I just put up a new piece with an interview with Wendell Weeks, CEO of Corning. Corning is an innovation-driven company which almost died in the tech bust, but seems to be doing much better this time.
I draw several lessons from the interview.
1. For an innovation-driven company, booms and busts are inevitable.
2. If a company is going to be innovation-driven on the product side, it should run its financial side conservatively. That means less debt, and what there is should be longer-term, so when the inevitable bust comes, there’s a cushion.
3. An innovation-driven company should keep a grip on manufacturing as well. That will slow growth, for sure, but it will also reduce the risks.
4. An innovation-drivn company should hold down the growth of non-R&D costs during the boom. That makes the bust less painful.
In each of these sentences, substitute the word ‘economy’ for the word ‘company’ and you will have an interesting set of prescriptions for the U.S. economy.