Exploring Key Areas for Business Innovation in Uncertain Times

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The pandemic has led to economic recessions and financial hardship all over the world. People have lost jobs while businesses have closed. Yet some entrepreneurs and leaders have managed to steer a course to survive amid such turmoil.

While every organization charts its own unique route to success during uncertain times, all of them will have one thing in common. They recognize the need to change and act upon it. Instead of resting on past glories and conventional best practices, they will innovate to do better now that many assumptions have been overturned.

Finding the right business model is like the inverse of a breakup. It’s easy to get divorce papers online, but the fallout is invariably messy. Business innovation puts the mess upfront, but once you get it right, you can move forward smoothly.

How can today’s entrepreneurs explore and execute on the potential for change to lead to greater success?

Evaluating your “why”

An aggregate study of 219 papers from 2010 to 2016 indicates that modern businesses innovate through experimentation. They embrace disruption, particularly in four major areas.

Perhaps the most obvious starting point for innovation lies in the business value proposition itself. This is the answer to the question: why does the consumer choose your company, or your products, over others? What are the needs you are satisfying for a given consumer segment?

When pursuing this approach, businesses can learn from the agile methodology that’s widely used in software development. It’s tough to pivot when you inevitably rely a bit on trial and error to see what works.

Agile organizations use the concept of a minimum viable product (MVP) to quickly develop and test something in an uncertain market. If you can’t rely on old assumptions anymore, at least cut down on the time, effort, and resources invested as you figure out the new reality on the fly.

Changing your operations

Another opportunity for innovation can come from reviewing and adjusting the way a business operates. In today’s globalized and highly networked world, every company relies on key activities and third parties. Disruptions caused by the pandemic can have a ripple effect that undermines your operations unless you adjust.

Each business has its own unique relationships and needs to be fulfilled by its partners. In general, the pandemic highlighted the risks of just-in-time models of production and outsourced manufacturing. By going over your supply chain, you can spot vulnerabilities, inefficiencies, or cost drivers.

In the long term, the driving theme along these lines will be sustainability. Businesses have been pushing up against different types of resource limits. A global crisis should emphasize the need to rethink how we operate, measured against thresholds linked to economic, environmental, and societal resources.

Working with people

Yet another angle businesses can take towards innovation involves addressing the ‘who’ of your organization. In a time of change, individual talent can have a huge impact on collective performance.

This is often related to other elements of innovation. Organizations seeking to be agile, for instance, can encounter difficulties when their people are too inflexible and procedure-bound. They may also struggle to recognize opportunities to streamline operations or seek alternatives.

You need to rely on people, not just to perform their individual roles, but to challenge old rules and assumptions. In a time of disruption, employers can address this need by tapping into a global talent pool. The tools that have enabled the rise of remote work also allow us to collaborate with professionals with diverse skills and backgrounds who can envision the necessary changes.

Revising financial assumptions

Most people change their spending patterns in a downturn, which negatively affects businesses in the financial aspect. While every entrepreneur recognizes this, not everyone sees it as an opportunity to innovate.

Certain financial assumptions are attached to each phase of a business’s lifespan. Using a transient method of net present value (NPV), you can analyze cash flows appropriate to investments or projects launched in volatile, rapidly changing situations.

A bare-bones NPV analysis is a vital tool for any organization amid today’s pandemic-stricken environment. You can’t be held back by hesitancy if the numbers show that a new initiative can drive your results. On the other hand, it can help you realize that some projects might need to be scaled down without necessarily shelving or delaying them.

In past years, many businesses have found success in one or more of these routes for innovation. Exploring them can be your way out of a difficult situation, sustaining you through potentially more uncertain times ahead.

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