Industry experts, among them JPMorgan Chase CEO Jamie Dimon, are predicting we’re heading into a significant recession, with economic growth estimated to plunge up to 35% and unemployment projected to hit a staggering 14%.
These are dire predictions for everyone, but for businesses that desperately need to evolve, the economy appears to be in grim shape for innovation. Why Your Business Should Drive Innovation in a Recession
But business leaders who can steer their businesses into the realm of differentiation may be able to operate innovative business practices even in the face of a recession.
This may sound like a lofty goal, but consider this example Forbes highlights: The last recession spurred many banks to respond – at long last – to customer demand for simple online banking. Today’s innovation might be tomorrow’s household staple.
How can innovation make a difference?
Business leaders tend to focus on reducing debt and preserving capital to survive in leaner times; however, refining the business focus and investing in revenue-generating opportunities can not only protect the business today, but it can also position it much more aggressively in the future.
A recession won’t last forever.
Of course, innovation just for the sake of creating something new also isn’t likely to yield the results your business needs. Innovation that makes a difference as a differentiator for your business must address an actual customer issue. To unlock this disruptive innovation, your business must:
- I truly understand your customers. This requires a good feedback loop to diagnose customer issues.
- Plan carefully. Unfortunately, customers generally don’t have one glaring problem for your business to solve. Instead, you’ll need to model different outcomes and apply predictive analytics to find the best issue to tackle first, assessing cost to produce, customer willingness to pay, and the size of the opportunity.
- Manage other costs. In order to allocate costs toward an innovation project, your business may need to curb costs elsewhere. Closely monitoring and managing performance and spending at a department level can help make more immediate decisions – and, here also – if your business can harness information with a predictive analytics tool, you can also proactive plan for where costs and revenue may be heading.
Unless your business is already equipped with a capable analytics software and possesses the in house IT talent to drive new innovation initiatives, it’s likely you’ll need to either hire new talent or look to a partner to support you. And in unstable times, leaning on IT staff augmentation reduces the burden on your management to make hard staffing decisions or commit to costly new payroll additions. Shifting to variable costs, as opposed to fixed costs, wherever possible helps control expenses in unstable times, Forbes advises.
Finding an outsourced corporate development partner in a recession
In order to meet a customer need head-on, your business leaders must have a keen understanding of what the customer needs – and let’s face it –that’s often an evolving target. As business leaders are faced with an imperative to keep operating costs down, innovation must be cost-effective, intentional, and successful.
To manage costs and avoid piling on an already lean staff, business leaders can leverage outsourced corporate development services to support new business innovation in a much more cost-effective way. The key, of course, is investing in a partner who can implement effectively, as now, more than ever, there is no margin for costly failures.
Instead, understand if your partner can offer:
- Flexibility. When many businesses are making daily decisions about workforce reductions, a third party must offer on-demand staffing that allows you to scale up or down to adapt quickly to a chaotic climate.
- Transparency. Many small businesses are seeking loans simply to keep the cashflow coming. A partner with hidden costs and fees can throw an already delicate budget into disrepair.
- Nearshoring vs. offshoring. While travel is unthinkable in the immediate, when some normalcy returns and travel resumes, having the option to build a dispersed team with some geographical differences can help capture the best efficiency through time zones and enable better convenience in onsite visits.
- Agile project management. If the aim of the innovation is to solve a customer problem, it’s imperative user feedback is incorporated, and adapted to, along the way. And providers shouldn’t simply be willing to execute an agile methodology – they should be experts in it already.
Innovation in the 21st century requires world-class technology expertise, whether you’re building the next software, launching a new app or simply looking to take better control of internal operations with better insights.
As the economy plummets into a recession and we collectively navigated this unprecedented crisis, it may seem like much is out of your control. But what you can control are the partners you lean on in this critical time, and TechGenies is committed to partnering with you to develop the best technology solution to move through the recession and step into the future with a strong position.
Contact us at firstname.lastname@example.org to tell us more about how we can help meet your technology needs.