How to thrive in difficult times

From our Friday noon memo #2:

Many successful companies were established and expanded during recessions. The key to success has always been to be innovative in at least one of three dimensions:

1. Create an innovative product or service.
2. Create an innovative business model.
3. Innovate your business processes. Quite often disregarded, operational effectiveness and efficiency can be the key success factors for organisations, enabling them to outperform the competition. Look at Ryanair, or at Zara, the fashion brand. (And look at our related blog "Why are not all companies low cost companies?")
   

By the way, innovation in these three dimensions keeps you ahead of the competition in good economic periods as well.

Comments

[David Lindelöf]

Sounds similar to something I recently read in "The Essential Drucker". He gave also the example of Xerox, who rightly understood that small businesses would never buy copying machines but would be more than happy to pay for the *copies*. Or Gilette: same principle, but with razor blades. You pay for the shave, not for the shaver. Those were some examples of innovations Drucker gave.

[Miguel M. Espinar]

I tend to disagree with innovation in low economic periods. How innovative can you be when your target market is "scared" of purchasing even what they already know very well? My take is, "not much at all".
On the other hand, reviewing what is not effective is certainly a must, but I wouldn't call that innovation strictly speaking, rather optimization.
If you substitute Innovation for Optimization, I couldn't agree more with you. Specially in my field which is Sponsorship, which as an independent practive in it's own right (although always linked to brand management, marcom and sales), more than ever requires optimization of Return On Sponsorship....the good old "do more with less".
Thanks for your friday posts.

[Volkmar Völzke]

Thanks for your comments.
I think both should be done: optimization and innovation, each in a dedicated business area. And I am not talking here about business in the situation of just surviving. I believe (also based on own experience) that many more organizations could benefit from difficult market conditions by being more innovative in business operations and saving costs at the same time.