The COVID-19 pandemic has spread around the world, markets have collapsed and volatility has reached extremes. Corporations and their leadership are navigating through uncharted territory, and are faced with critical decisions to safeguard their people, assets and businesses.
As entrepreneurs in the innovation and business prototyping fields, we chose to ask ourselves a very specific question: How will the COVID-19 crisis affect corporate innovation moving forward?
We spoke to CEOs, CIOs, Heads of Innovation, and other business leaders at 23 multinational corporations across 13 different industries in order to get a first-hand perspective of how they view the role of innovation within their organisations during these turbulent economic times.
Most of our participants view the crisis as a unique opportunity to take pause, conduct due diligence of objectives, and reprioritise initiatives with little or no impact on investments. A novel criteria, against which such decisions are made, is the idea of business resilience, or the ability to rapidly adapt and respond to disruptions while maintaining business operations.
In fact, there is a clear realisation that flexibility is key and expectations are that the coronavirus crisis will make cash-strapped startups increasingly attractive to those larger companies who are ready to deploy their capital. Several of our respondents foresee that they will become more aggressive buying external innovation as they expect a stream of M&A activity.
In a very volatile environment, future planning appears to take a new shape across three distinct phases 1) Surviving today: prioritizing initiatives according to where true value is generated and while ensuring business continuity in core activities, 2) Coexisting with the virus (and general uncertainty): capturing value through new ways of working and opportunities and 3) Embracing the New Normal: asking what will my industry, and role of my company, look like 2 years from now and beyond.
Along with the evident surge of e-commerce as well as new workspace dynamics, one of the main innovation priorities is the automation of processes and increase of capabilities through digitalisation, impacting sales forces, client channels, operations or businesses as a whole. In addition, we observe that the speed of innovation is a crucial factor for businesses and consumers alike. A minimum viable product (or solution) creates more value today than a perfected version of the same product tomorrow.
Who then drives this innovation? Our participants generally point to company leadership who is responsible to set the direction for innovation in their organisation while asking them: How do we survive and protect our core business? Are the actions we are taking being effective? If not, what should we do instead? What should we do next?
Beyond the pandemic itself, Covid-19 is turning into an opportunity that only innovation can grab by forcing organisations to get out of their usual modus operandi and comfort zones, and by thinking differently.
The key question is: how do we prepare for future pandemics? In fact, the danger is to become complacent and apathetic once this pandemic is in the rearview mirror. One of two recommendations is to look outwards, towards those countries that have experience dealing with such crises (e.g. SARS or MERS) and that operate in highly volatile environments, geopolitical or economical. Second, is making the innovation function towards a more central and essential responsibility in the organisational chart of companies, developing and finding talent and increasing the sophistication of innovation departments.
Lastly, most of the participants have agreed to the need of creating a corporate culture to embrace these changes. A culture that embraces uncertainty and new ways of working will certainly prove to be more resilient.
Companies need to ask themselves: what is our overall culture? Are we empowering our teams to embrace innovation? Do we have the capabilities and processes to train talent? Preparing to innovate is innovation in itself.
If you are interested in our study, we would love to share our findings with you. Click here and download our complete report for free.