September 30, 2020
COVID, and How to Pivot to Innovation
by Vivek Wadhwa
The pandemic has almost shut down entire industries, forcing companies to adapt -- and doing incredible things for a pivot to innovation.
The global COVID-19 pandemic has almost shut down entire industries, forcing companies of all sizes to adapt and evolve. It has also done incredible things for a pivot to innovation.
Safety has had to come first. And for many, that meant changing how they worked, using technology to power a shift to remote work and servicing of customers. For some, like retailers, restaurants and manufacturers, it meant shutting down key services or production lines and pivoting to new offerings or entering new markets just to survive and stay relevant. Others, rather than just close doors, have repurposed their assets to contribute to the collective effort to fight the crises.
When commercial flights were shut down, airlines like Virgin Atlantic, Lufthansa and American Airlines switched to cargo-only flights. In the U.K., healthy fast-food chain Leon announced it was turning its 65 restaurants into shops, selling meals via both click-and-collect and delivery. Hotels started offering day rates for remote workers. And multiple manufacturers, like Scottish craft beer specialists BrewDog, converted their plants to produce hand sanitizer.
What does it take to shift this fast successfully? And is this kind of progress sustainable?
The reality is that it is not essential that we be thrown into crisis before this kind of change can take place.
With the enforced change in human movement and behavior came a change in customer demand. Businesses had to think and act fast to repurpose assets, talent, resources, distribution channels, offerings. Minus the crisis, it’s what successful businesses do every day.
SpaceX’s giant step
On April 11, 2019 – before we knew what 2020 would bring – a Falcon Heavy rocket was launched Cape Canaveral, FL, making history. It was the first in a new generation of space exploration: a rocket that would not only be able to pilot its way through space but be able to navigate and return to Earth for re-use, radically reducing the cost of space travel.
To achieve this, SpaceX combined radical and creative funding systems, brilliant talent and, perhaps most importantly, vision. But the question at the heart of this isn’t – “How did SpaceX achieve this?”; the question is, “Why didn’t the incumbents?” How has innovation and creativity become so stifled in large, established organizations that it takes a new kid on the block to go, quite literally, where no one has gone before?
It’s about culture, leadership and some very practical steps that enable businesses to be their own catalysts for change, rather than relying on a crisis to spark exponential change.
The DNA of organizations that thrive through change
From Incremental to Exponential, a book I have written with Ismail Amla, looks at what it takes to drive exponential change in an enterprise. We examine five common components that make up the DNA of organizations that thrive through change.
- Firstly, speed. Leading companies just operate faster – from reviewing strategies to allocating resources. McKinsey research indicates that these companies relocate talent and capital four times more quickly than their less nimble peers.
- Secondly, being ready to invent. While business need to maintain the profitable elements of what they do, business as usual is dangerous. Leading businesses are investing as much in upgrading the core as they are on innovation.
- Thirdly, being all-in. These companies aren’t just making decisions faster, the decisions themselves are bolder, braver and further outside the box.
- Fourthly, making data-driven decisions. Data is providing the fuel to power better and faster decision making. High-performing organizations are three times more likely to say that data and analytics initiatives contribute at least 20% to EBIT. Which is profound.
- And finally, following the customer. Top companies that sustain a comprehensive focus on the customer (in addition to operational improvements) have been shown to reap economic gains ranging from 20% to 50% of the cost base.