses don’t respond swiftly enough. You can picture the conversations: ‘Our Kodak film is far superior to those digital gadgets people pretend are cameras’ or ‘Our watches have the best mechanics developed over centuries, how dull to replace craftsmanship with electronics!’.

Such firms face new competition and soon enough decline sets in. Rather than recognising the threats and investing heavily in the new disruptive innovations, many bosses of large firms respond cautiously, and cut back everywhere. The result? Like Kodak, once massive firms eventually go out of business. This process of ‘disruptive innovation’ is why the average age of a company on the S&P 500 share index is only 15 years. Could there be lessons here for the creative destruction of political parties?

The Liberal Democrats

The Liberal Democrats have been demolished in the elections, not just at national level, but also badly diminished in the locals. They face at least 15 years of re-building, if it is possible at all. The rebuilding will have to start with local government, which relates to their emphasis on local participation in governance as key solutions to problems. But could the party turn this recent destruction into a moment of innovation and change?

Another key theory we explore in business schools is the role of strategic alliances in helping companies to grow. These are not merely commercial deals, but where the partners realise they have complementary resources that can create synergies. Total similarity is neither necessary, or suitable, for a great alliance. Some of the most interesting alliances are between companies and charities. 20 years ago I worked for WWF in their collaboration with companies to create a global forest certification system. Such an endeavour was only possible through alliances. In both business and society there are hundreds of examples of erstwhile enemies collaborating to create new solutions.

So what creative ideas are there for the Liberal Democrats? What kind of alliance might help them evolve rapidly with the changing political scene?

The Greens

The Green Party have made major progress in both party membership and votes, but that translated into zero progress in numbers of MPs. The Greens face a conundrum of not coming second in enough constituencies to have a hope of presenting themselves as realistic contenders for seats at the next general election. It is extremely unlikely the Tories will entertain discussions about electoral reform in this parliament, and in 5 years tactical voting will be even stronger, as every seat clearly matters more than before. Given the urgent plight of the planet, it’s going to be difficult for Greens to be both authentic in their convictions and satisfied with the current progress towards power.

The so-called "left" of the Liberal Democrats, who take inspiration from William Beveridge, who helped create the contemporary welfare state, are now likely to lead the party away from the policy compromises inspired by coalition government. If one subtracts the coalition-inspired policies from the Liberal Democrats, what is left is similar to much Green party policy. Moreover, the Green Party manifesto included the kind of ambitious and innovative policies that the Liberal Democrats can, and should, now consider, so as to be relevant to political discourse over the next 5 years.

Both parties like to say they are neither left nor right, but ahead. Both like to argue they don’t represent vested interests, but arrive at their political platforms due to the application of universal principles to contemporary situations. For the liberals key principles include the sovereignty of the individual, the importance of community participation, and a mixed economy of state, private and cooperative forms of organisation. For the greens, key principles include the environmental sustainability of our society, participative forms of decision making, and social justice. Both parties share an internationalist, egalitarian and meritocratic outlook.

What would an alliance look like?

So what about a Liberal Green Alliance? The blending of ideas would be a fascinating process for British politics. It could begin with an agreement not to field candidates against each-other in forthcoming elections and then progress to the development of a common policy agenda. A joint leadership team of, for instance, Tim Farron and Caroline Lucas could give a new dynamism to the voice of national opposition and local transition over the next 5 years. At least being out on the campaign trail would have a new Brazilian flare (Norwich football team might even gain some new supporters).

The apparent radicalism of some Green policies might worry the some ex-coalition ministers, but they will soon be gone to jobs in the EU, quangos or lobbying firms. After eating their hats, some Liberal grandees might consider eating their shoes as the prospect of a tie up with the Greens. But their time has passed. The Liberal Democrats were born of an alliance between the Liberals and the Social Democrats, so alliances are part of its original DNA.

The Greens would have their own grumblers about such an alliance, but the UK has enough green pressure groups. The urgency of the planetary situation and the strictures of the British political system mean that bold new ideas on strategy and tactics are required. Greenpeace, Friends of the Earth and others can continue the campaigning and advocating, while the Green Party needs a credible strategy for political power over the next decade. That’s impossible without creating alliances.

In the latest research on the kind of ‘disruptive innovations’ that put incumbent firms out of business, the importance of connecting with consumer aspirations has become clear. That means some people switch to new products because they connect with the values of a company. If, in business, innovation can be driven by aspiration and hope as much as necessity, why can’t it in politics?

This could be a Kodak moment for the Liberal Democrats, as they face further decline and irrelevance at the national level. Or it could be a new beginning, through an alliance with the Green Party. According to Nick Clegg, the Liberal Democrats “had to” go in to government to save the economy – so it was a coalition based on fear. Ultimately it smashed them, but another coalition based on hope and creativity might begin their repair. For the Green Party, an alliance with a party with many more councillors and MPs could help it reach the next stage of relevance. Could now be the moment for the Liberal Democrats' 'liberty bird' to be reborn as the Green Phoenix?

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