Advocating a Return to Scrappy Innovation
By Gilbert Wong, Rob Simpson, gwyn schneider
The term ‘Digital Transformation’ has been used for decades to describe the automation of back-end processes, operations, and channels to bring products to market. However, just as technology has evolved, so has the meaning of “Digital Transformation.” As a majority of companies today have already leveraged technology throughout their processes, from concept to customer, the term “Digital Transformation” morphed to represent adapting a business to a rapidly evolving and increasingly digital world.
Over the past five years, midsize to Fortune 1,000 companies focused resources on Digital Transformation initiatives. Most of these initiatives actually represent how companies approach innovation, often centered around technology or technology solutions. At Slalom, we think about innovation in three different categories which we call our Innovation Horizons. The Innovation Horizons cut across organization, process, and technology:
Horizon 1: Strategic Efficiency — Looking at a company’s existing products, services, and business model, but evolving to scale: be better, faster, and more efficient.
Horizon 2: Expand Channels — Use existing products, but expand to a different use or customer segment, to new channels and new markets, or in a new way through partnerships.
Horizon 3: Change the Essence of the Company — Transformative change, leveraging capabilities that exist at the company to do something completely new.
We typically see innovation across all three horizons with 80% aimed at Horizon 1. However, during the COVID-19 outbreak, the focus seems to be squarely targeted in Horizons 2 and 3, as companies scramble to simply stay afloat. But innovation doesn’t have to be relegated to the realm of survival. We believe instead, this is a chance to innovate in the face of crisis, realizing the investment and hard work put in over the years to harden capabilities, to take advantage of the current situation.
This moment is an opportunity to innovate around technology, business models, products, and processes — when the world needs it most.
From small companies to multinational enterprises, across diverse industries, and around the world, examples of innovation born out of this global pandemic abound. We’d like to highlight a few Horizon 3 innovations that have inspired us.
While known as the most awarded craft distillery in North America by the American Distilling institute, Heritage Distilling Company turned its entire production capacity over from its core business to making hand sanitizer. Washington State was the first confirmed hotspot of COVID-19 in the US, and hand sanitizer and other disinfectants quickly became virtually impossible to find — doctors, nurses, and all of the local regional hospitals approached Heritage for help. In response, Heritage is now gearing up to produce 15,000 gallons of sanitizer a month, with most of the production already earmarked for hospitals, nursing homes, and medical first responders. They continue to find additional ways to support their local community with options for people to donate hand sanitizer to their favorite local non-profit.
Today, not only are other distillers around the country and around the world stepping up to help their own local communities, but international enterprises are joining the ranks as well, even perfume and cosmetics giant LVMH Moët Hennessy Louis Vuitton is making hand sanitizer.
Around the same time Heritage was hearing from healthcare workers, another Washington State small business owner, Jeff Kaas of Kaas Tailored furniture manufacturing, read about the 100 Million Mask challenge initiated by a large regional hospital system. “The whole idea is if this is our time, we’re going to rise and run,” said Kaas. Kaas immediately reached out to the hospital to discuss designs, reassembled his manufacturing factory in record time, and had a connection in Europe create a digital play-by-play of how to put them together. While thousands of masks are now made at Kaas’ factory daily, manufacturers in at least 25 other states have joined the effort, including alterations teams at Nordstrom department stores.
Multinational corporations, like Nike and Hanes are also pivoting to retool their factories and processes to manufacture these much needed supplies. The fact that these companies can pivot to manufacture different projects in a matter of weeks instead of months or years is a true testament to the level of maturity that they’ve created in their design and manufacturing processes.
Technology companies have also leaned in to offer their services in unique ways. With major urban centers in the US closing in-restaurant dining in the midst of COVID-19 outbreaks, Open Table, quickly pivoted their restaurant reservation app into a solution that helps find the optimal times and places to shop for groceries or order food. With this new app feature, you can plug in your preferred window of time, along with the size of your party, and it will show the best time to visit. This helps customers avoid large lines and reduces the potential for less than optimal social distancing practices.
Tock, a reservation, table, and event management system used by restaurants, was contacted by one of their customers attempting to create a delivery/take-out experience on the fly due to mandatory closing of its in-restaurant dining. Instead of “hacking” a solution together, the Tock team gathered all of the requirements from the customer and within a matter of days delivered a seamlessly integrated, fully functional delivery/take-out module.
Global technology companies have also leveraged their capabilities to provide information during this pandemic. Alphabet owned Verily made headlines when President Trump announced their intentions to create a website to determine if you should get tested for COVID-19. Microsoft also launched an interactive COVID-19 tracker, which also linked users to articles that were relevant to their location. In the past few days, Apple joined the fray with a Siri enabled COVID-19 symptom checker.
All of these examples show how companies have quickly taken their existing capabilities and leveraged them to support different products, with different needs, to different markets — Horizon 3 innovation at its best.
15–20 years ago, we may have called these examples of innovation “scrappy,” where through sheer will, power, or survival, a company buckled down and figured how to force the innovation through to market. Advancements in technology and process over the past 20 years, however, have allowed those that have mastery over their capabilities to pivot and innovate in ways that may resemble those “scrappy” days of the dot com era, but make no mistake, this isn’t simply slapping technology and processes together haphazardly hoping they’ll work.
This is innovation at speed.
The discipline and focus that it takes to engage and execute on the type transformation required, in the middle of a seismic disruption is no easy feat. The companies we mentioned above should be commended for their incredible and inspiring examples of innovation at speed and their “scrappiness.”
Can you use the catalyst of something like the COVID-19 pandemic to change the essence of your company? Are your company’s capabilities flexible enough to pivot and take advantage of new opportunities or react to disruptive change?
If you would like to learn about our approach to building capabilities that allow you to be resilient or even enable innovation at speed, we encourage you to reach out to us here at Slalom Strategy (strategy@slalom.com). We look forward to the conversation!
