I like this view, I took this picture from the window of Exchange Square, Hong Kong. This is a city where entrepreneurism thrived. SadlyI think opportunities are slowing diminishing. The only big money to be made is real estate or finance. People here truly embraced risks and never too worried about any downturn. In though economic times like this, it is the best time to invest in innovation. Innovation sounds like a great thing to invest in when business is booming. But when times get to get tougher, as they seem to be at present, the case for investment suddenly becomes much more difficult to make and even the most well-intentioned businesses can see their innovation efforts reaping less reward. I can see how the finance people asking questions such as “is this investment absolute necessary?” This is the time for a true test of any companies that claim that they are about innovation. Companies often pay lip service to the critical role innovation plays in their businesses' success, historical data shows that as economic times get tough, senior management's reaction may inadvertently lead to the creation of an innovation-stifling culture.
It is human nature that in times of uncertainty there is increased risk aversion, tendency to over focus on the short-term, and insistence on air-tight ROI as having potentially devastating effects on a company's competitive and alternative futures.
Truly innovative companies understand this is the time to look to the future, Cisco Systems is one of those who is now looking to the future with plans for big investments across its portfolio in "adjacent markets."
It is easy to retract to cost cutting and they are necessary to some extent. Companies like Cisco need to prepare themselves when spending starts again. For them, it means that they will invest in new markets that are adjacent to existing product lines in all its major customer segments from the home network to the data center, from small and medium businesses to the enterprise, and from its commercial businesses to the service provider market.
For example, Cisco's unified communications business and its IP telephony businesses were areas where Cisco invested during previous downturns. And today these businesses are paying off generating a significant amount of revenue. CEO John Chambers says he already sees the next technological wave. "Web 2.0 and collaboration will be the biggest drivers for our business over the next five to 10 years" according to Chambers.
Here’s advise from Steve Jobs in managing in a downturn. "We've had one of these before, when the dot-com bubble burst. What I told our company was that we were just going to invest our way through the downturn, that we weren't going to lay off people, that we'd taken a tremendous amount of effort to get them into Apple in the first place -- the last thing we were going to do is lay them off. And we were going to keep funding. In fact we were going to up our R&D budget so that we would be ahead of our competitors when the downturn was over. And that's exactly what we did. And it worked. And that's exactly what we'll do this time."
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