Innovating in a Forever Recession Part 1

 

Innovation Flight photo by Dinis Guarda

Innovation Flight photo by Dinis Guarda

Defining the present as “Forever Recession”

The concept of “Forever recession”, coined by Seth Godin, is particularly relevant to the present world climate and the business challenges we face today. In a fast changing economy and society challenged by innovative disruption technologies the sense of continuous crisis and somehow a “forever recession” makes us wonder about stability and for understanding the basis of macroeconomics and business this is a hard concept.

In essence, we are living in a continuous crisis. And if at a first-hand this concept seems dramatic or pessimistic, I would disagree. In fact, I would say that this is very good for business indeed.

Why? Well, simply because when you are in crisis it forces you to change and adapt faster. Similarly, you will invest more effort in upgrading your knowledge, skills, and focus. When forced into a crisis it is imperative for any business to figure out how to do something unique and discover how people will be able to pay for it, or get enough solutions to get what is really necessary. Crisis can make people more innovative, and productive.

The Forever Recession (and the coming revolution)

There are actually two recessions: The first is the cyclical one, the one that inevitably comes and then inevitably goes. There’s plenty of evidence that intervention can shorten it, and also indications that overdoing a response to it is a waste or even harmful…The other recession, though, the one with the loss of “good factory jobs” and systemic unemployment…I fear that this recession is here forever”, from The forever recession by Seth Godin

“A recession is an especially good time for entrepreneurs to build loyal followers,” says Thomas Koulopoulos, founder of strategic business consulting firm Delphi Group and author of The Innovation Zone: How Companies Re-Innovate for Amazing Success.

The Innovation Zone demonstrates an important fact, that most dynamic innovations are not a single stroke of brilliance. Koulopoulos states that in order to deliver new and successful products companies and organisations will need a disciplined, easily-learned business process that includes an organizational process, an “incubator” that supports, nurtures and sustains the practice of turning ideas, and aspirations into breakthrough innovations to deliver final products to an audience.

Individuals and big companies are in a uniquely shifting historical spot. Every business and professional is struggling to achieve branding awareness and attention. And often in community building and networking there are huge challenges to face in reaching the key interlocutors.

However, in a world marked by a recent downturn or crisis, this effort to reach the right community can also be seen as an opportunity. If you reach your key audience and influencers during a period of crisis, you will reach a golden spot. This is because when the economy recovers, everyone will go after that audience, and if you already own it that gives your organisation or company a unique position, and a tremendous leverage.

In a world that has been changing drastically since the post-industrial revolution, the way ideas spread, products, marketing and communication are radically new, and constantly evolving. Thus, in such a landscape there is a need for a strong focus leadership. When you find yourself in a world shaped by crowdsourcing, numbers, data, and most of all where social behaviour is irreversible, the best position is to keep a strong identity and focus.

Any business, company or organisation needs to keep a strong focus on their message, voice and position. And this message has to be customised according to the network, audience, or community that it is directed at.

In that regard a business needs to be a social and digital powerhouse. It has to have a strong and unique branding position, and to have a publishing DNA set up. A business that wants to grow and be visible both as a brand, product or service has to be visible from the crowd, and leave positive tracks and footprints.

However, any business needs to be more than that. It needs to be visionary both through ideas and technology to implement them. More than ever, the world needs ideas and people with the energy and knowledge of how to execute them.

Social Media shifting power from a few Goliaths to many Davids

Knowledge of key technologies are core and fundamental for a successful innovation strategy in the “forever crisis” landscape. Social technologies are shifting power faster than ever from a few Goliaths to many Davids. In today’s society ordinary people can easily broadcast their opinions, and extend their networks, reach and influence, and challenge global audiences.

“One day David, the youngest son of Jesse, was sent to the battle lines by his father to bring back news of his brothers. David was probably just a young teenager at the time. While there, David heard Goliath shouting his daily defiance and he saw the great fear stirred within the men of Israel. David responded, “Who is this uncircumcised Philistine that he should defy the armies of God?” So David volunteered to fight Goliath. It took some persuasion, but King Saul finally agreed to let David fight against the giant. Dressed in his simple tunic, carrying his shepherd’s staff, slingshot and a pouch full of stones, David approached Goliath. The giant cursed at him, hurling threats and insults. (…) As Goliath moved in for the kill, David reached into his bag and slung one of his stones at Goliath’s head. Finding a hole in the armor, the stone sank into the giant’s forehead and he fell face down on the ground.” Bible, 1 Samuel 17

This excerpt from the bible parallels the eternal fight in business between the newbies and the old big giants. And in the end an agile newbie can replace or kill a big giant. We know this because that is what is happening across industries, in the main because we now live in a world where the use of technology knowhow and strategy are the new doctrine that conducts the success or failure countries, people, and strategies.

In a world dominated by political, economic, and financial demographics, the emergence of social technologies have meant that society’s Davids are going to dominate the new agendas and processes.

Look the infographic of the global Social Media and Enterprise that shows the relationship between some of the shifts happening in the enterprise setup caused by the advent of social media and its platforms, technologies and effective reach and disruption.

The bellow graphics relates and defines social business and its various channels through social media, e-commerce, and social technology. It also displays some related numbers showing how industries are taking advantage by being engaged with social media technologies.

There is no doubt that big firms are now placing themselves side by side with consumers. There is only a limited amount of time they can avoid listening to their critics by neglecting social media’s advantages. These big companies and corporations have to adjust to this new reality, or face going under and losing their market and business.

On the other hand big firms can use social data to add to their already formidable influence over the consumer: Ford, PepsiCo and Southwest Airlines all monitor postings on social-media sites to gauge the impact of their marketing campaigns and then adjust their pitch accordingly. But ironically some of the most successful internet-savvy companies, such as Google, Amazon, Facebook and Microsoft, are more secretive about what they do, or are planning in line with any old-style company.

In the words of Venture Capitalist and a true entrepreneur Marc Andreessen, we are in a key historical period. The global business and economy is in the middle of a dramatically broad, open, technological, and economic social and digital shift. This scenario is a macro evolving landscape in which traditional and conventional businesses all over the world are being taken by technological software companies.

The crisis we live in is a perception crisis. There is a fundamental shift of where the money is, and its perception is evolving. Money is no longer a fixed value, it is fast moving systems of trust, and it is exchanging hands faster than ever.

Independent of all the financial write downs of banks, the IPO of Facebook, for example, is of a larger financial size than a number of small countries. If you put together the available cash of Apple, Microsoft, Google, Oracle, and Amazon you would be able to bail out a big proportion of the European debt.

During the years of financial crisis money did not disappear. What is happening instead is a continual shift of hands (and concentration in others).

By Dinis Guarda @dinisguarda

Related articles:
Innovating in a forever recession Part 2 – Disruptive technologies creating new businesses

Innovating in a forever recession Part 3: Why the social media industry is recession-proof