Don’t do it
Hope that you’re having a fantastic week.
There is a bit of a looming consensus that there may be another economic downturn around the corner.
I am not trying to panic you.
Believe me, it is something I do not want to contend with again.
But it is a possibility that we should all be prepared for…
So, whether it’s coming or not, now is a good time to “tool up” – as an ounce of prevention is worth a pound of cure.
When the proverbial hits the fan we see the same kinds of mistakes happen time and time again.
Today I want to give you a "heads up" about it.
So, what’s for the chop?
Cast your mind back to the last time the purse strings got tightened…
These moments are when the cost-savings exercise comes along, and people take a close look at what should be trimmed back.
The areas with the least “visible” impact are first for the cutting block.
You often hear of marketing departments shrinking and businesses focusing on their core output. (Essentially minimizing cost in everything apart from their main offering).
It seems to make sense. All the stuff that surrounds what we do, seems to be “extras” and it's what we sell that is the most important thing to fund and focus on.
But the value of some investments is just not as obvious as others…
Counter-intuitive hidden value
Those businesses that batten down the hatches and trim themselves down to the essentials give themselves a harder time of it when all is said and done.
We’ve seen it before where the forecast turns cloudy, and suddenly half of the businesses in the marketplace seemingly disappear off the face of the planet.
This has two knock-on effects.
Number one: As you have been unaware of the invisible “pull” your marketing activity has given you prior to cuts, not only are you experiencing the “knock” of your customers reduced spending – but you’ll also compound that with reduced pull in the marketplace.
Number two: being part of the disappearing crowd only serves to create more of a platform for those who continue to signal boost – and moreover maximise their presence in the marketplace. You see lots of businesses really consolidate and gain market position during an economic downturn as its much easier to stand out when the competition retreats!
What’s more, people expect businesses to fail in a downturn. A lack of presence in the marketplace can cause your audience to wonder whether you’re still in business!
It is interesting because none of this is the intention of the business owner (of course) – but it is a psychological reaction that happens time and time again.
The same goes for the stock market when there is a correction. When the market is in a significant downturn – it tends to historically be the best time to buy.
As Warren Buffet says: “Be fearful when others are greedy. Be greedy when others are fearful”.
If an economic downturn is on the cards - I would encourage you to think about how to go on the "attack" rather than how to batten down the hatches and stick your head in the sand.
The same goes for IP
You guessed it – the same goes for IP!
Often, we see that when economic belts are tightened – businesses are less forthcoming when it comes to protecting their IP. At least in the proactive sense.
What is seen as a beneficial “extra” to what a business does, suddenly seems superfluous and the money better invested elsewhere…
But of course, times like these are, in fact, the best time for investment in those things that we don’t quite realise the value of until it’s too late.
Again, a lack of oversight when it comes to IP in difficult times often adds insult to economic injury.
Number 1: Fraud increases in difficult economic circumstances placing businesses at serious risk of intellectual property violations.
Being vigilant around your intangible assets is more important than ever during economic downturns.
This is especially so as it relates to online fraud, where bad actors often use a host of stolen IP to swindle prospective customers and even internal stakeholders.
(If you’re worried about online fraud or infringements, get in touch with Kostas at firstname.lastname@example.org – he is our go-to guy for online brand protection.)
Number 2: It is another opportunity to steal a march on competitors who are sitting on their hands.
Investment in a contracting marketplace offers an increased dividend of value.
Simply put, deployment of a strong brand, for example, when the runway is clear can have an outsized return.
It's just another example of moving decisively when others stand still.
Number 3: IP is another one of those things that have definite but invisible value within a business.
For all intents and purposes, it is what makes you distinct from everyone else.
Whether it's your goodwill and reputation in the form of brands, your expertise and experience, processes and systems or databases (and everything in between).
We only tend to realise the value of these things once they’ve been misappropriated – at which time we find ourselves in disputes which drag us away from what we really want to focus on.
It is also notable that in difficult economic times, we typically see an increase in disputes that arise from neglect as IP falls down people’s list of priorities.
Indeed, those who have the resources also see downturns as a time where they can exert themselves on smaller players who haven’t protected themselves – as they know that they don’t have as much financial runway when it comes to litigating disputes…
It is a frustrating situation, but it is what we see time and time again.
Of course, we have a vested interest when it comes to IP – as it's what we do here.
And, of course, it would benefit you to review your intellectual property and conduct a due diligence exercise - do get in touch.
(Feel free to do so if this has “landed” with you).
Despite this, I really do encourage you to have a plan as it relates to how to move during a downturn, if and when it comes, and to be especially vigilant about all of those things that seem superfluous.
This includes IP, and I would much rather you had a position on this even if it means speaking to another firm than to have not been convinced and not done anything at all.
These things are counterintuitive, but those that get to grips it and turn left when everyone else turns right are the few who prosper.
It really can become the wild-west out there quite quickly, and I’d much prefer you to have your pistols loaded than not.
Hope you have a fantastic week,