Adapting in Times of Change
31 Oct 2008|Added Value
As far as months go, October has been anything but status quo. Just read the headlines from the past few weeks — government bailout plans, political debates, erratic stock performance, presidential campaign speeches, proposed legislation, recession predictions. The list goes on. It’s no wonder there’s widespread fear and uncertainty mounting among the American public. Never in our lifetime have we faced such extreme change. As overwhelming as it can be, it’s important to remind ourselves that change is good. Times of transition force consumers to re-evaluate how they consume, providing challenges and opportunities. So don’t panic — there’s hope in the chaos. You just need to know where to look.
A Ripe Time for Innovation
We stand at a unique point in U.S. history. Elbow deep in the early stage of economic recession and less than a week away from electing a new Commander in Chief to lead us out of it. It’s an uncertain time and an exciting time — a chance for our country to re-establish innovation as a national imperative.
Recessionary periods are rich in innovation. Consumers will consider new products and services that offer better value and create a willingness to try new things. It is logical that companies who innovate will do so to survive the economic times. The Strategic Planning Institute concluded from a survey of 1,500 new products introduced during the 1974-75 recession that a mild recession may confer an advantage, probably because the company is more likely to be first with an innovation and it enters a market with weakened competition.
Fresh national leadership also offers several opportunities for the development and advancement of innovation. Both presidential candidates have made detailed arguments for how the nation should deal with technology rivals, sharpen its competitive edge and improve what experts call its “ecology of innovation.” This doesn’t get much play in typical election coverge, but science and technology policies have a major impact on the health of a nation’s overall competitiveness. As blogger Michael White points out in a recent posting, politics and innovation have to be about the future, not just the present.
Progression During Recession
A brand is a vulnerable thing — especially during challenging economic times. But a recessionary economy can offer opportunities to those who take advantage of it.
- A recession can weed out weaker brands of lower quality, making category leaders even stronger.
- Value based brands get a boost by offering consumers a familiar name at a reasonable price.
- Sluggish economies allow trusted store brands to appeal to budgeting customers.
For more advice on branding when times are tough, check out the blog by Cheskin friend and brand strategist, Matthew Fenton.
The important thing for brands to remember is that they must constantly be in tune with their consumers’ values, evolving needs and lifestyles. For a Cheskin perspective on trends to expect as a result of the current economic climate, check out Leah Hunter’s blog, The Economic Tidalwave Brings Trends.
Voting on the Ballot
Of the countless issues on the table this election, innovation is one of the more crucial platforms for maintaining our long-term viability as a global power. Numerous experts have agreed that innovation is central to economic growth, improved quality of life, and success in the global marketplace. However, other nations are becoming more technologically advanced and attracting/retaining more talent.
In a recent blog posting, Cheskin’s Lucy Li breaks down each candidate’s stance on the current state of innovation and their plans for keeping America at the top of the world in this space. Come November 4th, which innovation platform will you be voting for?
Leadership, Design and Innovation in Challenging Times
The impact of the current economic crisis will be a pivotal theme at the upcoming Commonwealth Club event in San Francisco. Join Darrel Rhea, CEO of Cheskin Added Value and co-author, Making Meaning in conversation with Roger Martin, Author of The Opposable Mind and Dean of the Rotman School of Management in a dynamic exchange on the problem solving power of integrative thinking and creating meaning in the face of a global recession. “Leadership, Design and Innovation in Challenging Times” will be hosted by the Commonwealth Club of California on November 3rd, at the Club offices at 595 Market St., 2nd Floor in San Francisco.
What We’re Hearing
What Cheskin consultants are hearing from consumers around the world.
- With a weakened dollar, Western European tourists are doing their birthday and Christmas shopping in the U.S., snatching up electronic goods such as iPods and digital cameras for a fraction (sometimes half) of the cost that these same items go for in their home countries. People in Germany are concerned about the economy, but not to the depth that many Americans are. Germans are generally more fiscally conservative and responsible when it comes to finance. Germany, like most EU nations, are hoping for a regime change in the United States.
- Chinese consumers recognize that their country’s economy is tied to the U.S., and are anxious about the U.S. economic meltdown as well as the presidential elections. While there are no official statistics, anecdotal evidence points to strong support for Barack Obama in China, as Chinese citizens view Obama as an important figure of change that will help bring about new, healthier economic policies.
- People are feeling the impacts of economic conditions in Russia, and it’s being linked directly to the market situation in the U.S. This may serve as an opportunity for companies to gain loyalty and trust among prospective customers, by extending their offerings to rethink current products and the ways people access them.
Internal and external guidance for weathering the storm.
- Pay attention to what consumers need in this climate, and try even harder to deliver value. Don’t just focus on cutting costs and keeping your fingers crossed.
Steve Diller, Cheskin Added Value
- In today’s global marketplace, any business strategy must incorporate innovation as a core element. I believe that as strongly today as I did through the course of my 20 year career at Disney. In fact, when you’re trying to create things that are new, you have to be prepared to live at the edge of risk.
Michael Eisner, Leader in entertainment industry, philanthropist
- Stay calm in chaos, because change brings equal parts threat and opportunity. Understand your customers deeply to determine what is changing and what is constant. Priorities shift in turbulent times, so listening to what consumers need is more important than ever.
Lee Shupp, Cheskin Added Value