Innovating out of a downturn

Tough times means innovation is key to future success. NAOMI SIMSON

By Naomi Simson

If you are doing business now as you have done it for the past five years, then simply… you are becoming a dinosaur. If you look deep inside the retail trade figures you will see that butchers are being very hard hit – considered a luxury – while supermarkets are booming.

Banks know that they cannot keep doing business the way they have been doing it before… they have become risk averse. But that is a massive swing from the huge bonuses and incentives they were paying people this time last year for bringing in big “deals”. Innovation will be essential within banks.

But did it need to take such pain for businesses (and individuals) to realise that innovation was critical? Not just to survival, but for any future success.

I have recently been acknowledged with two NSW Telstra Business Women’s Awards – business owner, and innovation. This led me to contemplate why I have always innately innovated and agitated for change rather than excepting things as they are.

It gave me a chance to reflect on the last recession (yes I was around then) and the lessons learnt from that, which have held me in good stead for growing RedBalloon.

In 1988 I bought my first home, a two bedroom flat in Prahran, Melbourne. I wanted to own, rather than rent, and figured if I got into the market at a very young age I would always have a place to live no matter what I did.

If you are doing business now as you have done it for the past five years, then simply… you are becoming a dinosaur. If you look deep inside the retail trade figures you will see that butchers are being very hard hit – considered a luxury – while supermarkets are booming. Banks know that they cannot keep doing business the way they have been doing it before… they have become risk averse. But that is a massive swing from the huge bonuses and incentives they were paying people this time last year for bringing in big “deals”. Innovation will be essential within banks.But did it need to take such pain for businesses (and individuals) to realise that innovation was critical? Not just to survival, but for any future success.I have recently been acknowledged with two NSW Telstra Business Women’s Awards – business owner, and innovation. This led me to contemplate why I have always innately innovated and agitated for change rather than excepting things as they are.It gave me a chance to reflect on the last recession (yes I was around then) and the lessons learnt from that, which have held me in good stead for growing RedBalloon.In 1988 I bought my first home, a two bedroom flat in Prahran, Melbourne. I wanted to own, rather than rent, and figured if I got into the market at a very young age I would always have a place to live no matter what I did.

I didn’t have enough saved for a deposit, so my sister went in with me. Also, the repayments were considerable given my tiny salary. Then the Government decided to use fiscal policy to slow the economy – interest rates climbed above 16% (my sister lost all her savings in the Pyramid Building Society crash), and we had no cash to pay extra. We were both very scared, thinking that we would have to sell.

I got through this by never going out or spending money on anything other than the bare essentials, eating boiled eggs many nights of the week, and taking a room mate (one of which is now the godmother to my son – so you never know what benefits will come).

I learnt a lesson at a very early age – “don’t over-extend” since then I have been very conservative with funding. I have never forgotten what it was like to think I might loose my home.

In 1991 I met and married Peter, and by then Australia was in recession (the recession we had to have, said Paul Keating). I moved to Sydney to live with my new husband and I started work at Apple. My very first day at my new job, Pete called to say that “they were closing him down.” He was running a subsidiary of a major bank and they were pulling back to core business.

For the sake of a day, I would never have ended up in Sydney. If this news had come on the Friday before I would not have left Melbourne and I probably would still be living there.

It was a very painful road – a newly wed, living in an un-renovated house in Balmain, with a massive mortgage, all on my small salary. We were such corporate people. I had always thought I would work for a large multinational. Pete had had a big career in accounting.

But in the early 90s there were just no jobs to be had. It was so very hard. The months went by. To make ends meet we had held garage sales regularly – selling as much as we could including second hand computers, wedding presents and all Pete’s pre marriage boys toys like wind surfers and skis.

It was Robert Gottleibsen, a long time family friend, BRW chief editor at the time, who was at our very humble home for dinner and who said to Pete “if ever there was a person who could hang up his shingle, it’s you”. So Pete did just that – started ForeSight business advisory in the garage. In only a few months he had moved to a small office and employed some people. It was only two years before he sold the business, and worked in it for three years after that.

I watched my husband create something great. There was a recession on, jobs were scarce. Watching him battle it out, build something from nothing, and be successful, was inspiring – but also a relief.

We had pulled together (I did the marketing for his business after hours, from name to logo, promotion to spreadsheeting). What a result.

Out of tough times comes opportunity. I don’t know if without seeing what a success Pete had made of his first business, whether when I wanted to do something different and no longer work in corporate life (because I became a mum) if I would have known it was possible to run my own show.

We all need role models. We need leaders who are positive and disciplined. We need people who see possibility and work really really hard to get things done. Out of this current tough time new great stories will be created.

These are exciting times in which we live…. even if you can’t see it at this moment. Simply we cannot keep doing things the way we have always done them. It’s time to innovate.

Naomi is a finalist in the 2008 Australian HR Awards and the 2008 Telstra Women’s Business Awards, winners to be announced end 2008. Naomi was also a finalist for the BRW Most Admired Business Owner Award in 2008 and Marketing Employer of Choice by B&T in 2007. One of Australia’s outstanding female entrepreneurs, Naomi regularly entertains as a professional speaker inspiring middle to high-level leaders on employer branding, engagement and reward and recognition. Naomi writes a blogand has written a book sharing the lessons from her first five years.