A few days before California mandated a lockdown, I was meeting with a corporate innovation team who had travelled from the Mid-West. We sat comfortably together in a closed-door conference room, anticipating in-person meetings in the not-too-distant future, yet jokingly expressed concern about shaking hands. This would be my last in-person meeting in 2020 and in the days that followed, businesses nationwide shifted entire work forces to work from home. Priorities were rapidly reassessed, and employees shifted their personal ones, as they became “triple-hatted” – schoolteachers, stay-at-home parents, and full-time remote workers.
For many companies, innovation took a backseat to developing coronavirus playbooks to protect their workforce’s health and productivity, maintain customer engagement, and recover from supply chain disruptions and operational challenges. Other companies pivoted in-person corporate innovation meetings to video conferences. Greenfield business initiatives stopped coming to Silicon Valley in search of novel solutions. So here we are, 18 months into the coronavirus crisis trying to understand: how has corporate innovation faired and how can we nurture it in a changed landscape?
Delivering Microsoft’s quarterly earnings report in April 2020, CEO Satya Nadella shared, “We’ve seen two years’ worth of digital transformation in two months.” Despite no indication, at the time, of how long the pandemic would truly last, it became evident that both startups and established companies were innovating rapidly. One year later Steve Larmar, president and CEO of the American Apparel and footwear Association told CNBC, “We’ve implemented 10 years of innovation in the last 10 months… we’ve really seen a great deal of innovation on every angle: retail, supply chain, sourcing, technology, you name it.”
Corporate cultures that embrace early technology are reaping the rewards — increased work efficiency, reduced expenses and costs, improved company culture due to added inclusivity, and technology implementation in new areas of business.
For example, corporates with innovation and early technology adoption ingrained in their culture have already started benefiting from the explosion of change. Instead of boarding a plane and falling behind on email, workers can meet with startups any day of the week and business leaders can invite whole teams to presentations. These modifications raise the rate of connections made and reduce the number of time-consuming feedback loops among stakeholders. The sense of inclusivity and transparency in meetings is maintained virtually and the acceptance of video presentations to conduct business has been empowering to innovation teams. Lastly, corporates seem more open to startup introductions because of the reduced barrier to entry – committing to a 30- or 60- minute video meeting is easier than finding time to connect in-person. Corporates holding out for fully in-person meetings are missing out on these considerable benefits and instead spend precious bandwidth internally because it is potentially more comfortable in the near term.
Aside from new or hybrid work styles, enterprises can benefit by exploring business processes historically overlooked by transformational activities. For the past two quarters or so, corporate interest areas have expanded past the traditional data-centric and automation solutions. Companies are prioritizing supporting a digital workforce, which means (for what seems to be the first time), HR Departments will have a seat at the innovation table. Supporting this shift are portfolio companies like Spokn, restructuring employee communications and building a greatly supported remote culture, and Workera, powering an organization's talent/learning ecosystem.
A report from Deloitte last Fall, which interviewed multi-national corporations noted, “COVID-19 led them to search for technologies that are out of scope of their usual practices. Technologies like hygiene and sterilization and digital health are the focus of many of the companies we spoke with as they are working to provide a better working and shopping environment for their workers and customers.”
With the pandemic driving huge customer demand for mental health solutions, large corporates will undoubtedly look to make healthcare a key priority and roll out new benefits. Portfolio companies like Pager have brought telehealth capabilities to market, while new tools like Woebot, the AI-powered mental health chatbot, make mental health care liberatingly accessible. Employee scrutiny of work benefit packages has also risen during the pandemic and companies like Cleo, who saw a 167% increase in membership in 2020, are solving the demand for comprehensive family benefits programs.
Those who have traditionally driven enterprise innovation – the CIO and CTO – are not slowing down. In March 2020, corporates who had not yet committed to a cloud-based infrastructure were being forced to shift both their mindset and their policies. And there’s no going back.
According to a recent Gartner forecast, “Worldwide end-user spending on public cloud services is forecast to grow 23.1% in 2021.” Further, Sid Nag, research vice president at Gartner said, “[Cloud adoption] will further evolve from serving pedestrian use cases such as infrastructure and application migration, to those that combine cloud with technologies such as artificial intelligence, the Internet of Things, 5G and more.” Solutions like DataRobot, OmniSci, and Tigera will support the cloud-based euphoria reached once migration headaches ease.
And it is those with a massive supply chain — Consumer Packaged Goods (CPG), Retail, and Food/Agriculture — who are under more pressure than ever to do more with data by leveraging AI/ML, implementing technology to keep employees safe, healthy and at work, and find tech to help with product traceability. Startups implementing supply chain technologies are well-positioned to help corporates funneling resources to these areas. Portfolio companies Vimaan Robotics, Outrider, and Pilot AI have technology supporting these initiatives.
Even through a global pandemic, one trend remains strong — corporates lean on startups to help business leaders solve problems creatively. But the rate at which the problems are solved will depend greatly upon the breadth of solutions considered and speed at which corporates adopt them in a rapidly accelerating tech world. I’m curious to see the permanence of virtual collaboration tools adopted across industries and am optimistic that such digital transformations will raise productivity for both startups and major corporations.