Crisis can result in isolation, inaction and fear for any company and its leadership. But it also unlocks unique conditions that create permission for new ways of operating. The urgency required to react to the pandemic, social unrest and economic instability prevent long-term planning and development from meeting the needs of today’s business challenges.
Companies are reacting in many ways. Some are locking down, focusing on day to day operations and reducing time and resources on anything not deemed mission critical. Others are leaning into change, using the information available to make business model shifts now and driving their organizations to react quickly.
According to a recent McKinsey & Company report , 90% of executives believe the Covid-19 crisis will fundamentally change the way they do business, but only 21% have the expertise, resources and commitment to pursue new growth successfully.
Learning how other companies embrace innovation can dislodge inertia and jump your organization into high gear.
1. Embrace Speed to Change
Create an agile decision making process that allows you to make a plan, put it into market and pivot as new information is gained. Often referred to as a Minimum Viable Project (MVP), core products are developed just enough to gain a market reaction, then revised and honed with customer insights.
Companies like Airbnb, Twitter, Spotify and Etsy all used this methodology at the early stages of their business, reducing the resources, costs and time of linear product development.
2. Build a Culture That Can Pivot
It’s a classic conundrum – as companies grow, they seek to drive efficiency with best practices that can be replicated again and again. This can, however, create a void of acceptance for creativity. If teams are held accountable to follow the designated roadmap, they may not believe they are allowed to color outside the lines.
A culture that celebrates ideas is crucial when disaster strikes. Corie Barry, CEO of Best Buy said in a Masters of Leadership webinar that Best Buy operated 9 different business models from March until August as the Covid-19 pandemic evolved. They executed everything from online only, to curbside service, to setting appointments for stores. Virtually none of these options had existed pre-pandemic. Barry attributes this ability to pivot to an aligned management team with a common purpose. And during a crushing economic impact for most, Best Buy saw 15% growth.
3. Kill Preconceived Notions
“We did that before”, “It will never work” and the famous “It’s not in the budget” all create a psychology that what we’re doing right now is the only right way. Gary Shapiro, author of Ninja Innovation and CEO of the Consumer Technology Association has been a long term advocate of innovation in corporate America. Shapiro says “a rigid adherence to traditional methods is a huge hindrance to innovative problem solving.”
4. Measure & Operate New Ideas Differently
Forcing the new service, model or product to succeed on day one is an obvious recipe for failure, yet companies do it all the time. By measuring the new innovation on the same scorecard as existing businesses, you create pressure on the idea to perform before its ready. New ideas need time to grow and the oxygen and permission to change. Virtually no idea is right on paper, it requires market reaction. Smart and committed people can make necessary shifts for the short term in order to build a long term strategy.
5. Remove Silos by Making Innovation Success a Measurable Goal for Everyone
I worked for a rapidly-growing company that moved from start-up to medium sized business and then large corporation in a short time. With that growth, people were hired to create processes and gates for decision making under strict guidelines. While this successfully reduced the “wild, wild west” mentality of the sales team and removed pressure from the most tasked organizations(like IT), it also greatly reduced the speed of change. Those from sales (like me) complained loudly about the slow down. However, those with responsibility for the processes wanted more structure because they were measured on quality. This Fast Company article https://www.fastcompany.com/best-workplaces-for-innovators/2019 highlights the way 50 companies reward innovation – from major corporations, to start-ups and non-profits.
Innovation is messy. But as Thomas Watson, the founder of IBM said “The way to succeed is to double your failure rate.”
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