6 Ways to Thrive during Economic Turmoil

As we race towards the end of the year and businesses strap in for an uncertain and bumpy ride, you would be forgiven for putting a block on all spends. To ensure you can keep the lights and heating on over the winter months, you may be considering which unnecessary expenditures to cut from the budget and questioning the R&D department plans.

With the likes of the International Monetary Fund (IMF) predicting a gloomy 0.5% growth in the UK vs 2.9% globally and Forbes and The Financial Times mentioning the R-word, it may seem like a hard call to press ahead with development. Raw material costs are crazy, energy bills are skyrocketing, and many are still in recovery mode following Brexit, the pandemic and supplier shortages.

At Smallfry, having just celebrated our 50th anniversary, we’ve witnessed our fair share of financial downturns and seen first-hand the impact it’s had on businesses. Those that have come out strongest are the ones that not only didn’t cut development budgets, but actually increased their investment in innovation. So, take a PAUSE before you cut the budget on innovation… you need to be ready to thrive, not just survive.

Six Ways to Thrive during Economic Turmoil:

LEVERAGE – Double down on what is working well for your business. Leverage any assets you already have and shine a spotlight on a strong brand, respected leader, or your highest-performing products/services. Ask what can be done to make the most of what you already have. A small investment in new media collateral and focused effort can really help keep your business at the front of minds.

DIVERSIFY – Innovation can stem from all corners of the business so use it, exploit it, and bring it together to create diverse teams. Remember, innovation can also create efficiencies and reduce costs internally. Reach out to experts to support and challenge you through this process, find partners who can manage the whole process or simply help orchestrate it.

STRUCTURE – Create a sense of urgency, think agile and follow a process to avoid waste and de-risk output. Capture ideas from innovation exercises, filter them to focus on the right ones for your business and then set priorities that help you identify the sweet spot between desirable, feasible and viable.

GAP ANALYSIS – Undertake a gap analysis to identify areas of weakness so you can add talent in the right areas or make an informed decision to partner with those who can help.

VISION – Re-evaluate your vision. Does it still make sense?  Without a clear vision it’s unlikely that you will get to where you want to be. Will your innovation roadmap deliver results in this ever-changing world? Remember, what got you here will not get you to where you want to be. If you need some stimulus, check out our 5 tips to help you with vision setting.

FUNDING & FINANCE – Our partners, TBAT Innovation Ltd suggest that to help de-risk your future development plans, you should consider looking into alternative finance options from the UK Government. For example, R&D Tax Credits can help you recoup a proportion of the money you have already invested in innovation which you can use to drive your business forward, or look ahead to financing new projects with the assistance of Innovate UK Grant Funding.

You do not want to be left behind by those that were bold enough to double down on new development and in turn avoid the disastrous innovation death spiral. Whilst the Office for National Statistics indicate that over 400,000 businesses closed in 2020, we also witnessed the formation of a staggering 400,000 start-ups. Agility, resourcefulness, and the ability to adapt are key attributes for success in times of change. If you develop new products and services, strategic design and innovation must remain at the heart of your business, beating as strongly as ever.

Risk and Reward

When times are tough, difficult decisions need to be made, and for many that includes identifying the tipping point between risk and reward. Risk management has woven its way through society and embedded in the very essence of everything we do, but to quote John Adams’ Risk Paradox:

“In our desire to continually reduce risk, we also reduce our potential for creativity.”

John Adams’ Risk Paradox

So, the burning question is, how do you decide which project to back, and which resources to cut?

It perhaps feels safer to pursue the smaller incremental changes, deemed low risk, over the complex, more transformational projects. However, these more ambitious ventures are the ones with the potential to pack a much larger punch, move you beyond short-term gain and provide the foundations that will allow you to thrive, not just survive another year. In our experience, a healthy balance of both is best, but this quite often needs external and unbiased perspective to achieve. It needs a strategy.

Be ready to thrive, not just survive.

Innovation really is the bloodline of any organisation and if we have learned nothing else from Covid and the challenges of lockdown, it is that in times of crisis, innovation blossoms; companies pivot, new businesses emerge and those that adapt, flourish. You need to continue to have great ideas, but they must be the right ideas for your business and most importantly, they need great execution. For this to happen, expertise and careful planning is required because innovation is after all, simply joining the dots.

At Smallfry, when we think about strategic design innovation, it goes much deeper than the thin veneer of a shiny new product. It’s never just about how something looks or if it fits well within your company portfolio. It’s about the problem it solves and how it makes lives better, brighter, and easier. It requires research and customer-centric expertise to deliver actionable insights that really move the needle. It’s about finding the innovation sweet spot – that point between what is desirable, feasible and viable, and delivering a strategic plan for both short and long-term results.

Whilst there is no single action or golden rule to surviving a downturn, there are lots of small actions that can help you manage the purse strings, keep the risk and reward in balance and importantly, keep you innovating so you remain poised and ready in the starting blocks.

At Smallfry, we find innovation workshops can be a fantastic exercise to stimulate fresh thinking, align minds and energise the team. If you are looking for new ideas and thinking about how new tech might evolve over the next 5 years, check out this article.

To arrange an innovation workshop, or if you want to find out more about how we can support your team through strategic innovation, research, and customer insights, get in touch at design@smallfry.com. Chances are, we will challenge your thinking, but we are confident that the journey and the end results will be worth it.