Skip to content

Innovation During A Downturn

Belt tightening is the first instinct of many companies entering a recession, often with deep cuts to R&D and innovation budgets. However, history favors those who invest strategically rather than hold back. Vijay Govindarajan and Anup Srivastava note that recessions are typically short-lived relative to the periods of growth and prosperity thereafter.  For example, the OPEC oil embargo recession (1973 to 1975), the energy crisis recession (1981 to 1982), the Gulf War recession (1990 to 1991), the dotcom bust (2000 to 2002), and the Great Recession (2008 to 2009) were each followed by a longer period of growth.

Aspire and Invest

During economically challenging conditions, the development or review of your innovation strategy is critical.  What is your company’s winning aspiration?  How does innovation align with this goal? By working with top management, find ways in which innovation can support the future vision and leapfrog your competitors.

Furthermore, double down on what’s most important. McKinsey reports that organizations that invested strategically in innovation during the 2009 crisis outperformed the market average by 30% and their growth continued to accelerate the following years as well.

Prioritize and Mobilize

Once there is alignment to the company’s north star, ruthlessly review the innovation portfolio.  Remove off-strategy and zombie projects to free up scarce resources for projects that will align to the business trajectory.  In this context, innovation is not an end to itself; it’s a means to an end.

Once the strategic priorities are clear, deploy resources toward the most important work.  Review these priorities regularly, perhaps quarterly, and move resources dynamically as they change.

Sweat Assets and Experiment

There are many seemingly sleepy product categories that boom in a recession with proper investment.  Consider the performance of Arm & Hammer products during the last recession.  In the 2008 downturn, thrifty consumers responded to an uptick in advertising for household cleaners and laundry products which helped deliver double-digit sales gains over more than 12 months. Moreover, Bain & Company reports nine out of 10 companies that successfully renewed themselves found the solution in mining hidden or underutilized assets.

Do you have underutilized assets that could be working harder for you? Ask yourself the following:

  • Can you sell existing technology/service to a new market?   For example, Groupon, launched during the downturn of 2008, introduced many local companies to new consumers via their prepaid coupon platform.
  • Can you sell your offering in a new channel?  Your consumers may channel switch during a recession.
  • Is there new news, a feature or a claim that is more relevant now?  What about adding a value line, smaller packs, price-fixed service?
  • Is it time to accelerate the patent process for a premium technology in preparation for the next upswing? Does your portfolio include patents that could be out-licensed?

Once opportunities have been identified, experiment strategically and measure outcomes. Consider the HOPE framework to guide your planning – hypothesis, objective, prediction, execution plan.

Share Risk and Reward

Finally, consider this:  The 2008 recession was followed by a sharp rise in transformative startups including Dropbox (2008), Uber (2009), Venmo (2009), and WhatsApp (2009), now well-known brands.  All these former startups disrupted their competitive set, forcing established companies to catch up.  By tapping into start up accelerators now, it may be possible to develop partnering relationships that allow you to share the risk and later reward of offering new, transformative offerings to the market.

Fortune Favors the Prepared

Just when your competitors are pulling back spend, investments in innovation of product, process or partnership could maximize opportunities to increase ROI, market share, or efficiencies now or soon. Take full advantage of the turmoil to reflect on your core business and its north star – this might be the right time to move out of the status quo. As history shows, history rewards the bold and fortune favors the prepared.

Thought Starters

Whether you are in R&D, marketing or another innovation role, here are some thought starters to help you develop your ideas about how to plan during a recession.

  • What would I do differently if I thought that a recession was the best thing that could have happened to the business?
  • What are my consumers doing and thinking that’s different now? Is there an opportunity to simplify or offer a lower cost option?
  • Are there products in my pipeline that could be accelerated to leapfrog my competition?
  • Write your future press release:  When the recession is over, what do I want people to say about how the company acted during a downturn?
  • How did we innovate our process, service, or product offerings to protect the business and accelerate recovery?

Contributor

  • Gail Martino

    Gail Martino, Ph.D is a thought leader and global innovation leader in the fast-moving consumer goods industry, having worked with billion-dollar brands at Unilever and previously at Gillette. With a background spanning both corporate and academic roles, Gail has a proven track record in developing and executing highly effective innovation ecosystems, driving value through strategic partnerships and internal product development. Notably, she has been a valued member of the advisory board for the Front End of Innovation conference since 2015.

 
 

Related Content

Bulletin board with post it notes. One in center says Make Things Happen.
innovation team

Managing Productive Innovation

Conservatively, I estimate that I’ve attended 20,000-plus meetings throughout my career. I’ll admit, many of them should have been replaced with email…

A blueprint with a pencil and ruler.
innovation team

Innovation Principles, 7/7

Once adequate competency, support, and size of a new team are secured, clear direction based on a purposeful vision, alignment with a winning game pla…

coin operated binoculars and open blue sky
data science

The Road to FEI24: Analytics for Innovation

Anu Sundaram, Vice President, Business Analytics, Rue Gilt Groupe, is planning an interactive analytics session for FEI 2024, taking place this June….

A smiling little robot
innovation culture

The Road to FEI24: Brunch with the Bots

Samantha Johnson, Founder & CEO at Tatum Robotics, will take part in FEI 2024 in several ways, including participating in the keynote sessions, “Bru…

football chalk game plan
product development

Innovation Principles, 6/7

Development strategy (i.e., Game Plan) is a set of choices within applicable constraints and trade-offs that defines our development approach and posi…

explorer in a cave
user experience

Applying AI to Anthropological Research

Agile research and methodologies are of primary importance to the innovation discipline, as they promote a more versatile, rapid, adaptive approach to…

innovation strategy

The Benefits of Innovative Entrepreneurship

Entrepreneurship and innovation are closely linked concepts but also distinct and separate stages in business. Defining both is helpful from both an o…

gross profit margin

Innovation Principles, 5/7

Gross Profit Margin and Net Present Value are two primary profitability indicators for evaluating an intended entrepreneurial offering. Even if suffic…

artificial intelligence

Gaining an Innovation Edge with Automation

With the focus on how artificial intelligence, as well as digital transformation efforts, can help streamline operations, it’s worth another look at…

startup corporate partnerships

Creating the Right Innovation Partnership

Corporations often face many challenges when it comes to developing innovation in a fast, evolving market. They can face barriers such as inertia, the…

innovation collaboration

Bringing Sales and Innovation Together

Just how can innovation and sales work together to find success? Too often, companies find themselves stuck in their respective departments and the si…

design thinking

Innovation Principles, 4/7

The front end of innovation is a distinctly iterative endeavor based on human-centered, design-thinking principles. It could be represented by a spira…

innovation leadership

Winning the Innovation Strategy Game

We know that having a creative mindset can fuel innovation, and that fostering a culture of innovation is also important to get the job done. Yet ther…

innovation leadership

Taking Next Steps with Innovation Talent

As we head into the new year, taking the next steps with innovation talent remains an important question to explore. With the competitive landscape in…

innovation culture

PIE: Get Your Slice of Success

How can someone really stand out and succeed as a corporate innovator, get the most exciting projects, or secure a promotion? This is a question I enc…

transformational innovation

Shaping the Future with Disruptive Technology

As we head into 2024, innovation of all types, most especially in technology, will continue to disrupt, transform and impact our lives, from the workp…

resilience

Keeping Your Innovation Career Resilient

With the rise of technology, such as AI, impacting workers and workplaces, it’s safe to say the future of work is evolving—in innovation and in ma…

product development

Innovation Principles, 3/7

The main premise behind an integrated end-to-end continuum of innovation and new product development is that a holistic understanding of sequential de…

external innovation

Embracing Open Innovation

Open innovation is a growing tactic for today’s globalized enterprises. Rather than focusing just on closed loop systems and internal sources, such…

marketing innovation

Shaping the Next Generation of Innovation

Generation Z is in a unique position as they are often viewed as one of the first to be shaped and influenced by technology such as the Internet, soci…

human centered design

Innovation Principles, 2/7

Successful innovation endeavors are built on creative tension between key enabling entrepreneurial trade-offs associated with four must-have constitue…

innovation strategy

The Impact of AI on Innovation

Artificial Intelligence (AI) is having a profound impact and influence on a broad range of industries. From healthcare to publishing to industrial fie…

innovation mindset

Unlocking Business Growth Through Innovation

The business world is changing quickly for innovators and there is a growing and ever-present imperative to keep up. Business model transformations an…

technology

Living in A Digital Transformation World

Digital transformation (DX) has been a hot topic in the innovation space for some time, but the term can be easily misunderstood as well. As we accele…

transformational innovation

Innovation Principles, 1/7

Imagine a case where a company’s growth depends on an innovation involving complex cross-disciplinary technologies such as electro-mechanical hardwa…

innovation mindset

Sustaining the Self-Disruption Journey

The adage “disrupt or be disrupted” may not necessarily always mean the same thing to the same companies. Even the original architects of disrupti…

foresights

Playing the Game of Disruption

At FEI, Angelina Carvajal, Strategy & Innovation Partner, Sr. Dir. (Optum Advisory), UnitedHealth Group, had a chance to share her thoughts on disrupt…

innovation culture

Creating the Happiness Mindset for Innovation

With 2023 often being labeled the year of uncertainty, it comes as no surprise that consumers, and the innovation community, has had its fair share of…

internal integration

Powering Innovation’s Long-Term Play

Ishan Jaithwa, Manager, New Growth Areas, Cummins Inc., sat down with All Things Innovation’s Seth Adler at our studio at the FEI conference. Jaithw…

product innovation

Design Thinking Faces the Pace of Change

Seth Adler of All Things Innovation recently caught up with Prapti Jha, T.H. Chan School of Public Health, Harvard University, at this year’s FEI co…

ideation

Opening the Doors of Innovation Perception

Seth Adler of All Things Innovation caught up with Cory Sorice, SVP and Chief Innovation Officer, Masonite International, during this year’s FEI con…

innovation culture

Beyond Innovation Theater

At FEI, All Things Innovation conducted a special roundtable, bringing cross industry, cross disciplinarians together to talk about transformation and…

transformation

Supporting Data with Design Thinking

At FEI, All Things Innovation conducted a special roundtable, bringing cross industry, cross disciplinarians together to talk about transformation and…

disruption

Achieving Transformational Innovation

At FEI, All Things Innovation conducted a special roundtable, bringing cross industry, cross disciplinarians together to talk about transformation and…

innovation culture

The Finance Factor in Innovation

The finance function in an organization often gets tabbed as a bottom line-oriented, conservative department that more often than not stifles innovati…

chief strategy officer

Setting the Strategic Direction

A chief strategy officer (CSO) is increasingly becoming a more relevant element to a research and development team in an organization. An innovation t…

marketing innovation

Managing the Marketing of Innovation

Even some of the best new innovations might fail if there’s no effective marketing behind the product or service. With an emphasis on cross-collabor…

optimization

Playing Moneyball for the Win

In the popular baseball movie “Moneyball,” the character Peter Brand (played by Jonah Hill) highlights the “epic failure” of MLB leadership in managin…

innovation talent

Putting Together Your Innovation Team

As the community’s recent Innovation Spend & Trends Report indicated, innovation teams are not working in a bubble, or at least not as much as they…

innovation strategy

Generating Innovation Through Ideation

Ideation is often confused with innovation, along with other related terms regarding the creative process, such as brainstorming or design thinking. W…

talent

Managing Talent to Drive Innovation

With the economy producing mixed signals, and companies often in a state of flux, managing innovation talent has never been a more challenging and imp…

ambidextrous organization

Balancing Innovation with Ambidexterity

Innovators have long been tasked with being a flexible part of an ambidextrous team, as part of an organizational cog that can easily pivot and manage…

sustainable technology

Defining Disruptive Innovation

Disruptive innovation is often a phrase used to make a splash in the business world. Some may debate that the label has been applied carelessly at tim…

fostering innovation

Growing a Culture for Business Innovation

Whether it entails a large jump or a small step, the innovation pipeline for a business keeps it moving forward through a competitive landscape. Busin…

gaining true value

Gaining True Value While Moving Forward

The All Things Innovation community came together in this Gathering on Innovation Strategy to drive immediate lessons learned through the first half o…

innovation ethics

Diving Into Humanity-Centric Innovation

With the continued emergence and evolving development of artificial intelligence, there rises a question of how humans and AI can work together more e…

innovation team

Tapping Into the Innovation Talent Pipeline

In the last few years, the pandemic and a range of other economic factors have influenced the talent recruitment, development and retention practices…

human resources

Ignite a Culture of Innovation

From the successes to the failures, from the breakthroughs to the breaking points, the innovation community knows all too well that fostering a cultur…

successful innovation

Striving for Successful Innovation

In the quest for innovation, there is often a fine line between success and failure. The road to success is not always clear, easy or convenient. Howe…

business innovation

Innovation Survey

The All Things Innovation Survey Committee along with FEI have created a Spend & Trends survey to provide you the opportunity to benchmark with your p…

diversity

Innovation Diversity

Black, Indigenous and People of Color have always been leaders in innovation and it’s time for us to put that at the forefront. DEI, or Diversity Eq…

fostering innovation

Fostering Innovation

When you start to talk that way and lead that way, people do feel more psychologically safe to support change and support innovation that’s happenin…

innovation leadership

Breakthrough Innovation

While the rest of the industry relies on iterative change, Alex Moyes explains the breakthrough innovation happening at Dominion Energy. “So Dominio…

virtual reality

Innovation Reality

When working remotely, the main challenge is bringing people into an office when they live across the country or around the world. The AES Corporation…

corporate venturing

Innovation Ventures

The movement for startups and corporate venturing is becoming more and more of a trend in organizations according to Chris Varley, Principal of Goodye…

innovation leadership

Control The Sails

Although the world was affected heavily with change in the last few years, not much in the business world has changed as far as topics and issues go….

innovation talent

Innovation Culture

Innovation starts with the employees of an organization. As we know, the people that work for a business are some of its greatest assets. In today’s…

innovation culture

Interaction Innovation

We are at a time in history of incredible change and technological innovations, such as the rise of machine intelligence, and companies who keep doing…

technology

Humanity-Centric Innovation

Humanity-centric innovation is the idea of solving the biggest problems facing humanity in an economically viable way. Pete Dulcamara, Chief Scientist…

data and analytics

Measurable Innovation

Each company has their own KPIs that are important to their specific business in place to progress and be successful. Are people at the forefront of i…

innovation talent

Certain Uncertainty

Life is uncertain in every way. It’s always interesting to meet new people and try new things. On the other hand, attackers may sometimes appear out o…

rolling innovation

Rolling Innovation

If you’ve done it once, you can do it again. Make sure to keep doing it, it’s rolling innovation. Amber Case sits down with us to discuss how impo…

advancing innovation

Strategic Innovation

Any new concept or technological advancement will continue to change and advance. Landlines were commonplace before smartphones. Remember those? What…

innovation culture

Innovation Intelligence

It seems that innovation is one of the biggest buzzwords in business now. To sustain growth and be competitive in the marketplace, companies in every…

innovation culture

Innovation As Constant Change

The key strategy to a successful business is to know when they are being innovative or are just transforming their status quo according to market tren…

digital transformation

Innovation versus Transformation

Many people think digital transformation and innovation are one in the same, but according to Hatrick, while they are closely related, there is a diff…