Innovation in 2023: How to Survive Budget Cuts and Still Win
Put the sticky notes down and play defense — your moonshots can wait.
By Tristan Kromer · · 3 min read Quick Answer: To sustain innovation in 2023, we need to shift from radical moonshots to defensive, bottom-line-focused work — cutting costs, optimizing channels, and delivering measurable ROI within the core business. Put big ideas into slow-burn mode and align with what executives actually care about: their critical KPIs and survival targets. Your competition faces the same disruptions, so weathering the storm better is the competitive advantage — and history shows the bottom of a downturn is when the next Airbnbs and Ubers get built.
By Tristan Kromer 
As we navigate the confluence of global events that have disrupted the world order over the past few years – the war in Ukraine, the threats to democracy, the dwindling pandemic, the looming recession – we have some hard choices in front of us about how to invest in innovation in 2023. The lesson to take into the new year is how fragile, interconnected, and easily disrupted our world is. A single ship stuck in a canal can cause global shortages of raw materials spanning a dozen industries. Individually insignificant pollution from a hundred thousand companies can cause poverty and mass migration as lowlands flood and islands are swallowed by the seas. Forget about disruption from nimble startups – large organizations have to deal with a volatile macroeconomic environment that shows no signs of mercy. But innovation budgets are being slashed. Why?
Do we need innovation in 2023?
In times of grave uncertainty, we forget that innovation is a means to an end, not an end in itself. Innovation departments that forget this are in for a rude awakening. Yes, companies still need to think about their next business line 5-10 years from now. But if your company (and your innovation team) don’t survive the next downturn, those big ideas are just a collection of sticky notes destined for the recycling bin. So put the radical ideas into slow-burn discovery mode and focus on what’s important. Your competition is suffering the same disruption that you are – you just need to weather the storm better.
How to keep innovation going in a downturn
As budgets tighten, innovation departments need to deliver value or find themselves on the chopping block. Save your lofty ideas for later – you need concrete ROI and stability. When your business is under threat and being disrupted by external factors, innovation needs to play defense. Find creative ways to cut costs! Discover new channels to sell your existing products! Optimize and don’t be afraid of incremental progress within the core business. Do your own discovery within your core business. What are your executives worried about? What are their critical KPIs and targets? What will get them a promotion and what will get them fired? Make sure that you are delivering value to your stakeholders today, and stockpile your big ideas for a more stable business climate.
Every obstacle is an opportunity
The bottom of a downturn is a great time to invest in startups and ride the growth wave up! It happened when I first moved to Silicon Valley after the 2007-2008 financial crisis. Remember any of those startups – Airbnb, Slack, Whatsapp, Square, Uber, Instagram, Pinterest? So be ready and keep one eye on the future. Special thanks to everyone at the Innovator’s Handbook 2023 for inspiring this post. Download your free copy at our Innovation Resources section!
Frequently Asked Questions
Why are innovation budgets being cut in 2023?
In times of economic uncertainty and recession fears, companies focus on short-term survival over long-term exploration. Innovation departments that can’t demonstrate concrete, quantifiable contributions to the bottom line are the first on the chopping block. As product managers, we need to remember that innovation is a means to an end — and if the company doesn’t survive the downturn, those big ideas are just sticky notes destined for the recycling bin.
How should innovation teams adapt their strategy during a recession?
Innovation teams should shift from radical, long-horizon projects to delivering measurable ROI within the core business. That means finding creative ways to cut costs, discovering new channels for existing products, and embracing incremental progress. We should align our work with what executives are worried about — their critical KPIs and targets — and save the lofty moonshot ideas for a more stable business climate.
Is innovation in 2023 still worth investing in?
Yes, but the focus needs to shift. Companies still need to think about their next business line 5-10 years out, but the immediate priority is weathering the storm better than competitors. Put radical ideas into slow-burn discovery mode and redirect energy toward defensive innovation that strengthens the core business. Your competition faces the same disruptions — survival is the differentiator.
Why is a downturn actually a good time for innovation investment?
History shows that economic downturns produce some of the most successful companies. Airbnb, Slack, Uber, Instagram, and WhatsApp all launched during or after the 2007-2008 financial crisis. The bottom of a downturn is a great time to invest and ride the growth wave up. So while playing defense in the short term, we should keep one eye on the future and be ready to move when conditions improve.
What should innovation teams focus on to avoid getting cut?
Focus on delivering value to internal stakeholders by aligning with their most pressing concerns. Do discovery within your core business — understand what will get your executives promoted and what will get them fired. Demonstrate concrete contributions like cost reductions, channel optimization, and revenue protection. Quantifiable impact on the bottom line is what keeps innovation teams funded during a downturn.
Comments
Loading comments…
Leave a comment