Innovation amid economic uncertainty

Mark Gomes at Intellias explains how digital transformation and a people-first culture drive resilience and growth

While economic uncertainty and downturns bring inevitable challenges, these situations can also act as a catalyst for new and innovative business initiatives.

Indeed, more organisations are becoming familiar with the possibilities that investing in the right technologies can bring as part of a people-first culture, even when leadership teams are focusing on economising.

In navigating current economic difficulties, contemporary businesses also have the opportunity to learn from previous experiences. Consider, for instance, The Great Recession - a major economic decline that took place between 2007and 2009.

In the UK alone, more businesses went bust then than in any previous recession, with the Independent reporting in late 2009 that “Almost 27,000 [companies] have closed since the economic crisis began, compared with 24,000 during the early 1990s recession and 9,500 in the downturn of the early 1980s.”

Despite the damaging economic and social fallout this situation created, there are also many stories of businesses that were able to adapt, emerging from the crisis reinvigorated and on a sure footing to succeed in the long term. Lego, for example, embarked on a global expansion strategy during the late 2000s to post record profitability numbers - a remarkable achievement in a sector that might be expected to suffer during a downturn.

Others were able to identify new opportunities to establish themselves as major players in their markets during the most challenging economic circumstances, with Netflix being a great example of a business that thrived during The Great Recession to become one of today’s most recognisable global brands.

Looking more broadly, a strategy that many businesses have used to weather tough economic times is to focus on digital transformation, whereby digital technology is integrated into all areas of an organisation, fundamentally changing how it operates and delivers value.

In recent years, this has driven huge levels of investment to a point where the market as a whole is expected to hit nearly $7 trillion in value by 2029.

Strategise, economise, and innovate

Fundamentally, effective digital transformation projects depend on an organisation’s ability to strategise, economise, and innovate. Applying this rounded approach helps organisations to navigate change, deliver sustainability, and move with the times to prosper. Specifically:

1. Strategise

A successful digital transformation project begins with a well-thought-out strategy, outlining goals and a roadmap for implementing necessary cultural, organisational and operational changes. A strong strategy will also identify potential challenges and outline contingency plans to ensure business continuity.

For example, Intellias is a global technology company with Ukrainian roots that was able to maintain 98% business resilience during the Russian invasion by applying strategic preventative measures in tandem with a broader people-first culture. This enabled the business to post a 70% growth rate despite being faced with the start of the war in 2022.

In a matter of two weeks, approximately 1,300 individuals from southern and eastern Ukraine, regions predominantly affected by the initial violence, were relocated to western Ukraine. The company focused not only on ensuring the safety of its employees, but also on developing strategies to transfer its IT infrastructure to the cloud, physically distancing it from potential conflict areas.

This level of adaptability underlines how organisations can implement effective change, even when confronted with the most challenging situations.

2. Economise

Turning to the need to economise, this process isn’t just about cost-cutting. A more intelligent, long-term approach considers how to get the balance right between investment, effective efficiency, and a profitability regime.

Top priorities should be to invest in technologies that make an organisation more agile and whether approaches such as outsourcing can help them to do more for the business with less. A solid strategy that helps the organisation engage with existing and new suppliers and partners can help ensure everyone wins, even in the context of uncertain times.

Delta Air Lines, for example, responded to the challenges it faced having emerged from bankruptcy in 2007 by not only focusing on business efficiency and economies of scale, but also on improving the customer experience.

For many organisations, in fact, economising is an opportunity to invest in core business processes that can deliver greater value while also implementing tighter financial controls.

3. Innovate

In the current climate, there is a huge degree of emphasis on the role innovation plays in optimising business performance and competitiveness. This is where creating a people-first approach within an organisation is an essential ingredient in fostering a culture of innovation for survival and growth.

Given digital transformation often involves the integration of digital technologies into every aspect of an organisation’s operations, success requires a constant stream of innovative ideas to keep up with the rapidly changing digital landscape.

Ultimately, bold investment in new technology coupled with legacy system modernisation can significantly strengthen business resilience for the long haul.

The commitment to innovation in companies like Amazon, for instance, has seen it develop from its roots as an online book store to a diverse multinational corporation. Today, the largest contributor to its overall profits come from AWS, its hugely successful cloud computing platform launched nearly a decade after the Amazon books business was founded.

In the midst of economic uncertainty, one thing is clear – doing nothing is not an option, especially for those organisations focused on sustained prosperity.

By engaging with employees, partners, and vendors more effectively, building and implementing a solid strategy, and nurturing innovation at every level, business leaders and their teams can ensure they withstand the most challenging times to thrive in the long term.

Mark Gomes is VP of Digital Business at Intellias

Main image courtesy of iStockPhoto.com