Does it take a crisis for manufacturers to innovate? That’s the question raised by the edge blog.
It’s a valid point. Manufacturers around the world are now starting to realise that they only way they will get through this global recession is through innovation. Certainly, the data suggests that companies everywhere now are cutting back on the R&D. But as Forbes magazine points out, this time it’s different. R&D has fallen but not by as much as previous recessions.
There is one obvious reason for this: globalization. When we come out of this recession, manufacturers will need a really fast deployment cycle of new products and services to meet the demands of a global market. As a result, they will cut R&D now, but not by as much as before.
Plenty of evidence that this is happening. Last month, The Wall Street Journal reported that United Airlines has asked its aircraft suppliers Boeing and Airbus to bid on a deal to provide it with up to 150 new airliners over the next few years. Clearly, United is anticipating a recovery but rather than waiting until a turnaround is in full flower, the company is moving now. Lower commodity prices now and manufacturers’ need for whatever orders they can get means United can strike good deals. Similarly, chip maker Intel is expanding three plants in the United States. Again, this is in anticipation of the recovery.
In other words, innovation is critical for the recovery. Companies that fail to innovate will be left behind when things pick up again.
So what should companies do to innovate in this climate? According to the INSEAD business school, strategies include knowledge sharing, embracing diversity, putting the customer first and bringing in new blood to engender ideas. Champions of these strategies cited here include SAP, Bosch and Research In Motion, which created the Blackberry smart phone.
Celebrated entrepreneur Guy Kawasaki has his own advice for manufacturers seeking to innovate. His 10 commandments for business innovation include: deliver a product that means something beyond the sum of its components, ditch the mission statement and create a mantra that defines what you want to mean to consumers, jump to a new level rather than staying just a little bit ahead of competitors on the same curve, when designing your product think about features that go beyond the norm, don’t get bogged down making it too perfect, know what you stand for and don’t try to be all things to all people, create a whole lot of innovations and see where they go, always try to improve and listen to your customers for ideas and finally create a niche.
So how important is innovation in this economic climate? What should manufacturers do to stay creative, without busting the budget? Tell us your suggestions.
