Innovation requires an impetus. The need to transport goods and people led to the invention of the wheel. Shift work during the Industrial Revolution encouraged the harnessing of electricity.
Today, those same seeds can be seen in the disruptions caused by Covid-19. As difficult as they’ve been for organizations to overcome, they’ve also ignited new innovations. The goals of and processes behind these innovations will be different than their pre-pandemic counterparts.
What does the future of innovation look like? In the wake of Covid-19:
When you think about “innovation,” what business function comes to mind?
Resilience Will Be a Bullseye
Prior to the pandemic, most innovation initiatives aimed to increase profits, fend off competitors or both. The crisis has caused many organizations to set a new innovation target: resilience.
Covid-19 has helped leaders recognize the risks of enterprise inertia. “In this new era — or the future forward — innovation will be a cornerstone of organizational resiliency,” explains Jeff Wong, Global Chief Innovation Officer at EY, “one that will drive a company’s ability to shift rapidly in response to unexpected events and evolving customer needs.”
Gyms that couldn’t offer fitness classes outdoors were forced to close. Movie theaters began renting out whole theatres to households rather than trying to fill them by selling individual tickets.
Resilience-oriented innovation isn’t as simple as upgrading a user interface or building a faster processor. Leaders need to develop service lines and processes that are flexible enough to handle society-wide disruptions.
HR Is Going to Be a Hotspot
When you think about “innovation,” what business function comes to mind? Probably product development. Post-pandemic, it’ll likely be HR.
When Covid-19 hit, many companies sent workers home with little warning and even fewer processes in place. Simmering HR issues ranging from burnout to inadequate training to insecure handling of sensitive data burst onto the radar of business leaders.
The good news is, these problems highlighted the lack of innovation attention given to HR teams. “Once organizations have addressed the fundamental question of how to keep their people safe as they return to office settings, they will need to identify ways to continue the momentum established in adapting quickly to a changing environment,” Wong notes.
Technology will certainly be part of the solution. Almost every organization has now adopted video conferencing tools and project management software. More advanced technologies, such as blockchain and artificial intelligence, will be used to secure contracts signed remotely and identify gaps in workers’ performance.
Best Will Beat First
First-mover advantage is powerful. Arguably, Amazon’s position atop the e-commerce world stems from the fact that it was the first online bookstore. eBay built the first online auction site in 1995 and continues to be the big name in the space.
Innovation initiatives after the Covid-19 crisis, however, are likely to prioritize quality ahead of speed. First-movers enjoy less of an advantage in times of rapid change. “Gradual evolution in both technology and markets provides first movers with the best conditions for creating a dominant position that is long lasting,” point out Fernando Saurz and Gianvito Lanzolla, professors at Northeastern University and London Business School, respectively.
A good example is curbside pickup. Every restaurant and in-store retailer under the sun raced to implement it when Covid-19 hit. Now that it’s common, customers can now choose where to go because the innovation is no longer exclusive. They choose the company that offers the best curbside service, not necessarily the one that did it first.
Pivot Potential Will Factor Into Every Investment
Most pivots are product-based. During the pandemic, automakers retooled their assembly lines to produce ventilators. Clothing companies started making masks.
The crisis reminded companies that pivots are just as important to other business functions. Shifting from in-office to remote work — an HR pivot — made it possible for many companies to keep doing business at all.
Despite pivots’ importance, companies rarely get them right. Accenture research shows just 6% of companies have conducted a “wise pivot.” It defined “wise pivots” as those that strategically reduce costs, jettison underperforming assets or profitably transform their core business.
The problem isn’t that companies can’t change; it’s that most don’t plan for it. Marketers may design billboards that can double as banner ads, just in case new lockdowns force consumers back inside. Executives may opt to rent rather than purchase company cars to mitigate the risk of future travel restrictions.
Business leaders have, historically speaking, taken a narrow view of innovation. Covid-19’s biggest silver lining might be that it’s helping them understand it in new ways.
A company’s continuity is at least as important as its profit margin. HR deserves just as much attention as the product team. Thanks to Covid-19, innovation’s future will be broader and more human.
