Chapter 4: achieving growth in a downturn

 

Achieving growth in a downturn

History shows that the companies that continue to invest in their innovative capabilities during tough economic times are those that fare best when growth returns. In the current challenging business climate, small business managers have told us that focus is crucial. But entrepreneurs in Britain face a real dilemma: how to maintain that focus and manage costs tightly while keeping growth options alive for the future. Deferring or canceling less promising initiatives that might have been pursued allows a business to survive and eventually thrive again. Those companies most likely to prosper in the current economic climate are those giving attention and resources only to the projects that are most likely to generate near-term profits, and they end up deciding quickly which initiatives fit best with the company's core business.

 

Risks of prioritisation

The downside of this rigorous prioritisation, however, is that it halts many potentially promising projects at an early point in their development and leaves them stranded inside the company – developing an e-commerce component to your business for example. Over time, so many projects get abandoned that the company’s ability to grow beyond its core business is threatened. If focus is maintained for too long or with too much rigidity, it can become the enemy of growth. When the market recovers, the company lacks a foundation from which to recover.

 

Open innovation as a driver of change

Open innovation and partnerships can play an important part in the solution. By breaking down traditional corporate boundaries, open innovation allows intellectual property, ideas and people to flow freely into and out of an organisation. In terms of British entrepreneurship, this could result in choosing best-in-class partners to innovate on a company’s behalf and bring ideas into the organisation.

 

Insights from our survey

In our survey of 800 small businesses in the UK the managers and owners cited the complicated processes, expense and the investment required in developing staff inside the organisation. It is, therefore, logical to recommend that small businesses in Britain look for open innovation with high quality partners to solve their online payment issues. By building a partnership and investing in it over a period of time the supplier will develop with the new business to continue to deliver growth and progress.

 

To read this chapter in its entirety, go to the full report.

 

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