When COVID 19 first hit, most companies zeroed in on their core business, leaving innovation on the backburner. From a psychological perspective, this behaviour was understandable. Crises evoke fear, and fear inhibits creativity. When our fight-or-flight responses are triggered, innovation may seem irrelevant, even impossible.
But the fact is that those companies who innovate through a crisis come out stronger. During the crisis, they outperform their peers by an average of 10%. Then after the crisis, when external conditions begin to stabilize, they outperform their peers by an average of 30%. Crisis innovations pay dividends, in the short term and even more in the long term, when those innovations have prepared organizations for a changed world.
At the very of beginning of the COVID-19 pandemic, many experts speculated that, just as the Black Death transformed 14th century Europe, COVID-19 would change our world utterly. As we approach the two-year mark, it is clear that our world has indeed been radically changed. Office work, telehealth, and digital retail have seen particularly significant changes that appear long-lasting, almost certainly permanent.
Defining “Innovation”
Many in the corporate world may have a working definition of innovation as the creation of new value.” Innovation is about adding new value to a base of customers. But when the fundamental assumptions of the world undergo a seismic shift, innovation is equally about changing internal functions to adapt to a new set of external conditions. Going one step further, innovation is about anticipating future conditions and developing processes which anticipate, or even help create, the world of tomorrow.
The most dramatic, headline-grabbing instances of innovation involve introducing a brand new product that reshapes the world — jumping from flip phones to smartphones, for example. Other innovations are less newsworthy but just as necessary. For instance, Gartner found that the Chinese companies which demonstrated the best business model resilience during the pandemic were those who most nimbly shifted to digital processes.
COVID-19 has undeniably accelerated the world’s shift to digital. Especially for legacy companies like Walmart, whose business formerly relied almost entirely on in-person interactions, this shift constitutes a major innovation. Innovation doesn’t always mean a new product or service. It can occur at the intersection of new customer needs and technologies that meet those needs.
Here’s how to prime your organisation for emerging into innovation.
Invest in Tomorrow — Not Yesterday
At some level, innovating toward future conditions means placing bets. We can never predict the future with 100% accuracy — no-one predicted the conditions in which the world found itself in 2020.
But despite the future’s fundamental unpredictability, it’s always possible to gather data from customers and employees which provide a roadmap to a handful of most likely situations. In fact, a crisis is the perfect time to harvest this data; in stable periods, people are more satisfied, and have less to say about how the future should differ from today. During crises, everyone from the mailroom to the C-suite is trying to imagine a better future and how that can be achieved.
Expect (and Plan for) the Unexpected
At the beginning of the pandemic, organisations of all types, sizes, and specialties were forced to adapt to remote operations. The remote work dynamic had traditionally been viewed with scepticism as fraught with challenges. But as organisations made the transition, the reductions in office costs, commute times and greenhouse gas emissions that remote work enabled were appreciated by different groups.
Remote work likely won’t always be a necessity, but that doesn’t mean businesses should instantly revert to the norms of old. Instead, they should view this as a cautionary tale, whose moral is that unpredictable conditions call for flexibility. As they envision innovation, organizations should incorporate systems and processes that empower them to adapt to shifting work dynamics. Doing so will ensure that whether or not COVID-like conditions again threaten commerce, companies will be equipped to function at optimal levels.
Be Averse to Risk
The larger and more successful organisations become, the more they may cling to the processes in place during their growth, rather than a) refining those processes by incorporating new insights and technologies or b) developing new processes that anticipate change. The complacent “business-as-usual” mindset and the aversion to risk are twin enemies of innovation.
Emerging from a crisis can be the perfect time to conduct a thorough audit of existing processes, identify where you can grow leaner and nimbler, and reallocate resources to forward-thinking endeavours. Customer expectations have changed dramatically since the beginning of COVID-19. Companies now face the existential necessity to develop new processes which delight their post-pandemic customers who are not the same as their pre-pandemic customers since the crisis has changed many of their wants and behaviours.
Read more about innovation strategy, and why it is critical to growth, here.
The Strategy Group is dedicated to helping companies ensure they stay innovative and at the leading-edge of their industry. We have partnered with a broad range of companies to develop powerful innovation capabilities and establish clear strategies with innovation at the forefront.
For more on how The Strategy Group can help your organisation emerge into innovation-driven growth, contact us today.
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