March 29, 2020

Crises Create Opportunities – If You Embrace a Smarter Approach

Innovation Prototype

4 minute read

Crises drive hard realities, and most innovation leaders will share the hard reality of budget and headcount cuts. Yet, crises also drive change, which creates opportunity – making innovation more important than ever. With greater importance, yet fewer resources, now is the time to lean into a smarter approach to drive growth via innovation – an approach that brings together the “fast-cycle learning and adapting” of an entrepreneur with the big-company “focus on what matters most” to business success.

We effectively used this smarter approach with our clients during the 2008 financial crisis, which delivered strong results, despite constrained resources. We continue to practice this smarter approach and here’s what we’ve learned from that experience – that we think can help you now:

Embrace budget constraints as an opportunity to sharpen your focus. Most companies faced a budget and headcount reduction in 2008, but the winners used it as an opportunity force their company to get better clarity on where to compete, which ideas/technologies to prioritize, and how to most effectively launch a new product. Rising financial pressures will require smarter decisions because companies will have less margin of safety to make mistakes. Now is the time to “measure twice, and cut once” and a sharpened focus will help tremendously. (For more inspiration on embracing constraints to spur creativity and innovation, watch this video from the challenger-thinking experts at Eat Big Fish.)

“We were late to the game in a key emerging category in Europe. Frehner-Jens built a range of business approaches that enabled our country managers to successfully enter this category, despite constrained resources, resulting in significant business growth.”
– Rishi Daing, VP Innovation, PepsiCo

Quantify which activities matter most to business success to make your innovation team more productive. Because innovation is focused on a future which isn’t certain, it’s not an exact science. However, this doesn’t mean you should simply “go with your gut” and ignore the best available data/information. What is the size (consumers, spending, and profit potential) of the categories or territories being targeted? What’s the revenue potential, strategic fit, and right to succeed for each initiative to be prioritize within our pipeline? What’s the profit maximizing blueprint to turn an idea or technology into a new business – and which activities within that blueprint will have the biggest impact on success? Real clarity on these questions will drive the focus required to make an impact despite having fewer people and smaller budgets.

Prototype to enable fast-cycle learning and adapting on what matters most – a critical advantage, especially in fast changing markets. Companies that can “learn and adapt” faster have always had the advantage. Yet, this advantage is significantly more important in turbulent times. The key is to focus your “learning and adapting” on the few activities that matter most to business success. We’ve found prototyping to be an indispensable tool in doing this as it overtly connects activities (which require investment) to expected performance (which delivers a return). Importantly, this prototype-driven learning and adapting enables a team to make pivots before launching into the market which is an order of magnitude faster and cheaper than pivoting once in market.

Instead of trying to predict the future, create a range of scenarios to be better prepared for how the future unfolds. Anticipating the unmet needs of your customers over the next 1-3 years is critical. Yet, this is difficult to predict in stable times – much less in disruptive ones. With organizations having many competing voices with different views of how the future will unfold, the most effective companies capture all the competing viewpoints and then build blueprints for to succeed in each scenario. This shifts the focus from debating whose prediction is right to preparing for EACH of the potential scenarios, enabling a commercialization team to more quickly capitalize on the opportunities as they unfold.

While the world may be changing rapidly, the importance of delivering products and services of superior value to your customers hasn’t changed. The innovation leaders that are the most effective at doing this within the realities of fewer people and smaller budgets will emerge as the winners in the post COVID-19 market. Crises create opportunities – embracing a smarter approach to driving growth through innovation will help you turn this opportunity into a reality.

Key Points:

• Crises drive hard realities, but, they also drive change and opportunity.
• Innovation is more important than ever to successfully adapt to a COVID-19 disrupted world.
• Given the realities of smaller budgets and reduced headcounts, innovation leaders need to embrace a smarter approach centered on: a) sharpened focus, b) better clarity on what drives business success, and c) the ability to learn and adapt faster than ever.