Don't Blame the Poor Economy, Embrace It

The state of the local economy has helped companies clean house of bad business propositions while rewarding focused innovation.

By Udai Shekawat

Yes, the economy in the United States is weak, and, yes, the economy in the Puget Sound area is even weaker.

But I get frustrated when I hear other CEOs blame their business's poor performance or failure on the economy. Assigning such blame begs the question: Isn't a business responsible for itself?

Who is responsible?
Two (of three) little pigs made their houses of straw and wood. A wolf blew their houses down. Who is responsible, the two pigs or the wolf?

The grasshopper relaxed during the summer while the ants stored food. The grasshopper didn't have enough food for the winter. Which is responsible, the grasshopper or the winter?

The business goes bankrupt during a slow economy. Which is responsible, the business or the slow economy?

We think the two little pigs and the grasshopper are responsible because they failed to prepare for things they knew were coming. Should we not hold business leaders to the same high standards we set for pigs and grasshoppers? Business leaders should have known that the good times wouldn't last forever, and they should have been prepared for when the good times ended.

It's time to stop blaming the economy. It's time to start accepting responsibility and start using the opportunities unique to this economic climate.

Cleaning house
Not long ago, I read about a company that received millions of dollars in funding so it could produce a gadget that read special bar codes on magazine ads and then downloaded related website addresses into the user's computer. This company sent out the expensive optical gadget, free, to thousands of people.

Was this a sustainable business? Of course not. Besides addressing my less than urgent need to have the online locations of magazine ads automatically uploaded onto my computer so I could be annoyed by the ads all over again after I put the magazine down, it was just a really dumb idea.

This example, like hundreds of others, illustrates one of the key roles of a slow economy. It cleanses itself of wasteful practices and unsustainable businesses. It eliminates companies that:

• Buy hundreds of Aeron chairs for $600 each.

• Enter a bidding war for the right to hire a slightly above average college graduate.

• Fight for a market where the currency (read "eyeballs") cannot be deposited in a bank.

• Create, market, and sell a product that has no real value.

• A bad economy not only reduces the "noise" of stupid products and wasteful spending, but also brings great cost-saving opportunities for businesses. In a slow economy, commercial rent is cheaper (as is evident in current Puget Sound leasing rates), vendors are easier to work with, and employees are easier to retain.

Focusing innovation
A slow economy also forces companies to focus on innovation. Let's go back to the story of the three pigs. If I were a salesman calling on the three little pigs now living in the single brick house, what product would I want to sell?

I'd want to sell an electric fence.

Why sell an electric fence and not drapes or hardwood floors? Because the electric fence addresses the one threat that keeps the three little pigs up at night: the big bad wolf.

How would I know this is the right product? It's not as simple as it seems.

To validate the need and opportunity, I would talk with the customers to learn what kinds of wolf attacks keep them up at night. I would work with them to identify the technologies they're comfortable with. And, perhaps most important, I would want to be assured that they had enough money to pay for an electric fence (after all, I'm running a business, not a charity).

Innovation must incorporate a deep understanding of the customer. What are their goals? How do they work? What will they spend? A weak economy recasts the fuzzy concept of innovation into a laser-like focus on creating the things that solve "this is killing me!" problems for people, departments, and businesses that have the money and authority to solve them.

In a weak economy a laser-like focus is especially important because the CEOs, vice presidents, and directors of the world can't do the smorgasbord of projects they want to do. In lean economic times only the top one or two priorities will get attention, and innovations will have to target those priorities to register on customers' "what's keeping me up at night" radar.

At our company, we've added amazing features to our latest product release. I believe these features reflect a laser-like focus on providing benefit to the projects that matter most to companies. For example, we created a "best practices engine" in our product that enables companies to identify and distribute best practices company-wide. It enables companies to employ a system similar to one implemented by Ford that saved the company $1.25 billion.

So ask yourself: What is it that keeps other CEOs awake at night, and how can my product or innovations address and solve their problem? This is what enables any product to stay on companies' radar, get bought, and get implemented successfully, regardless of the state of the economy.

Yes, the economy is weak. Stop crying about it. There is no better time to start or improve a business. If you succeed, you will have filled a critical need in the marketplace and will be able to withstand whatever the economy will bring in the years to come.

Udai Shekawat is the CEO of AskMe Corp. (www.askmecorp.com), a provider of software solutions for creating and managing employee knowledge networks.