This chaotic world of business (and what's happening in the world at large) makes us wonder how traditional management consultants have little to offer beyond cost cutting and streamlining and the ad agencies keep reminding clients to spend their way through this downturn. The large outsourcing companies will tell you to move your back office operations to another country to cut cost. The truth is that if you do all those three, you will likely to end up far worse. You probably better off listen to Tarot card reader, as least they are cheaper.
It was once said that “Winners don’t do different things, they do things differently”, my advice for you is “Winners do different things, and they do things differently.” This is a perfect storm for 4 things 1/design-driven innovation 2/strategic acquisitions 3/strategic talent development 4/refocusing on customer needs.
Tuning up your focus on customer needs is more crucial than ever. Customers always have problems to solve, even more so in a downturn. This downturn itself is creating a permanent impact on customer needs and at the same time creating new ones. Take ethnographic quick and deep dives and quickly realign your business models to meet their needs. Rethink your business starting with these new opportunities.
Organizations often behave in counterproductive ways when hit with bad news. They get conservative and systematically switch to a defensive mode. As revenues slow and margins get squeezed, companies naturally switch its focus to cutting costs and outsourcing. The company protects its balance sheet—an approach leading to the deferral of growth and of low-priority investments, the shelving of innovation and acquisitions and its competitive advantages eroded. It is very easy to understand.
When times are tough there is a big temptation for business to cut ‘discretionary’ budgets - money allocated to activities such as innovation and research, perhaps. This is what the bottom 20% of managers will do because they don’t get the big picture. You plan for the downturn when business was booming and you plan for the recovery when you are in the downturn, it is above a step ahead. But design-driven innovation is a powerful tool in a downturn.
Smart companies should look to 'design' their way out of downturn and applying design thinking is more important now. These companies responded through an investment in design and innovation, which helped to turn their fortunes around and set them up to become the winner.
There are many ways design thinking can help your business perform more strongly even in a downturn, innovating your products or services, through to enhancing your overall efficiency and saving you money. This is where traditional competitive economics fail. You simply cannot increase the size of the pie without engineering desire. Design thinking can create new products/services/experiences that alter the demand curve.
During downturns investment in design can give a business a competitive edge over rivals who are reigning in their design and innovation budgets in order to save money and that’s the worst move for any companies unless you are on the verse of bankruptcy. As American Express chief executive Ken Chenault told Fortune magazine: ‘A difficult economic environment argues for the need to innovate more, not to pull back.’
Similarly, in September 2008 following a crisis in the global financial markets and in the face of an impending worldwide recession, Intel’s chairman Craig Barrett told Reuters that investment in the company’s products and innovation remained very much on track. ‘We’ve always had the attitude that you have to make that investment in good times and bad,’ he is quoted as saying.
Design-driven innovation is way to find light at the end of the tunnel. Do different things and send money wisely and most important ‘differently. Don’t expect your advertising or direct marketing agencies can bring you the solution even if they offer; it is like when your accountant offers to fix your car. It is those designers and design thinkers who can save this economy, not economists.
And we need move away from a culture of wants. Unfortunately, marketer and designers are putting too much of their creative energy to the wants of our culture, rather than the needs of consumers and societies.