Subscribe to Entrepreneur for $5
Subscribe

Special Report: Innovate In a Recession

If the downturn is hurting your entrepreneurial spirit, we have good news for you: Recessions are historically ripe with opportunity for innovation. Don't believe us? Read on.

By
This story appears in the February 2009 issue of Entrepreneur. Subscribe »

Change Your Mind-Set

The economy tanks. You have two options: hole up in a bunker and hope it ends before you run out of tinned peas, or innovate and emerge stronger than when the economy took the hit. "During a recession, people tend to say, 'Let's stop everything and save money until it's over,'" says Bernard Meyerson, vice president and CTO of IBM's systems and technology group. "Well, you're not going to save your way to greatness." But you can innovate your way there. So stop moping and heed our experts' advice. Here are three steps that'll help you focus on innovation rather than recession woes.

  1. Take a Reality Check

    "Love the lows," the experts proclaim. "Relish the recessions." Given the national mood, even Curb Your Enthusiasm's Larry David comes across as more sensitive. In fact, before you relish anything, "make sure your core business is strong," says Susan Schuman, CEO of innovation and leadership firm SYPartners. "Protect your core, because only then will you have the capacity to innovate."

  2. Don't Go It Alone

    There's the romantic notion of innovation: lone genius, devising the idea of the century--from a tool shed. Then there's reality. "Innovation is actually much more complex," says Edward Bevan, vice president of innovation and market insight at IBM. "Increasingly, it's the integration of technology, business models and pro-cesses--all wrapped together. It's very difficult for any one entity to do that alone."



    Bevan ought to know. He oversaw IBM's 2008 "Innovation Jam," an online gathering of thinkers who generated far-ranging ideas from which IBM will extract solutions that all participants can use. Few entrepreneurs could erect an IBM-size jam, but the guiding principle applies: "We believe that if we pool our wisdom, we'll end up with better results," Bevan says.



    If IBM, with its vast internal resources, thinks it's important to reach beyond its borders to fill gaps, it stands to reason that entrepreneurs should, too. Gather diverse thinkers around a table to create a "public commons of ideas," says Bevan.



    Meanwhile, Web 2.0 teems with tools for tapping the wisdom of crowds. Such as:

    . Collaborative brainstorming, mind-mapping: brainreactions.net, mindmeister.com, bubbl.us, mindjet.com, shareyourbrain.com

    . Emergent trends in business, culture: trendwatching.com, iconoculture.com, psfk.com, springwise.com

  3. Play To Your Strengths

    "A recession is an especially good time for entrepreneurs to build loyal followers," says Thomas Koulopoulos, founder of strategic business consulting firm Delphi Group and author of The Innovation Zone: How Companies Re-Innovate for Amazing Success. Big companies, often good at community building, will be distracted during a downturn. "But when the economy recovers, everyone will go after that audience--and if you already own it, that gives you tremendous leverage."



    Robert Wolfe, 38, founder of Madison Heights, Michigan-based outdoor equipment and apparel retailer Moosejaw Mountaineering, agrees. He built a loyal community around his brand by squeezing every pixel of opportunity out of Web 2.0. His innovative marketing, known as "Moosejaw Madness," spans text campaigns, a blog and "Daily Remark" on moosejaw.com, among other initiatives.



    70%

    of executives say innovation is a top priority.

    (Source: Forrester Research)

    In the 2000s, many larger retailers responded to the dotcom implosion by discounting extensively. Instead of battening down the hatches, Wolfe ratcheted up the madness. "For our survival, innovation was imperative," he says of his close to $40 million company. "We made sure our customers knew we were still at it and as crazy as ever. And I think it's going to work out the same way this time around."



    In this economy, Wolfe won't pursue everything on his innovation to-do list."But we think we're good at Moosejaw Madness," he says. "I'd say that if you're good at three things on your list, don't skimp on those three. Innovate around whatever you're best at."

5 Steps to Innovation

Continue reading this article -- and everything on Entrepreneur!

Become a member to get unlimited access and support the voices you want to hear more from. Get full access to Entrepreneur for just $5!

Get 3 months free with code ZENDESK

Presented by zendesk

Get 3 months free with code
				ZENDESK