Spotlight Series 1: Importance of Innovation in Crisis

Does the Importance of Innovation Change During Crisis?

SUMMARY

We’ve loved bringing you the Ask an Innovator interviews – but thought we’d change it up a little bit from time to time with these Spotlight Series episodes. In the first one, Josh Barker discusses the importance of innovation in a time of uncertainty. What can it mean for your business and how can you react? These are short episodes that are less than ten minutes to help you explore and understand innovation in every aspect of your business.

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FULL TRANSCRIPT

Erin Srebinski [00:17 ]: What pains are customers facing right now? How can they adapt quickly to this changing environment? And are there tools they can use to help them?

Josh Barker [00:25]: Yeah, that’s a great set of questions starting, I guess, with the first one, which is what pains are customer-facing? And I mean, I think we hear the word unprecedented, quite often these days with COVID-19. And it really is an unprecedented time of that has really disrupted a lot of different areas of our life. Obviously, you could just start listing them off in the ramifications. So some core ones are, well now everyone is staying at home, right? And so we’ve shut down businesses that are not essential, or you know, I’m going to say that with air quotes, but non-essential. Because of that, well now we have a lot of businesses that are closed.

Everyone is working remotely when before they were working in person. So the pains that they’re facing are also related to the physical illness of fear, right? There’s a fear of, well, how long is this going to last? How long are going to be in our homes? How long are these businesses going to be shut down? Uncertainty of the economy and really facing some rough times. Because of that, everyone is very much closed in their minded-ness at this point. They’re very close with their pocketbooks.

Businesses are conservative at this time. They’re hunkered down. We just talked about how there’s an uncertain amount of time. Complete uncertainty of how long this will last and how bad it will get because of that everyone’s being extremely conservative. So because of the conservativeness obviously, if you think in terms of customers, customers being conservative, will now things that are deemed as non-essential they’re starting to make cuts. We’re seeing this all across the board.

So basically, how can you adapt quickly is that there’s a lot of different threads I think we can go down. One example is remote work. How can you adapt quickly? I think companies are really trying to figure out how to do this whole remote work thing. So they’re really needing partners that know how to do that have done it for a while.

Using new tools like zoom, using new tools like Google Hangouts, Slack and being able to put the tools in place. Not only that, but traditional companies also have, you know, physical servers in their locations. They used to have a file share where they’re sharing files, well, now, they’re inaccessible. So now they’re talking about, well, how do we still get those files or the bandwidth to get those files because everyone’s working from home and it might be too limited.

There’s just a lot of these remote work challenges that companies are facing now. That’s one huge sector, but there are a whole plethora of other challenges when they’re making cuts and people are hunkering down. People are really looking at their line items on their monthly statements saying, well, is this really necessary? Right? Is this something that’s essential? And they’re cutting things that are non-essential. Basically, companies are having to adapt to say, “Well, how can we become essential to people in their line items, as they’re knocking things out.” We don’t want to be that line item that’s removed. So there’s just a ton of different changes. So those are a few that come to my mind.

ES [03:32]: Yeah, one follow up question. So when companies are trying to be essential, does that mean that they need to pivot their business model?

JB [03:39]: There’s a great book that I’m reading now. It is, How to Recession-Proof Your Business. The author is a McKinsey consultant who went through the Great Recession. One of the things that they talk about in this book is that imagine your business as a house. Your house is on the frontage of a river. And so the river is cash flow. You’ve traditionally, the river is just been flowing towards kind of your, your house or your business. You wake up and you go outside, and that river is dried up. You’re left with a couple of options.

You’re in your house, the river is completely dried up, or there’s a small trickle. So the question is, do we shrink our house? Do we stay where we’re at? Or do we go out and we find, you know, rivers don’t just dry up? They actually just divert course. So in other words, the river in the economy. If you look at the economy overall the economy may have shrunk. The worst-case scenario is that people are predicting the quarter is going to shrink by 25%.

That is an enormous amount. However, that still means there is 75% of the economy that’s still there purchasing things. That means the river has been diverted. Ask yourself, should we uplift our business and move that to another goal and find where the river is diverted to? Those are some questions to ask.

You asked, should we change our business model? It really depends on your risk appetite. If we’re talking about innovation, then yes, I think that businesses should really take this time to innovate. To become more essential. Basically go out and seek where that diverted river is. And it doesn’t necessarily mean to upheaval the entire business, depending on the size of your business. But it might mean to focus on more core offerings during this time that are more essential.

So taking an example, we’ve got a great partner, their name is Opstack. They do a lot of IT-related work. So they set up cloud-based migrations and things like that. There’s a lot of companies that are trying to do remote work. They saw this coming. The river was flowing down their way and they saw the river kind of shutting off. They added a new service offering that said, “Hey, we’re going to help you guys do remote work better.” And how we’ll do that is we’ll set you up with a remote environment. And we’ll do it within a week.

[Opstack] is hitting on these core needs so people being are able to set up remote work quickly. They moved to another river very, very quickly. That would be something that I would call innovative in a time of crisis that would be a necessary move. I think people do need to change their business model a little bit and rethink things. We don’t know how long this is going to last.

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