- New opportunities and business models are emerging in the wake of COVID-19 for those that are ready;
- Adopting a serendipity mindset can help leaders and businesses take advantage of this unpredictable time;
- Providing a sense of direction while preparing for uncertainty, as well as looking at how the situation should shape corporate culture, are two approaches businesses can take.
COVID-19 and the related economic turmoil has put a strain on businesses around the world and poses an existential threat for many enterprises. How can companies navigate this uncertainty and turn unpredictability into resourceful innovation and “smart luck”?
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Against the backdrop of a pandemic that has changed the course of daily life and exacerbated inequalities, we are witnessing people and businesses embrace the unexpected in creative ways. Instead of shutting down, some distilleries started producing alcohol-based hand sanitizer at an affordable price; snow cannon businesses began producing disinfection cannons for large open spaces; and swimsuit businesses started selling healthy food via e-commerce. New opportunities and business models are emerging for those that are ready.
My decade-long research on leading companies and CEOs, incubators and social enterprises has shown that the world’s most inspiring leaders have developed – often subconsciously – a muscle for the unexpected that helps them to unleash creativity and resourcefulness and drive impact especially in times of uncertainty. They create their own “smart luck” by spotting and connecting the dots. What steps can we take to benefit from this serendipity mindset in our own business?
1) Give a sense of direction while being ready for the unexpected. Why are we here and why should people care? Effective leaders, especially in times of crisis, often combine a sense of direction with a deep awareness that they cannot control, let alone predict, the future. Companies often identify this sense of direction by reconnecting with and modernizing their legacy and/or linking their capabilities to the current crisis or broader frameworks such as the SDGs. Recent research on incubators has shown that this openness to the unexpected is particularly important for early stage enterprises.
2) Reframe. Reframing is about looking at a situation – and our capabilities – differently. A designer brand might realize that it can produce and sell stylish masks and gowns, while artists who had their performances cancelled due to COVID-19 can start capturing new audiences by teaching an instrument online. For larger companies, spotting these emerging opportunities often requires structural change. Take the example of a multinational company organized in business units around particular solutions or technologies like tomography. This limits our thinking to everything related to improving tomography. If we instead broaden the business unit to be about precision diagnostics, it’s not about a particular product or technology anymore but about a broader problem that needs to be solved and real innovation becomes more likely.
3) Take advantage of the unexpected to shape operations and corporate culture. In a fast-changing world, often unexpected solutions to challenges emerge of which we need to make sense. IKEA producing wind farms or Mahindra & Mahindra operating effective waste-to-energy projects was not pre-planned – these solutions emerged unexpectedly. These companies’ leaders realized that the unexpected can be an opportunity rather than a threat and it helped them shape their companies’ operations and culture. This is particularly pertinent in moments of crisis: in the case of Best Buy, its response to a hurricane – when the company treated employees as a family, organizing food, water and private planes – ultimately led to a substantial increase in customer loyalty and employee productivity.
4) Place and elevate bets. Enlightened leaders increasingly “place bets” in a number of ways, including by developing “micro-enterprise” models in which employees are being encouraged to leverage company resources to spot and develop new ideas. Investment committees then bet on the most promising ones. At Chinese company Haier this included a potato washing machine, which emerged out of the unexpected observation that farmers used washing machines to wash their potatoes. Innovation then is not something that is limited to a small number of people – it is the job of everyone in the company to identify potential opportunities that help the company survive.
5) Cultivate serendipity-spotting. Alertness is crucial to notice unexpected events and turn them into innovation. Some companies have integrated practices such as asking team members in the weekly meeting if they came across something surprising last week and, if so, did it change their assumptions? But if we want our employees to come up with new insights or ideas, we need to “de-risk” the process of voicing them. We can learn from companies such as Pixar, where, in meetings, executives highlight that most ideas are bad at the beginning. Then, “imperfect” ideas, solutions or processes are used as ways of continuous learning.
What is the World Economic Forum doing about the coronavirus outbreak?
Responding to the COVID-19 pandemic requires global cooperation among governments, international organizations and the business community, which is at the centre of the World Economic Forum’s mission as the International Organization for Public-Private Cooperation.
Since its launch on 11 March, the Forum’s COVID Action Platform has brought together 1,667 stakeholders from 1,106 businesses and organizations to mitigate the risk and impact of the unprecedented global health emergency that is COVID-19.
The platform is created with the support of the World Health Organization and is open to all businesses and industry groups, as well as other stakeholders, aiming to integrate and inform joint action.
As an organization, the Forum has a track record of supporting efforts to contain epidemics. In 2017, at our Annual Meeting, the Coalition for Epidemic Preparedness Innovations (CEPI) was launched – bringing together experts from government, business, health, academia and civil society to accelerate the development of vaccines. CEPI is currently supporting the race to develop a vaccine against this strand of the coronavirus.
6) Provide a sense of belonging. Companies are often the most important place for people to socialize. In a physically-distanced, COVID-19 world, this needs to be emulated virtually. This can include “random lunches”, in which strangers within the organization are randomly matched and prompted to discuss inspiring questions. This can also lead to new insights and perspectives.
Our reaction to the unexpected and crises such as COVID-19 often defines who we are. In the spirit of Viktor Frankl, there is a space between stimulus and response and, in this space, is our power to choose. How we choose can be the difference between innovation and demise.