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  • Writer's pictureAgu Aarna

Sustaining Tech Competitive Advantage: The Organizational Perspective

Fostering Innovation Culture & Achieving Long Term Goals During Economic Downturn

Successfully adapting to a new market begins inside an organization, whether saturated or new. Building upon our previous article, in which we discussed four distinct strategies for navigating economically challenging times, we will now look closer into the organizational perspective of the 3rd strategy: Partial Cost-Out and investment in Innovation Culture.

Adapting Organizational Culture to Sustain Competitive Advantage

To pursue the strategy of developing a new product to stay current with market demand, a company must foster a culture of innovation within the organization. A recent 2023 Study by the Boston Consulting Group found that companies that invest in a strong innovation culture are 60% more likely to become true innovators. Although having scarce resources may render this tricky during an economic downturn, it’s certainly not impossible. Establishing such a culture can be built based on two main facets, each supported by specific actions and approaches.

An innovation culture that gets results

1. Staying Up-to-date with Technological Trends

Keeping pace with technological trends means staying ahead of the curve to sustain a relevant position as a technology company and ensure competitive advantage. By embracing contemporary frameworks and solutions, tech companies can increase their development speed, improve solution performance, and optimize resource utilization.

The first step in this quest is to create a comprehensive map of applicable technology trends, which can be a navigation tool for revising the company's architecture. This exercise will allow the business to identify the most relevant and advantageous technologies for product development, enabling a forward-thinking approach. This accelerates development and ensures that new products align with current market demands, setting them apart in terms of functionality and efficiency. To address this, companies can consider the following strategies:

  • Developing awareness: Conducting thorough market research will help to identify the latest trends and emerging technologies relevant to the industry. By analyzing competitor strategies and technological implementations, tech leaders can understand what drives market success.

  • Stepping outside the box: Contrary to old-school Silicon Valley tales, innovation rarely happens in isolation. Companies moving at the pulse of time are well-connected and engaged across various relevant innovation clusters. The nudge for tech companies is to actively seek connections with industry thought leaders, experts, and influencers by effectively leveraging conferences, webinars, and networking events.

  • Establishing a technology advisory board: A well-built technology advisory board comprising internal and external experts can help a company get past the tipping point. Regularly consulting with the board to gather diverse perspectives on technological trends ensures a well-rounded and informed approach to mapping relevant advancements while navigating change.

2. Investing in Employee Development

Handling economic downturns brings challenges that have a direct impact on employees. Part of the consequence is different requirements for employee motivation and development compared to periods of growth. Because of that, acknowledging employees' challenges and nurturing a supportive and adaptive mindset becomes non-negotiable. Here's how:

  • Team composition and organizational structure: To facilitate a culture of innovation, consider creating interdisciplinary teams that bring together diverse skill sets and perspectives. This can lead to more holistic and innovative solutions for new product development.

  • Eliminating silos: Instead of creating a separate innovation team, companies should ensure that all technology teams have a balanced approach to adopting new technologies. Encourage cross-functional collaboration and knowledge sharing to disseminate innovative ideas throughout the organization.

  • Hands-on learning: Employee development doesn't necessarily require formal courses. Providing opportunities for hands-on learning and experimentation can stimulate creativity and adaptability. Onboarding and encouraging employees to learn new technologies can be equally effective in fostering innovation, if not more so.

By focusing on the above-mentioned aspects, businesses can create an environment where innovation thrives even during economic downturns. Staying informed about technological trends and investing in employee development supports the development or adoption of a successful product and ensures that the company eventually increases competitiveness following the downturn.

Embracing Agility and Flexibility

To harness the discussed elements of customer-centric solutions and innovation, businesses must stay agile and flexible. This is a fundamental change in how things are done on a team level.

Clear KPIs, Simple Objectives, and Failing Fast as Operating Manual

When resources are not abundant, businesses should adopt a fail-fast mentality, focusing on easy-to-understand Key Performance Indicators (KPIs) and setting simple, measurable objectives for new initiatives. By clearly defining success and monitoring progress, the company can quickly identify which initiatives deliver value and which need adjustment or discontinuation. This approach minimizes resource waste on unproductive ventures and allows to redirect efforts towards more promising opportunities.

In resource-constrained times, thriving companies do so by adopting a fail-fast mentality. This means focusing on easily understandable Key Performance Indicators (KPIs) and setting measurable objectives for new initiatives. Clear definitions of success and progress monitoring enable quick identification of value-delivering initiatives and those requiring adjustment or discontinuation. This approach minimizes resource waste and redirects efforts toward promising opportunities.

Speeding up Iteration Periods - High Urgency

Short iteration cycles are critical to adapt swiftly to changing market dynamics. By breaking down product development and innovation into manageable iterations, businesses can continuously gather user feedback, make improvements, and pivot if necessary. Shorter cycles also facilitate a faster response to evolving/changing customer needs. This can look like releasing and refining a basic software version over weekly sprints based on user feedback, ensuring rapid adaptation to evolving market needs.

Balancing Costs and Customer Needs

Balancing cost optimization with a focus on delivering customer value is essential for long-term success. However, companies must in no instance compromise on the quality and relevance of their products. Product development efforts must align with customer needs and preferences to maintain or even enhance customer satisfaction. With insights acquired from the previously discussed tools coming into play, this strategic balance ensures that the company remains competitive and well-positioned for growth when economic conditions improve.

“Keeping the Lights On” While Innovating

As companies push forward with innovative efforts, it's vital that they don't neglect their fundamental business operations. Not maintaining the stability and reliability of existing products and services can cost businesses more than there is to gain with innovation. Therefore, operational stability and customer retention must be taken care of at all times when running innovation initiatives. This approach, often referred to as "maintaining the status quo," guarantees that the company can fulfill its commitments and cater to its customer base while simultaneously investing in upcoming growth initiatives.


In summary, the key to maintaining a competitive edge is to nurture a culture of innovation within an organization. It's about recognizing employees' unique challenges during economic downturns and investing in their growth and adaptability, which is the driving force behind a company's ability to stay agile and flexible. This allows businesses to strike a balance between cutting costs and delivering value to customers while ensuring long-term resilience.

Looking ahead to the third and final article of this series, "Investing into an Innovation Culture: The Market Perspective," we will broaden our focus to consider the larger market context. Adapting to market dynamics isn't just about fostering innovation internally; it's also about gaining a comprehensive view of competition and market conditions.

Two important elements of doing this successfully are strategic partnerships with other players and a robust intellectual property strategy - both of which are vital for propelling a company forward during a downturn.


Are you trying to transform your tech team to be agile and accommodating to market trends while keeping the development efforts sustainable and lean?


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