Going into the fourth global economic crisis of my twenty-odd year career, for some reason, I feel more comfortable with the idea that the world will be forced to embrace new models of operation without undermining the collateral damage that these shifts usually produce.
This has been especially true in the last 5 years, when I have worked more on structures for scaling innovation rather than actually building innovation, where it has felt like most organisation's initiatives have been a part of the so-called "innovation circus". For many, there hasn't been much pressure to actually change business models to serve the needs of our current society, and companies have mostly been focused on increasing their brand reach, people resources, and marketing initiatives.
Though the pursuit of scale in this context isn't bad, we're going to see a shift in how companies view scalability. Though these previous efforts have helped companies extend their audience reach, experience customer hypergrowth, and attract venture capital attention, many of these need to return to their core business fundamentals, and figure out new ways to disrupt in this new world economy. One of my favourite quotes for a time like we are in currently is from Bill Gates:
We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.
— BILL GATES, CO-FOUNDER OF MICROSOFT
Adversity breeds innovation
Right now, we think that the current crisis will force companies to ditch their existing modus operandi. Everyone is talking about how different the world will look in two years, but in my opinion, the world in twenty four months' time, will look very much the same as it does today with a couple of tweaks. Sure there will be fewer airlines, and there will (probably) be more of us working remotely, but I think today's crisis will give us the necessary push for truly revolutionary innovations in the fields of infrastructure, sustainability, medtech and the circular economy, accelerating timelines we'd have seen in ten years versus two. Just like Amazon, who thrived after the .com crisis, or Facebook and Google after the 2008 crisis, I have a feeling there will be plenty of companies that we will look at in 2030, that really caught wind in their sails during the 'black swan' event we currently find ourselves in.
Re-allocating of financial resources
So what does this mean for today's established businesses? I think this will kick off a period when organisations will go bananas trying to figure out whether to cut their innovation budgets or tenfold them, and the obviously smart thing to do is the latter. It's not an easy call to make, but I think that companies can think about re-allocating their traditional, non-measurable marketing channels towards R&D -- which could bring about new business avenues.
Out of every crisis, voices emerge from unlikely places to help us understand how we can build a better future.
— SCOTT GALLOWAY, NYU STERN SCHOOL OF BUSINESS
David and Goliath - startups and established businesses working together
So how can these established businesses create R&D budgets that can be utilized to the fullest? We think startups could be the answer. Nimble and agile, startups and growth-stage companies can bring about change quickly, and if integrated correctly and backed by larger companies with deeper pockets, we believe voices from these collaborations will emerge to help us understand how we can build a better future together.
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