Why investing in innovation during 2023 will set you up to thrive post-recession

Why investing in innovation during 2023 will set you up to thrive post-recession

How can you set your business up to weather the recession, and to be in a position to thrive when the country returns to growth? This blog looks at why 2023 needs to be the year of business and technology housekeeping

Ric Hill
Ric Hill Founder and CTO

With the UK expected to be in recession by the end of 2022, and the Bank of England predicting it will be the longest for 100 years, it’s a challenging time for business and technology leaders. 

Rising costs will mean your customers – whether they’re consumers or other businesses – have less money to spend on your services, resulting in static or declining revenues for many. At the same time, with the cost of everything from energy to staffing soaring, your profits will be being squeezed.  

So how do you set your business up to firstly weather the recession, and secondly, be in a position to thrive when the country returns to growth? 

My recommendation  is to use the quieter period a recession brings as an opportunity to invest time in innovation. This could be innovation to unlock efficiencies that help you get through the recession. It could be innovation to prepare you for post-recession growth. Or it could be both. 

Why 2023 needs to be the year of business and technology housekeeping 

If the recession results in a quiet period for your business, your teams will likely find themselves with less to do. While the immediate reaction for some will be to shrink their workforces, this can mean you’ll later struggle to meet customer demand when growth returns. Moreover, laying people off means you’re passing up on the opportunity to address long-standing headaches your business has been suffering, but which you’ve previously not had the bandwidth or inclination to solve.  

 You may have important or critical legacy systems that need modernising or replacing, to enable you to meet longer-term strategic business goals. There may be friction points in your business processes that are resulting in costly or time-consuming work-arounds. You might have a list of tactical improvements you’ve long wanted to make, to save money or enhance customers’ experiences, but in times of plenty, these were considered ‘nice-to-haves’ and never made it to the top of the priority list. Now that you need to find savings, they suddenly make a lot more sense. Equally, you may be looking to upskill your teams in new approaches or technologies, but have not yet had the time or opportunity to do this. 

Using spare capacity within your business during the recession to address these sorts of issues can have a variety of benefits. Firstly, tactical interventions can deliver immediate cost-savings, to help you get through the fallow period. Secondly, if you can improve your products and services, you’ll be better-placed to secure more of the shrinking market during the recession. Thirdly, equipping your teams in new approaches or technologies will enable you to build better products and services in the future. 

 And don’t just take our word for it: research has found that businesses that invest in innovation during economic downturns tend to perform better than their competitors, post-recession

How to get your business into shape during a recession 

Stakeholder workshops 

Rather than make plans from an ivory tower, talk to colleagues, customers and partners to identify pain points they’re experiencing – and what opportunities for improvement they see. At the heart of the session should be a SWOT analysis, looking holistically at your people, processes, data and technology. 

We recommend running this as a workshop, away from people’s usual working environments. This ensures you get people’s full attention and focus. Invite a diversity of voices, with those from outside of your organisation bringing valuable alternative perspectives. 

Identify the improvements you want to make 

As part of your workshop, you want to pinpoint ways to address the issues that come up. Here, it’s important not to constrain yourselves by existing systems and ways of working. Old applications tend to be data-oriented, with the user interface being an expression of the data underneath. This rarely aligns with the tasks people need to do, day-to-day, resulting in their jobs being more difficult. You’ll get the greatest benefit from your improvement initiatives if you reimagine better, task-oriented ways of doing things. Don’t simply rebuild a modern version of an old system. 

This is one of the areas where it’s so important to have diverse and alternative perspectives in the room, to constructively challenge preconceived ideas, and help people within your business understand the art of the possible. 

Improve incrementally 

Where you elect to build new systems or develop new ways of working, delivering change incrementally enables you to unlock value faster, while also reducing the risks associated with ‘big bang’ change. Achieving benefits quickly is particularly important if the aims of your innovation are first-and-foremost to help your business weather the recession. 

Build new journeys to run in parallel with the old, and migrate people across as new journeys (or sensible portions of journeys) are completed.  

Test changes with a small number of people before releasing them to everyone. Prime candidates are those who are keen to be early adopters, and will accept there may be some teething issues they can provide constructive feedback on.   

Remember to retire your old systems and technology 

During an incremental shift from old ways of working to new, many of the early milestones will be around delivering value to your organisation and its customers: better products, improved overall experiences, time savings, and the like. 

 In many cases, and particularly during a recession, you’ll also be looking to reduce costs as part of the transformation. It’s normally only when you shut down the systems that were supporting your legacy ways of working, that you’ll achieve these reductions. 

The general rule is to shut down your old systems as soon as possible, and to do this incrementally, if you can, such as by shrinking the infrastructure they’re running on as usage drops off. That said, early legacy application switchoff shouldn’t be at the expense of building your new process or system properly: cutting corners with the sole aim of bringing forward a legacy application shutdown by a few months is generally a false economy, since it’s likely to lead to other problems in the future. 

Invest for success 

2023 is undoubtedly going to be a tough year for many businesses. But whatever position your organisation is in, investing in innovation now can have immediate and long-term benefits. The right tactical improvements could be the difference between a recession taking your business down or you not only surviving but thriving off the back of it. And smart strategic projects can form the foundations on which you can build solid – or even spectacular – post-recession success. 

If you’d like support with any of the topics we’ve covered in this blog, please get in touch with us, and we’d be delighted to help.

Ric Hill
Ric Hill
Founder and CTO

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