We often talk about the role of innovation in an age of constant, radical disruption, as defined by the 4th industrial revolution. But in this new environment, where there are winners, there are also losers. So what happens when an organization is experiencing a time of crisis? What role do innovation leaders play and how can their programs drive value in a period where an organization is in distress?
The reality is that established, mature organizations are increasingly going to be facing instability as new competitors enter their markets, technology drives competition, and customers’ needs shift. As Rita Gunther McGrath says, “Your competition isn’t just the company down the street any longer; it’s companies from anywhere in the world.” Alternatively, incumbents can face disruption from government agencies. On a recent trip to Australia, I saw that the banking sector is facing a brutal Royal Commission (equivalent to a Congressional Hearing) that is not only creating terrible press, but also driving leadership change.
For innovation leaders, a time of crisis can be an existential threat to your efforts, or a real opportunity to create value and define solutions to help the organization effectively navigate the rough terrain. Here are some actions that innovation leaders can take to drive value:
Provide strategic context: When dealing with a crisis there is no shortage of finger-pointing and immediate demands facing leadership. However, where appropriate, innovation professionals should use this as an opportunity to educate leaders on the broader business and societal changes that may have contributed to the current scenario. For example, a PR crisis brought on by a product defect may be a result of a shift in power to consumers (based on expanding social media trends), or something to do with changing distribution channels/customer disintermediation.
- This context setting effort does not have to be limited to leadership. The education process can be rolled out broadly to get the whole organization, and even external partners, up to speed on the changing environment that contributed to the current crisis situation.
- Of course, just educating a broader audience is not enough, and needs to be paired with actions that point to a resolution being developed over time.
Develop responses: Innovation professionals should already have a range of channels, approaches, and people to source and develop new ideas. These resources should be directed to source ideas that resolve the immediate situation and/or position the organizations more positively for future disruption.
- Given that these resources are already in place, they should be able to mobilize quickly and in a manner that dynamically responds to the situation.
- Innovation leaders should also examine their existing pipeline of ideas, and reassess them in the context of the crisis
- Given the pressure of a crisis environment, it’s often best to focus on quick wins, as a way to provide an immediate response
- Should an organization have a tiered innovation-focused employee engagement model, the most actively engaged employees should be directed to develop solutions, as they may be the ones most inclined to drive change.
Communicate early and often: I have written in the past about the increasing importance of innovation-focused communications, given the ability to scale impact, inspire behavior change and support the development of ideas. During times of crisis, or soon after, corporate leadership will be looking for positive messages to help offset the negative mood that may be spreading across the organization. Timing and tone in this situation is everything, but messaging around innovative behavior and positive results can be a great way to help reset the message of crisis around an organization, especially once the initial heat of the crisis has waned.
- It is important to note that these communication efforts should extend to both internal and external audiences.
A focus on social innovation: In extended times of crisis, I have recently noted that a number of innovation leaders are emphasizing their social impact goals. Sure, the cynical side of me cringes a little when I hear of these efforts, but the reality is that positive outcomes are being generated and they often focus on marginalized communities.
- This can be extended to developing a social mission at the heart of the organization, around which all functions and processes should align. Coming out of a crisis, an organization may want to consider how they add value to society and avoid crisis situations going forward.
Assess/reorient innovation ecosystem: To encourage a more external-facing experimental culture, innovation leaders have been building ecosystems of vendors. At the least, innovation leaders need to assess these vendors and understand their role or position in relation to the crisis, and make adjustments as needed. As a crisis unfolds, the scope, type, and role of vendors may change.
Manage / Reassess Risks: During a time of crisis the last thing that an innovation leader wants to do is add fuel to the fire, so be sure to go through and assess all of your activities and resulting ideas against the quickly changing environment, and ensure that there are no additional risks that could exacerbate the situation.
The new age of constant disruption is only just kicking in, and as a result, crisis management is becoming a more common occurrence for organizations. It’s essential that corporate innovation leaders play an active role in resolving these situations and positioning the organization to be more flexible, responsive and socially oriented over time. Some may view this is a challenge, but I see it as a key opportunity for innovation leaders to step up and position themselves as adding value, where and when it’s needed most.