During Corona-times, optimists would say that ‘every crisis is a birth’, and for some aspects this is truly the case. Organizations discover that their team can actually work from home, so colleagues adopt a new sense of work-life balance and many elderly are more connected to their relatives than ever before – Boomers have become Zoomers. Apart from that, e-commerce and direct-to-consumer experience an accelerated growth, disruptive e-health and e-legal solutions are popping up. Good news if you’re in a business where you can ride the wave!
On the other hand, various companies experience a defensive reflex to keep the spiraling losses under control, especially in high-impact industries like construction, tourism and entertainment. In these challenging times, executives are looking for cost-cutting options on the short and mid-term. And this is when it gets tricky for R&D and innovation managers.
It’s totally understandable that in times where demand is plummeting, and the future outlook uncertain, organizations refocus all their efforts on the essential business processes. Keep the train moving! However, the current operations and business processes couldn’t be executed if it weren’t for past investments in IR&D. So let’s consider some options for your team to deal with this catch 22.
1. Take the offense
Outperforming companies of today differentiate from their competition because they invested in new growth options during and after the financial crisis of 2008, instead of just cutting costs. According to recent reports of Bain & Company and Gartner, these investments outside the core business are considered as an important strategy to win.
2. Take the time to (re-)assess the innovation strategy
IR&D should be an accelerator of the competitive sustainability of a company, today, tomorrow and the future. If you’re considering cost-cutting your IR&D projects, it might be because they lack alignment with the corporate strategy or because there’s an imbalance between short/mid/long-term projects. There are a few quick checks that can help your team to make that assessment:
- How does the innovation mission support the company’s ambitions? Is the connection clear for – and endorsed by – other executives?
- Which actions are currently initiated to support this mission, and is the budget spending in line with the ambitions?
- Is there an explicit way of steering balance in the innovation portfolio? Are we betting on (too) little or (too) many horses?
- What KPIs are we tracking? And are these the right Innovation Metrics?
If you’re not able to give a clear indication for these type of strategic questions, it might be a good time to sit down and get things straight. The following framework might create an overview of what needs to be done. Take note that all elements are interlinked and should be managed accordingly.
3. Adopt a lean and agile way to assess opportunities
Let’s face it. Even after thorough market research, newly introduced products still have a high failure rate: up to 80-85% according to some. Even if competently executed, most new ideas will fail in the market (dixit Alberto Savoia, Google’s Innovation Agitator). This is called ‘the law of market failure’. To overcome this pitfall, it’s essential to set up a step-by-step learning process to de-risk your innovation opportunities. For many companies, this requires a firm mind shift and the use of disruptive, lean pretotyping experiments that go beyond the typical focus groups and surveys in B2C or time-consuming co-development pilots in B2B.
We notice companies are still struggling with keeping mediocre opportunities alive by focusing rather on limited aspects of market success (e.g. technical feasibility first, market adoption later), or by avoiding to pull the plug because of lack of progress. Dare to kill your ‘zombie projects’ and focus your limited resources elsewhere. A lean and agile approach is the way forward to make optimal use of your team’s limited time and resources and to adopt a proof-driven assessment of opportunities. Several tools can be accessed digitally and are pay-per-use, so what are you waiting for? Rapid cost-efficient experimentation will lead to more bad ideas being killed so you can focus your scarce time and resources on the winners.
4. Train and empower your IR&D team
Do you have the right tools in your shed to accelerate innovation and be ready for the coming years up to date with the latest insights, technologies and methods? Consider e-learning and coaching for ongoing initiatives to elevate the internal competences of your team involved in innovation. Online collaboration platforms enable a highly transparent and output-driven process and are highly valuable when combined with an expert coach that can pool the right tool at the right time. This topic is at the crossroads of HR (training and career planning), R&D (project-based) and operations (remote collaboration platform).
This is the time for out-of-the-box thinking and pool some departmental resources. After all, IR&D skills like dealing with uncertainty, processing diverse/fuzzy/contradicting insights or an entrepreneurial attitude are considered core assets today and even more tomorrow.
5. Make it practical
During uncertain times like these, you can get lost in online articles about V-, U- or L-shaped curves in business recovery, and according actions to undertake. If you were planning on initiating a trend-driven roadmap, or market landscaping exercise, the truth is that it might be too complicated or even a bit naïve to predict the mid-term impact of this crisis on society.
As IR&D, product or innovation manager, it might make more sense to focus on something practical and bootstrap selected projects. Impose your team as a challenge to find accelerated revenues by exploring new go-to-markets (e.g. direct-to-consumer) or by targeting other customer groups (e.g. less-demanding users for a first-gen release).
Indicate the win-win situation to your management how your budget shift will result in more tangible, short-term results and explore new grounds and tools as you go.
Every crisis and in particular this Corona crisis is hard and unseen. But we don’t have a choice and only can try to fight the virus and become even a better innovating company than before, right? Verhaert’s experts help you out with pragmatic guidance, a solid toolbox and proven track record for A-brands across the globe. Contact us to talk about your innovation challenge.
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Leave us your email and get in contact with Pieter Deleye, Business Development Manager Services – Strategic Innovation, to help you with your innovation process.