Three Steps to Preparing for an Economic Downturn

January 16, 2020

In my experience in the corporate world, when there is an economic downturn, a couple of things tend to happen:

1. As you might expect, the CFO sends out an edict that budgets across the organization need to be cut by a certain percentage. Innovation teams usually don’t have a big budget to begin with, so the impact on the group is greater than on other business units.

2. If conditions get really tight and the team hasn’t had demonstrable results, the group might then be disbanded. High performers could be redeployed in the organization, while others might be furloughed.

So, what have I learned about being prepared for a potential downturn? This is my map for navigating the challenging terrain:

1. Strategic goals. Ensure that your innovation agenda is laser-focused and closely aligned with the organization’s strategy. Develop a deep understanding for the wants and needs of your consumer or end-user. In a downturn, we tend to focus on short-term gains. Projects should all provide some kind of near-term return, but you should also keep in mind the longer-term strategic goals of the organization.

2. Metrics/KPIs. Create and maintain a dashboard of metrics that focuses on deliverables and output. The key here is making sure that innovation is consistent and well-defined across the enterprise. Track and communicate return on innovation investment to the C-Suite.

3. Relationship building. Be a “goodwill ambassador” for your innovation group. Never underestimate the power of developing and leveraging strong relationships. Create an internal marketing program. Build awareness by announcing and celebrating small wins. Seek input and advice from your brand or business unit colleagues so they feel that they are part of the process. Not everyone needs to be an innovator, but everyone does have a stake in innovation.

Of course, this map is also dependent on how much support the team is getting from the CEO’s office. I firmly believe that without that explicit support, innovation teams can’t be successful.

Mark Polson spent nearly three decades at Estée Lauder, most recently as Vice President of Creativity, Business Innovation, and Global Management Strategies. He has also been an adjunct professor at the Fashion Institute of Technology and advisory board member for the Design Thinking Certificate Program at Rutgers University.