Friday, April 18, 2008

Recession Avoidance

Bad economic news is everywhere-UK retail sales fell in March, consumer confidence is low, and inflation is the only indicator above target. Is decline inevitable for you? It depends on whether you are a spectator or a player.

There is an undoubted impact on us all from the 3 main “circumstances beyond our control”; the collapse in irresponsible lending, the decline of the US dollar, and the feverish speculation in commodities. In response to these circumstances, some businesses will “circle the wagons” and wait for it all to blow over, thereby exacerbating the recession. The winners will innovate their way through and succeed by gaining share.

Nestlé, P&G, and General Mills sales are all up 9%. All of them put their success down to innovation.
As Peter Brabeck-Letmathe, Chairman and CEO of Nestlé, puts it; “Our success is now driven …by our capacity to innovate and use our R&D pipeline to launch new, added-value products and services”.

Innovation is THE growth driver, and growth is THE imperative when recession threatens. Macro-economic forecasts are not looking great, but now is the time to buck the trend and invest in innovation, albeit with more discrimination. No longer can we afford the “spray and pray” approach to innovation and the self indulgent directionless creativity that goes with it, but fortunately you don’t have to. You can do it our way.

Innovation in a recession demands that companies identify fewer, bigger, better, new product ideas earlier in the process and bring them to market as fast as possible.


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