Innovation and recovery after the Covid-19 crisis
In this article Jordan Bar Am, Felicitas Jorge, Laura Furstenthal and Erik Roth from Mckinsey explain why innovation will be essential to take advantage of the opportunities that will emerge from the Covid-19 crisis, and provide recommendations on the best innovation practices to help companies to emerge as leaders from this crisis.
According to a survey conducted by Mckinsey of more than 200 companies “more than 90 percent of executives said they expect the fallout from Covid-19 to fundamentally change the way they do business over the next five years, with almost as many asserting that the crisis will have a lasting impact on their customers needs”.
In this context the same survey reveals that investments in innovation have lost relevance during this crisis as “executives will return to innovation-related initiatives once the world has stabilized, the core business is secure, and the path forward is clearer”. Exception to this decline in focus on innovation would be pharmaceutical and medical products companies.
Contrary to this situation the authors offer eight recommendations for applying best practices and continuing to invest in innovation “to emerge as leaders from this crisis” as they found that “history suggest that companies that invest in innovation through a crisis outperform peers during the recovery” (companies that invested in innovation during the 2009 financial crisis outperformed S&P 500 index by more than 30 percent in the later period).
Innovation would allow to take advantage of the opportunities that arise in every crisis in the form of new business model, new client expectations, new market realities… In this regard the Covid-19 crisis has been very disruptive, exacerbating the digitalization of companies and clients “causing barriers that once took years to overcome to evaporate in a matter of days” and making innovation even more essential that it was “to prepare companies to return to growth coming out of the crisis”.