In Business Week’s July 27 issue, there’s a simple chart that tells a big story. Creative Beginnings in a Downturn shows that Hewlett Packard learned to buy game-changing companies in recessions, that Genetech leaned to use strategic partners when they couldn’t afford research labs, and that Google snagged top talent after the tech bust.
In another article in the same issue, General Mills reports increased sales, stemming from bigger marketing budgets, exactly when everyone else is cutting back.
They are just a few examples of some counter-intuitive strategies that smart business people have used successfully in past recessions. When others are cutting back, you can launch new companies, new products, and new approaches when the competitors are not circling around. And years of statistics prove that people who invest in research and marketing in recessions emerge as leaders for years or decades to come.
What’s more, in cost-cutting climates, people are more willing to risk doing business with a new supplier who can accomplish things faster, better or cheaper. That incumbent relationship may not survive belt-tightening, especially if the procurement guy has been laid off.
For those who aren’t frightened, it’s a perfect time to launch your innovative ideas, and watch them take off faster than the recovery.