The Impact of Covid-19 on Innovation

The disruptive impace of Covid-10, image showing a fractured lightbulb.

Following up on SmartOrg’s survey on the impact of Covid-19 on Innovation, I facilitated a series of small group discussions on how Covid-19 is disrupting innovation and what can be done about it. While it is an admittedly small and somewhat haphazard sample, it represents the perspective of innovation leaders from industries ranging from food to materials to industrial equipment to healthcare to agriculture. Two major themes emerged, shared here.

Maintaining intent to innovate while stopping innovation projects.

First, the survey results showed that 75% of companies were finding resource allocation to innovation disrupted. We followed up to find out what was going on.

The companies we talked to are all maintaining their strategic intent around innovation, but most are also being forced to stop projects.  Several variations:

  1. Cost pressure is creating cuts. This is pretty straightforward, the company needs to squeeze costs and R&D is giving its share. In our conversations, these reductions were typically modest, maybe 10-15%. For these cases, so far, efforts are being made to keep innovation alive.
  2. New opportunities are displacing current ones. Companies involved in the Covid-19 battle, like PPE suppliers, are overwhelmed. R&D resources are being pulled into these immediate opportunities, pausing longer-term investments, or things that aren’t crucial now. These displaced projects may or may not come back.
  3. The lack of critical resources, capabilities, or partners is causing cancellation or delay in projects. For example, the closure of testing labs, limited ability to get customer feedback, or financially weak partners are invoking force majeure in contracts.

In all these cases, companies are taking the opportunity to reconsider the focus of their innovation portfolio. Many see it as an opportunity to cull weaker projects. They are also looking to the future, wondering which projects are going to be the most valuable post-Covid-19.

Innovating innovation in a remote work reality

Second, 75% of survey participants also said that their ability to execute innovation was being disrupted. In the follow-up, everyone reported developing ways to continue innovation work remotely. Some obvious and not so obvious approaches:

  1. One food company said they were continuing product development at home, literally. R&D staff were using their home kitchens to do recipe experimentation.
  2. A materials company said it was using its labs globally, shifting critical testing work to locations that have some ability to operate.
  3. An in-home hospice organization is looking into using drones to deliver medical supplies from the balcony of their central office to the cars below of in-house caregivers, maintaining separation.
  4. Everyone is discovering that internet conferencing can improve productivity. For example, one open-innovation person said he was now attending more pitch meetings in more locations because there was no longer an expectation of showing up physically.
  5. Some companies are redefining work to optimize for the online experience using new tools, rather than as a bolt-on to physical interaction. For example, SmartOrg has been working to deliver its in-person workshops (on portfolio management and innovation) in online, highly-interactive 90-minute chunks.

If you have versions of these themes or new themes you have experienced, I welcome them in the comments. Let’s collaborate remotely right here!

The end of the beginning…

As I write this article, Covid-19 might be getting under control. My wife works at Stanford as a data scientist in the emergency department and reports: “Social distancing is working. We’ve prevented the surge in cases the hospital was dreading.” So now what?

We seem to have managed, more or less, the transition to a socially distanced world. The innovators I talked to are putting their minds to the future. They are beginning to wonder what the post-Covid-19 world will look like and how to navigate to prosperity in that world: What innovation projects now will help their companies grow then?

To that end, SmartOrg is offering a free, 90-minute interactive online assessment of your portfolio overall or specific innovation opportunity (using our innovation #5 above).  Please email me directly if you are interested.