Innovation in 2023
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?Even if your company can’t afford to take on disruption now, it’s a good time to invest externally in strategic opportunities that might make great acquisitions later. Click To Tweet
So be ready and keep one eye on the future.