Innovating with less

I remember the last recession, when clients of my ad agency Grey were slashing marcomms budgets left right and centre.  I recall thinking at the time that this was a rather indiscriminate carnage and this thought has reemerged.  NESTA and H-I Network are working on a piece of research called The Changing Shape of Innovation in a Recession.   Here's my hypothesis:

Before  After

In recessionary times company priorities shift towards incremental, step-wise improvements of existing products and services and away from capital intensive and risky new products and services.  In addition, in an era of "creative destruction" companies can be forced to reappraise their entire model and look for profits elsewhere.
The few corporates I have exposed this thinking to so far have broadly agreed with it and the research will hopefully confirm this.  What the UK does about it is another question.  My own view is that the time is ripe for new, more open, ways of innovating which can less costly and more productive.  Maybe a by-product of a closer examination of different strategies will be that 'innovation' won't all be tarred with the same brush when it comes to corporate cost cutting and that as a consequence businesses will be in a better shape to emerge from the down-turn than last time. Comments, as ever, most welcome. 

Comments

  1. Hi David. Reading this reminded me of the story of the lost American tourists somewhere in rural Ireland asking a farmer leaning on his gate the directions to Dublin. “Well,” he replied, you don’t want to be starting out from here.” Maybe another place to start is with how customers’ needs change in a recession and the impact this has innovation? Just a thought. I wish you well with the study.

  2. Hi Brendan, thanks for your comment, which as an ex ad-planner (consumer representative)I have some sympathy for. The study we’re doing is more from the corporate strategy perspective, that is how they are changing their budgets and priorities. Some of them of course will be fine-tuning these to changed consumer priorities and this is beginning to be reflected in the research results – one pertinent headline for now: “There is significantly more innovation focussed on responding to identified customer needs”. The sample of over 400 companies covers so many markets I can’t say what these needs are specifically, but it’s clear that many corporates agree with you.

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