When stock markets gyrate and growth prospects darken, it’s tempting to rein in innovation programs and hoard cash. The S&P 500 did exactly that during the Great Recession, increasing their cash levels by over 50% to nearly $1 trillion today. As it looked like the economic storm clouds were dissipating (ah, the good old days…) the prospects for company growth looked barren, which is what will happen after firms have locked their cash away. So we saw a wave of mergers and share repurchases as companies found they had few programs in-house that could profitably absorb all that cash quickly. Rather than carefully watering a set of growth crops, companies had a fire hose of cash that they turned off and on. This is no way to nurture the growth prospects of tomorrow.
Five Rules for Innovating in a Shaky Economy
When stock markets gyrate and growth prospects darken, it’s tempting to rein in innovation programs and hoard cash. The S&P 500 did exactly that during the Great Recession, increasing their cash levels by over 50% to nearly $1 trillion today. As it looked like the economic storm clouds were dissipating (ah, the good old days…) […]
August 11, 2011
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New!
HBR Learning
Innovation and Creativity Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Innovation and Creativity. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Unlock your team's curiosity and willingness to take smart risks.