Open innovation answers all the leftover problems that companies can’t solve during even the best of times. Economic downturns flash a light on the need for these solutions. Companies are most familiar with attracting employees and contingent workers. However, problem solvers can fit into those gaps left by a traditional workforce. Large corporations are more risk-averse. Therefore, it leaves them strategically vulnerable to shutting out open innovation. Smaller firms are more likely to take risks and pivot when needed.
Big Company Benefits
Larger companies should take advantage of dips in the economy to see what is possible by implementing a diverse-status workforce. Employees tend to flock to larger organizations during downturns in the economy. Crises such as the COVID-19 pandemic have innovators shifting toward more stable and traditional large companies. The glacial pace of a traditional big company can be sped up by using open innovation during a recession.
A traditional workforce can be held back by problems that don’t fit into an existing workforce strategy. This “not my job” mentality of employees and freelancers at large companies leaves a lot of important business development work on the table. These leftover tasks can be crossed off by running open innovation contests to unearth the breakthrough ideas that might go undiscovered in the daily grind of corporate life.
Experienced and higher-quality workers at smaller firms tend to jump to larger ones during economic strife. Due to this movement during financial disruptions, larger companies have the luxury of keeping their innovators working at a normal pace of output. This influx of skilled talent sets up large companies for success.
However, even the most financially stable companies must look at their current workforce and make cuts when the economy tanks. These cuts create small gaps that can be filled with Open Innovation. Large companies that want to create a future-proof workforce must think of shifting workforces that include employees, contingent workers and problem solvers.
Small Company Benefits
Workers at smaller firms are used to moving fast and breaking things. This mentality shows potential employees that smaller companies are less prepared to handle risks during a recession. Smaller firms are more apt to take extra risks during a booming economy. During an economic downturn, small companies reign in their innovation efforts, in many cases because of budget restraints. Their larger competitors are using open innovation to pivot in ways only seen at smaller organizations in the past.
Risks are inevitable at any company. The perception of stability is more important to small companies when attracting experienced employees away from larger companies. Small companies must assert that they can solve problems to attract highly-skilled talent. Experienced workers want to work at a company that’s not afraid to take risks to solve problems.
Small businesses can implement crowd-sourcing to solve problems stretched between fewer employees. Outside opinions and perspectives can set up a small company for success. These views from the outside help employees see what cannot be seen within the grind of working for a small business.
As small businesses grow, they can use open innovation to see where the company needs to move. Growth strategies can present themselves when problems are solved. Crowd-sourcing also supports full-time employees’ focus. If employees aren’t focused on these problems, they can hone in on the tasks necessary for their jobs.
Crowd-sourcing leads to small-business solutions that attract experts away from corporations. Some amazing work could only have been achieved by attracting these problem-solvers. Small businesses can unlock the problem solvers of today. These problem solvers today are the highly skilled employees of the future. Open innovation is a great way to meet future innovators.
Open Innovation Risk Profile
Recessions pause innovation at even the most innovative small companies. Big businesses get all the scared talent looking for a safe place to weather the economic storm. Larger firms are known to have the resources to innovate; however, all businesses, large and small, should be innovating during a recession. The quickest way to move your company thru an economic downturn is to continue to innovate using crowd-sourcing.
Entrepreneurial people want to get projects completed quickly. These people can be an asset to any organization, and they will be most attracted to companies that embrace innovative strategies such as open innovation. As budgets tighten, companies are open to new solutions needed in a pivoting landscape of problems. The gains of open innovation outweigh the risks when every move a company makes could be seen as risky.
What Goes Down Must Go…?
Companies of any size must think of long-term strategies that move into the future of work. Open innovation departments will be required at universities and companies. Every work problem will be considered through the lens of full-time, freelance or open innovation. Using this framework, you can set up your company for success before, during and inevitably after any economic struggle.
