November 10, 2021
The COVID-19 pandemic has shown that a crisis can act as a catalyst for innovation, removing entrenched orthodoxies overnight. While firms must continually innovate in the face of constant change, change often develops at a relatively slow pace and with irregular effects compared to a major disruption such as the pandemic. Regulatory requirements, seasonal demands, or M&A activity are relatively easier tasks compared to the unprecedented pace and global scale of the challenges that the COVID-19 crisis and its aftermath have presented. While all innovation requires creativity and action to deliver value, innovation in a crisis demands creativity and action under pressure and, oftentimes, constraints in response to such disruptive events or trends.
Leaders are now even more anxious about the disruptive forces that the pandemic has amplified. Systemic risks like the pandemic highlight the need for sustained innovation.Businesses that adapted and innovated during the COVID-19 crisis were more resilient to its impact. Technology leaders must now be prepared to embrace permanent change and develop a continual response to further systemic risks. They must adapt a crisis-driven innovation mindset to stimulate creativity and sustain the pace of innovation after the pandemic. They must set what Forrester calls a “future fit” vision that is adaptive, to reconfigure core business concepts; creative, to bring emotion and engagement to customer experiences; and resilient, to deliver on their vision and brand promise, no matter what comes next.
Leaders who assessed their future fit resilience and evaluated their innovation maturity and readiness ultimately proved successful in responding to the pandemic crisis. Tech leaders who are future fit are capable of reconfiguring business structures and capabilities to meet future customer and employee needs with adaptivity, creativity, and resilience. To better prepare for future uncertainty, tech leaders must consider integrating a “think, do, apply” three-stage approach into their design processes and innovation practices.
Three-Stage Approach for Fueling Innovation
1. Think: Develop concepts to plan crisis-driven innovation initiatives
The pandemic reinstated the importance of purpose, and you can’t detach that purpose from people. People become motivated to work on something bigger than their own interests. In a recent Harvard Business Review article, Albert Bourla, CEO of Pfizer, said of the company’s success in developing its COVID-19 vaccine with BioNTech, “It pays to put purpose first. Moonshot challenges that align with the right purpose are galvanizing.” Motivate teams to align on the “what” and “why” of the company mission, but also empower them to work out the “how.” Give them an inspiring and compelling vision of the future that provides the context for why your firm needs to innovate. Trust in the power of collective human behavior and give your teams the autonomy to innovate. The Pfizer and BioNTech teams openly collaborated and were trusted to do what was needed without financial constraints or contracts in place. Teams worked harder than ever to achieve their goal despite immense political and personal pressure.
To evaluate the impact of systemic risk, use scenario analysis. Scenarios are rich narratives that you can use to safely explore potential disruptive changes from which you then develop responses. Consider and then prioritize the systemic risks that have the most critical impact on your organization.
2. Do: Adopt design thinking and agile practices for success
Focus on the customer and integrate end users by practicing design thinking. Verizon accelerated its workforce strategy from five years to two weeks when pandemic protocols triggered working from home. It succeeded because it grounded its strategy in a common understanding of customer and employee needs, focused on the quality of customer and employee interactions, and was sensitive to employee well-being balanced against customer demands.
Agile’s structured sprints lend themselves well to delivering in a crisis. During the pandemic, teams from across the business at Medibank coalesced around a shared objective. They collaborated in a more agile fashion to identify opportunities and next steps. Daimler adopted swarming from agile practices to transform its traditional work culture. It pulled in expertise from different groups and created cross-functional teams to collaborate in developing new products and practices. By using swarms for innovation, it discussed and managed all elements of development practices simultaneously, enabling far greater team buy-in and faster time-to-market.
Moving forward, leaders should create cross-functional Formula One-style teams built on trust and autonomy, coach them in agile practices, and equip these teams with the skills and capabilities for successful innovation. Ultimately, leaders who encourage creativity among all employees open the door to more collaboration and innovation -- and a business advantage. Treat employees as the source of ideas to deliver ever-improving value to customers. Hire people with creative potential, but also stimulate creativity among workers in every role.
3. Apply: Train and practice for sustainable business resilience
Innovative leaders need to train and practice to be prepared for uncertainty. Regular training gives you a set of responses (or muscle memory) ready to use in a crisis. You can reduce the amount of time you spend thinking about what to do as your training and experience kick in. Manage with situational awareness. Constantly monitor the business and wider environment to identify new risk scenarios as triggers for continuous innovation. Determine and refresh your priorities, critical skills, and capabilities as the environment changes.
Resilient firms dynamically react to a sudden event or crisis regardless of whether they had foreseen it as a risk. They understand the specifics of a crisis, already have a practiced response, and use situational awareness to seek new opportunities. With situational awareness, they monitor what’s happening outside the firm, adopting, or pivoting their strategies to identify new priorities. They create new offerings and predict how an event will unfold or change to respond to future customer needs.
Tech leaders must recognize the key attributes for successful innovation in a crisis. This includes a shared purpose; scenario planning; adopting agile and design thinking practices; and training to be prepared for future uncertainty. These characteristics are what enabled leaders to drive digital transformation initiatives to be delivered in weeks and months, not months and years, during the pandemic. And it will be these capabilities that will help you adapt and be resilient for future systemic risks. Embed the three-stage approach into your innovation practices and as an integral part of your future fit strategy. This will set your firm on the path to future fit resilience and business success.
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