Our imagination is the only limit to what we can hope to have in the future.

When times are hard, we have to wonder what’s next in terms of innovation. The best strategists are saying that times like this result in even more emphasis on short-term thinking, meaning that innovation, which tends to rely on long-term planning, will suffer.

According to psychologists, people under stress tend to see fewer options. Their vision narrows; the mind’s creative system shuts down. But, given these circumstances, we need innovation more than ever – especially something called “disruptive innovation” which profoundly impacts how companies do business.  In fact, leading strategists believe we are going to see more of it in the longer term.

There are many examples in history of  nations and companies innovating in the face of intense pressure.

For example, while Great Britain was the first nation to undergo industrialization, they were soon matched and overcome by other powers such as Germany and the United States. Rather than try to match the advantages of those bigger and more populous nations, however, the British focused on trade. They controlled the seas, and had a large empire to serve as a captive market. By the late 19^th Century, Great Britain was overshadowed by Germany and the United States, but remained the premier economic power for many decades by virtue of its globe-spanning trade and finance network.

Another example can be found in Hollywood during the Great Depression. Hard times meant a shortage of financing for new production, and at the same time a highly disruptive new technology had been introduced during the darkest depths of the Depression: talking pictures. That meant the studios had to not only continue producing films, but invest in new technology, and the technicians to work with it.

And yet, despite those immense challenges, the 1930s is remembered by film historians as a golden age for Hollywood. It was certainly a profitable one, as suffering audiences flocked to the theaters to escape their troubles.

A more recent example is the auto industry of the 1970s.  Here in North America, the previous decade had seen something of an arms race among carmakers, with more and more powerful cars being produced. Then suddenly the price of oil skyrocketed and new environmental regulations, including the adoption of unleaded gasoline, killed off the muscle cars.

But carmakers responded by turning out fleets of much smaller cars powered by far less powerful and more fuel-efficien

t engines. The emphasis switched from raw power to efficiency, a priority that for many carmakers like Toyota and Honda continues to this day. Today’s Honda Civic, for example, has an engine with a far

larger displacement, and much more power, than its 1970s ancestor, and yet gets much better mileage.

Given the innovations that resulted from these and many other challenging moments in history, it’s hard not to

wonder what innovations will come out of the present downturn.

If the past is any guide, we will either be blessed or cursed to “live in interesting times.”

Choose Your Own Marketing and Sales Adventure - New Prospects

As a kid, I loved the “Choose Your Own Adventure” books. I found it interesting that depending on how you chose to read the book, it would turn out with a different ending. There were usually some endings that were more “winning” than “losing”. At first reading, I would always try to figure out what type of “moves” in the books would lead me to the best outcome.

The love for those books prepared me well for getting the right prospects for clients, because the way that you go through the process of Marketing and Selling can determine whether you are a “winner” or a “loser” in your business.

Scenario: Mike has a $150 out-of-the-box software package that helps consultants with their time tracking. Prospective Consultants could be from a wide variety of industries and geographies. Mike has one very experienced sales executive. Other than that, he does not have a large staff, but he hopes to build one in the future as the business grows.

Choice 1: Sales or Marketing?

Sales and Marketing often report to the same people or department. Although there are many war stories of Marketers who have hated reporting to clueless Sales bosses, or Salespeople who have hated reporting to head-in-the-clouds Marketing bosses, since they don’t understand each other, I think that it is pretty clear that we are doing the same thing: bringing in new business.

Sales is more “custom” and marketing as more mass appeal. Although there are many ways to customize marketing with geotargeting and demographically targeted messages, there is really nothing that beats having a live person talking to another live person. For example, custom vertical market software packages with a 40K + price tag will likely need more sales, since there are probably very few people that would go through some customized pre-built software wizard where the options would be so endless as to make it not worthwhile to build.  Given that the nature of the product is out-of-the-box, it seems that Mike should opt for Marketing.

Sales is better for a known market. If Mike’s software was for hospitals in Canada for example, doing a broad-based campaign does not make sense, since it is known that there are about 600 hospitals in Canada and the prospects within them are known on many lists.  Since the market is unknown and international, Mike should go for Marketing. However, he should have people on-hand to do phone sales where necessary.

Choice: Marketing

Choice 2: Search or Direct Marketing?

Online campaigns are effective for many products or services. Typically, I use online marketing campaigns for a market of unknown targets. It can be useful for markets with known targets, since sometimes it is not the person within the organization that you think it is doing the primary research. For example, a low-level clerk can be doing preliminary research for a buy decision, and could leave your company out if you are not reaching them through sales channels, but I use this as a secondary tactic only. Since the targets are unknown, I would lean towards search.

Although search is king when it comes to online marketing, it does not always get the best quality prospects. Prospects that are known to you, such as old customers that are on an opt-in list, will be much more loyal. Prospects found through search are ones who are thinking of you as a contestant among a long line of people, rather than thinking of you and only you. For example, you line up Hollywood’s hottest actors, and you compare and measure their features against each other. But if any of those actors walked into your local coffee shop, he would quickly become the centre of the room. Since Mike does not have an opt-in list, and has few connections in the industry, I think search marketing is appropriate.

Choice: Search Marketing

Choice 3: Qualify or Don’t Qualify?
I have already mentioned that search prospects are lower quality than those who are known to you. The question of qualifying the leads or not is a good one. Because of the potential quality issue, I would say that Mike should qualify.

Forms are often intimidating to users, and lead to sharp drop-off. Like many in the industry, I tend to shy away from them. Instead of large forms, use simple ones that collect little information. If there is a large volume of filled-in forms, I will suggest getting a more junior person to qualify them. If this is an intimidating prospect, it is always possible to get a work-from-home lead qualifier who will do it part time, or some companies source this abroad (I am not against this in principle, but I have simply never seen it done with success).

Having a qualifier is also good if there are more high-quality salespeople. If they are wasting their time on leads that are not worthwhile, they won’t have time to use their sales skills. Since Mike’s salesperson is very experienced, I would lean towards having a qualifier.

Choice: Qualify

I don’t have all the “choose your own adventure” options here, so you can’t see what the “losers” ended up with. But, I hopefully this adventure will help elucidate your adventure.

The Essence of Strategy is Choosing What Not to Do

That’s a quote from strategy guru Michael Porter of Harvard’s famed business school, one I think makes a lot of sense.

In my first year as a marketing consultant, I found that the biggest challenge I faced is that many clients resisted committing to a brand. Instead, they wanted to be everything to everybody. I understand the thinking – it’s an attempt to cast a wide net. But actually, if you try to speak to everybody, you end up appealing to no one.

Another scenario I came across more than once was a client who wanted to emulate the strategy of a competitor. Or a competitor might pursue something else, and my client will want to follow suit.

The honest truth is this: one of the worst paths to follow as a business is to battle with a competitor on their ground. For example, if you’re a hotel, you can’t emulate the strategy of the Four Seasons in some elements and the Holiday Inn in others. These are two very different extremes. If you are trying to be both, you are probably neither. There is no advantage in being average. Instead, focus on your own company’s strengths within the right industry, regardless of what the competition is doing.

When you’re doing something the same as the other guys, it’s called “destructive competition” because it leaves to escalation with lower prices and higher costs, unless one of the competitors happens to be incompetent.

Many companies focus on being “the best in their industry,” but the question is, what does that mean? “What is the best car?” Mr. Porter asks. “It depends on who is using it. It depends on what it’s being used for. It depends on the budget.”

The best solution is to focus on what you can be good at, and do it very well. For example, Porter Airlines, a commercial airline flying between major city centers, chooses to do so from the Toronto Island Airport, which is far smaller than the city’s Pearson International Airport, but which is located five minutes from downtown – unlike Pearson, which can be as much as an hour away from downtown if the traffic’s bad.

Porter is taking advantage of the preference of its customers for convenience, the airline has avoided the kinds of price wars that created other airline “wrecks” such as Roots Air, Jetsgo and Canada 3000.

Large companies have integrated this approach into their business models. For example, when Microsoft released the original Xbox, they created a brand that distanced itself from the Office productivity suite and the Windows operating systems. They knew that a gaming console would not be able to leverage from their existing brand, so they created something entirely new.

So if you’re sitting at your desk, trying to figure out what to do about the current economic climate, maybe you should determine what not to do as well.