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Innovating out of a Recession

ilmThe ability to innovate and be creative is an imperative during a recession. Almost a quarter (23%) of CEOs in a recent study by the Institute of Leadership & Management (ILM) said that it is most important that managers are quick to adapt to changing circumstances and can develop innovative and effective solutions to problems. They list characteristics such as innovation, flexibility, creativity and problem solving as highly desirable.

“We have to be thinking outside the box at these times. Old ways of doing things have been closed off and so we have to take a more creative approach.””Speed is important. In a recession it is no use spending a year developing a great idea. By the time it is ready the company may no longer be in business. The need for speed, said the CEOs, requires a degree of agility.”

Findings of the Study

Over a three-week period during March 2009, FreshMinds Research conducted phone interviews with the CEOs of 52 small and medium sized (20-250 employees) private sector businesses.

In this study CEOs listed innovation, flexibility, creativity, problem solving and pragmatism as essential characteristics in a downturn. Innovation can be seen as something of a luxury, most suited to times when the organisation can easily afford to inject cash into speculative projects. So, when businesses come under financial pressure, there may be a temptation to cut back on innovation driven projects. The CEOs we spoke to, however, recognise that innovation and creativity translate into competitive advantage. They need innovation and creativity in bad times as well as good, and from all employees, at every level of the hierarchy.

Being Agile and Innovative is Critical to Success

A recession requires organisations to find new ways of doing things, said the CEOs, whether it is managing costs or creating new lower-cost, higher-value services for customers. Flexibility is another essential characteristic during a downturn. Managers need to respond to constantly shifting circumstances. They must be willing to go beyond their usual brief and take on new tasks and responsibilities as needed, often at very short notice. Speed is important. In a recession it is no use spending a year developing a great idea. By the time it is ready the company may no longer be in business. CEOs want solutions quickly. The need for speed, said the CEOs, requires a degree of agility, the ability to roll with the punches, react to circumstances, and shift direction when required.

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