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A Crisis is a Terrible Thing to Waste: How to Capitalise on Them

Feb 14th 2023

Paul Campbell, Innovation Executive, Venture Builder, Speaker, shares his extensive experience on how to capitalise on a crisis and offers key takeaways for leaders to drive innovation.

My meeting with the Board was scheduled to start at 9am on September 11, 2001 – THE September 11. I had been invited to make a proposal on an innovation initiative handed down from them. As I entered the Board Room, the scene was chaotic as the entire executive team worked to understand what was happening 3,000 miles away, and the impact on employees, partners, customers, citizenry.

Someone pointed me to a laptop which held my two-hour presentation at the front of the room. The CEO got everyone’s attention, ‘Clearly, today is not a normal day to consider this proposal. However, out of respect for the work your team has done, we’ll give you 15 minutes’. We had been working on the project for six months. Today was supposed to be the day to get Board approval. Instead… 15 minutes.

After my short presentation, the CEO said, ‘The world changed today. Although this proposal is important to the future of our company, today is not the day to consider it. However, I promise you, we will invite you back to have a proper assessment and decision’.

As I left the boardroom, I wondered if I would ever be invited back. Amazingly, nine months later, the Board asked for an updated proposal, which was approved and ultimately became my first ‘unicorn’. Before departing, the Board asked if we had explored anything else? Yes, we answered. We had taken advantage of the crisis to explore new growth opportunities. In short time, the Board approved three more projects during the crisis that each turned into unicorns. What a commitment! Today, I remember with amazement the Board’s determination to explore strategic growth options, despite the disruptions caused by the crisis.

Crises: Opportunities or Setbacks

All of us would agree one role of corporate leadership teams is to sponsor and drive strategic initiatives that are not only good for the company in normal times, but survive disruptions and outlast short-term economic downturns, no matter how unprecedented the crisis may be. We’ve had our share of them. Since the year 2000, each decade started with an economic crisis that disrupted nearly every company’s business stability and for many, an existential crisis:

  • 2000’s: Y2K / / 9-11
  • 2010’s: The Great Recession
  • 2020’s: Covid-19

Image Source: Paul Campbell, taken at the Smithsonian Museum, Washington DC

As a result, today’s leaders are experienced in switching into crisis management mode, so much so that it has nearly become routine.

However, not all companies respond to a crisis in the same way. Some companies, unaware or unable to identify viable growth opportunities, use a crisis to focus scarce resources on the core businesses, reduce innovation and R&D programmes, and delay M&A plans. These companies have become accustomed to using disruptions as a crutch and a scapegoat for under-performance. If successful in avoiding a catastrophe during their first crisis, leaders at all levels in these organisations learn a lasting ‘lesson’ on how to approach crises: cut investments, reduce risk and store dry powder for the next crisis. Once ingrained in the leadership team, the same playbook is repeated each time. Only a radical shakeup can dislodge this mindset.

In contrast, other corporations see opportunities in the midst of a crisis. In these growth-minded companies, crises are seen as times to be aggressive, start new initiatives, execute their M&A plan, or access cheap capital to invest in bolder initiatives. Famously, during the 2001-2002 downturn, companies like Salesforce, DocuSign, Tesla, Facebook, SpaceX and ServiceNow were founded. After the 2008-9 Great Financial Crisis, Uber, Square, Pinterest, and many more started up.

In the corporate world, disruptions like the iPod, AWS, camera phones (don’t laugh, this was radical innovation in 2002) were launched in 2001-2002, and Waymo, IBM Watson, among others were launched in 2011.

  • In both periods, similar dynamics were at play that innovative companies deftly leveraged:
  • Access to venture investment (abundance of ‘dry powder’ looking for growth opportunities)
  • Access to talent (high unemployment, over 10% in 2010 in the US)

Emerging technologies that had matured but were now open, ubiquitous, low-cost and being applied to new business models (e.g. internet/fast connectivity, smart phones, Cloud, AI).

In addition to new ventures launched, another way to measure the risk appetite of companies during a crisis is M&A activity. Companies are easily divided into those who see few options during a crisis and are open to being gobbled up, versus those who see opportunities to expand into new markets and gobble up promising startups or competitors to strengthen their strategic direction. Let’s take a look at what happened in the USA. In 2021, there was a record number of M&A deals – 24,412!! Similarly, back in 2010, a record number at the time transpired – 16,537. Followed by a new record in 2011 – 18,882 deals.

Number of M&A Deals, USA (Source: Statistica)

What Will We Learn From The Covid Crisis?

Rarely have we had the opportunity to assess corporate leadership like we have now! Unlike previous crises, the global pandemic and ensuing economic disruption hit every industry simultaneously, either positively or negatively. A remarkable disruption case study, indeed. And companies responded differently, some slamming on the brakes and others stepping on the accelerator. Every company made strategic tradeoffs on where to re-deploy capital to generate the best outcomes for their customers, companies, employees, and shareholders. This ubiquitous period of disruption gives a rare, first-hand opportunity to observe and compare leadership, culture and for this audience, commitment levels to growth and innovation. In other words, how committed are companies and Boards to stated objectives, or how fickle their decision-making is proving to be.

Leaders are complaining they have no internal competence, successes nor confidence building new businesses. Without a bit of success, it’s easy to see why they cut their innovation and R&D programmes during times of crisis. To them, there’s nothing to lose.

As we saw after previous crises, this story will unfold in the coming years as companies bear the burden of their decisions. As we all know, only half of the Fortune 500 companies from 2000 still exist today. The consequences are great.

A Crisis is a Terrible Thing to Waste

We all know the value of a sound strategic plan. It guides the company’s investments and innovation efforts through a crisis. Companies align teams and resources behind the strategy and as progress is made it gains organisational knowledge that helps hone instincts, turning them into smarter decisions that turn into valid new businesses.

Referring back to the opening story, that leadership team was committed to its strategic direction throughout the crisis. During which, the innovation team explored growth opportunities for near-term investment to match business conditions and emerging opportunities during and after the crisis. These explorations led to three unicorns that happened because the leadership team was prepared to act faster than competitors who didn’t manage the crisis as an opportunity. Actions to take now:

Low-Cost Experimentation: Companies with successful innovation programmes encourage teams to develop proposals during all business conditions. By encouraging this preparedness, a constant inflow of growth initiatives or innovation projects create an innovation playbook that matches the business terrain. I saw this dynamic in action recently. I was helping a company whose innovation team had explored drones + computer vision + AI for automating warehouse inventory tracking. We demonstrated a low-cost POC (proof of concept) but it was rejected because the legacy solution had worked well enough for many years. However, six months later, the manufacturing team ran into a problem after an ERP system upgrade. The legacy inventory automation connections broke, creating significant manufacturing disruptions. This self-inflicted supply chain disruption added to the existing supply chain nightmare already unfolding due to Covid-19. At once, we deployed the drone solution to restore manufacturing capacity and predictability.

The Value of Serial Intrapreneurship: Recent McKinsey research showed that serial business builders generate 40% more growth from each initiative versus a company that is making its first effort. 40% – each initiative! In part, this happens because the team responsible for innovation and growth programmes commands a deep understanding of how the company works, and deploys agile structures, funding models and processes that empower and embolden the company to be more ambitious. With each success, teams are more confident setting bold ambitions for new initiatives.


– Assess your understanding of customer’s changing needs during the crisis and set up agile experiments to understand deeply if you can create new solutions that meet unmet needs better than competitors and better than your own solutions pre-crisis

– Benchmark competition or industries to gauge their preparedness and approach to a crisis

– Explore emerging tech to gauge its readiness to accelerate growth or reduce operating costs

– Re-assess vendors and GTM partners, squeeze more innovation out of both (supply chain disruptions forced many companies to adopt a ‘China + 1’ strategy, but honestly, many companies were already pursuing supply chains that didn’t include China. These companies were rewarded with out-sized success during the pandemic when China ‘zero-covid’ policy disruptions took place

– Change funding models to an on-demand, ‘ATM’ model, where capital is accessed when projects hit milestones but given to others if unsuccessful. Similarly, access external capital markets for co-investment opportunities for your big ideas

– Re-Assess leadership, understand who is ambidextrous and who is not. Place ops-minded teams in lower-level roles and promote growth-minded leaders.

In Closing

One of my hobbies is running half marathons. Mixing work with my passion, I like to use a running metaphor to describe the mindset exhibited above. When running on the flat, racers settle into a pace that matches their physical condition. That pace doesn’t change during the entire 13.1-mile race, except when there’s a hill, which in San Francisco can be formidable. To successfully conquer the uphill run without over-exertion, racers are taught to take shorter strides without changing foot speed. When done correctly, the cardiovascular system is not significantly affected by the uphill climb and so runners feel energised when they reach the top. Likewise, on the downhill side, runners continue at the same pace but lengthen strides to let gravity carry them further without extra exertion.

Take-aways for corporate leaders during a crisis:

  • Retain your innovation pace (strategic explorations) but
  • Shorten your stride (time horizon and funding model) and
  • Evaluate weakened competitors or promising startups
  • To be ready to act boldly

Have a great race!