The building pressure and severity of recession is not something any employee, leader, or organization as a whole should take lightly.
It does, however, produce a couple of silver linings for innovation-minded organizations—a paradoxical concept that has fittingly been dubbed the Innovation Paradox. In short, Mike Maddock, founder and CEO of growth consultancy firm Maddock Douglas, defines the Innovation Paradox as such:
The more companies try to innovate, the worse they get at it.“How to Drive Innovation During a Recession,” Mike Maddock, Forbes
In other words, when organizations filter innovation through their definition of success—which is to say, previous, obvious innovations—the more risk-averse they become.
Robert C. Wolcott, co-founder and chairman of TWIN Global and Adjunct Professor of executive education at Northwestern’s Kellogg School of Management, highlights a number of reasons why economic downturns are an appropriate time to seize on market opportunities.
In an attempt to cover current and potentially foreseeable losses, organizations will try to cut any waste or excess.
However, that is a short-term fix for something that could be a long-term issue. Whatever is cut in a scramble—programs, projects, or, most traumatically, staff—will need to be rebuilt in an upturn.
With the rate of technology (and disruption) increasing by the year, the month, the day, it’s important to show your current team that you’ve truly invested in them for the long haul.
‘Technology changes so fast, if we hold off on developing our people through a downturn, by the time recovery begins, we’ll be too late.’“Recession Looms: 7 Actions to Innovate Through the Downturn… And Beyond,” Robert C. Wolcott, Forbes
It may not seem like the time to develop a long-term business plan when you’re busy dealing with immediate fallout. The oft-spoken cyclical nature of the economy implies that upturns and downturns are part of a larger course.
Goldman Sachs analyzed stock declinations dating back to 1835, finding that most event-driven drops recover to previous levels within 15 months. That’s not a short amount of time, surely, but hope and composure is certain to be on the horizon.
Economic downturns are sometimes predictable, other times unprecedented. The way your organization operates in a time crisis, though, leaves a lasting impression.