How to restructure your innovation department after a crisis
By Anais Masetti - 23 August 2021
The Covid-19 pandemic put a spanner in the works for most companies. As uncertainty grew, many chose to focus on their core business and put their innovation activities on the backburner. But that wasn’t the case for all companies. Some corporate groups leaned heavily on their innovation department to find solutions to the new challenges raised by the crisis. Either way, the pandemic has forced corporate innovation leaders to change their ways of working.
Throughout the Covid-19 crisis, Early Metrics has supported some of the largest companies in Europe in making informed innovation decisions – some of which had been heavily impacted, such as Air France and the Paris Airport group (ADP). We have therefore witnessed how these companies’ innovation teams have adapted to face this unprecedented period.
Here are top strategies to structure an innovation department capable of withstanding the ups and downs of a crisis:
Set your priorities straight
Before the pandemic, some innovation teams had been given carte blanche on certain aspects of their activities. They usually had some degree of flexibility on the number and type of projects they could launch. However, with tighter budgets, it has become crucial for innovation departments to prioritise. In light of the pandemic, innovation leaders should take time to recalibrate their key objectives at a company level. They should then commit to only selecting projects that fully align with those objectives. It can obviously be tempting to partner with a pioneering startup, even if it doesn’t fully meet a current need. But this can take focus and resources away from initiatives that can serve the company’s goals.
Balancing short and long term goals
A word of caution: prioritising can lead teams to abandon important, disruptive projects in favour of quick wins. It would be a shame for innovation teams to lose the chance to work on transformational themes that could benefit the company in the long run. So innovation departments have to find a balance between short-term projects (with demonstrable impact) and long-term ones. For instance, the pandemic has coincided with an increased awareness of the climate crisis. While it may not benefit a company in the short term and may go against cost-cutting strategies, initiating transformative projects around sustainability is likely to pay its dividends in the long run. In this delicate balancing act, innovation teams have to ensure great communication with individual business units to identify those short term needs but also convey the potential of long term trends.
Learning to say “no” faster
Once new goals are set, in line with the times and with a balance of short and long term expectations, potential projects can be prioritised accordingly. Having clear priorities can then help innovation teams assess the relevance and performance of a project. Indeed, the pandemic forced many innovation teams to pull the plug on certain projects or refuse low-priority new projects faster. Going forward, innovation departments should keep having processes in place to be able to quickly determine whether a prospective initiative fits the priorities and whether an ongoing project stops being relevant.
Analyse and share the performance of your innovation projects
So as we have seen, prioritisation is key in a post-covid context. One practice that can help innovation teams better prioritise is setting clear KPIs for their projects. Before the pandemic, many corporate innovation departments followed the overall performance of their initiatives. Yet, they seldom had specific KPI goals and tracking in place. Now, we are seeing those same innovation teams adopt a much more structured approach to their performance tracking. This can not only help make decisions faster as to which projects they should foster or drop, but also help defend well-performing projects with key internal stakeholders.
The value of feedback
But it’s often tricky to find concrete KPIs for small and/or recent innovative projects. During the health crisis, it became clear that the top management was mainly interested in pursuing projects that had a tangible, positive impact on their employees or clients. Gathering qualitative feedback from the users of the solutions put forward by the innovation department turned out to be an efficient approach to show the impact of such projects. For instance, Julien Bourcerie, Head of Open Innovation at Bouygues Construction said in our podcast Open Inno vs. Covid:
“We were asked to put more emphasis on collecting testimonials from internal stakeholders that showed that our activities had actually been useful to them. That’s a novelty that is not a KPI strictly speaking but has a lot of weight on the perception of what we do… And it’s great, I’m very happy with this KPI because it has much more value than some of our numbers.”
Raising awareness internally
Indeed, it’s crucial for innovation teams to keep reaffirming their usefulness because having an innovation department is a relatively new practice in the corporate world. They have to be able to defend the importance of their activities, even more so in times of crisis, where cost-cutting comes top of mind. Therefore, once they have solid KPIs to rely on, innovation departments should proactively showcase the impact of their activities to all business units to improve internal buy-in and foster a culture of innovation.
Pool your resources and join forces with your allies
In times of crisis, optimising resources becomes a necessity. Hence, innovation leaders should look for opportunities to access larger budgets for projects that have a cross-department impact. These can include innovation for process optimisation, employee productivity tools or health and safety solutions, to cite a few examples. Such cross-department projects can be more easily defensible and ensure a wide impact on the company.
Another strategy that makes sense during or in the wake of a crisis is to find external allies. It is in times of hardship that leveraging a network of innovators makes the most sense. Co-developing with other companies (startups or corporates) who share similar goals or pain points can allow for significant savings in terms of money and effort. Through open innovation, your company doesn’t have to carry the burden of developing, testing and deploying a new product alone. When budgets are tight, pooling resources with external partners can also increase the chances of success. Not to mention that it can speed up the R&D process and lead to usable MVPs faster.
The Covid-19 pandemic saw many examples of successful innovation partnerships. For example, in response to the sanitery crisis, Air France collaborated with other large players in the transport industry (both in land and air travel) to find new disinfection solutions.
Finally, it can be wise to reduce the variety of innovation approaches to optimise budget allocation. This can mean choosing between your intrapreneurship scheme and your startup incubator, for example. Pursuing fewer innovation programmes can increase the chances of success of at least one of them.
Seeing a crisis as an opportunity
Talking to our clients, we realised that for many innovation leaders the pandemic was a catalyst rather than a blocker. Indeed, the adoption rate of new technology and innovative approaches, such as hybrid worforces, was greatly accelerated. Times of crisis can therefore present new opportunities for innovation departments to shine.
In the wake of the coronavirus crisis, we have learned that large companies should restructure their innovation department by focusing on:
- agile decision-making
- clearer goals and performance tracking
- resource optimisation – which can happen through collaboration between departments or with external players