The pandemic disrupted business operations in ways leaders could not have possibly imagined little more than a year ago. But forward-looking companies have used this as a catalyst for innovation, to test new ways of working and ensure they survive the crisis.

To avoid the risk of slipping back to business as usual, ill-prepared for the next crisis, companies should embed these changes to become more resilient than before and to be prepared for a continued environment of uncertainty.

Businesses big and small have had to innovate their offering due to Covid-19. From high-end restaurants offering takeaway services to hair salons offering video consultations and personalised ‘dye-at-home’ kits, few were able to operate as they did in 2019, without having to think outside the box for new revenue streams.

This ‘survival’ innovation has been essential to global businesses in 2020-2021, but how can a company go from one great idea, albeit hastily implemented, to an evolving approach to innovate their service? The answer lies in an embedded test-and-learn culture.

In 2020, Arca Blanca worked with a hygiene product provider that lost many hospitality industry customers due to the pandemic, to create a new go-to-market model and rethink its target customers in a way that would create a more sustainable long-term business. Optimising their product range and adding these new customers in a thoughtful, embedded way meant they are now prepared for a new phase of accelerated growth and by using this low-risk test-and-learn approach, can continue to expand their offer into new sectors.

The reopening risk

The lifting of restrictions is now on the horizon, but it would be unwise for firms to believe that an imminent return to pre-pandemic normal is on the cards, or that current behaviours and requirements are permanent.  Changes in behaviour might spring ‘back to normal’ post-pandemic, but behavioural reactions to the current change-heavy environment will be difficult to predict.

Arca Blanca worked with a property portfolio owner to create additional revenue streams by transforming their service offering. By using a well-defined and repeatable process to create an innovation incubator, the client was able to design, test and roll out new services in a way that was low-cost and low risk. These successful services are creating £40m annual additional revenue and the test-and-learn process for new ideas has been embedded into business operations.

Embedding Innovation

Embedding innovation sounds simple, and in theory, it is; it is nothing more than process implementation – which does not sound like a revolutionary approach. However, there is a reason many organisations fail in their attempts to become more innovative; they overlook the process and cultural implications of an entrenched test-and-learn approach.

Many innovation processes are not designed to truly encourage test-and-learn. The most common issue is a failure to differentiate risk/ROI requirements for innovation work and business as usual, which can set any new idea up to fail. This kind of thinking further embeds a fear of failure and prevents the test-and-learn culture that enables good ideas to become great projects.

The importance of entrenching the test-and-learn process into the business is the key step that is often overlooked. People are creatures of habit and without creating (and incentivising) a cultural shift that supports adopting new practices and celebrating well-managed failures, it will be hard to make change last. The full benefits of innovation cannot truly be realised unless the process and tools are consistent, transparent, and embedded in the culture of the business.

Instituting simple, clearly articulated processes designed to support innovation and embed test-and-learn provides a strong starting point that goes beyond crises-led innovation. The first step must involve creating a focus on current and future key customers, and how any product or model will serve them. The last step of the process must involve the rollout and implementation of successful products.

About The Author

Lizzie McKinnell is a manager at Arca Blanca. She is a business transformation expert specialising in innovation, disruption, transformation and new product development across multiple sectors; from global retail to utilities.

About Arca Blanca

Arca Blanca is an integrated consulting and data company, resolving complex growth and profitability challenges. We help businesses of all types thrive in the face of unprecedented change and upheaval driven by new technologies.