By Jeffrey Kitt
The world economy is in survival mode. As the globe grapples with the continued fallout of COVID-19, it seems only natural for companies to proceed defensively and cut costs.
It is however in these times of crisis, many analysts point out, that history actually rewards action.
For example, instant coffee from Nestle was born from a glut of coffee beans during the Great Depression. Tech giants Google and eBay successfully innovated while competitors solely fought to survive the dotcom bubble in 2001.
Further, Airbnb and Uber, responding to financially stretched consumers eager to save on accommodation and commuting, came out on top of the Great Recession in 2008.
While the threat of global pandemic might seem like the perfect time for business to wait for stability, past crises show that companies should not shut the door on innovation.
This is the message being shared by many analysts and advisors. It’s one that’s being broadcast louder and louder, also, from the vast entrepreneur network of Techstars, an ever-growing global seed accelerator.
Intent on offering guidance to entrepreneurs globally during this trying time, the organization has emphasized that in periods of uncertainty it’s innovation – not reservation – that will safeguard a business for future success.
As the global accelerator is emphasizing, this principle remains true in the midst of the coronavirus. The economic fundamentals for a post-virus world remain strong and innovative business solutions will be more valuable than ever.
Moreover, failure to innovate has been a problem for big business before this pandemic, and it poses an even bigger threat in the wake of the virus.
Since 2000, in fact, failure to respond to an evolving market has forced half of the companies on the Fortune 500 to go bankrupt, sell, or close. Corporations, therefore, are best advised to strive for innovation during this crisis if they want to thrive in its aftermath.
Innovation is essentially born from breaking with tradition. To achieve this requires radically different thinking — and this is thinking more geared to startups than corporations.
Startups represent a source of high-potential new products and services, investment and acquisition opportunities, and partnerships that could help corporations stave off disruption.
Collaboration rather than competition between business big and small works to future proof both entities from disruption — and the potential for such integration is only more important during times of crisis.
This Techstars report, which follows an initiative to promote startup-corporation partnerships, outlines that success between the two can fast-track product development, bring awareness to new trends, and shift entire business models.
Willingness to work together creates mutually beneficial circumstances. While some startups are determined to go it alone, others are eager to partner with large organizations for mentorship and advice, joint product development, access to markets, funding, and the potential of a large equity event in the form of an acquisition.
The report also shows that more experienced companies were similar in their approach to their goals for working alongside startups.
Learn about how The Nature Conservancy is using innovation to fight climate change by partnering with startups like 2NDNATURE.
All companies said the top collaboration goal was running pilot tests or proof-of-concept tests for new ideas, followed by “driving internal transformation” by using startup tools and methodologies, and to better understanding customer or tech trends.
As Techstars notes in its COVID-19 Resource Guide, there is no denying that all companies face tough decisions right now. Many within the accelerator’s network have been through tough times before and are helping others navigate this one.
Along with practical advice on how to handle tech, talent, real estate, remote work, and mental health during this period, the accelerator continues to foreground the importance of long-term planning.
As noted by Deloitte, companies that have previously embraced future of work practices are well-positioned to sustain their operations and respond quickly to the demands of navigating the virus.
In maximizing their response to the virus, businesses can create resilience to future threats by applying future of work concepts and practices that are already under exploration.
And time is of the essence. There is only a small window to deliver an innovative product or service as there is no going back once people get used to the innovation in question. Thus, innovation is king — until it is not.
History shows us that innovation is often the deciding factor following times of crisis. Companies big and small, then, must decide today how they can continue to innovate and experiment during uncertainty to ensure supremacy on the other side.
It presents a delicate situation, one which demands resilience and transformation while the world is in a state of flux.
Whatever businesses do decide, it is clear that now is not the time for complacency.
This article originally appeared in The Sociable
Interested in joining the global platform for innovation? Learn more about Techstars membership and accelerator partnership opportunities.