Trading Innovation for Survival:
Of all the steps taken to negate the impact of the slow down, perhaps the most significant ( in monetary terms)one remains the Cut in R&D expenditure. ( though Lay Offs are more popular due to their sentimental value).
While this seems like the ideal strategy for the short term, in reality such practices would actually put organizations at more risk than previously thought. Sacrificing innovation amidst the recessionary cost-cutting frenzy can leave companies vulnerable in the long run.
Firing Talent, Cutting back on technology expenditures, reducing risks,stopping new product development and replacing systems management over Innovation as Key Strategy for success are the Worst Mistakes that an organization can do during the bad times.
These actions are partly because of the misconception on what Innovation really means. Innovation is not Rocket Science. Innovation doesn't always refer to inventing new technologies or making drug discoveries!
Peter Drucker rightly points out the effects of innovation during recessionary time in his work : Management - Tasks, Responsibilities and Practices
"Innovation is a term of economics than technology. The most productive innovation is a different product or a service creating a new potential for satisfaction, rather than improvement. Typically this new and different product costs more - yet its overall effect is to make the economy more productive"
Also from Drucker Library: Peter Drucker and Innovation
Perhaps its time for your company to jump OUT of the bandwagon of needless layoffs and cost cutting and see the see the Upside of Recession - The Innovation Engine.
Other Interesting Reads: Innovation is recession-resistant
The Official Site of Drucker
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