Jan 2019 - Sept 2020
I was lucky to complete the Oxford innovation strategy module during the historical coronavirus crisis. Moreover, I would say it was the right choice at the right time to take part in a course by legendary Marc Ventresca. Fresh knowledge about innovation heated by coronavirus creates a dangerous mix that pushes for entrepreneurial thinking.
Shadows of uncertainty caused by massive health problems, physiological stress, economic decline, and continuous media pressure triggers entrepreneurs to think about what the world will look like after the pandemic. Even now, in the face of growing implications from coronavirus, the debates started about how the traditional economic, political, and social orders will change in the post-pandemic period. Entrepreneurs started to search for new opportunities coming from the pandemic, continuously monitoring available business information. So what? How to start?
The rule number one – cool down for a week, take time to rest, stay at home with your family, give your brain time to rest, and stop continuously updating your digital timeline. Then, systematically digest business information. Do not jump immediately to crazy ideas like “let’s produce masks”, if you are in the construction business.
From media, the most popular proposal for the post-pandemic era is the growth of online education businesses. However, having my fifth higher education in my 40s, it is a mega uncertain question for me. Staying home for a quarantine period with my twins, supporting them in their online courses, I have observed how anxious and even depressing it is for kids. In spite of teachers’ great efforts to make online communication funny and interesting. Online education is without socialising, networking, live communication, feelings, and touching, cannot be as productive as in-person classes. The same is true for my online lessons that can never be an adequate substitution to in-person classes in Oxford, where real discussion, learning and sharing, socialising, college visits, atmosphere in library and group works are developed. It is possible that application of AI and ML will improve online education further. However, our brains have two phases: analytic and emotional; AI and ML can improve the first part, but for emotions, we need real communications. Thus, my proposal is opposing perspectives of online education in post-pandemic period, as I think people having a chance to try online education in coronavirus crisis will better understand the value of in-person education and will be willing to pay more for in person classes.
Another widespread proposal is online food delivery business or cooking at home. Of course, it depends on different cultures, but I personally know many people staying at home and eating a homemade meal made them nervous. The same about online food order, it cannot be a substitution for restaurants. Because going to restaurants is not only about eating a hot meal or drinking, it is about socialising, it is about good music, dancing, acoustics, and an ambience. In the era of artificial intelligence, it is even possible to predict client taste, feelings, favourite wine, important day, daily workload, music, design and colour, which is likely to be integrated as a part of customised approach to clients in real restaurant conditions.
Further, discussions have started about human behavioural changes including hygienic and health preferences. Changes are possible, but in the short term. The human brain is designed to forget negative experiences early. For example, after having minor car accidents, we are trying to drive safer, but for one or three months, then coming back to initial behaviour. The human brain forgets bad things, but remembers good things and anchoring on good stories did happen in past. People’s behaviour is not going to change significantly in the post-pandemic period, so to design any project on such predictions is not safe and requires additional more in-depth research.
Supply chain of most production companies is seriously affected. Annual plans, forecasting, inventory management predictions, transportation, production, and sales plans all need to be revised for post-pandemic period. Companies depending on supply of China’s raw material are possibly experiencing the worst year for the last 20 years. A general assumption is that the Chinese raw material was the main cause of shortages, which further leads the world in the post-pandemic period to attempts of localising raw material from other resources. Moreover, it could be the end of globalisation of supply-chain. Logically everything is right, but if we think of capital investments of shipping companies, access capacities, and low costs in China, the localisation of another supply-chain does not seem real. Maybe it will affect supply chain localisation differently in various industries, but anyway it will not be an easy and quick process.
Entrepreneurs should be cautious with popular business ideas originated during the coronavirus period. What works during the pandemic may not necessarily work in post-pandemic era. Entrepreneur’s innovation strategy should be resistant to macro shocks like a pandemic. Innovation strategy needs to follow a systematic pathway integrating stable customer preferences, the company’s strategic intent, operational resources to be leveraged, and leadership commitment.
How to evaluate opportunities for post-pandemic period
Strategic Intent. What is your company’s strategy? Is the new post-pandemic business idea strategically important? For example, if strategic intent is to reach 500k USD and cover a huge part of the market, then choosing a project of 50K USD is not the best idea. If you are in the construction business and your strategy is designed to enter modular construction business, so you don’t need to jump to online health care start-up, as a totally different business can divert you from core business. What is our competitive advantage for jumping to this opportunity, and whether your advantage is sustainable for long-term? Why do you think people will pay for this product in the post-pandemic period?
Customer Centred Design. Ongoing pandemic massive information flow must not disrupt our focus about fundamental product or services design. Who is going to be the customer? What are the customer needs now and why do you think they will change in the post-pandemic period? Has the company had experience with that customer segmentation? Why should a customer choose our product specifically in the post-pandemic period? How is existing and post-pandemic technology feasibility fitting opportunity requirements? What is the customer’s new habit, and what motivates customers for that activity?
Operational Capabilities. Is it possible to leverage the company’s existing capabilities and resources to support new business ideas? How can sales, marketing, production, and people’s competencies be used for new opportunities? What is the process of the supply chain? What is your forecast for profit-loss and other fundamental business management KPIs? How are you going to manage the transformation from existing businesses to a new opportunity? For example, if your company is producing beer and have experience in fermentation and biotechnology, maybe it is possible to invest in the bio-pharmacy industry, but not in online communication start-up.
Leadership Commitment. Even if a new opportunity aligns with your strategy, operational capabilities, and customer evolving expectations, it cannot be successful without leadership commitment. Actually, lack of leadership support kills countless bright ideas in innovation departments of companies. It is very hard to focus on a new initiative when the company has existing mature businesses and stable cash flow. There will be people in companies willing to kill an innovative idea, and they are mainly operations managers “gods” of the existing business. Besides all, innovation projects should be the goal of the entire company but ensure sufficient separation from mature business, perhaps a separate business unit and independent organisational interface. Financially, innovation projects also should be independent and have its own budget.
To conclude, it is clear that available media content will push entrepreneurs for innovative projects creating an illusion about the magic post-pandemic era. Entrepreneurs, before jumping and embracing new opportunities, should carefully review behavioural activities of people in the pre, current and post pandemic world. Further, assess how new opportunities align with their strategic intent, operational capability, customer evolving expectations, and leadership commitment.Back to top of article