I've read several blog posts over the last several months discussing the importance of investing in R&D and innovative products during this recession. The May 2009 Oracle newsletter discusses the importance of investing, specifically in SOA. Anne Mulcahy, CEO of Xerox also shared some of her insight on the importance of investing in a downturn. I ran across countless other articles and blogs discussing the importance of innovation in rough economic times, most all of which focused on investing in products and marketing. I have to agree with the vast majority of these sentiments - working while others sleep is a great way to get ahead.
One point that seemed to be regularly glossed over, however, was the importance of innovating business processes, procedures and systems - innovating businesses themselves. Let's face it, although all businesses are either directly or indirectly affected by technological advancement, product innovation, and evolving marketing tactics those facets of business do not alone dictate success. How we do business - our efficiency - our approaches - these aspects of our businesses separate the survivors from the extinct and the titans from the proles.
Two things happen during a severe economic downturn such as the US is currently experiencing: (1) businesses of all sizes cut back spending; and (2) consumers shop around for the best products for the best prices. As it happens, both of these tendencies foster a perfect environment for business innovation.
When businesses cut back on spending, the areas that gets hacked early on are wages and salaries - individuals get laid off, companies shrink their workforces. Obviously there is an unfortunate reality associated with these decisions, but there's also a silver lining for innovation-minded organizations. With fewer employees, the ability to innovate, implement and improve procedures and business systems is greatly increased. A smaller work force implies more opportunities to be dynamic. Now is the time to really focus on tweaking processes that didn't scale well when business was booming, get rid of processes and positions that were easily merged and replaced during downsizing, and develop new processes to help processes scale again when the economy picks back up.
When consumers begin paying real attention to the products and services that they need and considering their ROI, they become smarter consumers out of necessity. Such conditions reward those companies that are spending time figuring out how to offer their products with superior quality and delivery. Clients and customers become more willing to provide praise or criticism to companies that exceed their expectations or push the wrong buttons respectively. Taking the time to listen to consumers, identify problem areas and exceptional areas will pay dividends.
The point? - Smaller workforces and more demanding consumers today, are providing organizations with the opportunity to take advantage of an environment that will foster innovation and increase the likelihood of emerging from this recession a stronger, more stable company. Business leaders that recognize this and push for improvement now will reap the rewards when the money begins circulating again.
