It was in 1928 that the modern jet engine and penicillin were invented. However, these innovations came into global use only during the second world war. Some of the most common things we use today like stainless steel, zippers, kleenex and pilates exercise were spin-offs of efforts made during the first world war.
Many think tanks across the world credit the spike in the industrial revolution to world war one and the computer revolution to the second world war. Today’s smart devices are Turing machines that evolved after a global crisis and have the potential to transform any business in a short time.
The last economic crisis in 2008-09 also resulted in some innovations. Startups like Uber, Airbnb, Glassdoor, Square etc. were founded during that time and became successful in a short period of time. It is also observed that the years 2008 and 2009 saw the most number of companies founded in the US that have over $100 million in funding today.
Undoubtedly, Covid-19 has pushed us into a global crisis. Today, deaths climb daily around the world while the global economy continues to plummet. I am optimistic that once again, the crisis can transform innovations and lead to a better future.
Speed is the key
Our interactions with various innovation leads and strategic decision-makers have clearly indicated that the Covid-19 crisis has upended the roadmap and strategic actions for corporations. It has also precipitated investments and digitalisation by the companies. Gartner’s latest survey has also suggested that decision-makers should be aggressive about seeking open innovation and must expect their competition to do likewise.
Embracing open innovation is inevitable as planning in the volatile environment is not easy.
Many corporate strategies today can be segmented into the following three phases:
- Business continuity: Use ‘costavation’ (innovation to cut costs) to reduce opex and increase focus on running a profitable business with core skill sets.
- Work with the virus: Create processes to empower our resources to dodge the effects of the virus and help corporations survive.
- Welcome the new normal: Strategise and adopt business models to generate revenue and create a significant role for the corporations in their domain.
Corporations today cannot afford to have inertia and expect their consumers to behave the same as pre-Covid 19 times. Agile businesses will rise and find more avenues than before to serve their customers. However, transformation at lightning speed for a big organisation is an arduous task with legacy processes and models at the back-end.
Why companies should look for innovation in the startup ecosystem?
Big corporations have suffered the most during the pandemic, as they operate with higher capital expenditure and are spread across geographies. Global corporations are slow to respond to the varied effects of the pandemic in different locations. The imperative for a leaner, more agile structure and an ability to pivot quickly is now directing innovation strategy leaders to look towards startups.
- Shorter learning curves: Research organisations and startup entrepreneurs across the world are continually experimenting with new approaches to deliver products, services and experiences. Now it’s time for big corporations to learn from entrepreneurs instead of reinventing the wheel.
- Asset-light models: The higher adoption of technology has resulted in lower dependence on human capital for startups. This phenomenon has given rise to aggregation models and low-touch asset-light models. Joining hands with these organisations will certainly revolutionise the current business models of big companies.
- Fail-fast attitude: The agile approach of startups gives them the flexibility to conduct experiments and pivot with minimum damage. This ability can be used by big companies to explore the finer nuances of customer behaviour and adopt the best approach for rapid success.
- Quicker implementation: Successful startup founding teams are subject matter experts in their domain. Additionally, flat structures enable quick decisions and swift implementation. This advantage needs to be leveraged by transformation leaders in the corporate world for a successful future.
Corporations and big businesses that are dealing with the impact of Covid-19, recognise the urgent need for transformation to successfully cater to customers in the new normal.
Corporations in this new “digital-first” and “low contact” paradigm must quickly adopt new market innovations. Undoubtedly, collaborating with startups working with emerging technologies will be a sustainable and forward-looking step in the right direction.
Rama Iyer is the chief innovation officer at T-Hub. The views expressed in this article are his own.