Invest in innovation now to be competitive in the post-COVID world

p 1 90619181 invest in innovation now to be competitive in the post covid world

In 2001, the vaunted glass producer Corning nearly collapsed. The corporate had invested closely in fiber-optic cables, and its market all however disappeared after the dot-com bust. However as a substitute of slashing its R&D finances and concentrating on core merchandise, Corning continued to make investments in innovation, trying to find methods to combine its merchandise into up-and-coming functions.

The corporate’s dedication to innovation throughout its hardest years paid off. In 2007, Corning Gorilla Glass was reformulated to present the display screen for the first iPhone. As we speak, Gorilla Glass is discovered in greater than 6 billion cellular gadgets, and Corning is value over $28 billion.

Corning’s regular concentrate on long-term innovation in the midst of disaster holds an necessary lesson for firms battered by the COVID-19 pandemic: Maintaining a pipeline for innovation at present is essential for rising from the pandemic stronger tomorrow. Whereas many companies are merely targeted on staying afloat proper now, historical past exhibits that innovation can’t wait.

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As a professor of innovation administration at Babson Faculty, I’ve lengthy championed the significance of breakthrough innovation. Breakthrough innovation includes extra than simply exploratory R&D. Firms should construct devoted infrastructure to incubate promising alternatives and speed up enterprise traces that present potential. My research signifies that firms that construct strong pipelines for innovation not solely see a higher return on their R&D investments but in addition outperform their friends in phrases of market worth.

Doubling down on innovation in the midst of a disaster can have even higher advantages. Firms that prioritized breakthrough innovation at the onset of the 2008 monetary disaster outperformed their peers in phrases of market worth by 10% throughout the recession. 5 years later, those self same firms have been outperforming opponents by 30%.

Regardless of the potential long-term advantages of sustaining an innovation pipeline throughout the pandemic, a survey from final summer time discovered that nearly one-third of executives have been deprioritizing innovation in favor of reducing prices and buoying core enterprise fashions. For instance, the VP of a chemical manufacturing agency I not too long ago interviewed stated that in the first month after the pandemic hit, they redirected their R&D personnel to concentrate on making their plant operations COVID-19-safe. Firms that spent years constructing innovation groups frantically repurposed them for disaster administration, tasking them with creating short-term fixes as a substitute of planning for enterprise in a post-COVID-19 world.

Though almost all of the executives in the survey plan to reprioritize innovation after the pandemic, by then it can be too late. Innovation has a very long time horizon, and firms should make investments constantly in order to see payoffs. Analysis exhibits that investing in innovation in matches and begins usually fails to produce results.

As tough as it’s to look past the day-to-day, the time to form your organization’s success in the post-pandemic future is now. With financial restoration on the horizon, listed below are three steps firms and innovation groups can take to place themselves for breakthrough innovation in the months and years to come.

First, firms ought to take inventory of how the panorama round them modified over the previous 12 months. Some diversifications will end up to be short-term responses to the pandemic, however others signify extra everlasting shifts in the manner the world does enterprise. What’s going to the new equilibrium be after the pandemic is over, and what markets does it open up which are ripe for innovation?

For instance, grocery shops drastically expanded curbside pickup and supply as an pressing response to the pandemic, however many anticipate continued demand for these providers as a part of the new regular. That presents a chance for breakthrough innovation inside the trade, significantly since curbside pickup because it at the moment exists is broadly demanded by customers but barely profitable for grocers. Already, Complete Meals has tinkered with a “dark store” that only offers pickup, whereas Kroger has partnered with the know-how firm Ocado to build grocery fulfillment centers manned by robots.

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Subsequent, firms ought to look internally at how their very own fast diversifications to the COVID-19 pandemic labored. Many companies discovered organizational capabilities they didn’t know they’d, or that all of a sudden gained worth given the circumstances. Breweries and distilleries pivoted to making hand sanitizer, eating places shifted to assembling at-home meal kits, and producers corresponding to GM started producing ventilators. Most of those pivots are short-term—GM stopped making ventilators in September—however the classes from the experiences might spark new product traces and enterprise fashions. Eating places, for instance, are contemplating how the capabilities they not too long ago honed for producing to-go meal kits and merchandise optimized for supply can complement in-person eating in the future.

With this data in hand, firms ought to reevaluate and reimagine their current innovation methods in the context of the new regular to come after the pandemic. Which tasks and priorities are most related to the post-COVID-19 future, which might be refocused to clear up a present downside somewhat than a previous downside, and which now not make sense?

For instance, many firms with services for workplaces are retooling their domains of innovation intent for a world in which extra individuals earn a living from home. Grundfos, a worldwide water-pump producer, had a strategic concentrate on making workplace buildings extra sustainable. The necessity for water conservation stays as robust as ever, however the firm is adapting its innovation portfolio to emphasize functions for different settings. Mirvac, an actual property and property administration firm, had quite a few workplace buildings in its portfolio earlier than the pandemic. Their designated innovation program, Hatch, is experimenting with city farming, photo voltaic panels, and different sustainability initiatives they consider could have worth in the altering city panorama post-COVID-19.

Prioritizing the future is difficult when many firms are nonetheless struggling to survive the current. But we all know from previous expertise that investing in innovation pays off, particularly when that funding comes throughout a disaster. Beginning small at present is healthier than not beginning in any respect, and firms can see vital advantages even with only a handful of tasks and one or two individuals engaged on innovation full-time. The COVID-19 pandemic is a gigantic problem that has without end modified the enterprise panorama, but it surely’s additionally a chance to lay the groundwork for breakthrough innovation that can set your organization forward in the post-COVID-19 world.


Dr. Gina O’Connor is a professor of innovation administration at Babson College and an teacher in Babson Executive Education. She research company strategic planning and the way firms can develop capabilities for breakthrough innovation.