Th famous Idiom of “Necessity is the mother of Invention” might see a change in future.
The Recession brings cost cutting, tighter time schedules, faster deliveries, efficient utilization of resources and the most important, Innovation.
As a result of recession, Innovation has to grow in every sector. It starts from smarter way of working, and is most seen at bringing new Innovative Ideas to industry where you can raise the margins and hence lower the operating cost.
History is proof of the quote. After all, many of the world’s enduring, multibillion-dollar corporations, from Disney to Microsoft, were founded during economic downturns decades back.
Generally speaking, operating costs tend to be cheaper in a recession. Talent is easier to find because of widespread layoffs and dissatisfaction. It’s easier to find a more talented resource relatively at a lower cost. The competition is usually less fierce because, frankly, many players are taken out of the game.
Recessions can also help executives figure out how to improve products, services, and processes internally and for customers. Ideally, the creative thinking that’s needed to weather the storm of an economic downturn can lead to new markets and revenue streams. “Innovation originates from challenges,” says Vineet Nayar, CEO of HCL Technologies, a Noida (India)-based global IT services company.
HCL recently partnered with Xerox (XRX) to provide tech support for corporate customers using Xerox systems meant to reduce the amount of wasted paper. The systems themselves were inspired by the dual challenges of helping to save the environment and the need to slash office expenses during the downturn.
Inventing cost-effective and time-saving processes becomes a priority in a downturn, and it’s an area of interest for companies and organizations in a variety of fields, from high tech to health care. “In a recession, you can innovate to be more efficient,” says John Kao, author of the book Innovation Nation and the head of Deloitte’s Institute for Large Scale Innovation.
Recession is the time when major of the Mergers and Acquisitions are triggered. Though multi-billionaire companies can go bankrupt in months, there are always new owners to overhaul the system. The Fall of Sun Microsystems, Nortel are the best examples. Though they fall for bad, Innovation-driven Big Fish eats them and keep them in a more safer zone.
Mergers are driven by effectiveness of cost at which they can be done. Recession is the best time, the market being down, a good bargain is available to the bidder, no matter what is the financial state of the company on radar.
Lessons to Be Learned
Some companies are always left Recession-resistant. Best example is for Apple. Apple reported quarterly profits jumped 15%. With sky high sales for Mac, iPhone, Apple once again proved the key to survive in recession is Innovation. Innovation at technology, flashy gadgets, quality, and rumors among it’s fans :).
Smart companies will continue to apply the innovation lessons learned during today’s tough times even when things pick up. The innovative processes, products, and services that hatch now can help executives understand how to curb costs or take risks on fresh ideas when the economy rebounds.
Innovation is all about, how companies are finding creative ways to come up with new products and services faster and more efficiently—with fewer resources. Industry has to look at the current recession through a variety of lenses to rethink how to approach innovation tactics even as R&D budgets have been slashed. Smart companies are finding inventive ways of keeping employees motivated and creative even when morale is low. We need to look into the benefits of outsourcing innovation in areas ranging from industrial design to corporate strategy.
All these strategies help us to prove that there’s light at the end of the tunnel.