Leverage Innovation

When economic tides are lifting all businesses keeping an innovative ‘ecosystem’ going usually is not as difficult, because management can keep ‘the good business innovation model’ going – approving budgets the same as last year. But what happens when the tides fall, when economic headwinds are blowing hard against your business?  The first indication that the business environment is affecting your business is when sales drop.  First, assess why sales are dropping.  Here are a few things that think about: 

1. How do customers perceive the value my product or service?  If they do perceive high value, why are they cutting back?
2. Is their business dropping, so they need to reduce purchases of your product or service which is incorporated into their product?
3. What new problems are they experiencing?  How can your product or service help to solve a new problem?

When management thinks of innovation quite often executives are thinking about 3 – 5 years out in terms of product launch or revenue impact.  And you should have in place, customer councils, customer monitoring, and feedback business processes already in place – picking up the reasons why business is slowing. But, every slowdown is unique and you may need a specific focus.  Customers will always tell you what they need, if you will listen. One hi tech firm, recently setup a ‘swat team’ representing customers, development, sales, and support to look at what changes they could make to immediately address customer issues, and add value to their offering. At a recent Berkeley Innovation Forum meeting, hosted by the Center for Open Innovation, led by Prof. Henry Chesbrough (author of books - Open Innovation, Open Business Models) a few additional insights were proposed by innovation executives: 

1. Reposition your innovation effort – focus on your innovation programs being agile, and useful in setting up additional product lines or processes to buffer the business from the slow down, or focus on cost reduction innovation over product innovation.
2. Make innovation assets work harder – for example, capture new innovative ideas from diverse parts of the firm and bring them into a knowledge base with a wider access and distribution.
3. The crisis can be a catalyst – when other businesses are weaker or failing this opens opportunities for your business.  This is a good time to evaluate your present business model and look for new openings in the competitive landscape or customers seeking new solutions that other firms are not addressing.
4. Recruit newly available innovation talent – this is a good opportunity to recruit highly talented people who would otherwise be employed.  Keep track of those people who can really add to your innovation talent pool and aggressively recruit them to your organization.  When, business conditions get better your company will be in a stronger innovation position, plus these talented people can contribute right away toward the new products and services you need to get stronger.

 While, business times are challenging, they offer new opportunities to get stronger, closer to your customers and improve your competitive advantage with top-notch people.