- Image by Calidonia via Flickr
“When the tide goes out, you see who is standing naked.” (Warren Buffet)
When Joseph Schumpeter described capitalism as creative destruction, he was talking about business model innovation. New or transformed companies take the place of companies that are lethargic due to size-induced bureaucracy or over-confidence.
This transition, Schumpeter argued, drives a nation’s long term economic vitality and growth. Recessions are great, the economist in me argues, because they accelerate creative destruction.
The business-owner in me wants this recession to end. These are downright scary times even for businesses like my own that lack significant fixed capital and an employment base in the hundreds or thousands.
The wise advisor in me knows that we’re in times of rich opportunity, ripe for business model innovation. Why?
- Billions of new dollars in federal research and even more in infrastructure and renewable and clean energy: How can you capitalize on these changes?
- Confused and hurting business customers and consumers: How can your business model innovations enhance your value promise, creating customer loyalty missing before this recession?
- A world awash in environmental and social problems with too little money to afford current solutions: What new solutions can you offer?
Rethink your value promise.
- Challenge the definition of the business you are in
- Build hard-to-copy advantages
- Focus your leadership team on business model innovation
How are you making the current recession an opportunity, not just a curse?
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For insight on business model innovation and business model differentiation, read my recently released book, Beyond Price.
Right On! Recessions are horrible times, there is no question. And the hurt is widespread. But so often it seems as if the economy is simply shaking off ideas that have outlived their usefulness making room for new concepts. Be open to that and life gets better. For some clients this has been the chance to push through ideas that have been blocked for ages, simply because it’s obvious what’s in place has stopped working.
Hi Kay, Fred – When I was in the packaging business, which was and is quite successful, we always held to the notion that any swing in the economy was an opportunity … as long as you’re paying attention. The worst situation is when everything’s flat. Companies become apathetic, run on autopilot: the answer to everything is, “Let’s not rock the boat.” Right now, with a deep recession, the boat has hit the rocks. When the boom comes, people will want to rock and roll. Either way, we will be more receptivity to new ideas.