For several weeks now, economists have been warning us of an impending recession. Most of us have already experienced this situation and are a little dreading this period of uncertainty, especially as business managers.
Although we know the mechanisms and the definition of a recession, the next one will always remain a great source of unknowns. Will it really take place? When will it start? How long will it last? Which country(ies) will be the most affected? Which industries will be spared?
In our field, the big question is often: “Is it safe to continue (or even begin) the development of a new product?
Should we invest in product development on the eve of a recession?
According to several experts, including the BDC, it would be a serious mistake not to do so! In fact, times of uncertainty would be the perfect time to improve your operations and products in order to be ready when the economy picks up. Therefore, you will be more likely to have the competitive advantage over your competitors. You will also take advantage of the slowdown with your customers to be able to brainstorm on collaborative opportunities. In other words, “security” does not lie in inaction, but in action.
Obviously, you must not throw yourself headlong, at all costs, into the first project presented to you. When investing in innovation, you have to be vigilant, regardless of the economic period.
On this matter, Dr. Jean-Samuel Chenard, President of Motsai, says: “An investment in the company generally aims for a return over 3 to 5 years. Targeting promising projects and staying the course during a period of uncertainty will avoid making decisions with long-term impacts on a temporary problem.”
Experts offer various methods to not only survive during a recession, but to take the lead in the face of the competition, and even ensure growth.
3 actions to stand out during a recession
#1: Improve the efficiency of your operations
Waste of resources, loss of unsold items, breakdowns, delays, etc. are insidious expense items and much larger than you think. Now would be the perfect time to take a serious look at this subject: not only will you be more productive, but you will free up capital for future investments.
*Did you know that Soralink, a sister company of Motsai, specializes in predictive maintenance using sensors to reduce breakages and unplanned work stoppages?
#2: New Markets
As 2008 showed us, not all countries experience recession in the same way. Europe and the United States were hit hard while Canada remained fairly stable. If your competitors are closing down, their market shares are up for grabs. It is important to periodically assess your market and examine potential new markets arising from economic changes.
#3: New products and/or optimized products
With the money generated at #1, you can invest to improve your offer and outperform the competition. The needs of your current customers may have changed since your product’s launch. The expectations of new markets in #2 may be slightly different from your existing customer base. Would current technology allow you to have a more compact product? With a greater range? With a battery that lasts longer?
Stay tuned to the market, involve people on your team who know your customers well, and be proactive.
How not to be mistaken?
Regarding innovation and product development, there are unfortunately no guarantees. On the other hand, there are certain rules that greatly minimize the risk; and this is the importance of choosing your partners appropriately. Whether reviewing your operations or new markets, trust the professionals who have traveled this road time and time again.
At Motsai, our expertise is the development of smart products, but we make it our duty to support our customers; to tell them how to minimize their risks, which subsidy programs could suit them, which functionalities they should prioritize in a product, etc. Success is never guaranteed, but avoiding multiple development mistakes greatly increases the odds.
In conclusion, there are many smart ways to deal with a recession and doing nothing would probably be the worst decision for your business. Start now to think about the appropriate actions for yours.
If you already have ideas for improving your products, or developing new ones, but don’t know where to start, read our series of articles on the stages of product development or contact us at firstname.lastname@example.org