Innovation During Tough Economic Times

Survivalist training teaches us that severe conditions require refocusing. What made sense before the current economic crisis may not necessarily be sensible now. The principles of survivalist training can be applied to innovation in the tough economic wilderness of today’s market.

First: Throw Out What You Don't Need.

Don't weigh your innovation portfolio down: Roald Amundsen survived his numerous explorations because he learned an important lesson on his first nearly disastrous winter expedition to Antarctica:  Much of what you carry in normal situations is worthless once conditions become severe. He dumped traditional, standard issue equipment in Europe and North America and focused on what would work. The same mentality can be applied to the business world.

Clean the pipeline: Get rid of the projects in the R&D pipeline that are not essential. Under the current conditions, you can’t afford to waste the resources on good—but not great—projects.

Reduce complexity: Dump the products and broad portfolios that weigh you down and don’t provide value. In the past, many of these products may have seemed worth supporting and broad portfolios may have seemed attractive. Now they just suck up R&D resources and time—both of which are precious.

Next: Move Faster.

Severe conditions punish slow movers. Drive a few critical projects faster and reap the benefits sooner. Allocate additional resources to selected high-priority innovation projects that can deliver near-term benefits. Also, remove any barriers that would delay decision making and action.

Now, Manage Capacity.

Take a hard look at what you have on hand and what you will need to survive for the next 12 months.

Find new sources:  Make sure you have sufficient quantities of the best available resources because this storm is not going to blow over any time soon. Take advantage of R&D talent in low-cost countries such as China, India, Vietnam, and Eastern Europe. Properly executed, sourcing not only lowers cost but also improves innovativeness.

Identify constraints: Find out where you have constrained resources and make sure you don’t make matters worse by cutting those.

Convert What You Have Into Something More Valuable.

Be imaginative and bold: Those tent poles you brought camping may be important for spear fishing and the tarp may be important for gathering food. Don’t get stuck in a rut and use innovation resources solely to create new products.

Create business model innovations for current products: This includes looking for new services to complement existing products. Cisco recently launched the sale of hourly blocks of time on its new TelePresence video conferencing product. Cisco knows that, under current conditions, large capital expenditures for things like video conferencing equipment will decrease significantly. Cisco modified the business model accordingly.

Innovate on cost reductions for existing products and services: Reevaluate projects that you may have shelved before the storm that provide incremental and breakthrough cost reductions to processing or manufacturing, assembly, and the supply chain.

Leverage strong customer loyalty to provide new customer experiences: Your customers are an immensely valuable resource; identify major gaps in the customer experience and focus innovation resources on creating improved experiences. This creates stronger loyalty and grows revenues.

And Finally: Keep Your Head.

Don’t let the current situation affect your basic good judgment. There is no need to become overly risk averse—making good decisions is still the best path forward. Survival in extreme conditions takes a cool head, keen judgment, and the guts to do things differently.

Authored by Rob Shelton (rshelton@prtm.com), a partner in PRTM's Product & Service Innovation practice.