Innovation Strategies in Volatile Times
It’s easy to innovate in an exuberant economy when “risk on” is the dominant catchphrase. But when risk aversion becomes the new mantra, smart leaders need new strategies for innovation. As we move through a period of tighter funding and general budget austerity, smart business innovators have the opportunity to position offerings that offer clearly defined value to a targeted, addressable market.
“This is an exciting time for innovative companies to demonstrate their worth,” said Jason Quinn, Chief Financial Officer, Vendr. “Our learnings from having helped companies purchase $2B worth of software tell us that companies are still looking to purchase SaaS, but they’re getting pickier in the process. More than ever, buyers are valuing fair prices, a fast sales process, and products that drive innovation.”
Data-driven decisions Diligence is the process of paying proper attention to the “puts and takes” of a given decision, and today’s buyers are increasingly focused on data-driven decisions. Thus companies selling innovative products or services are paying closer attention to everything from product development to promotion – doing careful in-house research into the competitive landscape, real-world needs, appropriate pricing and target marketing. Whether a brand new product or an upgrade to an existing one, innovation requires steady attention to the current state of affairs, while also looking ahead to what’s possible.
Decision-making cycles As the economy cools, buying decisions today can take longer and include more people with an expanded decision team. Where the pandemic forced companies to make decisions in a compressed time frame, today those companies are adding people and cycles to the buying decision. While this can be frustrating, typically for both buyers and sellers, the longer sales cycle can also open a window into product and market fine-tuning.
Capital management Asset allocation is increasingly important as well with the shift from more fundraising, hiring and building, to careful allocation of resources. Thus rather than developing a full suite of products and services, a new venture may choose to focus on a core offering.
Market positioning A product that offers better connections or capabilities, be it between or among people, data or processes, is one that is positioned for success regardless of macro factors. With today’s laser focus on making smart economic choices, innovation and efficiency are strong contenders for a buyer’s attention.
Today’s risk averse economy can present a more challenging landscape to innovators and their companies. However, successful financial leaders know that careful attention to product development, capital deployment and market positioning are the mainstay for buyer acceptance and continued success.