BusinessWeek.com offers up a provocative article about the slowing economy – The Upside of Recession. Interesting opening:
Pop quiz, hot shot: What do MTV, Trader Joe’s, and the iPod have in common? Yes, of course, they’re all now ubiquitous and make our lives much more agreeable.
But to us, the most interesting thing about all three is that these great brands were born during recessions. (Trader Joe’s: 1958; MTV: 1981; iPod: 2001, if you are scoring at home.)
The authors are just warming up:
Cutting (ed.- lay offs) across the board is the coward’s way of dealing with a downturn. It assures that no one is going to yell—how could anyone possibly object to sharing the pain equally—and it gives the timid a built-in excuse to fail. (“Gee, I know no one liked our new product, but they slashed our budget 22.73% right before launch, so, it wasn’t my fault.”)
But suppose you use the recession not as an excuse or a reason for hiding under your desk but rather as a catalyst for innovation? Instead of cutting everything by 22.73%, why not see the downturn as a chance to whack 90% (or the whole darn thing) out of stuff that isn’t working well?
Cutting off funding to your laggards would free up a lot of money to back the one, or possibly two, big ideas you have been working on, ideas that have a chance to become breakthrough brands. If you want to be less aggressive, you could place more resources behind the existing ideas/programs/products that are already working well.
These are my people – “a coward’s way” is about as direct a shot as you can take. They close their article with this graph:
Recessions by definition are temporary. Great companies and great executives don’t abandon their growth strategies in light of temporary setbacks. They attack aggressively, while everyone else is pulling back.