I have been studying recession for years. The current Great Recession, while highly unfortunate, is not an unprecedented event. We have had many recessions in the past. Based on my study of them, I can make several observations. First, expansion always follows recession and lasts longer than recession. For instance, a 16-month recession after the dot-com debacle was followed by seven years of expansion. Second, after the recession is over, the competitive landscape fundamentally changes—there are new winners and new losers. That leads to the third observation: The winners invest in innovation during recession, while the losers fail to do this. The best time to prepare for expansion is during recession.
True, these are tough economic conditions. Resources are scarce. I recommend a three-pronged strategy for pursuing innovation, even during extraordinarily difficult times. First, set aside a percentage of resources (both people and dollars) for innovation, and ring a fence around these resources. Second, take a hard look at all the projects under way in your company and stop the ones that show little future prospect. You can release resources by shutting down "low-probability-to-succeed" projects. Third, be very disciplined about implementing innovation initiatives. It is the third step—making innovation happen—that seems to be the most difficult.
To read the full, original article click on this link: How to Innovate After a Recession - BusinessWeek
Author: Vijay Govindarajan
