Harvard Business Publishing

That's a pretty negative viewpoint on the opportunity that companies have as a whole... You've missed out the major elements of change that provide not only the biggest opportunities for innovation - but also the biggest need for innovation!

Recessions actually increase the need for companies to change and be different from the pack in order to sell to a changing market and a changing consumer who all act differently in a recessionary environment. This forces companies to look for:

- increased business process efficiencies
- new business models and channels to drive new methods for doing business
- new and under-served customers to target
- the creation of new differentiating factors for their industry or product segment

and many other such things. Recession has actually been the lifeblood of so many boom periods in corporate innovation because it forces them to think outside of "business as usual" and to be more accepting of more radical ideas rather than sticking to incremental ones. The only problem is the knee jerk reaction to short term strategies like cost reduction that so many companies have. However - at least that's all it is - a short term strategy. The only long term way to survive in a recession is through innovation and differentiating yourself.

Boris: We're in agreement here. I went with Layoffs/cutbacks and other less than joyous examples for the simple reasons that if those factors create opportunity, all the other ones probably do as well.

I think going back to fundamentals can be an awesome strategy, provided competitors are failing at them, and a recession can force those weaknesses to surface in a way boom times can hide.

Thanks for the comment - but I read what you wrote as amplifying my point, not disagreeing with it. Let me know if I'm wrong.

Hi Scott

I think we're in agreement on the second two points - although I would change the bullet title from Cutbacks - to simply "Change Happens" and I certainly believe - with you that Big Change = Big Opportunity (love that comment actually :) ) - indeed having constraints, such as cost, forces you to innovate in order to make a difference.

I also kind of get your point about the personnel - but only in part. Whilst I agree with you that start ups can frequently get more done - it has more to do with entrepreurial energy, a lack of rules to work with, as well as the lack of needing overly complex decision making processes.

However - layoffs in bigger companies have a lot of negative effects that will typically halt innovation. Not only are you losing a good deal of intellectual capital and potential idea sources and implementation resources when you lay masses of people off - you also create an atmosphere of fear - especially with regards to potential failure and risk taking - both important aspects to successful innovation. So whilst yes, theoretically getting leaner and meaner might streamline decision making - those decisions will be much more conservative due to the prevailing company culture around layoffs. In the longer term - sure it will eventually present some opportunities - but in the shorter term - layoffs kill innovative behaviour in my mind...

Best,
Boris Pluskowski
http://www.completeinnovator.com