It is only a few months since the world first had to respond to a new deadly coronavirus. As a result, we have experienced dramatic changes at home and at work. Companies are having to revise their plans in the face of a likely deep recession, new consumer behaviours and new ways of working.
In this disrupted and uncertain environment, innovation has rarely been more important. This level of disruption and uncertainty calls for radical, big-picture, holistic and breakthrough thinking. But how can we know if these changes will be sustained? And what and who are we innovating for?
The media has been awash with predictions, ranging from the dire ‘It’s the end of life as we know it’ to the more reassuring ‘Get real, people will quickly get back to what they have always done’. As with most things in life, the reality is somewhere in between.
There is no doubt that as a result of the crisis, some pre-existing trends have been dramatically accelerated. Three trends that have shown an accelerated increase are online consumer activities, digitally enabled business transformation and demand for sustainable products and services.
Although there have been rapid changes, it’s hard to know which changes will be sustained. To start off, it is best applying behavioural science criteria to estimate which of these changes will be ‘sticky’.
For example, ask questions such as ‘Are people capable of sustaining the new behaviour?’ Have they had sufficient time to build a habit? Do they possess new knowledge or new skills?
Have people had the opportunity to sustain the behaviour? Have new social norms been created? Do people have the resources (time or money) to continue with the behaviour?
Finally, are people still motivated to sustain the behaviour? Have their prior beliefs changed? Have their beliefs about the consequences of the behaviour changed? Each behaviour will differ, but using these types of criteria at least allows you to be more systematic and make more educated guesses.
There have been many changes in online consumer activities, but the one that has affected the broadest range of companies has been the growth in ecommerce.
Thanks to ecommerce, remote working, telemedicine and remotely managed supply chains, digital transformation is now probably a necessity for survival rather than a nice-to-have. It is highly unlikely that we will go back to a pre-Covid digital age.
The increased demand for sustainability is hard to predict. Some factors, such as a new-found connectedness to nature, may drive this trend. Others, such as lower oil and gas prices, and reduced appetite for making sacrifices, may limit it.
What scenarios might play out?
To work out how these changes might play out in the future, we can indulge in some good old-fashioned scenario planning.
No one can accurately predict the future, especially given the high levels of change we are currently experiencing. However, we can consider a range of plausible scenarios that go beyond the limits of existing trends to help us think about coming challenges.
At Innovia, we have identified two key dimensions influencing how the world will evolve in response to the Covid-19 induced recession.
Innovation will need to be radical, not marginal, and play a central, not subservient, role in determining strategic plans and marketing messages.
One dimension is ideological – people may either yearn for the past or aspire to the future. The other dimension is behavioural – people may either try to collaborate or to be self-reliant. This leads to four different possible worlds.
Each of these scenarios could occur at different points in time and in different regions at the same time.
A salient feature of ‘Cocoon world’, which is dominated by a yearning for the past and a desire for self-reliance, is that consumers want comfort and nostalgia, but on a budget. Values are more traditional and there is a focus on home, family crafts and hobbies, whilst sustainability is a lower priority. In this world products that are authentic and remind people of a ‘better past’, or create traditional rituals, are more likely to thrive.
In the ‘Them-and-Us world’ people want to be self-reliant, but aspire to a better future. Consumers want to feel special, with new and better products and services. Local credentials are prized, sustainability is important at the local level and self-help is encouraged. Products and services that thrive will emphasise local ingredients, local labour, origins and sustainability. Anything that encourages self-development and self-help will do well.
In the ‘Society-Matters world’, there is a yearning for the past, but a desire for collaboration. People want to work together and ‘fit in’. Consumers favour ‘fixable’ products rather than disposable ones, and pro-social behaviour and corporate responsibility is expected. Products that act in the collective interest and companies that have a purpose are valued. Creating products that encourage socialising, social participation and volunteering could be winners.
Lastly, the ‘Better-planet-for-all world’ looks to the future and collaboration. In this world, a radical rethink is possible. Consumers are environmentally aware, seek out purpose-driven brands and reward firms with pro-social practices. Being radical and emphasising forward thinking and collaboration is applauded. The winners in this world will push their tech credentials and focus digital tools and models on automation, remote service, better consumer choices, environmental benefits and collaboration.
Innovating for the future
Innovation and adaptation enable companies to survive and thrive when disruption occurs.
The marketing community is better placed than most to understand what type of innovation is needed as a result of the disruption caused by Covid-19. This is because marketers are tasked with understanding changes in consumer motivations and behaviour, and have to communicate the relevance of these changes to management.
Not since the World Wars have there been so many disruptive changes occurring simultaneously. Innovation will need to be radical, not marginal, and play a central, not subservient, role in determining strategic plans and marketing messages.
It must become a core capability for any company if they are to thrive and survive. We believe there are three key components that enable acceptance of transformational innovation: a breakthrough mindset and motivation, a defined set of simple-to-understand innovation tools, and a shared innovation language and process map.
In the post-Covid world, you will need to focus on all three of these components to explore digital solutions for improving customer insights and engagement. It will be crucial to be agile and flexible in order to take advantage of early signals indicating market change, and capitalise on new behaviours and expectations.
The current levels of uncertainty make it especially hard to plan for the future. Nevertheless, it’s possible to make well-informed estimates of what changes are likely to persist. And when we consider a range of possible scenarios, we can stress-test our strategies to be robust to future disruptions.
The vital skills that enable us to adapt to this unknown future are the skills we’ve always used – closely tracking signals from the market and driving breakthrough innovation to deliver what people need.
Helena Rubinstein is head of behavioural science at Innovia Technology and regularly lectures on behavioural science at the University of Cambridge and City, University of London.