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3.84% Signals Recession--This Will Be A Testing Time For CEOs And Innovation.

The interest rate on the 10-year Treasury bond dropped to 3.84% on Monday, below that of the 2-year bond and you don?? have to be a financial whiz kid to understand that in the past this often signalled a recession ahead. The Federal Reserve is again pumping extra money into the financial system.

The big test for senior managers (of big corporations and small design consultancies) over the next year or so is whether they proceed with their plans for innovation and change or fall back on cost-cutting and efficiency drives to keep profits up.

Already you see CEOs killing plans to transform their business cultures as the marketplace slows down. They are falling back on tried-and-true mechanisms for survival. And for some companies, Six Sigma may be the salvation in tough times. But for many other corporations, a slow-down in growth may be the golden opportunity to transform the way they work and how they develop products and services.

My advice to CEOs contemplating cutbacks to their innovation efforts??on?? do it. Seize the moment to create competitive advantage for the future now.

Steve Ballmer, Power Forward
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