|How to Build in Tough Times|
Some tips for jumpstarting innovation despite recessionary pressures.
And that's just looking at it from the marketer's perspective. What about consumers? Their confidence in the economy is falling lower and lower. They're worried -- about their jobs, about the value of their homes, about the cost of gasoline. And it all takes its toll on how much they spend and plan to spend.
But the fact is that Ad Age was right. Recessionary times provide ripe opportunities for innovation, especially product innovation. If we are indeed entering into a recessionary cycle, remember it's just that: cyclical. There will be an end, and you'll want to be well positioned when times turn around. Profit Impact of Market Strategy, a British study of 1,000 businesses during the past 30 years, found that companies that spent more on innovation during the downturn saw return on capital employed rise 23.8% during the recovery, compared with 0.6% for those that slashed spending.
And remember, a recession can actually provide an opportunity to break away from the pack. During boom times, money flows freely and fuels start-ups and new competitors. Companies are forced to innovate just to stay current. During a recession, the little players tend to shake out, and many established companies go into innovation dormancy. It's precisely this moment when a touch of strategic innovation can mean a big marketplace advantage.
So, how can you overcome the paralysis and innovate triumphantly in a recessionary environment? How can you create success while others sit on the sidelines, waiting it out?
The answer is to bring speed, insight and focused innovation to the product-innovation process -- or, as we call it, to Spinnovate.
Speed is the overall guiding principle to ensure that you can quickly move to maximize the innovation opportunity. You need to be fast, scrappy and economical.
Digging for truth
Insight is the truth that can unlock opportunities. Sometimes there are unfulfilled needs and desires that have been sitting under our noses for some time to which we've failed to respond. Others are directly connected to the recession and the economic pain consumers are feeling. In a recession, you want to get those answers quickly and inexpensively. So, be open to new research techniques and don't be afraid to leave the focus-group facility behind. Do grass-roots research -- whatever it takes to uncover those essential truths.
And to get the right answers, you need focused innovation: clearly defined, strategically driven goals, a focus on key insights and a nuts-and-bolts understanding of technologies. It's up to management to set the focus and to make sure the right people are involved -- both from within the organization and from qualified, creative outsiders who can bring a fresh perspective to the process. What's important is that you consider several ideas, even those that have been considered before. It should also mean that not every idea has to be a home run. A few well-placed doubles can be equally successful and get to market more quickly.
Opportunities for successful innovation in a recessionary economy are indeed out there. But rather than "forget the recession" as Ad Age suggested, "understand the recession and its impact on your consumer, and act quickly" might now be better advice.
Hal Fass is senior consultant at Consumer Dynamics. He spent most of his 24-year career in advertising account management, first at Grey Advertising and then at Foote, Cone & Belding, later returning to Grey.