Change, Risk, Innovation, and Opportunity: A Way to Approach the Pandemic
Nelson Soken, Ph.D, Chief Innovation Strategist
During this time, I find myself spending countless hours absorbing information about the pandemic from both a health and an economic standpoint. At times, I am emotionally drained and anxious like many of us; however, at some point, my optimistic spirit emerges and my focus moves toward a positive future, filled with opportunity.
In our Intelligent Risk-Taking, Strategic Thinking, and Managing Innovation workshops, we introduce the concept of the change formula adapted from Gleicher’s research for change (Dannemiller, K. D., and Jacobs, R. W. (1992). “Changing the Way Organizations Change: A Revolution of Common Sense.” The Journal of Applied Behavioral Science, 28(4), 480-498.)
The formula is as follows D x V x S > R ->C where:
The left side of the equation is:
D = Dissatisfaction with the status quo
V = Vision of a preferable future
S = Support for and assistance in making the change
And the right side of the equation is:
R = Risk (perceived) of the loss of tangible or intangible resources (money, opportunity, “face,” etc.)
C = Change
Thus, If D, V, and S are not present in some form, the intended change will not occur; to support and drive change in people and organizations, the strength or impact of D, V, or S must be increased, or R needs to be reduced.
Interestingly, this formula describes the typical organizational situation we face during the current COVID-19 pandemic. We have been forced into a dramatic situation where an external force (a virus) has dictated that we make dramatic health, social, and economic changes within a matter of weeks.
To respond to the current circumstances, it is critical for us to use the power of creativity and innovation. This situation requires us to “color outside the lines” in order to manage our businesses. Examples of such creativity are described in a Washington Post article by Rachel Siegel, “Cheeseburger,” (April 11, 2020) where restaurants are tapping into their supply chain contacts to do whatever it takes to generate revenue, continue operations and provide value. Some restaurants are going beyond curbside take-out orders and providing other “essentials” that customers need, such as produce, meats, and other food staples; even selling or providing toilet paper as an incentive for customer orders. In a Forbes magazine article by Jason Wingard entitled “Pandemic Pivots: These 3 Companies are Making it Work”, Wingard describes how companies have pivoted in different ways: designers making face masks, distilleries making hand sanitizer, a taco restaurant creating an “emergency kit” which includes supplies to make 40 tacos plus a free roll of toilet paper. This is innovation in a time of crisis and aligns with the old saying, “necessity is the mother of invention.” So, what does the future look like and how will we navigate it, starting right now?
In an April 9th TED talk entitled, “What Coronavirus Means for the Global Economy,”
Ray Dalio (Hedge Fund Manager and Founder of Bridgewater Associates) discusses what social and economic changes will occur during and after this unprecedented health and economic shock to the world. Interesting terms or phrases that he used regarding how the future will look, what it will take to survive and thrive, and who will get through this period include:
- “This [COVID-19 pandemic} is a stress test….”
- “It will pass, the world will be very different. There will be a new world order.”
- “It’s a re-orienting type of experience. That in many ways makes us healthy. Even appreciating the basics of life.”
- “The greatest force through time is inventiveness. Human inventiveness, adaptability.”
- “Because the greatest force is the force of adaptation and inventiveness, if we can operate well together.”
- “There are the innovators…those that can adapt well and innovate well….they will be great winners…They’re going to do great.”
In summary, what Ray Dalio (and others heard on news channels) are positing is that we should expect changes to what is everyday life (a new normal) and that creativity will be required now and into the future as we prepare for a post-COVID-19 world. In some form, the world we live in will be changed forever to some degree, and we need to prepare for it now.
So, what can we do to prepare ourselves as we move forward into the new normal? Here are some thoughts:
- Persevere with the mindset of Edison: “Many of life’s failures are people who did not realize how close they were to success when they gave up” and “I have not failed. I’ve just found 10,000 ways that won’t work.” This time of upheaval can provide an opportunity, if we have the right mindset…to try things out that in many cases we have been thinking about doing but it was never the “right time.” It’s an opportunity for radical change – especially since we can’t be stuck in the status quo. Give it a shot!
- Follow the “80/20 Rule:” It’s time to act, versus spending a lot of time thinking and analyzing! When making decisions, and deciding to act, we can fall into an analysis/ paralysis state where we seek perfection. The challenge for leaders, especially in a time of crisis, is that it is impossible to have 100% of the information before making a decision and taking action. And if 100% of the information is available, it is probably too late to act and get the desired outcome. During these times, decisions must be made quickly and with limited information. We can then embrace the notion that decisions can be changed (consistent with Jeff Bezos’ philosophy at Amazon: making decisions on 70% of the information and remaining nimble by accepting that decisions can always be undone as new data emerges).
- Strategically ideate, prioritize, plan, and execute: It’s time to come up with as many ideas and options and then figure out where to focus our efforts, balancing risk and reward. Below is a graphic we use in several of our workshops which you might find helpful to apply to your decision-making:
- Low Risk and High Reward: JUST DO IT!
- High Risk and High Reward: TAKE THE CHANCE…this is your time! Do what you can to reduce the probability and/or consequences of failure, then act.
- Low Risk and Low Reward: COULD GO EITHER WAY! If it does not cost you anything and may be helpful, then go ahead. On the other hand, now may not be the time for incremental approaches.
The point is that focusing on Low Risk and High Reward, and High Risk and High Reward yields the greatest value. Creativity, innovation, and boldness is required in unprecedented times.
- Learn by doing, then pivot/adapt based on data: The path forward requires all of us to find ways to try things out on a small scale and “prototype or pilot” to see what the response is and to generate data. Concepts such as Lean Startup and Design Thinking have been in our collective consciousness for a while, but now, more than ever, it is time to employ these concepts and move from the abstract to reality. For example, at Barnes & Conti we are “practicing what we preach” as we live alongside you in partnership during the pandemic. Our new normal, day-to-day experience has been to work at hyper-speed to “try things out” while being customer-centric. We have been and are transforming our in-person workshops to virtual experiences at lightning speed to meet the diverse needs of our clients. Is our offering perfect on first round of delivery? Probably not. However, we are delivering rich and valuable offerings to our customers and we continually learn and improve after each delivery. Speed to deliver a quality product versus absolute perfection is our new norm.
- Deliberately plan your loss limit: Focus on how much time, money, and resources you are willing to expend on an initiative (determine your loss limit) before you make a call on whether it is worth continuing (set a decision-making milestone or several, based on urgency and importance). This provides everyone with clear direction on scope and a specific deadline for re-assessment. During times of immense stress and limited resources, this provides everyone with focus, and a short-term time horizon to get work done and to determine whether the work should continue beyond the specified loss limits. Again, we at Barnes & Conti have been focused on execution during these times and have clearly delineated who is doing what and how much time and resources should be expended in daily or weekly time frames (sprints) before determining whether the work should continue or be stopped (loss limit).
In closing, we all have a choice to make. We can either harness our creativity during scarcity or we can succumb to fear and be paralyzed. Now, more than ever during this time of social or physical distancing, it is critical not to go it alone. We need to leverage the power of others (diversity of thought) by expanding the potential solutions. Essential to our success in these unpredictable times, we need to:
- Move forward without all the answers.
- Accept that there are factors that we have little or no control over
- Maintain an open mind
- Collaborate with others
- Be willing to try new things and experiment
- Think strategically and be laser-focused on what and where we invest time and resources
Yes, this is a terrifying time and it is also an exciting one. We have the capacity to shape change and innovate for the future if we allow ourselves a little more freedom in our time of constraints.