New ideas, transformative innovations, and bold thinking don’t die with recessionary times – in fact, a downturn is often the starting point for big ideas. Companies such as Burger King, Microsoft, CNN, and FedEx all started up during recessions.
Given the new economic volatility, shrieking stock market headlines, and the reappearance of a sense of dread in the corporate world, it’s probably a good time to rethink your focus. Are you stuck in doom-and-gloom, watching the market and economic volatility? Or are you thinking about economic growth and opportunity? The Wharton School of the University of Pennsylvania released a provocative article in November 2008 suggesting a recession is a perfect time for disruptive innovation — that is, rewriting an industry’s business model to achieve significant growth. Think of Steve Jobs and the iPod, which he first released during a less-than-rosy economy in 2001.
Here’s Futurist Jim Carroll on stage at a keynote shortly after the economic meltdown of 2008 – talking about why a recession is a great time to focus on growth, opportunity, and innovation!
So what do companies need to do to make the most of this recession? First, accept the economic reality. Those unable to move past shock, denial, and anger through to acceptance will be innovation laggards and will only be ready to innovate once the market and industry recovery is underway. Unfortunately, that may be too late.
Innovation leaders, however, are prepared to keep their idea factories running (perhaps not at full tilt, but running nevertheless) in the face of uncertainty. They know there is still a place for innovative thinking despite the vast sections of the economy under stress. They know there are growth markets and opportunities for the marketplace, distribution channel, and operational innovation. These leaders are aware ongoing change in consumer behavior means there are still new ways to brand, grab customer minds share, and forge unique and distinct relationships.
It is critical that organizations begin to undertake a series of bold actions that reorients them to face future challenges. These actions should include several integrated elements.
- Boost the experiential capital of the organization. Get your teams working on projects and ideas that build up their experience. For example, they might explore new methods of branding and marketing (particularly for the next generation); investigate technologies that can streamline business processes; or work with distribution models that expand market potential.
- Identify weaknesses or areas for improvement. Consider what elements of the organization’s product line, skills, or structure could benefit from specific innovation efforts. For example, are competitive threats emerging that you haven’t really thought about? What should you be doing to innovate your way around those challenges?
- Explore key opportunities through a variety of risk-oriented initiatives. If, for example, you focus on a customer-retention strategy (such as visiting every customer in the next three months to see if you are meeting their needs) can you put a stop to future revenue leakage?
The greatest mistake any organization can make right now is to do nothing. Inertia — real or implied — establishes a culture of inaction, and that can lead to another slippery slope. Today, innovation isn’t simply an option — it’s critical because it is the best way to gain traction.