Thriving in tough times

In these times there are opportunities to grow your business. The advantage is that you have to be able to see them without falling prey to the negative attitude which seems to dominate the media right now.

Andrew Long of Critical Pathfinders is introducing a workshop to do just that: its called “Leveraging the Power of Crisis” and will be led by noted author Gina Mollicone-Long. Gina notes,”

“People are constantly telling me that they are worried about 2009.  I’m here to tell them that more millionaires are created in times of recession than during high times.  The companies and leaders that stand out this year will be those who step up and change their mindset,” she adds.

This is crucial to keep in mind. As I have said before in numerous posts, there is a shift going on in the economy and those companies that can see beyond the current turmoil to identify trends and opportunities will be those that succeed!

You can get more information about the sessions here.

Strategic innovation counters short-term thinking

Many executives find themselves facing difficult decisions these days in light of the challenging economic conditions. Short-term results are often scrutinized closely by the market as a way of determining a company’s financial health and direction. Although this can be a viable way of judging whether corporate strategy is translating into market success, what often happens is that short-term thinking permeates the organization leading to a starvation of resources for longer-term initiatives like new products and services.

One can see this happening at large companies in different sectors as they announce cutbacks in spending on innovation to meet customer needs. As the former CTO of Cisco notes, America is facing an “Innovation Crisis,” and needs to find “new ways of funding fundamental research.”

She cites the fact that Bell Labs announced late last year that it was discontinuing basic science research to “align the research work in the Lab closer to areas that the parent company is focusing on.”

The problem is that with these expense reductions, there is a tendency to pull back customer facing programs in order to conserve cash and “reduce” risk. As in an earlier post, I maintain that this may actually be a riskier strategy over the long term as competitors who continue their innovation program will be in better shape once the economy returns to normal growth.

Arguably, innovation can be seen as an “assembly” of tools, techniques, or assets to meet those deep customer needs. But without the foundation of basic research, it is very difficult to source assets to put into a solution. Of course there are grey areas within both fields, but I believe these days it is becoming increasingly difficult to justify investments in basic research which makes partnerships with universities an interesting way to explore getting access to more fundamental work.

In my opinion, innovation (which I define as meeting stated or unstated customer needs) is different than basic research or invention. While both are important, it is harder to make the case in today’s corporate environment for basic research, which is why I believe that many corporations are reducing their investments in these areas to (hopefully) concentrate more on innovation and getting more value from their existing assets. Keep in mind that the best way to use these assets is understanding the needs and taking a simple (but not dumb) approach to serving them.

In this economic climate, we at Brandsential work towards this goal by using “Value Extraction;” to leverage what’s inside the company to satisfy deep customer needs. And as I’ve said before, now is a perfect time to develop and innovate with these existing assets to make sure the company is well positioned to lead the market once the economic climate improves.