The FINANCIAL - Why some of the best inventions are born in crisis

Why some of the best inventions are born in crisis

Why some of the best inventions are born in crisis

The FINANCIAL -- Crisis spurs innovation. Discover the innovators who have created lifechanging solutions at the worst of times. According to London School of Business, as the saying goes, necessity is the mother of invention. History has shown that periods of significant upheaval and stress inspire reinvention to overcome constraints, overthrow old assumptions and achieve new imperatives. Some of the biggest companies in the world today were created during or in the aftermath of the financial crisis in 2008.

Instagram, WhatsApp, Uber and Airbnb were all started by ambitious entrepreneurs who might have ended up working in a comfortable job at a big corporate, bank or management consultancy if it weren’t for the difficult economic environment at the time.

This year has certainly not been like any other year. The shock unleashed to our daily lives by the COVID-19 pandemic changed the world before our eyes. Organisations, businesses, even healthcare systems and learning institutions like ours, scrambled to adjust to overcome challenges they could not have imagined and innovate new capabilities, products and services in a matter of days and weeks – rather than months and years.

Retailers and cafes launched gift and subscription services; whisky and gin distilleries became hand sanitiser and ventilator factories and the lockdowns saw many organisations across sectors suddenly embrace digital, data and analytics functionality in a way that hadn’t happened before. Some of these innovations will not stick around for the long term, but many will, as new habits are configured and old behaviours don’t return.

So, to pay tribute to the extraordinary ingenuity focused on mitigating the worst socioeconomic, business and health effects of the pandemic, we have created a new category this year as part of our annual Real Innovation Awards: the Innovation in Adversity Award. This category was open for enterprises that radically changed their business model to survive the pandemic or that mobilised to fill a new opportunity created by the crisis – as well as those which had rapidly repurposed existing assets or reconfigured their organisations to meet an urgent societal need unrelated to the pandemic. Some great examples were shortlisted, with different approaches to innovation in the face of adversity.

Life-saving innovation
A team at Warrington and Halton Teaching Hospitals invented the Black Box to treat COVID-19 patients – a lifechanging innovation that literally saved people’s lives. Experiencing an international acute shortage of ventilators, the small team of consultants, nurses, physiotherapists and physiologists at the NHS Foundation Trust, knew they needed to try something different.

“Some of these innovations will not stick around for the long term, but many will as new habits are configured and old behaviours don’t return”
The Warrington team adapted breathing machines normally used for sleep apnoea, a disorder that stops breathing during sleep, which became known as “black boxes”. These have been so successful that Warrington hospital continues to have the lowest number of COVID-19 related deaths in the northwest of England – half that of some local hospitals. A classic example of ‘recombinant innovation’ in a time of need without delay, it also demonstrates that small innovations made locally by people just ‘doing their job’ can make a huge difference to people’s lives.

Big and small businesses quickly shifted their services and operating model this year not just to survive the pandemic but to create a beneficial impact for their local communities and society at large.

When the pandemic hit, consumer appliance firm Arçelik, which owns the Beko and Grundy brands, joined forces with some of the biggest names in technology and aviation to undertake the mass production of life-saving mechanical ventilators. In a remarkable case of cross-industry collaboration for innovation, 120 engineers, including 60 from Arçelik and others from BioSys, Baykar Technologies and Aselsan, got together to use the rapid prototyping facilities at Arçelik Garage, an open innovation centre in Istanbul, to design and test the initial prototype on a strict two week deadline.

Arçelik completed production of 5,000 life saving mechanical ventilators in June, with more than half sent to 18 countries including some of the hardest hit countries, such as Brazil, Somalia and Nigeria. The collective expertise in the design, industrialisation and localisation of the ventilator is given to the Turkish Ministry of Industry and Technology on a not-for-profit basis.

‘Part of the solution’
Arçelik CEO Hakan Bulgurlu says: “We’re proud to have played a role in this project, which shows what can be achieved when we come together for the greater good. We want to be part of the solution; working collectively with businesses and governments to fight COVID-19 globally and shape a more sustainable future.”

Meanwhile, on a smaller scale, San Francisco-based restaurant wholesale app Cheetah pivoted to sell to consumers after the pandemic and lockdowns cut 80% of its revenues almost overnight. Demonstrating true innovative thinking in adversity, Cheetah saw the opportunity not only to pivot to survive, but also to support its local community. By creating a consumer version of its app, it enabled customers to order from its wholesale suppliers and collect orders the next day at designated pick-up points in a completely contactless process.

The system leveraged Cheetah’s infrastructure to solve numerous pain points in a post-COVID world: it helps local grocery stores overcome possible supply shortages through access to a separate supply chain; enables more food ordering transactions with fewer employees than door-to-door delivery, and saves customers time by avoiding speculative shopping trips and queues to enter stores – and reduce risk of COVID-19 transmission.

Cheetah is also supporting restaurants by removing its delivery fees on supplies for those that remain open; little wonder that in April this year it closed a $36 million Series B round, bringing total funding to more than $66 million since its 2015 inception.

From coal to code
Two of the finalists were chosen for innovation in adversity that had nothing to do with the pandemic. Bit Source is an unusual software services company located in one of the poorest areas of the US, in the Appalachian region of Eastern Kentucky. A region once powered by the coal industry, it has been in decline for many years as a result of anti-coal policies and the shutdown of the mines that employed most of the local population.

How, wondered two former coalminers in Pikeville, could they create employment and reboot the local economy in this bleak scenario? Having considered “just about everything – wind farms, solar farms, hog farms – you name it” – Rusty Justice and Lynn Parrish set up Bit Source, a software services company that turns former miners into coders and sells software products to companies. Along the way they had to overcome challenges seemingly the size of the surrounding mountains themselves: a scarcity of IT skills, poor high-speed internet access and difficulty in accessing funds and projects.

“Small innovations made locally by people just ‘doing their job’ can make a huge difference to people’s lives”
But the founders had seen how miners employed logic to solve life-or-death problems underground and had a hunch that the same skills could be successfully redeployed in programming. They began by hiring 11 former miners who scored highest on a coding aptitude test, trained them to be highly competent programmers and secured software development contracts with several companies. Bit Source is still small but, five years on, most of the original team still code in the company’s old Coca-Cola factory by the Big Sandy river, diligently applying Appalachian ingenuity to move mountains.

The innovation story of Barcelona-based Batec Mobility, meanwhile, is equally inspiring – with its founder forced to think differently and create a new mobility solution to overcome his personal adversity challenge.

At 18-years-old, founder Pau Bach was passionate about motorbikes and cycling. In his first year of studying industrial design, and someone who led an extremely active life, a traffic accident left him quadriplegic and struggling to cope with a profoundly life-changing injury. He found that the mobility aids available then simply did not allow him to do what he wanted to do, in terms of mobility and lifestyle.

The solution? Pau decided to start manufacturing by hand his own mobility solutions: ‘add-on’ handbikes that incorporated technology from cycling and electric vehicles that could be connected to his wheelchair. Thanks to his inventions, he was able to practice sports, travel and get around autonomously. In 2006, at the age of 27, he decided to improve the life of others in his situation by developing products to sell. In 2008, he launched his own product line in Spain and they are available today in more than 20 countries worldwide, reaching more than 6.000 wheelchairs users in total.

He has since gone from strength to strength, winning numerous awards for social responsibility and entrepreneurship along the way. If ever there was a case of necessity being mother to invention, this is it.

Innovation is a process that requires creativity and, above all, grit, tenacity, hard work and a bit of luck. Since 2015, the Institute of Innovation and Entrepreneurship (IIE) has been on a mission to celebrate founders who have stretched the boundaries of human endurance, ingenuity and originality to create new archetypes for a better future for consumers and communities. Register for the #RealInnovationAwards 2020 here to be held on 10 December at 16.00 GMT. Hosted by Professor Julian Birkinshaw and Jeff Skinner, Executive Director of the IIE, the awards event will feature a ‘fireside chat’ with the Judges Choice winners of the Innovation in Adversity award, as well as hear from the winners of the other five categories and LBS Faculty sharing their insights on this theme. Get ready to be inspired!

Author: The FINANCIAL

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