HP Innovation Journal Issue 15: Summer 2020 | Page 22

THOUGHT LEADER: POST-COVID ERA
8
STEPS COMPANIES
CAN TAKE NOW
1 / 4 /
EXPECT CHANGE
AND LOOK AHEAD
Organizations
tend to become myopic
and insular when under
threat. But crises often
mark strategic inflection
points, and a necessary
focus on the present
should not crowd out
consideration of the future.
The key questions become:
what next, and with
what consequences and
opportunities?
2 /
UNDERSTAND
BROADER SOCIAL
SHIFTS
Addressable opportunities
are often born out of
new customer needs and
frustrations, so listening to
customers is vital. However,
traditional surveys only
tell you about existing
product and category
needs and uses; consumers
may not be explicitly
aware of their emerging
needs. Companies need
to look more broadly at
how social attitudes are
shifting, to understand
which observed changes in
behavior and consumption
could be lasting. For
example, if leaders’
and workers’ attitudes
toward remote working
shift after a few months
of experiencing it, that
could have significant
consequences for office
equipment, office real
estate, home remodeling,
transportation, and other
sectors and segments.
3 /
SCRUTINIZE
GRANULAR, HIGH-
FREQUENCY DATA
Aggregates, averages, and
episodic statistical data will
not reveal the weak signals
of change. Companies
need to access and analyze
high-frequency data, such
as data on credit card
transactions, at a very
granular level in order to
spot emerging trends.
IDENTIFY YOUR
OWN REVEALED
WEAKNESSES
The crisis will undoubtedly
expose needs for greater
preparedness, resilience,
agility, or leanness
in different parts of
your company. Those
weaknesses also signal
opportunities to renew
your products and business
model and serve customers
better. They may also
help you to understand
broader customer needs,
since others are likely to
be experiencing similar
stresses.
5 /
STUDY REGIONS
FURTHER AHEAD
IN THE CRISIS
China and Korea are
many weeks ahead of
Western countries in their
experience of crisis and
recovery. By studying what
happened in these markets,
leaders can better predict
which changes are likely to
stick or could be shaped. A
geographical fast-follower
strategy may be available
to agile players.
6 /
SCAN FOR
MAVERICK
ACTIVITY
Some companies, often
smaller players on the
edges of your industry, will
be making bets predicated
on new customer needs
or behavioral patterns.
Ask yourself, who are
these mavericks, and
which potential branches
and leaves on the tree of
possible shifts are they
betting on? Are those bets
gaining traction? What are
you missing? From there,
you can decide on the
appropriate response to
each opportunity or threat:
“ignore,” “investigate
further,” “create an
option to play,” “replicate
and exceed,” “buy the
maverick,” or “act with
high priority.”
7 /
LOOK AT WHICH
NEW PATTERNS
REDUCE FRICTION
Frictions are unnecessary
delays, costs, complexities,
mismatches with needs, or
other inconveniences that
a customer experiences in
using a particular offering.
Forced habits that entail
more friction than the
traditional alternative are
likely to be temporary:
We may be forced to eat
only canned food from our
pantries in a crisis, but
many are likely to return
promptly to consuming
fresh food when it is over.
On the other hand, forced
habits that reduce friction
are more likely to stick:
How many of us relish the
thought of carving out a
couple of hours each day
to reach our workplaces?
High-friction areas are also
ones where it is logical for
mavericks to innovate and
where they are more likely
to succeed.
8 /
MAINTAIN HOPE
AND A GROWTH
ORIENTATION
It’s almost inevitable that
we will face a deep postcrisis
recession. This is
not a reason to postpone
innovation and investment.
Counterintuitively, 14%
of companies grew both
their top and bottom lines
during recent economic
downturns, and our
analysis shows they create
value mainly through
differential growth.
This is true across all
industries. The evidence
is clear: The best time
to grow differentially is
when aggregate growth
is low. “Flourishers” in a
downturn do reduce costs
to maintain viability, but
they also innovate around
new opportunities, and
they reinvest in future
growth pillars in order to
capture opportunity in
adversity and shape the
post-crisis future.
Societal crises can also have lasting
effects on consumption patterns. For
example, the 2003 SARS outbreak in
China changed attitudes toward shopping:
Because many people were afraid to go
outside, they turned to online retail.
Though the crisis was short-lived, many
consumers continued to use ecommerce
channels afterward, paving the way for the
rise of Alibaba and other digital giants.³
How will COVID-19 shift
beliefs and behaviors?
Lasting shifts in social attitudes, policy,
work, and consumption will likely also
emerge from the COVID-19 pandemic.
It’s hard to predict precisely how it will
shape our perspectives on society, but it’s
plausible that we could see a greater focus
on crisis preparedness, systems resilience,
social inequality, social solidarity, and
access to healthcare. It’s also easy to see
how the crisis could accelerate nationalistic
tendencies, and some commentators
are already talking about the possibility of
a “great decoupling” of international interdependencies.
At an individual level, it’s
also possible that we may adjust how we
view the balance between work and family
life, having been reminded of what is truly
important to us.
These attitudinal shifts could in turn
be reflected in significant policy shifts in
many areas, including trade, border controls,
healthcare, crisis preparedness,
foreign affairs, employment, and social
welfare. National security agencies are
already drawing analogies between COVID-
19 and cyber warfare, and rethinking and
bolstering cyber defenses as a result. The
pandemic could also shape national politics,
as citizens judge the effectiveness of
their governments’ responses.
Attitudes, policies, and the direct experience
of the pandemic are already changing
how we work, including greater emphasis
on remote working, digital collaboration,
workplace hygiene, and protections for temporary
workers, for example.
And we can already see significant shockdriven
shifts in purchasing patterns in our
analysis of credit card activity for hundreds
of thousands of consumers. For example,
spending on food delivery, DIY materials,
and online shopping through Amazon has
INNOVATION/ SUMMER 2020
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