Publication date: 23 February 2010
No comment on the lessons of 2009 could avoid discussing the downturn and the way businesses have dealt with it. Many of us are experienced enough now to have worked through a number of these cycles, and have seen the ways in which businesses adapt to survive and grow. Each recession forces leaders to find smarter ways of operating, and the improvements found typically enable the business to operate better especially after the recession has passed.
This is not simply about being “lean and mean”; a more nuanced approach is necessary to manage short to mid-term liquidity while at the same time staying true to long-term strategy. At Design LED, for example, we have not frozen recruitment, or slashed our marketing spend – as often happens. We have been careful about where we spend money, and we have made sure we achieve the highest possible return. As an innovation-driven company we need to hire the right expertise, so we have been careful to attract the best and most highly qualified people we can. Similarly with marketing, our approach has been to invest time and effort in defining and communicating with our ideal customers and clarifying our value-add to increase the quality of our sales leads.
We have achieved this by focusing our marketing messages and characterising our perfect customer. This allows us to identify those prospects that will benefit most from our technologies and products. Increasing the quality of sales leads is important to all businesses. None of us can afford to spin our wheels, and our actions now will ensure we have the right people, the right message and the right customers as we pull out of recession.
The downturn has been global, and it is a fact that technology companies today absolutely have to be global to be able to satisfy customers and grow in the long term. My company, as a supplier of innovative LED user-interface and back-lighting solutions, has set out to achieve this by careful selection of strategic partners – not only pure manufacturing partners but also companies that will combine our technologies with their OEM products and so add value for their own customers. Through a number of partnerships and licensing agreements set up in 2009 to achieve this goal, we now have the benefit of worldwide manufacturing sites, three R&D centres, and an international sales team.
I am always struck by the ambitions of many far eastern companies. Some are prepared to leapfrog an entire product or market generation to concentrate on becoming Number One in the next big market; laptop producers skipping the netbook and PDA market to focus resources on becoming the world leader in smartphones; or the mobile phone battery producer now aggressively developing a range of electric vehicles to sell core competency and gain market leadership - while established car brands divide their resources between electric research and the diminishing returns from selling conventional vehicles. Companies like these have thousands of engineers, working seven days a week to establish differentiated products that will ensure they achieve their ambitions. At Design LED we share that entrepreneurial aggression with a fraction of the resources. Sometimes however, being smaller has its advantages in pace and efficiency.
We have to really think global and get on with it. Some of the initiatives we have implemented in 2009 are enabling us to harness the best resources available worldwide. At home we have the benefit of Scotland’s outstanding educational infrastructure allowing us to hire the PhD level people we need to drive the business forward. We now benefit from the best manufacturing competencies and capacity in Europe, America and of course Asia., We have additional R&D resource located both here in Scotland and worldwide, close to new customers design centres having our technology designed in at source, quickly and efficiently.
By taking these steps mid recession we expect to achieve maximum commercial success for our best applications as the economy recovers. At the same time we are creating valuable opportunities for our customers, employees and partners wherever they are located, and critically building a business of scale and sustainability. This is what it means to be global: it truly is a different mind-set.
As product lifecycles continue to shorten it is easy to see consumer demand for new products as the major technology driver. Shorter lifecycles can really benefit innovative technology businesses. Delivering highly differentiated new products to the market is the most effective way for customers to maintain higher selling prices and continue to build the value of their brand.
The companies that are doing this most successfully are those that focus the major part of their resources on bringing new products to market quickly. Nokia, the world’s most successful mobile phone supplier, devotes around 90 percent of product development resources to ensuring the best possible product, offering unique value to customers and ahead of the curve, is the one that reaches the shelves. Other manufacturers may devote only 60-70% of their attention to these activities, but will expend effort during the product lifetime to reduce the build price by approving alternative component suppliers. With shorter product lifecycles there simply won’t be time to re-qualify new suppliers - one of the key reasons for our investment in design and design centre relationship building.
Differentiating technologies, shortening time to market and subsequently maintaining continuity of supply for the lifetime of the product will become increasingly important. I believe we will see traditional post launch cost down initiatives replaced almost exclusively by designed in competitive advantage for next generation product - where that next generation might only be months not years away.
2009 has been tough, but then so is every year in the technology sector. 2010 will bring many challenges and opportunities but the steps we have taken will give us the best possible platform for success.
Founded in early 2004, Design LED products have developed and patented a manufacturing technology to embed Light Emitting Diodes within printed light guides. This enables thin, inexpensive, segmented display panels suitable for a range of applications from consumer electrical & electronic devices, automotive, point or sale advertising & industrial keypads.
Design LED aims to become the world leader in printed light products technology in a wide range of markets including consumer electronics, automotive, industrial and point of sale. More than 50 billion LEDs are sold every year into products and Design LED has the opportunity to both displace existing solutions and enable a new generation of products.
Design LED Products Limited, Alba Innovation Centre, Alba Campus, Livingston, West Lothian, EH54 7GA. Tel: +44 (0) 1506 592310; E-mail: info@designledproducts.com;
Web: www.designledproducts.com
