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Archive for the ‘Innovation’ Category

How long until you’ll be buying your groceries with your phone?

Posted Friday, April 8th, 2011

In light of recent advances in technology– the mobile payment sector is fighting to be the next big thing.

While our friends in Asia and parts of Europe have already been making purchases with their phones, mobile payments in the UK haven’t really taken off.

The biggest problem with mobile payment and top of everyone’s greatest worry is security. When it comes to people’s payment processing, data is of the utmost importance. People are generally very reluctant to enter their payment details when very few sites offer any obvious security measures.

There are 3 important factors to think of when you’re making a payment:

• Make sure it’s only sent to the POS system, rather than passing through third-party services.
• Your payment details are stored carefully on your phone
• Make sure it is encrypted when it’s sent to the POS system

However, despite the security measures and concerns million os people use the POS terminals and systems which in actual fact aren’t that secure. Ironically, there is no evidence that mobile payment is any less secure.

Starbucks has recently started accepting mobile payments. They claimed 3 million people paid for their coffee using the company app.

How long will it be until we pay for our Sunday newspaper using your smartphone?


Growing Your Business: 5 Tips from the Co-Founder of Foursquare

Posted Thursday, March 25th, 2010

smallbusiness, 23 March

As co-founder of the Internet’s hottest startup, Foursquare, Dennis Crowley knows a thing or two about growing a small business.

Foursquare is a location-sharing mobile app that lets users check-in to venues, share that check-in with their friends and social media sites, and discover friends, tips, and popular places nearby. The startup launched one year ago, has attracted massive press coverage, and has grown to around 600,000 members.

This isn’t Crowley’s first success story as a technology entrepreneur, and given that he’s also worked for Google, his perspective is colored with the sagacity of knowing that being nimble, lean, and fast can be just as effective — if not more so — as having bigger budgets and more manpower.

Over the years, Crowley’s learned several key lessons applicable to small businesses. Here are five that small business owners should take to heart.

1. “Twitter is your best friend”

Crowley speaks of Twitter as a distribution channel for all types of communication, and describes it as the most immediate way to connect with customers.

“At Foursquare we use Twitter for a little bit of everything: Good news and bad news, press clippings, RTs [retweets] from other users and customer service inquires. We’ll tweet when new versions of our apps are ready for download and tweet when our database is experiencing hiccups. Keeping users in the know doesn’t take any more than a few seconds and your most loyal users will spread the word via RTs.”

The nature of Foursquare may position it to be more heavily followed than the typical small business, but the point here is that small business owners should use Twitter to compliment their day-to-day work experiences.

2. “Keep it light”

The Foursquare team lives by this mantra, so while they share everything from where they are to what they’re doing, they’re doing so in edible, consumer-sized bites, perfect for the sporadic attention spans of their audience.

On this front, they’ve opted to use Tumblr as a lightweight blogging platform. Crowley explains, “On our company Tumblr we’ll post the success stories our users send in, write recaps of what goes down at Foursquare HQ meetings, and post pics of what we’re having for lunch. Our staff is full of personality and we try to show that as much as we can. The story of 16 guys and girls crammed around four tables is much more interesting than the story of a faceless Internet startup.”

Crowley also advises to apply the “keep it light” philosophy to all customer-facing initiatives. He also suggests that small business owners don’t have to be “all business, all the time.”

3. “Guerilla customer service”

Foursquare is by no means perfect. As a young startup, the company faces the challenge of keeping their servers running as they attract record levels of activity, and doing so always in the public eye. It’s a daunting position to be in unless it’s approached head-on, and that’s what Crowley and his team do on a daily basis.

“We’ll use Twitter Search to search for things like “foursquare sucks,” “foursquare broken,” etc. to find people who are experiencing problems but who would probably never submit a support ticket. With a quick @reply we can often shed some light on the issue and do it in public.”

The same guerilla-style customer service is perfect for small businesses, especially with regard to negative press or unflattering blog posts and comments. Crowley says, “don’t feel shy, jump in and comment. Making yourself part of the conversation shows users you’re listening and care about the issues they have.”

4. “Small and scrappy marketing 4eva”

Not everything should be expensive, especially when it comes to marketing. Small businesses could easily be intimidated by the money that bigger companies can throw at large campaigns, but bigger isn’t always better.

Steal a page from Foursquare‘s play book and get scrappy. Take the SXSW Interactive festival. Inside the convention center there were dozens of sponsors with huge tents and elaborate setups. Here’s what Foursquare did:

“Instead [of formulating a marketing plan] we did two things: #1. Took all the swag we had (pins, stickers, temporary tattoos) and put them in ziplock bags. Everytime we found a user that told us how much they loved Foursquare (and there was an army of them!) we gave them a bag of swag to hand out to their friends. #2. We picked up a rubber Foursquare ball and a box of chalk, drew a Foursquare court on the ground outside the convention center and played for four days straight (and yes, we are still sore).”

The game was a huge hit and attracted the attention of conference goers and big media alike. Crowley continues saying, “Thousands of people stopped by to see what was going on, say hi, play a game or two, and pick up some swag. It gave people the chance to meet our team in a super informal setting (playground game!) and hang out with us in an environment where phones and laptops were completely out of the way.”

5. “Show off your team”

The scrappiness didn’t stop with fun and games. Crowley also used the offline event as an opportunity to introduce users to team members, and vice versa, in a playful way.

Crowley states, “We designed our business cards as collectibles — collect all 6 and unlock a Foursquare badge. Once word of this got out, people were looking all over downtown Austin for employees just so they could introduce themselves and collect a badge. Every time we handed out a card, we got to meet one of our users. Actually encouraging people to reach out and introduce themselves to your team puts a name and a face on the products you’re building. It also helped us start a dialog with people who’d probably never introduce themselves.”

It’s a smart strategy that small businesses can emulate to create more personal connections with their customers.


Mobile App Market to Surge to $17.5 Billion by 2012

Posted Wednesday, March 17th, 2010

Lithuanian-based GetJar, an independent mobile phone application store with more than 60,000 mobile applications for major mobile platforms such as Android, Symbian and Windows Mobile, commissioned a study that predicts a huge surge in the number of mobile app downloads and the overall size of the mobile app market.

Mashable, 17th March 2010

According to the study, created by Chetan Sharma Consulting, mobile app downloads should jump from 7 billion in 2009 to almost 50 billion in 2012. By this time, the market will be worth 17.5 billion dollars, the study predicts, despite the expected lower price of mobile apps, which should drop from the current average of 2 dollars per app to 1.5 dollars in 2012.

GetJar chief executive Ilja Laurs makes another bold prediction, echoing the one we’ve recently heard from a Google executive. “It is easy to see how mobile apps will eclipse the traditional desktop Internet. It makes perfect sense that mobile devices will kill the desktop,” he said.

He backs this up with more data from the study, citing that 17% of GetJar users spend more time on internet-linked smartphones than they do on desktops.

Be that as it may, the work you do on your desktop is still a lot different than the work you do on your smartphone. The mobile application market definitely has tremendous room to grow, especially with the coming of iPad, which takes the mobile app paradigm and slaps it onto a bigger, tablet device. But let’s wait and see how it performs on the market before we declare desktop dead or irrelevant.


Google Launches Real-Time Search

Posted Friday, February 12th, 2010

We knew it was inevitable, and now it’s here: Google has just launched real-time search integrated into search results pages.

Mashable, January 31st

Google real-time search updates as stuff is happening around the Web — for example, live tweets, Yahoo Answers, news articles and Web pages now stream in on the actual result pages for your query. It works on mobile too (at least iPhone and Android for now).

MySpace and Facebook Deals

That’s not all, though. Google’s announced that they’ve inked partnerships with both Facebook() and MySpace() to pull in data in real-time. For Facebook, that means public Facebook Pages, and for MySpace, it means any stream data that is publicly available. This is on top of the partnership that the company announced with Twitter back in October.

Live Within Days

Google says the features aren’t available to everyone yet, but will be within the next few days. However, all users can see it now via a “Hot Topics” feature that’s been added to Google Trends. Click on any trend, then click a “Hot Topic,” and you’ll see the new “Latest Results” area of Google search results. For example, you can currently see real-time updates for the Tiger Woods story.
http://mashable.com/2009/12/07/google-real-time-search/

Staying in Front of the Inevitable

For some time, it’s been clear to us that search has been moving to real-time, but until now, Google was seemingly falling behind Twitter(), and even perhaps Bing() (who inked its own search deals with Twitter and Facebook earlier this year).

Now, with one sweeping stroke, Google has grabbed the lead in the real-time search space, and it appears that Facebook and Twitter have both conceded that they aren’t going to outbuild Google when it comes to search. These are significant strategic decisions for all of those involved that will dictate much of where these companies head in the years to come.


3D Technology: The End Of Product Placement As We Know It?

Posted Friday, January 15th, 2010

Avatar’s 3D technology is being credited for revolutionizing the way we watch movies. Its success has been followed by a flurry of announcements about blockbusters-to-be in 3D. While Avatar certainly revolutionized the way we watch movies, might it also revolutionize the way we place products?

BrandChannel, January 14 2010

For years now the product placement practice has been booming. Once generally considered a loose agreement between brands and prop managers, it is now an established business. A-list director Brett Ratner shamelessly boasts about his ambitions to help brands get scene-stealing placements. Even audiences have come to expect them and the term “product placement” is a household word. However, 3D technology poses incredible threats and opportunities for the advertising practice.

One of the key characteristics of 3D, as used in Avatar, is “limited depth of field.” Essentially, this means that the figure onscreen in 3D pops out at the audience while the background appears out of focus. An attempt to focus on the background causes what some call “Avatar h3dache.”

For product placements though, the loss of a clear background means the elimination of countless placement opportunities for a wide range of brands. Cars logos, soda names, box graphics and any number of other brand identifiers will appear to be just a swirl of blurry color. Any attempt to distinguish them will be pointless. What good is a product placement that cannot be seen?

Obviously, the flip side is that 3D focus might allow product placements to really jump out at viewers. Think about E.T.’s legendary Reese’s Pieces not just lined up flatly on the ground but each popping out at every rapt child in the audience. Mmm, delicious exposure.

Brands certainly will balk at paying for placements that will never be seen, but will brands even be willing to supply prop masters with products knowing the small chances of getting a decent placement?

Product placement was already a field of branding with few established norms or ground rules. A move to 3D only promises to shake it up further, with the future as promising as it is foreboding.


Using Design to Drive Innovation

Posted Friday, December 11th, 2009

Designers must deliver the orchestration of the total experience with a brand, product, or service or face irrelevancy

Businessweek, June 29 2009

In a previous era, all the talk was of strategy, strategy, strategy. More recently, it’s been innovation, innovation, innovation. As design thinking seems poised to sweep away some of today’s celebrated innovation practices, we must be wondering what new provocation is on the horizon. Relax, I’m not planning to conjure one up.

For those of us on the design consulting side of the business, it has not exactly been a smooth ride lately. But then again, I can’t say that I ever remember it being all that smooth, even when the demand for all forms of basic design and new production capability was sky-high.

Having lived one career on the corporate design side of the consumer-products industry and now a good part of another on the consulting side, I’ve seen the ascendancy of design as a profession and the movement of design toward business competency. At the outset, designers were about style and the creation of bright shiny objects, and we dutifully manned our post at the last decoration station on the way to the marketplace.

Today, there are arguably two design strategies in the marketplace. You either succeed as the low-cost producer, or you successfully differentiate your offering by design in a relevant, meaningful way that is valued by shoppers, consumers, and sellers. As such, the theoretical role of design in business is relatively uncomplicated and straightforward.

Design in Business
The complications come with these two questions: Where does the core idea around a differentiated, relevant, valued offering come from? And what is its relationship to this thing we used to call design? You know—the bright shiny objects.

In our practice, we refer to the former as innovation strategy, and to the latter as design strategy. Somewhere in between resides the opportunity for brand strategy, and we hope to create a system in which there is a seamless flow from ideas to brand meaning and, finally, to how that brand or product or service is expressed and communicated.

Putting all three aspects of this brand-building practice together provides validity in thinking about design as one of the primary idea generators for the creation of viable business platforms. Assuming that the manifestation of a business offering is realized in the context of a brand, that brand requires meaning, a defined expression, and then, given some success, a plan for continued opportunity development that sustains and grows the business.

How to Innovate
True innovation requires the adoption of a belief system that sometimes must prevail in the face of other data metrics. Read up on the great inventions and business wins and you will note that at the core of most of them lie belief, dedication, and the passion to succeed.

Today’s business leaders are often too afraid to move ideas forward without ironclad data proofs that they will be successful. All too often, they are the losers. Use your head, listen to your heart, and feel what’s in your gut.

As long as the human spirit and the marketplace lives on, I’m sure we will be inventing and innovating. Innovation is the commercial side of discovery and invention. Change is a huge driver of both discovery and invention. The world changes around us and we discover new things and we observe change and invent new things to deal with change.

If designers are content to function as purveyors of bright shiny objects, they will likely fade into obscurity. On the other hand, if they step forward and deliver the orchestration of the total experience with a brand, product, or service in the context of our changing environment, their future, too, looks bright.


Coca-Cola Lays Out Its Vision for the Future at 2010 Meeting

Posted Friday, November 27th, 2009

AdAge.com, November 22 2009

Amid some 200 analysts, investors and media last week, Coca-Cola CEO Muhtar Kent made a confession.

“There was a period when our company did lose its way,” he said. “We were too internally focused and not focused enough on the changes taking place with our consumers and customers. In essence, we were too busy looking at the dashboard and were not sufficiently paying attention to the world outside of our windshield.”

We live in an ‘ADD economy,’ said Joe Tripodi, chief marketing and commercial officer, Coca-Cola, at a 2020Vision meeting last week. While Coca-Cola remains the dominant beverage company in the world, and controls nearly 51% of the global carbonated soft-drink business compared to Pepsi‘s 22%, according to Beverage Digest figures, it had, perhaps, been too focused on soft drinks at a time when other beverage categories were on the rise, said Bill Pecoriello, CEO at ConsumerEdge Research. “They were too inward thinking and missed a lot of trends that were happening,” he said. “There was a shift away from certain beverages and needs being filled by alternative beverages.”

Certainly, soft drinks remain a key focus for the company, but now it has also established dairy beverages as a global platform, with brands such as Vio and Minute Maid Pulpy Super Milky, and has set juice as its top priority after sparkling beverages. It’s also put more emphasis on innovation, with its venturing and emerging brands group, of which brands such as Zico, Honest Tea and Illy are a part.

Globally, Coca-Cola says it leads in sparkling, juice and juice drinks, ready-to-drink coffee, tea and active lifestyle, or enhanced waters. It is No. 2 in sports drinks and No. 3 in packaged water, which includes plain bottled water and bulk water, categories where there is stiff competition from the likes of Gatorade and Nestle Waters.

John Sicher, editor and publisher of Beverage Digest, also points out that between 2000 and 2004, when former CEO Neville Isdell arrived, the company struggled with management changes and simply wasn’t functioning well. “Today, in my view, Coke is really back to functioning at a high level again,” he said. “Relations with bottlers are good. There’s good morale inside the company. They’re recruiting good people and not losing people anymore. They’re really now focusing on the business and the brands.”

Multicultural plans
But the most significant changes appear to be in the multicultural space, which Ms. Bayne said will be a core focus for the company in the U.S. by 2020. Already, multicultural consumers account for 33% of all of Coca-Cola‘s U.S. volume, and given the population growth occurring in this country, by 2020, those consumers will make up 40% of U.S. volume.

“Our multicultural plans are now 12-month plans. It is no longer Hispanic heritage month followed by Cinco de Mayo,” Ms. Bayne said. “We have a deep connection through the World Cup with Hispanic males and through the novelas with Hispanic females.”

The company is also embracing a 12-month strategy for African-American consumers. “We’re really focusing on moms. Moms lead the decisions in this segment of the population, even more than others, so we’re really focusing on her,” Ms. Bayne said. “Also, [we’re] celebrating the historically black colleges and universities, Black History Month and connecting over music.”

The brand is also recognizing the power of consumer-generated content and social media. “Among Coca-Cola‘s most powerful differentiators are the stories only our brand can tell,” said Ms. Clark. “But we’re not the only ones that can tell our story. Much of our content comes from our consumers. It’s the phenomenon of social media. Consumers remind us daily that Coca-Cola is actually their brand, not our brand.” To that end, the company is launching Expedition 206, an ambitious global social-media push.

While it’s not entirely clear what the return on the program will be, Adam Brown, director-digital communications and social media, said the company will be monitoring fan participation and online share of voice, as well as increases in friends or followers. “One of the great things about digital and social-media programs is the ability to measure just about everything. This is critical for us to demonstrate ROI on an exciting and, in a way, experimental project like this,” he said. “I also think content sharing is a critical metric to watch. … That third-party credibility is magic.”


Electric cars save cash for city drivers

Posted Friday, October 30th, 2009

 They may miss out on revving their engines at the lights, but urban drivers of electric cars can cut their emissions by two thirds and save up to £3,000 a year. Sound like a fair compromise?

BBC.co.uk, April 2008

Electric cars produce no exhaust fumes, minimal pollution and a third of the CO2 emissions of petrol engines. On top of that they’re tax free, immune to congestion charges, and a full ‘tank’ of fuel costs no more than a pint of milk.

So what’s the snag? Currently, limited range and recharging opportunities, and a lack of driving pizzazz. But could the next generation of electric vehicles change all that?

How does it work? Electric cars use a battery and electric motor to power the vehicle and are charged via a standard mains socket in your home, or at an increasing number of free outdoor charging bays. The average electric car does 60 miles on a single charge with a top speed of 40mph – while higher performance sports cars can do 150 miles and 130mph. There are currently over 100 electricity pumps in the UK – the majority of which are in London. But 250 new points are expected to be added this year across Britain.

How will it make a difference? 1. An electric car run on conventional electricity from a coal-fired generator produces a third of the emissions of a conventional petrol car (64g of CO2 per km compared to 176g CO2 per km) and just over half the emissions of a diesel or hybrid car (104g CO2/km). 2. You can save thousands of pounds a year in running costs
3. If you’re thinking electric car plus green electricity tariff equals carbon neutral transport, you might need to recalculate. green energy

What’s stopping me?
“Max speed, 40mph?” Electric cars are currently best suited to city driving because the average speed of traffic in London, for example, is notoriously just 10mph: 2mph slower than an Edwardian horse-drawn carriage.

“I’ve heard they aren’t safe” Electric cars are classified as ‘quadricycles‘ by the Driver and Vehicle Licensing Agency, so are subject to less stringent safety tests than cars. But one report estimates they are three times less likely than petrol cars to be involved in accidents. Insurers certainly think so – electric cars qualify for the lowest insurance category, group one, because (reckons the AA) their likelihood of getting into dangerous situations is much lower than that of conventional, high-speed cars.

“Won’t the battery go flat as soon as I get out of my road?” Current models manage an average of about 60 miles on a single charge so we can make our average daily commute of 17 miles more than three times between recharges, but out-of-town journeys are of course trickier. Upgrading to more expensive lithium-ion batteries can increase range significantly.

“I’d love to help the planet, but I can’t afford such fancy new technology” Actually, electric cars range in price between £8,900 and £17,000 and, based on the UK average of 10,000 miles a year, you could save £800 a year on fuel, £300 in car tax, up to £2,000 from congestion charges and free parking in London, and get cheap insurance too. On the other hand, the current generation of electric vehicles are unlikely to rack up that sort of mileage due to their limited range.

Fuel and maintenance costs are also about a third of the typical petrol car: about 6.5p per mile as opposed to 20p. Even with the cost of replacement batteries – about £1,500 every three to four years – electric motoring still costs only about 11p per mile.

What’s the debate?
Electric vehicles are exhaust free but critics say that they simply shift the point at which the emissions and pollution is generated to the power station. This is true (in fact, electricity generation accounts for a third of the UK’s climate impact) but power stations are more efficient at generating energy than cars, so emission reductions still hold. You may be tempted to switch your electricity tariff to green energy to reduce your driving emissions to near zero – but think twice before making the jump.

New research published in the journal Environmental Science and Technology in 2008 levels another, less serious, accusation at electric cars: they use more water than fossil fuelled cars. Vehicles running off electricity use about 17 times more water per mile than petrol vehicles because electricity production in power plants requires the withdrawal (and return) of surface water from nearby lakes and rivers. It’s worth bearing in mind, however, that one million electric cars account for just 0.3% of the miles driven by light duty vehicles in the US.


Social networking for business is next big thing

Posted Thursday, September 17th, 2009

Social sites like Facebook, MySpace and LinkedIn feed the craving people have to find one another, exchange information, catch up and solve problems.

Commercial Appeal, June 8, 2008

But there’s more, and for business, this matters. In the back-and-forth of ordinary conversation, ideas pop up.

They may be about your product or ways you could do things better … or new products your customers could use if you were hearing what they had to say.

“Those conversations are going on online anyway, believe me. You want them going on in your foyer,” Barger said.

The idea, of course, is that if people are talking in your presence, you’re the first to hear what is being said.

And if it’s said on your site, the exchange can be cataloged and stored, giving you a tidy archive of correspondence.

Barger, president and chief executive of LunaWeb Inc. — a Memphis company that does Web design and Internet marketing — is speaking Wednesday on social networking at the Public Relations Society of America meeting at the University of Memphis Holiday Inn.

“It has gotten to be such an important part of a PR person’s job right now,” said Bob Phillips, chapter president and Thompson & Berry Public Relations account exec. “Listen, business is so competitive. Everyone wants to know as much as they can find out.”

Barger is likely to start his talk by reminding the audience that “business used to be a faceless entity behind a security guard at the corporate gate.

“A perfect corporation was a business entity that could be perfected with mass production and quality assurance. It was all mechanized, and not human,” he said.

Now, with the push to put a face on the corporation, companies are using professional photos of employees on their Web sites, for instance, and finding employees, such as Don Dodge at Microsoft, to blog in voices that are credible and, well, folksy.

Blogging opened up a dialogue that social networks expanded. Today, there are more than 200 social sites, excluding niche networks — sometimes called vertical sites — tailored to specific audiences.

LinkedIn is one of the best for connecting professionals. In Memphis, about 100,000 people have Facebook pages. Two years ago, the population was probably closer to 40,000, Barger said.

Everything changed last fall, when Facebook broadened its membership beyond its college core, and the universe changed overnight.

“Now all of sudden, Facebook is saying, ‘Business, we welcome you. Here is how you set up shop; here’s how you engage your client base,'” he said.

“Businesses tapping into social networks to expand customer base need to have a clear idea of what they want to achieve,” said Chelsea Dubey, account executive at RedRover.

“You need success metrics, such as: How many people use the site? How many prospect leads are generated?

Social networking just for the sake of social networking isn’t always a good investment. It needs to connect to other elements of your sales and marketing strategy,” she said.

When FedEx Corp. created NetFace in 2006, a social networking site for employees only, it did no promotion but sat back to see how quickly a community would form, said Nicole Heckman, manager of innovation research.

“We found it was much more viral than we expected,” Heckman said. “Over several months, we had 2,000 active users.”

People into social networking use the word “viral” to describe how quickly networks form and spread.

Some companies build in viral functions, giving users gifts for telling friends.

“One of the things I found was that it really did give employees a way to have a personal identity within a large organization,” Heckman said.

People were soon connecting in and outside work to talk with people who had worked on similar projects or simply to play flag football.

“It really doesn’t have to be a huge investment,” Heckman said. “We accomplished FaceNet with a team you could count on one hand. You do obviously have to have someone manage it, but it wasn’t someone’s full-time job.”

For people who think the networks are just for kids, the average new Facebook enrollee is in the mid-30s.

“Many of my friends that are older and less tech savvy could care less,” said Gwin Scott, president of business incubator EmergeMemphis.

For him and the startups he works with, social networking is a chance to attract like-minded people, plus it gives business a way to tap into audiences that aren’t watching as much TV or paying as much attention to other traditional media.

Memphis Light, Gas and Water Division rolled out a blog in January, frankly as damage control after the utility was rocked with leadership scandals and contributions to its Plus-1 charity fell to record lows.

“We had to look at taking a more creative approach to communicating with our customers,” said Glen Thomas, head of the utility’s public relations. “We had to take the blinders off to look at the different ways to reach our customers, interact with them and respond to them.”

When looking over the staff for a potential blogger, Thomas suggests someone already passionate about the subject area.

“The woman writing our blog would chastise us if someone had a plastic bottle in trash,” he said.

Oh, he also suggests frequent views of the blogs that tend to break news in Memphis so you’re not caught off guard when the media come calling.


Recession: The Mother of Innovation?

Posted Thursday, September 3rd, 2009

Our special report looks at innovative ways businesses can turn the troubled economy to their advantage

BusinessWeek, July 22, 2009

Necessity may be the mother of invention. But could a recession be the mother of innovation? After all, many of the world’s enduring, multibillion-dollar corporations, from Disney (DIS) to Microsoft (MSFT), were founded during economic downturns. Generally speaking, operating costs tend to be cheaper in a recession. Talent is easier to find because of widespread layoffs. And competition is usually less fierce because, frankly, many players are taken out of the game.

Recessions can also help executives figure out how to improve products, services, and processes internally and for customers. Ideally, the creative thinking that’s needed to weather the storm of an economic downturn can lead to new markets and revenue streams. “Innovation originates from challenges,” says Vineet Nayar, CEO of HCL Technologies, a Noida (India)-based global IT services company.

HCL recently partnered with Xerox (XRX) to provide tech support for corporate customers using Xerox systems meant to reduce the amount of wasted paper. The systems themselves were inspired by the dual challenges of helping to save the environment and the need to slash office expenses during the downturn.

Inventing cost-effective and time-saving processes becomes a priority in a downturn, and it’s an area of interest for companies and organizations in a variety of fields, from high tech to health care. “In a recession, you can innovate to be more efficient,” says John Kao, author of the book Innovation Nation and the head of Deloitte’s Institute for Large Scale Innovation.

Lessons to Be Learned
Sure, there have been some signs lately that the economy might be picking up—Apple‘s (AAPL) quarterly profits jumped 15%, for instance. But a recent survey by consulting firm Bain & Co. found that 60% of 1,430 global executives polled expect the current recession to last through 2010.

And smart companies will continue to apply the innovation lessons learned during today’s tough times even when things pick up. The innovative processes, products, and services that hatch now can help executives understand how to curb costs or take risks on fresh ideas when the economy rebounds.


 
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