I just got off the phone with a magazine editor and she asked several insightful questions during the interview. One of them was, “What should companies be spending their money on during a recession?” My answer was learning.
We’ve all heard the stories of how some companies take advantage of a recession to sprint ahead of their competitors. While those competitors “hunker down” and conserve their capital, these forward-thinking firms plan and install new capacity during the ugliest of times. Then, just as favorable economic winds begin to blow, their capacity is coming on line. Surprise! Their competitors are caught flat-footed and the companies that had their high-beams on gain significant market share.
There are strong parallels to organizational learning during an economic downturn. Let’s take the example that I specialize in…understanding in-depth B2B customer needs before beginning to develop a new product. What would happen if a supplier invested in a) training to learn new advanced methods, and b) some travel costs to conduct these respectful, peer-to-peer customer interviews? Three things really…
First, the supplier would know precisely what customers in the target market segment wanted in the next new product. So, instead of wasting over half the supplier’s R&D working on dumb projects (as is now done, on average), this supplier would be prepared to launch very exciting new products just as the economy ticks upward.
Second, the supplier would now have a “favored position” with the customers they interviewed. These interviews are designed to “wow” the customer because it is clear the supplier is actually listening to his customer. We find this is much more of a rare occurrence than you might think. This favored position can lead to immediate ancillary new business, as our supplier takes a larger share of wallet at the expense of suppliers using the same old sales tactics.
Third, the supplier will have built a 2-3 year head start in the critical competency of understanding customer needs. This is akin to a significant head start in implementing Six Sigma or other new practice over competitors. They often never catch up and have to struggle mightily if they do.
Learning is a funny thing. It might seem expensive… but is almost always less expensive than not learning.