It has become clear in recent months that the economy is looking quite uncertain for 2023. Neil Russell-Smith at Quantanite shares his thoughts on how an uncertain economy can actually innovate and will be good for some…
One thing that has become clear in recent months across most developed markets, including Europe and the US, is that the economy is looking quite uncertain for 2023. If you ask one expert then growth will continue, albeit slower than we have known in the past, but others are warning of an imminent global recession.
The real problem is that none of us will know who is right until much later in 2023, so there is a period of uncertainty ahead where executives will be wary of new ventures and investments. The only certainty is uncertainty right now.
But one lesson that history teaches us all is that innovation explodes in an uncertain environment. When times are good, and revenue keeps growing, there is very little appetite to change course – most corporate leaders are happy to keep steering the ship into the growth cycle. It takes courage to try new ideas when they go against what is already working.
Innovation happens when everything is uncertain. If the old processes are shrouded in uncertainty then it feels less risky to try new ideas and quickly discarding the ideas that don’t work doesn’t feel like failure, it feels more like charting a new course.
In past decades it was difficult to attract talent to young innovative companies during a period of economic uncertainty because smart people would naturally move to safer positions in large companies. This made start-up innovation more difficult, but the situation is rather different today. New ideas can be tested with very little capital and a new service can be created and launched globally on the app store to gauge interest by a team that has regular salaried jobs – the new service can be up and running as a side hustle.
Last year the Harvard Business Review published a detailed article titled ‘3 ways to innovate in a downturn’ – perhaps anticipating the uncertain year to come. The article suggested three important ways that companies can succeed when the general economy isn’t looking positive:
1. Be a game changer: do something completely new that changes your marketplace. Airbnb was launched because of the global crash in 2008. Nobody had ever considered a global room and property sharing service before.
2. Be more simple and affordable than the competition. Change your industry by finding how to simplify and beat the competition. Just after World War Two the McDonald brothers applied the lessons of Henry Ford to food production and service – the result was food that could be bought from a drive-thru and eaten while still driving and all for less than the cost of food requiring experienced chefs and waiting staff.
3. Be bold. Similar to game changing, but related to any business decision – be bold as others are taking shelter. Adobe scrapping packaged software and going completely SaaS before other major software companies is a good example.
Our team recently developed an ebook titled ‘The Key Trends Shaping CX in 2023’ which includes the prediction that small companies that manage to get their new business model right will trigger a wave of hypergrowth start-ups in the year ahead.
The general economic news may be gloomy, but for the innovative companies defining new services that customers really want, there is only strong growth ahead. Larger companies will be more tempted to try new ideas in these uncertain times, but this type of economic environment makes it more likely that entrepreneurs are experimenting and trying to develop the next Airbnb. For some, 2023 will be a year of hypergrowth.
Please click here to download a free copy of the ebook – The Key Trends Shaping CX In 2023.
Quantanite is a Customer Experience (CX) and Digital Outsourcing solutions provider for the world’s fastest-growing companies. The company delivers customer experience management services, back-office services, and digital content services, and provides sales enablement and demand generation services through its sister brand Growthonics. Founded in 2014 and headquartered in the United Kingdom, the company’s nearly 2,000 super-charged employees operate on four continents. Through global delivery centres, Quantanite powers customer experience and digital outsourcing for leading enterprise brands.