Whether it’s a bad quarter, your market or demographic is rapidly shrinking, or we are in the midst of a recession—you may be tempted to halt your innovation program. However, innovation is precisely what you need when your sales decline. This isn’t to suggest that you won’t need to pivot or downsize, but a strategic approach is required. Whether the decline is gradual or rapid, these tips will help you prioritize and keep innovation alive.
Revisit Your Analytics
Before you make any major changes, take a deep dive into your in-house analytics and industry trends. Even if you comprehend why your sales are down, such as a recession, there are sure to be some new insights. From where consumers are still spending to what features and functions they are actively asking for, and niches that you can focus more attention on. Your deep dive should include how your competition is responding to the current market. This includes generating new market research, but also requires direct contact with industry insiders.
Your new data and insights will help you make an informed decision regarding your next steps. However, major decisions shouldn’t be made without insights from your team.
Brainstorm With Your Team
As a leader, you feel the weight of the world on your shoulders. Even if the final decision is yours, gather relevant teams for brainstorming sessions. These sessions should include more than the leadership team, as a top-down approach is rarely effective when speaking of innovation. In fact, a bottom-up approach is effective even when you aren’t in a time of financial strain. Watching a few episodes of Undercover Boss provides use cases of this concept across a wide range of industries.
While you may need to drastically cut costs, including currently allocated innovation spending, your team’s perspective is likely to illuminate a few factors you have yet to consider. This is because they are closer to your consumers than you are, and they are the ones working within your designated workflows.
Share your new data and insights with your team before your brainstorming sessions.
Play Both the Offense and the Defense
Statistics find that only 10% of firms emerge stronger during a financial downturn. So, your initial response may be to lay off, cease hiring, shrink budgets, postpone new investments, and restructure. While you may need to implement a few of these defensive strategies, firms that emerge stronger do so by simultaneously playing the offensive. It’s a delicate but essential balance.
By only playing the defensive, operational output is likely to decline—and not only because of layoffs. Between worrying if they will be laid off next, taking on a larger workload, and the stress of the unknown employee morale will drop. Operational outcomes are never at their peak when morale is low.
Playing the offense will keep your team engaged, provide them with a sense of purpose, and inspire ongoing innovation. The key to playing the offensive when sales are low, is to re-evaluate and reprioritize your innovation program.
Invest in Both the Short-Term and the Long-Term
As you review your current investments to re-evaluate where to pivot and what to move forward with, prioritize a mix of short and long-term innovations. This should include projects that will be completed in:
- 3 to 12 months
- 1 to 3 years
- 3 years or more
If you are a small to mid-sized organization or your sales loss is severe, you may pause projects that will take more than 3 years to complete. Not because you want to, but because you sincerely don’t have the capital.
When deciding what to pause, be mindful that innovation is required to remain competitive. On the flip side, you may decide to launch new innovations or accelerate projects that will reduce operational costs or generate new revenue streams.
Again, this is a delicate balance.
Collaborate With External Partners
There are a variety of reasons to consider an outside perspective. While a financial investment is required, the right partners deliver a high ROI. Maintain your existing external partnerships and inquire about how they can be of further benefit. While already a partner, they may have a few ideas you have yet to consider. Also, consider new partners who can help you navigate this time of change.
- Internal blind spots are inevitable, but external specialists are unbiased, and able to share their insights without sugar-coating things.
- External specialists are often a cost-effective way of filling the gap left in areas you have had to downsize.
- Subject-matter experts have the technology, tools, and resources to deliver on your objectives with minimal setup time.
- If your market or demographic is rapidly shrinking, they can help you to strategically pivot and evolve.
- Change management partners will help you streamline the changes that need to be made, while maintaining communication and culture.
- Strategic industry partnerships can optimize innovation and help both organizations navigate the market change.
- Maximize your time and financial resources by knowing whose expertise to procure in times of transition.
Perform an Innovation Maturity Assessment
Even if you have already assessed your innovation program, you’ll need to do it again in times of extreme change. For best results, leverage the expertise of an external innovation agency. This will assess and measure your existing program to ensure you are positioned for success, not just making a shot in the dark. It will also bring to light new innovations and help you determine which ideas to prioritize.
Once you and your team get to work, your innovation partner will help you stay on track and scale your program as needed. This is achieved by leveraging proven innovation technology and systems.
Not Sure How to Prioritize Your Innovations?
If you aren’t sure which innovations to halt, pause, or invest in—we invite you to consider partnering with Idea Scale. We have the tools and technology to provide the unbiased assessment and strategic approach required to navigate innovation in times of change. Reach out today to learn more!