What I Learned: Innovating in a Recession

Over the last few months, I have been mainly
sharing our benchmark research with you in this BLOG. One of the
joys of what I do is learning from survey results and letting the
research change my assumptions about the way things really work.
But that is only a part of what I get to learn during the week. In
my role as industry analyst, I get to meet some of the most
interesting people and hear about their passion to change the way
companies innovate and profit from innovation. I also get to hear
about a lot of things that are going on in the industry, much of
which doesn’t hit the radar in formal publication. So, I am
planning on sharing a bit more of the fun and excitement that I get
to enjoy with you in some “What I
Learned” posts. I know, get on with
it…

What I learned this
week came from an article that came up in my Google
Alerts on product innovation. It came from Advertising Age in a CMO
Strategy piece (thanks to Hal Foss) called Innovate
in a Recession? Yes.  It appears that it is a follow up to
a previous article, and it had some very interesting commentary.
The piece that really struck me was a bit of research (ok, shoot
me, but at least it wasn’t mine). I don’t have the source of this
and haven’t verified it, but it sounds interesting and this is a
blog entry not an academic journal - so here goes: “Profit Impact
of Market Strategy, a British study of 1,000 businesses during the
past 30 years, found that companies that spent more on
innovation during the downturn saw return on capital employed rise
23.8% during the recovery, compared with 0.6% for those that
slashed spending.” Wow! What a wake up call. Considering
how long it takes to launch a commercial product, it makes perfect
sense. If you wait until you can ramp up spending on innovation
comfortably during an upturn, you miss the opportunity that the
upturn offers to sales because you start the clock running to late.
The key, according to the piece, is to gain insights inexpensively
through an innovation process. Fits in with a lot of what we have
been seeing about “operationalizing innovation” in our
research.

So that is one of the things that I learned this
week, I hope you found it interesting. And if you didn’t find this
post interesting, I hope that you followed the link and enjoyed Mr.
Foss’ piece.

So innovation in a recession is a smart long-term
investment. Who knew? I didn’t, if you did let us know about
it.