Innovation is Key to Success in Recessionary Times

I didn't write what you are about to read. It is an article by Jeremy Miller of LEAPJob, a Toronto, Canada, based sales and marketing recruiting firm. Jeremy has been kind enough to allow me to reprint his thoughts. As I read the article it struck me that the advice provided did not just apply to bad economic times but to almost any time. Companies often divest themselves of marketing and sales when facing tough times. It seems to be the easy way to cut costs but it often further reinforces the downward revenue cycle. There is no doubt that controlling costs is an important part of managing a business successfully, but examining where to manage those costs strategically so that revenue is not impacted is a critical skill.

Please enjoy this article and let me know what you think by your comments.

Turtles & Innovators

It's hard to stay positive in the midst of a recession. Every time you turn on the news you're barraged with negativity: plant closures, layoffs, bankruptcies and more. It's enough to make the most optimistic entrepreneur turtle up and hope for better days. Resist that urge. Turtling up is the last thing you should do. This recession will ravage the Turtles, and reward the Innovators. So rise up, and innovate, innovate, innovate.

Slow Down, Listen and Learn

Purchasing behavior changes dramatically in a recession. Companies become far more cautious with their investments, and many defer any major decision as long as they can. You see it in their behavior. Companies increasingly opt for trimmed-down options or do-it-yourself projects to maximize cash flow. Each spending decision is agonized over, and even small purchases require executive sign-off. The organization becomes hyper aware of their spending habits.

Frugal spending is an opportunity for Innovators, because companies are more receptive to new ideas. They still have needs, but they don't have the same budgets. Can you offer a better way? If so, this is a golden opportunity. While executives are scrutinizing their budgets, you can gain their attention. These buyers are fantastic to work with, because they see the big picture and know where the company can take risks.

Now is the time to be listening. Tune your organization to be hyper alert. Train your sales force to start asking probing questions, and teach them how to look for new opportunities. Sales people are focused on winning business in the here and now, but they can also be leveraged for reconnaissance. Their customer interactions are invaluable.

As you gather information, management needs a way to capture and disseminate that knowledge inside the organization. Are the customer service reps hearing the same things? What is marketing finding? Can marketing tweak the messaging to speak to these customer challenges? What about operations? Can they develop new products or services to solve these challenges, or adapt current solutions to be more effective for the economic times? The whole organization can accomplish a lot with the right information and a can-do attitude.

Float like a butterfly, sting like a bee

Muhammad Ali had an uncanny ability to spot weaknesses, move quickly, and strike. This is exactly the same skills we need for innovation.

The first thing a Turtle cuts is marketing. They view it as discretionary spending, and something that can be cut for short term gain. Bad idea. Rhodes and Stettler write in the February 2009 issue of the Harvard Business Review, "Companies that injudiciously slash marketing spending often find that they later must spend far more than they saved in order to recover."

As the Turtles cut their marketing, the Innovators should strike. Companies want to work with vendors that are secure and stable. They don't want to invest money in a risky vendor; they will seek out the companies that offer sure-bets. Actively marketing your firm is a sign of strength. When customers see you on the Web, in the media and at the tradeshows they will take notice. It shows that you are upbeat and optimistic for the future, and that you are here to stay.

Share Your Point of View

Market visibility is not enough. What makes you remarkable?

Customers are looking for your X factor. They want to see how you are different, and what your company is doing to innovate and stay ahead in this market. So tell them. Show them. Educate them.

The neatest ally you have in this recession is the Internet. At any given time only 3% of your market is buying. This means 97% soon will be. If you are only focused on sales, then the non-buyers will tune you out. To engage the non-buying audience share information and advice that companies can use right now.

You have so many options to contribute value to your market. You can post how-to videos on YouTube, write articles or blog, comment in social networking sites, or simply put great content on your website. All of these activities count. By sharing your videos and value-add content you can build relationships with your customers even when they aren't buying. These relationships will offer you powerful opportunities, because as these customers enter a buying state you will be their first call. They will know you, have experienced your value proposition, and will be ready to do business with you when the time is right.

The Innovators Advantage

No matter how you cut it, Innovators will always beat the Turtles. Look at the giant companies today. Many of them, like Apple and Microsoft, were founded in recessionary times. They achieved their stature by being innovative, aggressive and committed to success. You too have this opportunity in this recession. Grab hold of it, and enjoy the ride.