Simply surviving the pandemic with their business models intact was a challenge for most companies. But, for some, Covid-19 has proven to be a catalyst for growth and reinvention.
Among them were companies that a Financial Times panel deemed “Tech Champions.” These include Stockholm-based Legimeet, whose founders drew inspiration from the blockages to create a Start which organizes shareholders’ meetings online.
Meanwhile, Oxford Nanopore, which was established out of the University of Oxford in 2005, has met huge demand as its DNA sequencing technology has been widely used to identify and track the spread of variants of Covid-19 in some 85 countries. The group was floated on the London Stock Exchange in late September for a valuation of Â£ 3.5 billion.
Part of the success of these businesses was delivering the right products and services at the right time, but that’s not all. Big steps forward require courage and the willingness to try new things when others are just getting away with it.
Firms “that innovated before the crisis were more likely to innovate during it,” says Andrew Wear, author of Recovery: How we can create a better and brighter future after a crisis. âThey have the talent and the organizational structure. You can’t just activate innovation.
Indeed, a McKinsey study found that in the first months of 2020, many executives prioritized reducing costs, maximizing efficiency and maintaining business continuity, at the expense of true innovation. Many business leaders have made significant changes to their processes and policies to accommodate the need to work remotely or socially. But it absorbed time and energy that would otherwise have been spent developing new products and services.
âOrganizations that become crippled or only participate in incremental change are those that don’t have the muscle memory of transformation in their philosophy,â says Tsedal Neeley, professor of business administration at Harvard Business School. âYou need change management as a core skill. “
Successful innovation also requires a focused approach. Many companies have gone into the manufacture of personal protective equipment, trying to develop Covid drugs or offering online services. Most have not made any money.
Companies that thrived during the pandemic were able to align their offering with social and business changes, such as working from home or shortened supply chains, but that wasn’t enough.
They also tended to do sideways extensions of their existing businesses, rather than move on to something completely new, and they had a clear path to sustainable profitability, says Mauro GuillÃ©n, director of Cambridge Judge Business School. He calls the process a “pivot” because companies “kept one foot on the ground and turned with the other to distort what they were doing.”
Restaurants, for example, traditionally viewed themselves as dining rooms with a kitchen to provide the food. During the pandemic, many homeowners shifted their focus to being kitchens preparing food for delivery.
Examples of a pivot among this year’s tech champions include Starling Bank, a UK challenger bank that dove into commercial lending during the pandemic, growing its loan portfolio from Â£ 54million to over Â£ 2.2 billion, largely by offering government-backed coronavirus business interruption loans and rebound loans.
Likewise, va-Q-Tec, based in the German city of WÃ¼rzburg, has extended its vacuum insulation and cold chain. logistics company to produce insulated boxes that can be used to store mRNA-based Covid vaccines at the extremely low temperatures required.
Neeley, author of Remote working revolution: Succeed from anywhere, argues that successful reinvention also requires companies to look outward, in a process she calls âdouble transformationâ. âThere is an interconnection that requires working with your partners and customers,â she says. âIt’s not just you, it’s your ecosystem. Otherwise, you will change and no one will be there to receive the product of your transformation.
Sunday, a restaurant app and another FT tech champion, has registered more than 1,000 restaurants with its service, which allows customers to scan a QR code to pay their bill. This required changing the attitudes of diners and restaurateurs. âBefore Covid, I would never have put a QR code on my table. It sounded disgusting, âadmits Victor Lugger, who co-founded the app and tested it at his French restaurant chain Big Mamma.
Companies that succeed in innovating are already benefiting from it. a OECD study from Australia, New Zealand and the United Kingdom by Dan Andrews, Andrew Charlton and Angus Moore found that high productivity companies added staff in response to the pandemic, while low productivity companies were more likely to contract.
âA crisis gives great recourse,â says Wear. âThose who cling to the past fail. Those who look to the future are successful.
In the words of Stanford University economist Paul Romer, a crisis is a terrible thing to waste.
Brooke Masters is the FT’s chief business commentator