Hiroshi Wald

Guest Post By Hiroshi Wald, Principal at The Wald Group and Program Chair at MIT/Stanford Venture Lab

In the current global economic climate, thinking long-term is more important than ever.  Today, we can lay the groundwork for growth. Many nations and businesses try to save their way out of a recession. It is much better to invest our way out.

 – Craig Barrett, CEO, Intel (retired) CeBit, 2009

Everyone is cutting back - or so the conventional wisdom goes. So what’s up with Intel? They just recently launched a new advertising campaign, making their employees stars. In addition to boosting their advertising presence Intel is investing heavily in R&D and Innovation. Shouldn’t they be focusing on deep discounts and layoffs and not worry about anything else? Turns out that the answer is a resounding: No. And Intel is in good company.

[media id=12] 

According to a recent survey of senior global executives by BCG and Businessweek, 58% said that they are increasing their spending on innovation in 2009. Furthermore, evidence suggests that downturns are opportunities to start something new. All of the following powerhouses were started during major economic downturns:

Hyatt Corp. : During the Eisenhower recession (1957 to 1958).
Burger King Corp.: During the Eisenhower recession (1957 to 1958).
LexisNexis: During the 1973 oil crisis.
FedEx Corp: During the 1973 oil crisis.
Microsoft Corp.: During 1975 downturn.
GE: During the middle of the Panic of 1873 Edison invented the light bulb. .
HP: At the end of the Great Depression in 1939.

Listen to the market. It’s quieter when it’s less crowded. Unmet needs abound.

 – Professor Andrew Razeghi, Kellogg School of Management

According to Professor Razeghi, in 1933 Kraft launched a new product, Miracle Whip, after listening to their customers. Consumers had grown weary of bland Depression Era food (salads, sandwiches and vegetables) and Kraft spotted an opportunity to develop a product that would enhance the flavor what few choices people had to eat. Miracle Whip was born not despite the Depression, but because Kraft listened and saw the opportunity to develop products because of the Depression.

So what to do today? Invest in research and innovation. It doesn’t have to be expensive or as splashy as Intel. Sit down with your customers and your potential customers and listen to them with ethnographic research or with focus groups or even just plain old one on one chats using someone who knows how to get them to talk. And make sure that someone knows how to get to underlying beliefs and values as part of listening (for example: Someone might say that they want a car for transportation. But really, it’s about freedom).

These conversations will yield a rich treasure trove of opportunities to make the bland a little less so and a stressful time more manageable for your customers. And in the age of social media, these conversations are an excellent way to build and engage an ongoing community and dialogue with your audience.

If you don’t, someone else surely will.

Links:

• Hiroshi Wald’s Twitter Feed