Page 139 - Accelerating out of the Great Recession

ACCELERATING OUT OF THE GREAT RECESSION

leadership within each niche market, the company chose to nest
R&D facilities within individual business units, giving the units
free rein over new-product development. In 1994, the company
had 16 business units, each of which had R&D, manufacturing,
and sales capabilities.
For Shin-Etsu Chemical and Nitto Denko—as for IBM and
DuPont before them—the courage to invest heavily in innova-
tion got them through the hard times and positioned them
strongly for the period that followed.

■ CAPITALIZE ON CHANGES IN ■
THE EXTERNAL ENVIRONMENT
Like today’s Great Recession, the three previous periods of
recession that we studied were times when there were secular
shifts in government policy, consumer behavior, risk appetites,
and industry composition. Many of the most successful compa-
nies recognized these shifts early and either tailored their busi-
ness models or developed and adapted their products to capi-
talize on the opportunities such changes present. They provide
a good role model for today’s companies.

Take Advantage of Changing Customer
Behaviors or Attitudes

During the Great Depression, the emergence of scientific market-
research methods profoundly deepened the consumer goods
industry’s understanding of the way consumers used and per-
ceived its products. Procter & Gamble, for example, introduced
synthetic detergents to the market, and—although technical
breakthroughs played an important role—many of its product

■ 118 ■