COVID-19 has become a catalyst for change, accelerating the next decade of innovation.
More than 90% of US business leaders believe that COVID-19 will fundamentally change the way they do business over the next five years, according to McKinsey’s recent survey of over 200 organisations1. And while the majority see it as incredibly challenging, they also agree it will provide opportunities for growth.
In this way, COVID-19 has created a burning platform across every sector – an unanticipated ‘disruptive dilemma’ trigger point, as Subculture co-founder Michael Maness would define it. His research uncovered a Universal Arc pattern that repeats across businesses, institutions and even societies – from a ’divergent idea’ through growth, and then eventually into stagnation, decline and demise2.
Digital disruption accelerated the momentum of movement through this arc over the past few decades. But according to Maness, “with COVID-19, we’re seeing that arc become a rollercoaster. It’s moving fast, and you have to prepare to ride it3.”
The initial impact of COVID-19 has proved to be a test case for this framework. We saw businesses hold true to their purpose, with leaders focusing efforts on both employee and customer experience. They empowered their teams to seek out innovative ways to get products and services to market safely, and solve for shifting customer needs.
In some cases, the restrictive nature of containment policies necessitated the removal of legal or regulatory barriers to keep essential services running. For many businesses, COVID-19 became a catalyst to embrace new technologies and rethink flexibility and convenience for clients and employees alike. Others began to rethink traditional business models and look for new ways to diversify their revenue streams, while also lowering costs.
Adaptive business owners haven’t waited for the pandemic to abate to innovate. In the words of one of our clients, “when you have a sense of urgency and you don’t have a choice, it’s incredible what you can do.”4 Examples of innovation include the rapid move to reimbursed telehealth consultations for medical specialists, or digital signatures for contracts.
The Macquarie Perspective report explores how any disruptive change – from digital transformation to a global pandemic – demands a more adaptive business response.
There is little doubt that the rapid change we have seen in 2020 will continue, and we may need to operate within its constraints for some time. However, constraints can inspire creative solutions – providing the momentum for positive change.
Hear from a range of leaders across industries facing similar challenges by downloading Macquarie’s Adapting to change: a playbook for business leaders report at Macquarie.com.au/advisers/perspective
References
1 Innovation in a crisis: Why it is more critical than ever, June 17 2020 McKinsey. Data source: McKinsey Innovation through Crisis Survey, April 2020 n=200+
(https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/innovation-in-a-crisis-why-it-is-more-critical-than-ever)
2ACCE Webinar: Divergent Leadership, Michael Maness October 2017
(https://www.youtube.com/watch?v=gIotLMpI2pY)
3 COVID-19: surfing the wave of disruption (video), Michael Maness, July 5 2020
(https://www.youtube.com/watch?v=O43jjrwesoM&feature=emb_logo)
4 A catalyst for positive change, Macquarie Bank, June 2020
(https://www.macquarie.com.au/site/coronavirus-resources/supporting-your-business/a-catalyst-for-positive-change.html)
