Source: David Schatsky, Brand Contributor/ Forbes.com
The COVID-19 pandemic has spurred many organizations to innovate in order to survive. While the acute uncertainty surrounding the pandemic will eventually recede, there is a broader trend of growing uncertainty – brought on by factors ranging from economic uncertainty, and the disruption caused by digital transformation, to the rapidly growing need to address climate change. In fact, researchers from the International Monetary Fund and Stanford University developed a way of measuring uncertainty and found that it has been on the rise for decades – a trend unlikely to reverse itself. To thrive in this world, organizations need to be able to innovate quickly, not only now but after this crisis subsides.
When uncertainty is high, scenario planning can help organizations envision and prepare for a range of possible futures. Yet only about half of companies use scenario planning to help future-proof their strategies, according to a recent Deloitte survey of chief strategy officers. And when the future happens, it often differs from what was originally envisioned. Faced with unexpected events, organizations need to innovate.
Responding to the COVID crisis requires a rapid shift in innovation.
As the pandemic began to unfold, it shifted the focus of corporate innovation and triggered a burst of speed to adapt to the changing circumstances and needs. We saw many examples of rapid innovation with most of these moves occurring just a few weeks after the World Health Organization declared the COVID-19 crisis a pandemic. For instance:
- A passenger airline shifted to cargo-only flights as passenger demand collapsed.
- A hotel chain offered workspaces at day rates to professionals unable to work from their offices.
- A movie studio released a new film directly to its streaming service, bypassing shuttered theaters.
- A retailer converted some of its sites into “dark stores” that served customers for pickup only.
- A mobile car cleaning and disinfection service scrapped a two-year national rollout plan and went national in two weeks instead.
- A pharmacy chain and a logistics provider announced that they would begin delivering prescription medicine to vulnerable residents of a retirement community by drone.
While the current pandemic emergency will eventually subside, there is little sign that the future will be any more stable or predictable. In fact, according to the 2021 Deloitte Global Resilience Report, more than 6 in 10 CXOs believe that occasional or regular large-scale disruptions are likely to continue going forward.
As uncertainty continues to rise and the unexpected becomes more common, organizations may not always have the luxury to conduct extensive analysis before acting. Indeed, high uncertainty and rapid change tend to reduce the relevance of the data that companies may have traditionally used for planning. They may need to place bets on multiple possible futures. Above all, they will need capacity for rapid innovation—every day, not just in a crisis.
How to innovate faster
Companies executed the rapid innovations described above by repurposing existing knowledge, resources and technology. A recent article suggests that organizations in all industries may be able to use repurposing to achieve ultrafast innovation to develop new solutions to our current and future challenges.
Some innovation thinkers take inspiration from venture capital. Venture capital firms tend to tie funding to the achievement of milestones that reduce investment risk, such as proving technical feasibility or product-market fit. This approach instills a sense of urgency in startup companies: Their very survival may depend on achieving a funding milestone. A crisis such as the COVID-19 pandemic can produce a sense of urgency in even large organizations. But banking on effective innovation in response to a crisis is not a robust strategy.
Making effective use of technologies such as cloud computing, data analytics and artificial intelligence is among the key principles of repurposing that can support ultrafast innovation. It is also among the digital pivots a company needs to make on the journey to becoming a digital enterprise, according to a 2019 Deloitte study. Each of the digital pivots described below can play a role in accelerating innovation:
- Flexible, secure infrastructure involves leveraging cloud computing for scalability, agility and cybersecurity to protect data, applications and infrastructure—and to lower the risk of innovation.
- Data mastery means using data and analytics to generate insights that can enhance efficiency and effectiveness, guide product development and support new business models.
- Digitally savvy open talent networks involve securing flexible access to the talent and skills necessary to evolve and grow a digital business.
- Ecosystem engagement involves working with business partners to gain access to resources such as intellectual property, technology or talent that can help accelerate innovation.
- Intelligent workflows mean leveraging automation to increase efficiency and effectiveness and free up resources to focus on higher-value tasks such as creating new products.
- Unified customer experience means delivering a superior customer experience built on deep data-driven knowledge of the customer—a focus on many recent digital transformation initiatives accelerated by the pandemic.
- Business model adaptability is about expanding the business models and revenue streams that can help a company adapt and thrive in changing conditions.
- The more broadly and deeply companies apply the digital pivots, the more digitally mature they tend to be. And the more digitally mature they are, the more successful they tend to be at driving innovation.
The pandemic has highlighted how critical agility and rapid innovation can be. This may be one reason why corporate investment in digital transformation remains strong, even in a year characterized by dramatic reductions in overall technology spending.. Companies seeking to develop their capacity to innovate quickly are continuing to invest in digital transformation.
Innovation in an era of uncertainty
At a time of rising uncertainty, an ability to innovate rapidly has never been more important. Innovation is complex and many factors influence an organization’s innovation ability. Digital maturity is one of those factors—and an increasingly key one. Some of the most innovative companies on the planet were born digital. For the rest, a concerted effort to become digital can help meet the growing need to innovate at speed.