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Innovation and the new opportunities of post-covid19 or the “new reality”.

The current crisis has caught us all completely off guard because of its nature, its sheer scope and intensity. The virus or the lockdown concept weren’t contemplated in the majority of companies’ risk prevention scenarios. This has created a great upheaval in the market and in society in a very short period of time and the recovery will be progressive and will require us to adapt to a new state of affairs. The post-Covid19 paradigm or the “new reality”. This new reality forces us, at least for many months ahead, to run our companies differently and calls for an unprecedentedly swift adaptation to the market and the changing environment. 

Managing the crisis entails various stages. Once the company’s survival has been assured, following the initial impact, we need to think about how to generate value and pick up on the opportunities that the post-covd19 scenario presents. Innovation and change management, and transformation are an essential part of this response. 

We are witnessing, amidst the covid19 crisis, how organisations are being forced to quickly adapt and address change. To innovate speedily, radically and relevantly so as to limit contingencies. This is no easy undertaking, regardless of how many years we have been talking about innovation, digitalization and transformation. 

Some companies are proactively addressing the current crisis and the “new normality” paradigm, by applying innovative solutions which can be grouped into four areas: 

  • Addressing customers’ needs
  • Promoting new ways or channels for reaching customers
  • Rethinking the supply and logistics chain
  • Integrating new ways of working

Let us now look into each of these in more detail:

Addressing customers’ needs. New needs and behaviors are arising in both B2C and B2B in response to “the new normality”. We need to keep in mind that, according to some sources, “45% [of surveyed consumers] think that COVID 19’s economic impact will be long-lasting[1]” After the crisis, Asia has witnessed a boom in new purification and disinfection systems with sales increasing tenfold[2]. For example, sales of sanitization, prevention and healthcare products are surging. Many businesses that provide services directly to customers (such as retail stores, hairdressers’ and dentists) clearly see the need for prevention, disinfection, maintenance and of sanitized environment certification, and this is opening up new opportunities.  One example of this is the “Healthy Space Guarantee” concept by Plexus Tech. We are also seeing many initiatives involving body temperature scanners, such as those integrated in taxi and limousine transport systems, or Grupo Control’s temperature detection access control system. Understanding the insights and needs of customers and offering them new relevant solutions. Generally speaking we need to understand how customer and consumer needs are changing. What will the post-Covid19 consumer be like? Which trends will take over? The challenge is to understand what these new customer needs are and how we can address them in a relevant way. This entails implementing a customer centered innovation approach, what is known as customer centricity. 

Promoting new ways or channels for reaching customers. With this crisis many traditional channels, especially physical or retail, have been jeopardized. The way we purchase is likely to change significantly, as it has in other crises[3]. In the present case, we will see sustained growth in online channels with purchasers becoming more omnichannel and mobile phones taking on greater protagonism. In actual fact, we have already been witnessing robust growth in e-commerce and digital channels, in part due to the incorporation of new users. Small companies can also find business opportunities here by collaborating with sales portals, as is the case of the small appliance repair workshops that work with Back Market. In this new state of affairs, many companies are looking for new ways to continue to reach customers or maintain a commercial relationship with them. Hence, upmarket cosmetics and beauty care companies, which previously sold their products through cosmetics and beautician stores, are now allying with the latter to reach their customer database via new channels. Restaurants too “must work on a new business model, step outside their comfort zone and rethink their value proposition”[4]. One way is by trying to take advantage of the surge in home deliveries, which have risen 27% during the lockdown. The culture world is also seeking out new ways and channels to connect with audiences. One interesting initiative in this respect is StayHomas, a music band that was formed during the lockdown and that has become famous on social networks. Michael Buble has just recorded an adaptation of one of their songs. We are also seeing some artists promoting the masterclass format, and the purchase of previously recorded performances in streaming such as Soho Theatre of London. The recent initiatives by bookshops and florists for celebrating Sant Jordi in Catalonia are yet another example. Logically, those who had already developed this communication and sales channel with their target clearly found themselves in an advantaged position in the new state of affairs, as was the case of Damis Gelabert with their music for children. The challenge is how can we continue to reach our customers via new channels or alliances.  This is something that many companies have been looking into and working on for some time now but this new state of affairs may give them the definitive push. 

Rethinking the supply and logistics chain. The new reality is forcing some companies to rethink their supply chain, their suppliers policy, and to become more agile. We have seen how some companies have focused on gaining flexibility and following their customers more closely. For example, in Asia, some food manufacturers have continuously followed the plans of their customers’ stores and were able to adapt their supply chain in a more flexible way so as to better serve the stores that would reopen after the lockdown, thus gaining a competitive edge on their competitors. On the other hand, concentrating manufacturing in far away locations in order to obtain greater cost efficiency has proved to be a model that entails many risks. The impact is great on a world scale, affecting 94% of companies on the Fortune 1000 index, and this has created shortages in many sectors[6]. As a result, some companies are applying innovation and creativity to rethinking their logistics chain. The paradigm is changing. Undoubtedly, the cost factor is still important, but now, securing the supply chain, speed of delivery and the ability to react and innovate rapidly are becoming increasingly more relevant considerations. In some cases the transport model is being changed. Other companies are diversifying suppliers or seeking out alternative locations which are geographically closer and with a greater response capacity. We are also seeing a rise in the use of new technologies -IoT, advanced robotics, analytics and big data- and platforms to anticipate and gain transparency in supply chain management, accelerating the evolution towards Supply Chain 4.0. The challenge here is to define what the new supply chain model should be like in order to address the post covid19 paradigm. From what we are seeing, taking an innovative, agile and holistic approach to addressing the challenge is key to coming up with an appropriate response. 

Integrating new forms of working. This is one of the areas where we are witnessing a widespread and massive transformation caused by the coronavirus crisis. This encompasses the way of working of teams, leadership and change management. In the space of a few days teleworking or remote working has changed the way many companies operate. A clear example of this is the recent massive surge in popularity of platforms such as Slag, Zoom or the more recent Microsoft Teams [7]. And this presents challenges for organisations that arise from how they can rapidly adapt to the new remote, distributed, non presential, network and digital support work models. This forced adaptation to the digital environment is bringing about very intense change management and transformation.  As Jason Fried points out in his book Remote, organizations will progress towards collaboration, remote, disseminated and “more entrepreneurial” modes. Many companies are working out how to get the whole organisation to react effectively to this new state of affairs. How can we incentivize teams to define innovative solutions and react to this disruption, working remotely and dispersed? In practice, we have seen different levels of response within teams. Some are more outgoing and proactive, and others are more reactive, passive or are simply overwhelmed.  The challenge here is how we can incentivize teams to experiment, try out, validate and roll out innovation solutions effectively.   How can we set up exploration and quick trial teams in a remote environment?  This is where entrepreneurial, VUCA environment management and lean Startup approaches can prove to be of great use. 

In the same way as the 2008 downturn brought about innovation in the financial sector and the Fintech explosion, the Covid19 crisis is very likely to bring about innovation in healthcare and lead to the adoption of solutions put forward by startups in HealthTech and DigitalHealth.

Healthcare deserves special mention here. Although it is a specific sector and field, we include it because it is at the heart of the crisis, constituting a clear opportunity for many companies in that it is generating a great diversity of responses. The pharmaceutical and healthcare industry is making enormous efforts to come up with effective solutions and treatments for this disease. In many cases this takes the form of an innovation approach centered on R&D for coming up with vaccines and drugs. But we are also seeing innovation in new approaches to treatments using new technologies such as Big Data and Artificial Intelligence as well as collaboration initiatives for developing and organizing supply chains. Some examples are the alliance between Sanofi and GSK for the development of a new vaccine, or Grifols’ approach, stemming from its expertise in blood plasma products. There have also been significant developments in the deployment of new technologies to manage the pandemic, such as the initiatives in South Korea[8] and Israel. The question here is how can our company come up with quick solutions to the prevention and treatment of the disease. A challenge that many companies related to the health sector are already working on and that can also open up business opportunities to adjacent companies or even companies that may be not related to the health sector at all, such as textile, digital or industrial companies. An interesting example of this opportunity for “non-traditional” healthcare sectors is the case of the disinfection arch for vehicles and PPEs developed by Istobal, the robot by the Danish company, Blue Ocean Robotics, the launch of a reusable face mask  by the manufacturer Playmobil, not to mention, the announcement of an association between Apple & Google to create a contact tracing app for Covid-19.

Undoubtedly, innovation is a part of the response to the crisis and “the new reality”. The paradigm change and value creation can only been achieved with new approaches. Novel products and services for new solutions. New ways of reaching the customer. New ways of working. 

All this demands an approach, which Connociam has been applying and helping others to put into practice for many years now. Over recent years we have completed over 300 innovation projects with national and international companies in different sectors and countries. And this puts us in a position to help others to address the challenges of the post-covid19 era in a very concrete and fine tuned fashion, because this crisis requires working innovatively and cooperatively to forge ahead. 

At Connociam we understand the needs of clients. We help to unravel the complexity of disruptive situations such as the current one. We build innovative responses and design effective solutions that generate value and growth. We support teams in solving their strategic transformation challenges so as to innovate more and better.

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