The Chinese character for 'crisis' is a combination of the symbols for 'danger' and 'opportunity'. Crisis is, in fact, like an uninvited guest - it comes calling when you least expect it. Yet, crisis can also be viewed from a positive angle - as an opportunity to innovate and do better in future.

On his blog, Think | Innovate | Execute, Gudjon Mar Gudjonsson, CEO of Industria, states that during an economic boom, most companies and consumers choose the most obvious option, without taking cost or long-term viability into consideration. This is usually because it's easiest to opt for something familiar. Hence, when money isn't the primary factor to consider, lesser known but highly innovative solutions tend to fall by the wayside. However, once money is in short supply, both businesses and consumers become more cost conscious and focus on long-term benefits. This helps fuel innovation, growth of new ideas and ensures customer needs are fulfilled in as efficient a manner as possible.

Companies can't avoid being a part of a larger economic crisis but they can certainly use it to their advantage by developing more robust and cost-effective processes and investing in long-term innovation which is the ultimate differentiator when it comes to business. The Indian Railways is perhaps one of the best examples of successful innovation in the face of adversity. The world's largest employer and one of the biggest and busiest rail networks in the world, the Indian Railways was, until very recently, a loss-making organization on the road to bankruptcy.

When Minister of Railways, Laloo Prasad Yadav, took over the reins in 2004, he had a budget of just $200 million with which to turn the beleaguered institution around. Instead of retrenching staff and increasing passenger and freight fares as expected, Yadav chose to retain the railways' large workforce and in fact, reduced fares by up to 45 per cent with a long-term focus on building volumes. Moreover, mere increase in capacity of a long-distance train from 800 passengers to 2,000, saw input costs fall by over 40 per cent.

Plans are also afoot to expand freight lines, increase their efficiency, and capture the 60 per cent of goods that are still transported by road. In a striking example of innovation, Prasad will also plans to use the railways to aid in India's water conservation efforts by building siphons and canals, and pipes with water for drinking and irrigation on the wasteland on either side of the 64,000 kilometres of track. He plans to reduce fuel consumption by building train carriages from aluminium to reduce their weight and electrify the main routes throughout the country.

A combination of calculated risk-taking, ingenuity, business acumen and long-term vision has seen the Indian Railways emerge as a success story, an example to emulate. Another instance of innovation in the face of adversity is the increasing focus on eco-friendly technology for cars in the backdrop of rising oil prices. This has led to an increase in vehicles running on alternative fuels such as the Alfa CNG, the Bolero Pik Up CNG and the Bijlee, India's first battery operated three-wheeler.

Perhaps the last word belongs to Prasad's adviser, Sudhir Kumar who says, "We are not in the business of railways; we are in the business of transportation - one of several modes of transportation, and the only way to survive and thrive in the marketplace is to offer superior and compelling value to your customers."