There is an upside to the credit crunch. While deep downturns in the market are destructive and many people have lost their jobs and investment portfolios, now is not the time to cut resources to innovative efforts.
Research into companies who continued innovating during the Great Depression, such as DuPont, showed that they were able to weather the drop in sales by introducing new technologies.
Hewlett-Packard and Polaroid were actually entrepreneurial start-ups that came into existence during the 1930s.
Oracle and Google are hailed survivors of the dotcom crash (though there is some dispute about the timing of Google) due to their level of investment not only in technology, but in people.
I know that these are only four examples, and there are many others where companies have failed during these times. But what gets me is the number of times the “innovation team” has been disbanded in Australian organisations to “focus on core business” at the hint of a downturn.
Here are some things to consider:
- Focus on implementing new ideas (i.e. innovation) to ensure the core elements of the business are sound. For example, review major costs and see how new approaches could reduce these costs and increase productivity.
- Get input from all stakeholders. Talk to your customers, suppliers, staff on what their needs (and wants) are and see how you can differentiate your offering.
- Innovation is not just for technology companies. What new services can you offer the marketplace? Non-bank mortgage companies like Aussie Home Loans started in the mid-1990s and completely changed the marketplace.
- Groom breakthrough innovators. Sustain innovation efforts by developing future leaders who understand the nature of creativity and how to be innovative — not just replicate.
What companies do you know will be able to survive and thrive through these interesting times?
