Want to innovate during a time of economic uncertainty? Here's how product-led organizations can apply Warren Buffet's "Noah Rule" to build an ark and grow through the unknown.
Economists say a recession is looming. And, yet, business leaders intend to keep investing in innovation. Of the U.S. CEOs surveyed in a recent KPMG study, 91% expect to see a recession in the next year.
However, more than half (56%) are also seeking transformational growth to “ensure that their business models are a fit for a more dynamic, more digital future.” They expect this to come through mergers, acquisitions, and continued digital investment.
So, how can your organization be among those that grow and innovate during a time of instability?
According to Warren Buffet’s “Noah Rule,” predicting the rain (aka the recession) “doesn’t count.” While it’s easy to get caught up in trying to discern what the future holds, it’s more important to spend your energy and attention on what you can control: you need to build an ark to get you through the storm.
For those of us who have weathered a few storms, we gain new knowledge each time we navigate uncertainty. DesignMap opened its doors one year before the Great Recession of 2007. And we, like many other businesses, felt the recent impact of the pandemic.
Here’s what we’ve learned about “building an ark”—both from our experience as a business and from helping product-led organizations map their futures in times of uncertainty:
Slow down to speed up with strategy
The worst time to be without a map is in rough terrain. Unfortunately, it is also when we are inclined to act on emotion or instinct. Resist the urge to keep moving for the sake of it by taking the time to review your business and product strategy.
Rigorous discovery is instrumental to shaping an effective strategy. Speak to internal stakeholders, buyers, and users (the last two are often not the same in B2B and B2B2C spaces). Audit your product, competitors, and the marketplace to understand where you are today, so you begin planning for tomorrow.
Make adaptable decisions
We’re all seeing the difficult news of mass layoffs, particularly within the technology sector. The reality is that these things can often be avoided by making “adaptable” decisions or decisions that are easier to undo.
Consider creating a network of trusted contractors/partners with flexible terms instead of scaling your team with full-time hires. This will lessen the repercussions if your business finds that resources are scarce.
And this network will continue to serve you even when things recover. In What CEOs Need to Know About Design, DesignMap’s Chief Growth Officer Audrey Crane shares how having a trusted design partner can help internal teams flex and grow. This kind of “both-and solution” will serve you well in many situations.
Cultivate your core product(s)
It’s hard to keep throwing money at a problem when there isn’t much to throw around. With budgets tightening, companies need to be more strategic about how they invest limited resources.
SVPG’s Marty Cagan recently argued that teams who invest in making their products better—instead of pouring money into sales, marketing, customer success, and acquisitions—tend to fare better during times of uncertainty. In fact, some don’t just survive, they thrive. As Marty says, “very often the best products come from companies during [down periods].”
Another reason to focus on making your core product better? Prospect budgets are also tightening in the wake of the potential recession. It could prove difficult to “hunt” for new business in a cautious marketplace. Instead, deliver new/better value through your product to “farm” your existing client base.
Invest in training (not turnover)
We’ve heard our share of companies say: “we don’t have the right talent on staff.” And honestly, we have lots of questions when we hear that—especially when it comes to product design.
Has leadership positioned the team for success? Are they balancing workloads between short-term to dos and long-term product vision work? Have they offered professional growth and upskilling opportunities?
There is a reason you brought team members onboard and it is important to evolve with them vs. replace them. It’s not only the right thing to do, it’s also smart business. The Society for Human Resource Management (SHRM) reported that on average it costs a company 6 to 9 months of an employee's salary to replace them.
Fractional leadership/teams can work alongside your team to help complement and reframe how everyone approaches problem solving. And there are many great training and thought partnership programs available to help teams realign and get reinvigorated for the work ahead.
Look beyond the bust to keep up team morale
Teams want the truth. A Future of Work Study conducted by Slack found that 87% of surveyed workers hoped their next job would be transparent. This is especially true during tumultuous times.
So, be honest with your team about how the organization is adapting in times of uncertainty. But, a word of caution on this: don’t let speculative fear drive the narrative. That is what Buffet’s “Noah Rule” is all about!
One way to do this is to provide an inspiring and clear vision for the company’s future. A future that gives everyone a motivating sense of purpose that goes well beyond an economic bust. Visiontypes, North Stars, Strategic Narratives–these are the types of artifacts that not only align teams around a shared purpose, but also excite them.
For those of us who have lived through economic hardship, we know that the clouds do eventually part. And when that happens, it is better to find your business intact than wrecked from the rough waters you encountered along the way.
So please, be the ones who build an ark. Sail toward the next horizon with a sense of purpose and pride that you’ll make it to the other side!
Need help figuring out what your ark should look like? Reach out to chat with our team about what might work best for you and your organization.