First and foremost, I want to acknowledge that all organizations will be impacted by COVID-19 differently. When the economy is volatile and business is uncertain, it’s difficult for companies to know how to react. This article is not intended to be prescriptive to leaders, rather, it’s intended to inspire them to think differently (perhaps more positively) during times of instability.
How many times this year have you heard, “It’s time to get creative”? When organizations face times of uncertainty, the natural reaction is to cut spending and shy away from innovation. For some organizations, this is the best strategic move, but for many others, it’s the perfect time to lean into innovative projects that will propel your organization forward in the long run.
The call to action here is to be what we call “a thoughtful risk-taker.” Be one of the brave few that resist the inclination to cease action out of fear. Why? Because the return on investment during a tough economy is often greater than one would expect. It’s why leaders should consider accelerating their 1 to 3-year roadmap by investing in areas that will make their organization come out stronger on the other side.
Constraints create innovation
If you’re not yet sold on the concept, think back to the 2008 financial crisis and the many companies that innovated and thrived during that time. If there’s one lesson that the recession taught us, it’s that constraints actually create innovation. In fact, the Kauffman Foundation found that over half the companies on the Fortune 500 list had been founded during a recession or bear market.
It’s because we’re forced to do more with fewer resources. We take a harder look at our teams and how they could work better. We work diligently to prune internal projects that aren’t going anywhere. We adapt to customers’ changing preferences/circumstances. And the list goes on! If leaders are savvy, they can turn a negative situation into an opportunity, while also taking care of their teams.
Innovation during the recession
In 2008 we saw an explosion of startup activity and large companies innovating. Looking back, it seems like the executives of these companies had a crystal ball, but of course, that’s just because of their dominance today. Remember, Amazon Web Services was just a startup idea within Amazon during the last recession. Crazy! Especially considering AWS is larger than all of its top four competitors combined.
In consumer tech, we saw Twitter & Uber go from being startups to coming out of the recession to IPO’s with over a $100 billion new value created. In the B2B tech space, Salesforce continued its reign and the stock has soared 1400% since the recession. These were all things that happened because of innovation that took place in a down market.
Your next big opportunity could be right in front of you. You don’t have to have a crystal ball, you just have to get started. And because we believe in thoughtful risk-taking, we recommend looking internally first.
Look for opportunities to improve the way your team works and how you serve customers
We speak to extremely successful organizations that work in typically repetitive & outdated ways. I don’t mean this as a dig at all — they’re successful for a reason. If things are broken don’t fix them, right? Right — until now! If your team is having a hard time transitioning to remote work, this may be a leading indicator that your team is overly reliant on processes, procedures, and tools that are outdated or disparate throughout your organization.
One common area we advise clients to invest in is building custom software that helps their employees do their job better and more systematically. You would be surprised to find how many successful businesses don’t have systems in place that standardize inputs and outputs of a product or service they offer.
Another common — and perhaps my favorite — way businesses leverage technology is when employees have built their own tools to make their lives easier, and they are breaking before they can scale. Now would be a great time to take what was learned from their homegrown tools and turn it into a robust software asset for your organization. This is a lower risk form of innovating within the business because your team knows what problems they need solved, but just haven’t been able to find a solution.
The final common case of outdated structures is hiring more employees to do more repetitive work. This is another leading indicator that a business may not have the systems in place to scale. So work smarter, not harder. We often say, “let the computers do the repetitive work.” That's what business innovation is about.
The ROI of investing in software during a tough economy
In my last article, the ROI of Software Projects, I outline several ways that businesses can invest in building custom software that’s purpose is to help the business standardize workflow, provide inputs and outputs, and improve overall productivity for employees. These investments lead to lower costs, more efficient employees, fewer breakdowns in communication, and a huge competitive advantage down the road.
Investing in operational software is a great investment. Building these systems will help your teams evolve into a well-oiled machine when we arrive on the other side of this global pandemic. The software will be a growth engine for your company in the cost savings it produces, operational efficiencies, and the net new revenue you can take on because you can do more projects with the same amount of staff.
Focus on areas you have control
To quote a proverb from Stoic Philosophy, “ The single most important practice is differentiating between what we can change and what we can’t. What we have influence over and what we do not.” In the current environment, we all find ourselves in so many ways focusing on things we cannot control. Yet, there are so many areas where we can move the ball forward and do great work within our organizations.
My hope is that you take a look to find the areas that could improve within your organization. The answer isn’t always technology, but it can be a major factor. Even though feelings may point to contraction and preservation given the current outlook, I hope you know that we will get through this, your organization will grow and become even more resilient because of it, and we will go on to do great things on the other side of the COVID-19 pandemic. Now is the time to dig in, take a look internally, and take the first step to build a better future for your organization and to be ready for the rebound.
If you’re in need of some guidance, want to chat about your innovation process, or need someone to bounce ideas off of, send me an email to set up a free, 30-minute coaching conversation. If I can’t help you, I will point you in the best direction possible. You can reach me any time at email@example.com