Recessions are the best time to take chances, make that leap, and truly reinvent your business. When times are good it is all too easy to keep doing what “works”. But when times get tight that’s when businesses can dig deep to find long-lasting success.
There are some classic examples of truly innovative businesses starting in the worst of times. HP was founded in 1939 during the Great Depression. Microsoft was founded in 1975 during the Oil Embargos. Siebel was founded in 1993 when things looked a bit grim. What drove these businesses was desperation and a lot of sweat. In today’s landscape business looking to truly break out need to:
1) Re-evaluate the value you bring to your customer. Simple ask yourself “What business am I in? List all of the potential answers then match it up with what your consumers need. Boil that down till you have a view of your business that is positioned for growth. Dunking Donut’s is in the “fuel that gets me though my day” business. The New York Times is in the “Information I need to know” business (there will always be a demand for “news” – it’s the “paper” part that is killing them). United Airlines is in the “get me there” business. New perspectives will open new possibilities.
2) Redefine your Market. Who do you sell to and how do you sell to them? Look for opportunities to expand the audience for your products and services. Or look to narrow your audience while increasing the value you bring to that audience. Now is the time to look for new ways to get your products to your consumer. We’ve talk to death about leveraging the internet, but that doesn’t always mean e-commerce. There are new subscription, micro-payment, and direct response models developing that show promise. Don’t forget mobile. The iPhone and other smart phones are redefining this must have accessory.
3) Challenge your competition. When times get a bit tough the tough find and exploit their competitor’s weaknesses. Now is the time to review your distribution model, your vendor relationships, and price structure with an eye for where you can position yourself to take share away from the competition. While your competition is hunkering down you’ll be bringing a new approach that adds value to every part of the value chain. Talk to your partners and find out how to help them through this down turn. They will reward you now and even more when things look up.
4) Create a new Market. Ten years ago there was no Red Bull. Five years ago there was no Kindle. And two years ago there was no iPhone Aps Store. Invention is the fuel for growth. And the world is in need of innovation across the board. We need to rethink our cars, our energy, healthcare, television, food – the list goes on and on. The US car industry is not dieing it’s being reborn. Green energy is a reality that will create amazing new products and services. Healthcare is a mess – new businesses will fix it. Television is still a passive medium – that’s about the change. And we’ll all a bit fat – let’s rethink our food.
5) Develop talent for growth. Success is driven by having the rights folks with the right skills. Now is not the time to pull back on talent development. Take a deep look at your team and identify where your strengths are and where you have weaknesses. What worked before won’t work in the future. You need the team that will drive the business forward toward that ever changing future rather than holding you back. Empower your newer team members with projects that expose them to different areas of the business. Push your more seasoned staff to think differently and throw off the restraints that hold back innovation.
Recessions are not a time to panic. They are a time to re-evaluate your businesses value proposition. If your business can add value during these times you’re poised for enormous growth when things recover.