We’ve all seen the headlines and felt the unease building. Inflation’s rising. Layoffs seem to be the new pandemic. And “recession” is whispered in the Zoom rooms of almost every business.
Whether this economic downturn gets officially labeled or not in 2023, times are tough. Especially for consultants, managed service providers, and anyone else whose business relies on helping companies grow.
Maybe you’ve already seen a slowdown in your client’s discretionary spending heading into the end of the year. It’s human nature to hunker down, play it safe, and stick to what you know in the face of adversity.
But 2023 is the year you need to commit to innovation. It could be the difference between growth and stagnation for you and your clients.
Survival of the innovative
In today’s rapidly changing business environment, the fittest businesses can adapt and innovate. This is no longer for the brave and daring. Innovation is crucial for consultants to stay competitive and relevant, let alone grow.
You need to be more open to trying new things and taking risks to find new sources of revenue, streamline operations, reduce costs, and set an example for your customers.
Here’s what you have to gain by committing to innovation going into 2023:
- Attract more talent: While impacts on your revenue might be the obvious reason to innovate, your acquisition of new talent is just as affected. Draw the best young, digitally-native talent by employing the latest technology and showing them that they’ll have the chance to provide value immediately.
- Stay ahead of the competition: By constantly innovating and coming up with new ideas and solutions, you can differentiate yourself from your competitors and stay ahead of the curve.
- Meet clients’ needs: Clients are always looking for new and better ways to solve their problems, and consultants who can offer innovative solutions will be more attractive.
- Enhance your expertise: Innovation makes you more valuable to clients and allows you to deepen your knowledge and expertise in your field.
- Create new opportunities: Innovation can lead to developing new products or services, which can create new opportunities for growth and revenue.
If you want to compete, you have to innovate. And doing so during an economic downturn has proven successful time and again.
Fortune has favored the bold
It’s one thing to hypothesize about the impact of innovation. It’s another to look at how it’s played out (and led to immense growth) over the last few major financial crises.
During the 2007-2008 financial crisis, Apple leaned into innovation and released the iPhone. This risk helped the company disrupt the mobile phone industry, weather the downturn, and continue to grow.
Around the same time, known risktaker Netflix turned the entertainment world on its head by introducing its streaming service. This not only helped them survive the impending downturn but also helped them generate over $1 billion in revenue for the first time. Now that streaming has overtaken all other video services (and our lives, honestly), we’re curious to see if Netflix can pull off another historically innovative feat in the coming years.
And during the dot-com bust of the early 2000s, as web-based companies were folding left and right, Amazon remained. They’d recently pivoted from selling books to offering a wide range of products and services. It helped see them through that tumultuous period, so they could ride out the crisis in 2008 and emerge from the other side, having launched Amazon Prime, the Kindle, and AWS.
Yes, these are software and technology companies. But as McKinsey Quarterly claims, every company must act like a software company. You don’t need a new product or service to do that. You need the right mindset and culture.
Leaning on innovation during a downturn starts long before the actual crisis hits. It involves a culture of preparedness and adaptability. The good news, though? It’s never too late to start.
Try employing these steps as the new year starts so your consultancy is ready to jump when it’s time to innovate:
- Foster everyday innovation: Fuel an innovative mindset in your team and organization by encouraging open communication, promoting risk-taking and experimentation, and providing opportunities for learning and growth. Try starting small with a monthly Lunch & Learn, where you bring a new technology vendor to demo for the team.
- Lead by example: Your team will model what leadership does. For example, if you constantly consume content (podcasts, blogs, etc.) from thought leaders and industry trendsetters and then discuss it with your team, they will follow suit.
- Create incentives: Your culture is equally sculpted by what you reward and punish. Whether with bonus structures or professional advancement opportunities, rewarding individuals who bring innovative solutions with widespread organizational impact will show the rest of the team what “right” looks like.
- Build a network: Cultivate a network of contacts within your industry and engage with them regularly. Share your challenges and listen to their experiences. These relationships can provide valuable insights and inspire the next big idea.
- Develop new problem-solving skills: Look outside consulting to find creative solutions to complex problems, new tools, and techniques, such as design thinking or agile methodologies.
- Be open to change: Finally, being willing to embrace new ideas and approaches will be the most valuable mindset to adopt so that you can stay open to opportunities for innovation.
By taking these steps, you can position yourself and your team to be ready to take advantage of opportunities for innovation as they arise.
New year, new risk
Sticking to what’s safe and comfortable might be tempting as we enter another uncertain year. But in 2023, as some of the greatest visionaries have said, the only risk is not taking one.
While the spark for innovation might seem to appear out of nowhere, the consultants who do the work to prepare and create the opportunities for innovation will be the ones who benefit most.