It\u2019s been a dry season for IS groups. So nobody\u2019s going to blame you if your response to the downturn is to just keep the servers serving, the help desk helping and the lights on.Well, guess what: This recession isn\u2019t going to last forever. And CIOs who have kept their staffs energized and focused on innovative IT will help their companies shake off the economic malaise, ahead of competitors. You don\u2019t need massive bonuses and multimillion-dollar projects to keep staff engaged; it can be done in small, inexpensive ways.If you don\u2019t focus on keeping your employees focused, they\u2019ll be out of shape and unprepared once the economy bounces back, or worse yet, out the door. Sure, people are motivated by the prospect of losing a paycheck?but money\u2019s not everything. "If [employees] remember staying here in tough times because it was the only available situation, you\u2019ll lose them," says Hank Zupnick, CIO of GE Capital Real Estate, a $1.9 billion real estate investment company based in Stamford, Conn.What\u2019s Their Motivation?Perhaps the most important action a CIO can take to keep staffers looking ahead rather than over their shoulders is to make sure they know it\u2019s OK to fail. In a rough economy, where IT workers may have seen friends or coworkers lose their jobs, it\u2019s natural that they might be paranoid about doing any work that involves risk. You must combat this. For example, Dan Horton, CIO of S.C. Johnson (the makers of Johnson Wax and other consumer products) in Racine, Wis., recently tried to pilot an enterprise portal. Though the project flopped, team members were featured in a companywide internal communication piece discussing how important it was to try new things. "It showed employees that even if we fail, as long as we learn something, it\u2019s encouraged in our company?no matter what kind of economic time we\u2019re in," he says.Neil Hastie, CIO and senior vice president of Chicago-based TruServ, the $2.6 billion parent company of True Value Hardware, saw his IT budget drop from $58 million to $34 million between 2000 and 2001, and hold flat for 2002. Yet he was still able to initiate "vendor-managed data," an ambitious attempt to wire TruServ\u2019s hardware supply chain end-to-end, enabling even the smallest vendors to share product information and custom catalogs online. The project did succeed, but Hastie was concerned from the outset about staff trepidation. So he as-sured them that he\u2019d take the fall for any failure. "Especially during an economy like this, staff are good businesspeople too and are scared to make mistakes with any dollars at stake," he says. "You need to give them 100 percent backing that it\u2019s OK for them if it doesn\u2019t work out."Another crucial motivational tool is recognition of and reward for staff success. This may be a clich\u017d, but if employees feel appreciated, they\u2019ll run through a wall for you no matter what the economy\u2019s like, and they\u2019ll stick around when the job market comes back. "People remember how you treated them during tough times," says Zupnick. "When a headhunter calls with a job that pays $5,000 more, if you\u2019re good to them, they\u2019ll think, Yeah, but does this [new opportunity] let me accompany my daughter\u2019s class to the zoo without taking a vacation day?"Employee recognition has to come from the top. Despite losing 20 percent of his IT capital budget last year, Steve Agnoli has continued to innovate as the Pittsburgh-based CIO of Kirkpatrick & Lockhart, one of the world\u2019s largest law firms. He used technology from an existing PeopleSoft HR package to create a one-stop-shop portal for lawyers and staff to access all their knowledge-based tools and resources from a single place?a tool that could significantly affect how attorneys practice. The project required considerable staff energy, so Agnoli made sure the firm\u2019s managing partner recognized contributing employees individually, in a firmwide communication. "Because this is a time of uncertainty, it makes them feel more stable, secure and able to focus on things that really matter," Agnoli says.Financial rewards are a tougher nut in this economy. It\u2019s hard to hand out cash when budgets are shrinking. But you can create a win-win situation by rewarding employees for money saved or costs avoided. Hastie did just that with the networking manager of TruServ\u2019s vendor-managed data project. It concluded three months early, saving the company an estimated $1 million, with millions more to come, says Hastie. He declined to say how big a bonus his employee received but hints, "you could buy a new high-definition TV with what he got."Only ConnectAnother way for CIOs to keep staff thinking big is to initiate regular face-to-face communication, even with the lowest-ranking IT employees. If they know you, they\u2019ll feel comfortable with you and go out of their way for you, says Zupnick. That\u2019s why he schedules monthly "skip-level" lunches with each of his 35 IT employees, six to eight people at a time, as well as quarterly individual sit-downs. He\u2019s found that these meetings can produce great things. For example, GE Capital Real Estate recently launched a system called Market at a Glance, which uses a special mapping technology to give a comprehensive, real-time picture of the commercial real estate market. An employee had been hiding this idea for nearly a year, not telling anyone about it because she figured there would be no interest. But in the informal setting of a skip-level lunch with Zupnick, she felt comfortable enough to mention it. He liked it and brought it to a couple of senior businesspeople. The company funded the project through future savings, and Zupnick says it\u2019s paid off big. Meanwhile, his employee got a president\u2019s award and looked like a hero before the whole company. "This has encouraged her and others as well to step up to the bar," he says.But perhaps the best way to keep IT employees in good shape when the economy\u2019s in the doldrums is to entice them with what really turns them on: toys. Megan Petry, vice president of IS at the Kerr Group, a $145 million maker of bottle and container closures based in Lancaster, Pa., has done this with secret skunk works projects, undertaken without authority from upper management. Her already-tight IT budget was slashed another 10 percent last year, but she was required to implement a plant shop-floor control system using industrial PCs. She knew the PCs would take a huge bite out of her budget, and it would be tough to rally her staff to get excited about working with such old-school equipment. So she decided instead to use WebPads?handheld radio-frequency-based touch screen PCs designed for consumer access to the Internet. Each one cost a quarter of what an industrial PC would have cost, and the staff was psyched about working with such newfangled gadgets. "They\u2019re actually excited about coming to work, and they\u2019re no longer bitching about picking up help desk calls," Petry says. The successful implementation has given Petry a free hand to work on other cool projects, she says. "By showing [the CEO or CFO] a result, it makes them confident that in a bad time, I can come up with solutions that are innovative but maybe not as expensive," she says. "And if you guess right, you can have a solution to the question before they even ask for it."Jerry Gregoire, former CIO of Dell Computer and PepsiCo (and a CIO editor at large), says skunk works are a great way to energize IT staffs anytime, not just during a recession. "The big, reengineering projects are much less interesting to most IT people than skunk works," he says. "Give them something new to do with technology and let them work in small groups, and they\u2019ll get really excited."Agnoli of Kirkpatrick & Lockhart emphasizes the importance of preserving training even when your budget is tight. It\u2019s conventional wisdom that in tough times, training is one of the first things to go. After all, it\u2019s tough to demonstrate direct ROI for training to the bean counters. But if you want your employees up-to-date and enthusiastic once the economy comes back, now is no time to send the message that you don\u2019t care about their development. And like other motivational tools, training doesn\u2019t have to cost a lot. We\u2019re not necessarily talking about five-day seminars in Las Vegas, Agnoli points out. In addition to limited formal training, he taps into training with vendors (he says most will put on free or low-cost training sessions as a way of getting an in with users during the recession), and he utilizes what he calls cross-training, where staffers will train each other on their unique skills. "This all lets your staff know that you\u2019re interested in them," says Agnoli. "You\u2019re telling them, We\u2019re not just sitting on the bench while the economy is bad."