I just read a very interesting article in the New York Times called Why Bad Times Nurture New Inventions which combines some of my major interests: customer experience, innovation, and managing in the recession. It’s a series of short commentaries by five people:
- Amar Bhidé, professor of business at Columbia and author of book “The Venturesome Economy.”
- Scott Reynolds Nelson, history professor at the College of William and Mary and author of the forthcoming “Crash: An Uncommon History of America’s Financial Panics.”
- Rita Gunther McGrath, professor of management at Columbia University and author of “Discovery Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity.”
- Don Kelly, patent agent and former chief of staff for the United States Patent and Trademark Office
- Martin Lindstrom, marketing consultant and author of “Buyology: The Truth and Lies About Why We Buy.”
Here is my take on the key items in the article:
Bhide: “The deck gets reshuffled in a recession as habits are re-examined and patterns of behavior are broken, perhaps to greater degree than when things are humming along at a steady state. And that’s what creates business opportunities.” Bhide discusses Kindles, iPods, and computers and the 1980s.
Nelson: “America’s financial panics have often been the periods of its most interesting commercial and logistical innovations. Plummeting commodity prices combined with new observations about manufacturing or trade often suggest new solutions to old problems.” Nelson discusses wool manufacturers circa 1815, industrial food canners circa 1873, and integrated circuits in the 1970s.
McGrath: “With business as usual off the table in a recession, people become more open to new and efficient ways of doing things. And they’re forced to show more entrepreneurial discipline – you have to expend imagination before spending money.” McGrath discusses recent companies Kiva Systems and Hulu.
Kelly: “Inventors and innovative entrepreneurs should be smiling. That timeworn proverb about “an ill wind that blows no good” truly applies in an economic downturn. No doubt, in garages across the country, innovators are hard at work as opportunity bangs on the doors. Answering the call, however, will require them to step back and take a hard look at the current environment.” Kelly discusses small entrepreneurs.
Lindstrom: “What do Lindt chocolate, the Rubik’s Cube, French perfumes and a pair of Wellies have in common? They’ve all had increased profits during this recession. The number of products getting these results, however, is small and getting smaller by the day. These brands, which may weather the storm, offer some hints for start-up businesses.” Lindstrom describes two concepts: 1) don’t ask consumers what they want; figure out what they need; and 2) practical features give consumers a reason to make a purchase.
The bottom line: It’s time to ask yourself if you’re keeping up with shifting customer needs