The coronavirus pandemic has generated tremendous uncertainty for businesses. But while the scale of the crisis is new, uncertainty itself is not—it's a natural condition of doing business, and numerous tools exist to quantify and mitigate it. Most strategies rely on accumulated knowledge from the past—there's a precedent on which to make sense of unknowns. COVID-19 breaks all that. There is no precedent for how to respond to this moment, much less steer ahead.
The biggest challenge to businesses right now isn't uncertainty, but ambiguity—a condition in which the future is unclear, the past is no help, and we don't even know what we don't know. There's no predicting when the pandemic will end, nor what “business as usual” will look like when it does.
Late last month, Stewart Butterfield, the CEO of Slack, acknowledged the unparalleled challenge leaders face trying to buoy their organizations in the absence of any familiar strategies. Though Slack is one of a handful of companies experiencing massive growth right now, Butterfield and his team are still struggling to predict the future. Other companies are not this fortunate, and have had to halt operations, let go of employees, and make other painful decisions.
Understanding that organizations are facing a broad range of challenges and have varying capacities, the question becomes, how might businesses create new ways to push ahead intelligently? Human-centered design can offer leaders an alternate set of mindsets and methods for navigating ambiguity. Here are four ways forward, along with inspiring examples and questions to drive action.
Perhaps the most well-known design thinking model suggests that innovation occurs at the intersection of consumer desirability, business viability, and technical feasibility. Many leaders are currently mired in thinking about what’s possible in this new world (technical feasibility) and what the economic impact of COVID-19 might be (business viability). While a business model pivot or reapplication of technology may be critical for some businesses to stay afloat, it’s important not to forget to lead with people (consumer desirability).
Focusing on customers’ needs is a way to rally a company and employees around a purposeful cause. It also offers focus and clarity operationally and strategically, and points to a clear path forward that can deliver value.
Restaurants were one of the industries immediately and dramatically affected by the pandemic. Many dining establishments have had to lay off employees or shut down entirely. Canlis, a fine-dining restaurant in Seattle, chose early on to shift their business in a way that leads with customers. Throwing out the rule book, Canlis turned their restaurant into three distinct offers: large family meals, CSA boxes, and to-go cocktails and wine. These options make it easy and efficient for customers to get what they need, while keeping many of their employees working. Restaurants around the world are now taking similar actions, driven by real attention to people’s current needs.
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Part of what makes the current changes so complex is their scale. In travel and hospitality, for example, metrics like trips and bookings are unmoored: What will travel mean in the wake of a pandemic that doesn’t have a known endpoint? CPG companies have been hit with destabilizing shocks to demand that not only put pressure on supply chains, but raise existential questions about what people will value after the crisis. The meaning of “essential” across products, services, jobs, and needs is evolving in real time. We must simultaneously grapple with the abstract and tactical, and the immediate and the indefinite.
It’s inspiring to see examples of companies redirecting their capabilities toward urgent needs—distilleries using their alcohol to produce hand sanitizer, automakers shifting to produce ventilators and respirators. But this kind of quick adaptation isn’t simple and the opportunity isn’t always clear. Stepping outside of our own domains and even our companies to connect can help.
Coronavirus has sparked rare collaboration between some of the world’s biggest business rivals. Apple and Google recently joined forces to enable the use of Bluetooth technology to help governments and health agencies reduce the spread of the virus, and pharmaceutical giants GlaxoSmithKline and Sanofi are teaming up to develop a COVID-19 vaccine.
Pivoting in this moment calls for collective processing aided by viewpoints from different departments and types of thinkers. Some companies are relying on open innovation, which can be used internally to break down silos, or externally to find new partners to bring ideas to life. IDEO’s open innovation portfolio recently launched the COVID-19 Business Pivot Challenge to help organizations wrangle the present complexity and adapt at various scales through collaboration. The Challenge is open to anyone involved in business adaptation, from C-level executives to business students, and startups to global corporations. Participants are working together to find partners, develop new offerings, and secure funding.
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The time has never been better to experiment. This means considering fundamental changes in business and operating models out of necessity, while also prototyping new channels, offerings, pricing structures, and value propositions.
The pandemic has caused some organizations to challenge the status quo of legacy industries, questioning fundamental beliefs and paradigms that have long been held sacred. Film studios, for example, have historically resisted releasing movies straight to online platforms, in the interest of preserving their relationships with movie theaters and maximizing everyone's financial gain in the film ecosystem. But with theaters shut down, many studios have been forced to either delay blockbusters or experiment with online releases, putting pressure on the previously sacred release window. Paramount’s The Lovebirds was set to release in theatres on April 3, but will now debut on Netflix. And Disney released Frozen II on Disney+ three months ahead of schedule, giving many parents a much-needed break.
Experimenting doesn’t have to result in a full-scale business model transformation or a polished new offering. This is a moment of extreme leniency: Customers will forgive scrappiness and even mistakes, and they’ll appreciate effort and vulnerability from organizations who try. Moreover, experimenting in low-fidelity ways allows teams to quickly iterate, minimize costs, and preserve optionality. In other words, there’s little investment required for potentially high return.
Airbnb, like all travel and hospitality businesses, has been hit hard by COVID-19. But they have worked to respond quickly: First, they mobilized their rental marketplace to offer units free of charge or at subsidized rates to healthcare providers in need, waiving their own fees in the process. In the meantime, Airbnb has launched online experiences that provide new things for customers to do while stuck at home and an alternative source of income for hosts. Their email announcing the offer read, “Let’s try something new together.” Airbnb transparently recognizes that this won’t replace the travel experiences that customers wish they could be doing, but we can try to make the situation a bit better, together.
Whether through major shifts or small trials, experimentation not only serves as a response to the current times, but can also pave the way for future strategy. While some companies are testing by necessity, organizations with the means to do so can consider how prototyping today might strengthen their value propositions and capabilities tomorrow.
Questions to inspire action:
It’s understandable to feel an overall sense of scarcity right now. Organizations are inundated with legal, health, social, and operating constraints. It may seem counterintuitive, but these perceived limitations often create generative circumstances for growth and innovation. A recent study on innovation in crisis found that during the Great Depression, while the total number of patents decreased, the average level of quality increased, mitigating the quantitative decline with more innovative impact overall. In many ways, today, we are witnessing this same jump-start in business innovation in light of COVID-19.
OpenTable, a company that allows diners to make restaurant reservations, is using today’s constraints to find new opportunities. Since many restaurants are no longer allowing customers to dine in, OpenTable’s core offering is no longer relevant. But rather than become obsolete, they used this constraint to make a quick shift and repurpose their platform. The team developed a new tool that leverages their core offering by partnering with grocery stores, allowing customers to select shopping times at supermarkets and to avoid overcrowding.
History has shown us that scarcity can be the mother of invention. Take the beloved hazelnut spread Nutella. The product was created due to a cocoa shortage during World War II. Italian confectioner Pietro Ferrero decided to make a new paste using hazelnuts, sugar, and a smaller amount of cocoa. The rest is sweet-tooth history.
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We are in challenging times. Leaders are being called to make difficult decisions around their business’ strategy, operations, and people. As we continue to navigate these uncharted waters, we can find ways for ambiguity to be an aid, rather than an impediment, to progress. Design-led mindsets like empathy, collaboration, experimentation, and even scarcity can be guiding lights along the way.
Illustration by Kateryna Romanova