The real treasure lies within your own company
It’s easier said than done: crises bring about change, and change can open up new business opportunities. But how do you spot and make use of opportunities? Prof. Nikolaus Franke, Academic Director of the WU Executive Academy’s Professional MBA Entrepreneurship & Innovation, conducted an empirical study in which he canvassed 130 international managers on the factors they considered decisive to overcoming the crisis during the lockdown. He found that two components were particularly important: one’s staff and innovation-oriented structures.
Let’s start with a little story: BüBa is a medium-sized German enterprise specialized in office and commercial property cleaning services, which received the TOP 100 innovation award in 2019. With the arrival of the coronavirus in March 2020, an enormous demand for disinfectants was created practically overnight. Companies, doctor’s offices, and private households: suddenly everyone everywhere was eager to get their hands on disinfectant dispensers for effectively sanitizing one’s hands. But it is not enough to just spot an opportunity. You also have to use it.
As a cleaning services provider, the business held a large reserve of disinfectants – its core “raw material.” However, they were lacking pump dispensers needed to serve this entirely new market. In a first step, BüBa contacted its regular suppliers. But their capacities were not even close to sufficient. So what to do? Pester the companies? Sit back and relax? Come to terms with this fate? Finally, an employee remembered something: didn’t IKEA sell dispensers? All IKEA outlets throughout Germany and neighboring France were contacted immediately.
BüBa bought all dispensers it could get. But how to bring the masses of dispensers to the BüBa headquarters as quickly as possible? Conventional logistics companies were not fast enough. Again, the employees combined their brainpower to solve the conundrum and came up with the idea of using a car-pooling service for the transport. BüBa also had to develop novel ways of bottling and delivery. Overall, the service provider turned into a successful production enterprise in a matter of only a few days.
Prof. Nikolaus Franke
The new market was accessed by being highly flexible, greatly benefiting from the employees’ entrepreneurial mindset.
For a systematic analysis of this pattern, 130 managers affiliated with WU’s Institute for Entrepreneurship and Innovation were surveyed on how they perceived the coronavirus crisis. BüBa seems to be a prototypical case. The analysis revealed that existing suppliers were relevant to overcoming the crisis only in 16% of the 130 canvassed managers’ enterprises. Also customers (24%), cooperation partners (29%), and the state (20%) played a relatively small role. At 70%, the innovative force of a company’s staff members was identified as the uncontested key factor. Employees’ creativity, commitment and entrepreneurship clearly made the difference.
The comprehensive survey also confirmed how significant agile and innovation-oriented structures are. Asked for their most important learnings from the coronavirus crisis, this factor was mentioned most often at 66%, far ahead of “investments in IT,” which took second place at 27%. Flat hierarchies, decentralization, and a quick, learning-oriented, and flexible design of processes enable companies to adapt to changing circumstances in a way that they can turn the crisis into an opportunity.
Two lessons can be drawn from the importance attached to employees and innovation-oriented structures:
Companies should continue to invest in qualifying their staff. They are the initiators and driving forces behind adaptation reactions – or the obstructors to such change.
To ensure that this potential can be realized, agile and innovation-oriented structures are necessary. When these factors come together, companies can turn a crisis into a real business opportunity. The survey showed that as many as 91% of companies identified new chances, and close to 10% even developed drastically new models capable of causing disruption.
For more information about the Professional MBA Entrepreneurship & Innovation, please click here.