Innovating in Tough Times
I was recently interviewed via email for a Canadian publication. I was asked 5 questions. Given the journalists deadline, I needed to provide an immediate response. Here are “off the top of my head” answers – without editing.
1. What is your own definition of an innovative business?
An innovative business is one that continually adapts and evolves to meet changing market conditions. It is not about new product, new processes, new ideas, or new services. It is about staying one step ahead of the competition.
2. Why is it so important for a business to invest in innovation during recession time?
Innovation can be used to reduce costs as well as grow a business. You can either slash your business, or be creative about how to do more with less. But investing in growth during troubling times is important too. Given that everyone else is cutting back, for every dollar invested in innovation, you get a larger return than you would have in the past. Regardless, the economy will rebound. Innovation is more like a marathon than a sprint. If you are not prepared, when market conditions improve, you will be behind the curve.
3. Do you believe that each recession leads to a changing of paradigm in the way people buy and live, and if yes, what can we expect after this crisis?
During a crisis, buying habits certainly change. People focus more on eliminating their pains than they do on pleasure and growth. Therefore, if you solve someone’s pain, you will continue to thrive even in tough times. We also see people looking for affordability and accessibility. After a crisis is over however, the market in general (although not necessarily individuals) return to their old ways. After the recession of 1970, consumers eventually returned to old habits. After a while, we forget the pain.
4. What are the worst innovation mistakes to avoid during recession time?
Stopping innovation altogether is a mistake. But investing in the “wrong” innovation is an even bigger mistake. Albert Einstein once said, “If I were given one hour to save the planet, I would spend 59 minutes defining the problem and one minute resolving it.” From my personal experience, most organizations spend 60 minutes finding solutions to problems that don’t matter. Doing this wastes your money and the energy of your people.
5. How can a business boost its creativity during a recession when money is in short supply?
Here are several ideas 1) Instead of developing new products, adapt existing products/services to make them more affordable/accessible, 2) Use Open Innovation to reduce costs while gaining valuable marketing insights, 3) Use process improvement techniques to reduce costs, 4) Find ways of solving your customer’s pains, 5) Use a “build it, try it, fix it” approach to innovation enabling you to fail cheaply.