Innovation is a Necessity for Survival

04.28.2020 | CIPE Insights | Karim Shaaban

“Innovate or die” was coined by the father of business management, Peter Drucker. This concept cannot be truer and more urgent than now under the Coronavirus (COVID-19) global pandemic crisis.

 

Innovation is defined as an idea, method, process, product, or practical solution to meet a need. It implies research, analysis, creativity, learning, and continuous improvement.  In the modern era, innovation is associated with computers, digital tools, automation, and technology, but it doesn’t always have to involve any of these things. Innovation could simply be a new solution or approach to a problem that a business association or chambers have not utilized before. It could be a new perspective on how to look at a problem.

 

Changing Global Trends and Role of Business Associations and Chambers

Because of COVID-19, nations are now forced to redefine the meaning of national security, strategic industries, and how to recalibrate their national and international supply chains for more resilience. International trade has suffered as travel bans and lockdowns of borders are instituted to avoid the pandemic’s spread. Consequently, there is more emphasis on national production and self-reliance. All are innovating to survive, adapt, and develop future strategies to protect national economies from similar disruptions, even nations that have been thriving economically.

 

In its Annual Trade Statistics and Outlook Report, The World Trade Organization estimates that “…merchandise trade is set to plummet by between 13 and 32% in 2020 due to the COVID-19 pandemic.” It also estimates that “…all regions will suffer double-digit declines in trade volumes in 2020.”

 

Some sectors, particularly related to healthcare, personal care and hygiene, certain food industry segments, cleaning supplies, information and communications technology, big data analytics, drones, health technology, education technology, e-commerce, delivery services, artificial intelligence, and financial technology are thriving during this pandemic crisis’ economy. Others are questioning their business models and value proposition to innovate, adapt, and survive. Informal sectors in many emerging markets are incentivized with amnesty programs to move to the legally registered and tax-paying formal sector to be able to take advantage of government economic protection measures.

 

Membership-based business support organizations, such as business associations and chambers of industry and commerce, have a responsibility to their members to provide innovative services, adapt their business models, and help members do the same. They must understand the challenges their members face to be able to develop innovative solutions. Closely tracking and analyzing information related to business trends will help them provide timely, relevant, and impactful services. There has been a notable explosion of digitalization of services, online education, and e-commerce. A new consumer culture has been formed by the pandemic and it is not likely to disappear after it ends. There are many lessons and advantages that we can ensure to carry forward after the resolution of this pandemic.

 

Inclusive Private Sector Engagement is a Must and Part of Good Governance

As governments manage the crisis, each in their own manner, they struggle to balance the preservation of life and integrity of their health systems with economic activity and productivity. Many countries are operating under a state of emergency, granting them unprecedented powers. Some are placing an emphasis on transparency, accountability, and collaboration. Others are seizing the opportunity to create state-run monopolies and/or curtail rights and freedoms.

 

Some countries are bullying the private sector, blackmailing them to contribute to national economic relief funds, threatening them covertly with nationalization, or, imposing tough measures to safeguard employees at businesses’ expense. Other countries are only protecting select sectors or large enterprises, forgetting that small and medium enterprises are the engines of most economic activity. Others are using quasi-government business institutions to rubber-stamp government decisions, allowing them to claim private sector engagement as they roll out economic relief and recovery efforts.

 

Inclusive and diverse private sector engagement in formulating economic relief and recovery plans is a key strategy in managing the crisis successfully by any government. Business associations and chambers have a responsibility towards their members and sectors to ensure this level of engagement.  They also have the responsibility to provide practical solutions, raise awareness, garner support, effectively advocate, in addition to raising red flags pointing out problems.

 

CIPE is helping its partners around the world to create innovative solutions to support and represent private enterprise effectively, provide valuable information and analysis, deliver relevant and valuable business support services to help their members become more resilient, and even thrive after this crisis passes. CIPE and Global Partners Respond to COVID-19 & CIPE News Brief: COVID-19, Corruption, and the Urgency of Transparency

Practical application for associations and chambers:

Governance and Leadership

  • Innovation as a value: create an intentional organizational culture with innovation as an officially adopted core value at its heart. Be clear about what innovation means to your organization and write that description down for everyone to see.
  • Innovate through learning. Any strategic planning exercise should be based on a comprehensive environmental scan of internal, external factors, coupled with analysis. It should be built upon data from members’ needs, levels of satisfaction, successful strategies, and failures. It should be based on a logical framework and sound assumptions. Strategic plans will need close examination and revision to account for the changed environment and new members’ needs. A strategic plan governs a period of about 3-5 years.
  • A crisis management plan is not the same as a strategic plan, it only governs the crisis and is revised more frequently than the organization’s overall strategic plan. Lessons learned from managing the crisis will inform longer-term innovative strategies included in the broader longer-term strategic plan. The crisis management plan may call for the suspension of certain programs and the initiation of new ones. The crisis management team is mostly made up of the executive director, department heads with some board of directors’ representation. Strategic communication is an essential component of the crisis management team and plan.
  • Create supportive structures and allocate resources. Establish an emerging leaders committee to help recruit and cultivate new volunteer leaders to ensure sustainability and innovation. Committees, task forces, and micro-taskforces supplement the role of the staff and board. They can be very effective if managed right for any association and/or chambers. They are particularly critical for smaller organizations with limited human and financial resources. Including non-members as well as members in them ensures fresh and diverse ideas.
  • Term limits: if they are not in the by-laws, add it on the board’s to-do list to revise the by-laws and include them. No one should be a chair for life or for too long. It is recommended to have staggered term limits if possible, to allow for stability yet guarantee a healthy turnover of volunteer leaders and thinking.
  • Board meetings should be structured and orderly, but too much structure and rigidness might come at the expense of dampening creativity and innovation. The board should encourage open meetings and strive for inclusion and diversity of thought.
  • Empower innovators and celebrate good ideas around the board table and within committees and task forces. Egos often kill great ideas. Include a section on innovation in the board orientation manual and within board members’ commitment forms. If there isn’t a board responsibilities and commitment form outlining expectations, this is a good time to develop one. The first step towards ensuring an intentionally created organizational culture is through setting clear expectations upfront, training volunteer leaders to prepare and empower them to lead and innovate.

 

Management

  • Implementation responsibility falls heavily within the purview of the executive director as the chief staff executive responsible for implementing the board’s strategic vision for the organization. In some cases, the board may delegate value setting to the executive director and his/her team, but in this case, the board is the one that needs to be brought along.
  • Create a ONE-TEAM culture within the organization. While respecting lines of authority to avoid chaos, avoid creating organizations within organizations, and encourage cross-team collaboration. Hold non-collaborators and those who don’t believe in a one-team approach accountable. Celebrate successes, reward collaborators, and innovators. While health and government officials work on “flattening the curve” of COVID-19, managers should work on flattening their teams to encourage collaboration and innovation.
  • The best innovation return on investment for any organization is the investment made in its people. Encourage and support staff professional development opportunities.
  • Create space for innovation, whether something as simple as a whiteboard in the office where anyone can write down their ideas, a suggestion box, or an online forum, and topical staff working groups.
  • Strategic management: set benchmarks, key performance indicators, and goals for strategies and tactics. Constantly test the assumptions made in setting plans. Regularly evaluate progress and don’t only focus on counting outputs on the activity and program levels, but make sure to assess the impact as well. We often learn most from failures than anything else, so place an emphasis on compiling lessons learned from both successful and failed projects, otherwise, you will reinvent the wheel over and over again and repeat the same mistakes every time.
  • Be comfortable with risk-taking and pilot projects, but again, don’t ever miss an opportunity to learn from your strategies, activities, programs, and services. Your organization will never be able to innovate if you don’t learn. Preserve organizational wisdom and make knowledge management and learning a major focus area.
  • Monitor members’ needs and challenges and forever seek innovative solutions to address them. Invite member and stakeholders’ participation through surveys, virtual focus groups, other digital platforms, or simply plain old phone and in-person interviews if that works best for the target audience. There is no one-size-fits-all solution in this area; just get the data you need to develop impactful programs and services.
  • Stay informed and dedicate resources to monitor the latest members’ industry trends and forecasts to be able to provide relevant and valuable services to your members. You want to help your members anticipate future trends, guide them towards growth areas, and away from danger. Be sure to also monitor the latest trends in association and chambers’ management and service delivery.

The opposite of an innovative organization is one that is stagnant, that isn’t in touch with their stakeholders’ needs, doesn’t change its culture, doesn’t adapt, improve, or grow.  Business associations and chambers that focus on learning, adapting, innovating, and enhancing their offerings will not only survive this crisis but will also thrive after it passes.

 

Click here to download the Arabic translation.

 

About the Author:

Karim Shaaban, IOM, is Program Director for the Levant Region at the Center for International Private Enterprise (CIPE). www.cipe.org • www.cipe-arabia.org (Arabic)

kshaaban@cipe.org