As a near decade-run of economic growth slows down, cost cutting and budget revisions are around the corner – for which preparations will be on the FY 2023 agendas of most businesses.
However, the intuitive slashing of resources during a downturn focuses on short-term priorities: a strategic mistake that must be addressed.
The non-intuitive response to the economic downturn must be to increase focus on innovation – in other words, focusing on long-term strategic priorities.
A challenging business atmosphere should trigger the need to innovate as businesses capitalize on the recession to set course for the future. To help companies stay on course and deliver on long-term strategic priorities, they should consider the following actions points:
Businesses should prioritize innovation by creating a distinct ‘connection’ between their corporate ‘purpose’ and innovation. A sense of purpose beyond ‘operational business as usual’ will help foster an attitude of disruptive innovation.
During a downturn, as resources become scarce, businesses must become merciless while making decisions on over–budgeted projects and unprofitable business lines. Ruthless prioritization will help uncover corporate bandwidth and uncover resources that can be diverted into innovation.
Challenging business cycles can expose unmet customer needs. Businesses can leverage an economic downturn as an opportunity to identify new products or service offerings. By listening closely to customers and using their feedback as an ideation soundboard, businesses can divert innovation efforts appropriately.
Innovation can yield both success and failure. Businesses that are not ‘failing’ are simply not innovating enough. Embracing failure is a key component of innovation, and during a downturn, embracing failure becomes a critical part of the “build it, try it and fix it” mentality that successful businesses employ.
Downturns demand a more collaborative approach to innovation. Partnering with other departments involves giving them a vested interest in the business’s own success. Partnerships also allow opportunities to innovate while sharing costs, spreading risk, and combining resources.
Innovation is a critical catalyst towards long-term strategic priorities. During a downturn, it becomes especially important for innovation to be tackled thoroughly because the margin for error drops to zero. Businesses that crack long-term strategic priorities through innovation emerge stronger and ahead of the competition.
A collection of articles, trends and thoughts from our consultants at Curia. We strive to provide relevant content that will equip any business owner with information required to improve their business.