When the COVID-19 pandemic forced lockdowns around the world businesses undertook rapid innovation out of necessity, faced with an unimaginable ultimatum between adapting their established practices and risking going out of business altogether. Restaurants flocked to delivery services, retailers doubled-down on eCommerce, and corporate offices moved to remote work environments, all seemingly overnight.
The speed and scope of these changes were extraordinary, especially those that signalled a much larger systemic shift. For example, we have long been told that the future of work will be remote but many organisations were reluctant to embrace this in significant ways. Enter 2020. Now we know remote work is not only possible on a wide-scale, but can actually benefit employee productivity and work-life balance (Stanford Institute for Economic Policy Research, 2020). The status quo was no longer viable so wide-spread change was able to occur. This is a form of systemic innovation, a process that “transforms the rules and/or infrastructure used by organizations” (University of Hull, 2017).
We now find ourselves navigating the “new normal”, a world in which the status quo has been called into question across almost every industry and new norms are yet to solidify. A world where we know significant change is not only possible, but necessary. This provides a unique and potentially revolutionary opportunity to utilise systemic innovation and reimagine even the most complex systems from the ground up.
The most significant catalyst for this window of opportunity is the shift in purpose of organisational innovation. Where it was previously predominantly focused on carving out competitive advantage and increased revenue, there is now a focus on organisational resilience and agility. Where teams previously resisted venturing into unknown territory for fear of failure, they now have no choice but to take the leap of faith and embrace innovation at every level of their business practice. This systemic form of innovation is vastly more complex than product innovation, as it requires the challenging of deeply ingrained norms and practices. But with these norms called into question across most industries, the door has opened for systemic change to occur.
One industry that has been forced to undergo some of the most significant systemic change is the hospitality industry. Hotels more specifically saw an industry-wide revenue decrease of 87% almost overnight. The hotel industry is one of the most long-standing in existence, so this sudden revenue decrease has had significant impact. While this caused businesses to rapidly undergo product innovations, such as shifting to room service breakfast instead of self-service buffets, InterContinental Hotel Group identified the need and opportunity for more significant systemic change, or the proactive development of a “new normal”. IHG developed a new operational structure that is fluid and scalable across their multiple brand categories. Innovation consultancy Inastra facilitated the project, introducing transdisciplinary practices to mitigate risks of falling back into the status quo and to drive meaningful systemic innovation. After rapidly testing and iterating potential solutions, these structures have now rolled out across IHG's Australasia portfolio. While rapid product innovations, such as the packaged breakfast offerings, are temporary and will likely be reversed once restrictions subside, the industry won't return to their previous operational structures because the new ones are more efficient, resilient, and adaptive to change. Only when faced with the necessity of change was IHG able to re-evaluate from the ground up and design a system for the future, instead of relying on the ones of the past.
In the wake of the COVID-19 pandemic, as the status quo is questioned, tested, and ultimately nullified, a window of opportunity has presented itself for meaningful systemic innovation to occur. The purpose of this change is not for incremental product improvement, but for large-scale organisational resilience. Across all industries now is the time to step back and evaluate the best possible structures you could be operating with, then go out there and implement them.