Financial Planning | Leadership / Management

Disruptive innovation: How to create a recession advantage

"Times of great turmoil in industries and markets are also times of great opportunity."
-- Peter Drucker

You can't wake up without seeing more bad news -- this week's job losses in the small-business sector, the Satyam scandal in India, yesterday's market drop. CPAs are "battening down the hatches" and reducing costs, conserving cash and preparing worst-case"scenarios. That is what we all should be doing.

We also should be looking for opportunities and into the future to the extent possible. In other words, as you cut costs, don't destroy revenue opportunities or select investments that may produce future income. Don't eat your seed corn unless you absolutely have to.

In fact, if possible, this may be the time to disrupt your competition while they are busy eating their seed corn.

Have you read Disruptive Innovation by Clayton Christensen? I found his Forbes column Disruptive Innovationparticularly interesting in light of the recession.

The article, titled "How Do Disruptors Perform in Recessionary Times," highlights 23 companies that actually grew revenue by 32 percent during the recession of 2000-02.

"If you work on an operating company that is debating whether to postpone disruptive innovation efforts until 'better times' arrive, be careful," the article reads. "You might be missing great growth opportunities and creating space for competitors to create substantial competitive advantages in tomorrow's great growth markets."

Think about that: Could you develop and implement a strategy (or help your clients do so) that actually grows your business during the recession? If so, we want to hear about it. ost your comments on how you are preparing to beat this recession...

Mark the date on your calendar to attend the Maryland Business Expo on June 16-17. We will feature sessions on how to beat the recession and feature companies that have figured it out.

UPDATE: Bill Sheridan here. I stumbled across another article that's a great addition to Tom's inspired post above.

Baseline Editor-in-Chief Lawrence Walsh and Editor-at-Large Chris Gonsalves have put together a list of the 25 most disruptive companies. If you're wondering who's doing it right, the list includes juggernauts like Google, Wal-Mart, GE, Microsoft and Apple; lesser-know disruptors like Zipcar, Alibaba and Baidu; and even a pair of sports franchises -- the New England Patriots and the Boston Red Sox. Find out what they're doing to disrupt the competition and blaze new trails.