Crisis Innovation Guide: Survival Mode (part 2 of 5)

The shock of the coronavirus has triggered survival mode in many companies. Being too busy putting out fires and making financial cuts, countless businesses have put a halt to their innovation projects. For example, in Germany we have seen companies reducing cooperation and research projects, which could have a negative impact on competitiveness.

According to a recent study, the number of companies planning not to invest in innovation has gone up from 8% to 25% since the beginning of the crisis! When we consider that 96% of innovation projects fail to make a return on investment, this would appear to be a logical move. Should innovation still be high on businesses’ priority list in the current climate?

The simple answer is yes. Now more than ever, companies need to innovate, starting with the core of their organisation in order to remain relevant. A crisis like this is a facilitator rather than an inhibitor of innovation. It creates a climate of opportunity that innovators everywhere have been waiting for!

Considering the number of ‘white spaces’ that have opened up in the wake of COVID-19, exploration and experimentation will be more fruitful than ever. Defunding innovation would therefore constitute a series of missed opportunities. The question is not about IF organisations should innovate, but rather about WHAT and HOW they should do it.

A study by McKinsey in 2019 reported that the companies that survived the 2008 recession tended to be the ones that invested early in the crisis. Companies would be well-advised to learn from the lessons of the previous economic crisis and take note that today’s innovators emerged from the 2008 economic downturn. Research by BCG shows a similar pattern.

There are already plenty of companies who have taken the lead since the beginning of the pandemic. Following the initial emergence of COVID-19, most companies were forced into change – offering remote work, changing work structures and providing digital learning opportunities. Some companies were lucky enough to benefit from an increased interest in their services, like Zoom and TikTok. Others were forced to innovate to stay afloat and shifted their entire production line to adapt to changing customer demands.

These temporary success stories started with proactive leaders identifying how the competencies and resources at their disposal could be used to meet the new needs of a confined and concerned consumer base. They provide us with proof that acting fast and innovating in times of crisis brings success.

A Dutch company specialising in the production of beds, changed its production line to respond to the country’s urgent need for face masks. It managed to produce enough masks to meet almost 25% of the nation’s acute medical mask needs in record time.

The manufacturers of computer accessories were fortunate to benefit from a global increase in the number of remote workers. The rapid increase in product demand was supported by effective mobilisation of the workforce leading to impressive financial growth figures.

The former LED manufacturer emerged during the peak of the coronavirus outbreak in response to an acute shortage of ventilators. The company managed to produce a low-cost ventilator model in just a couple of months.

This article is the second part of a larger series of five contributions, which together constitute a ‘Crisis Innovation Guide’; a guide with tips and tools on how innovation can help your organisation prepare for the turbulent period ahead. The guide is constructed around multiple scientific and opinion articles, interviews with researchers, and input from various webinars and conferences, the sum of which provides an overview of the latest talking points of the COVID-19 crisis.

From 16 November 2020 onwards, every week will see a new contribution as part of the Crisis Innovation Guide. The guide will be made available as a downloadable PDF to members of UMIO Prime as of 14 December 2020 through the UMIO Prime app. The app also provides access to all available articles of the series until now.

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