Post-Pandemic: How Can Startups Be Supported and Innovation Continue?

Crises are adrenaline for innovation, stemming from startups or from within firms.

Still, when you look at companies’ innovation strategies, I am repeatedly surprised to see that innovation efforts are linked to the cash flow. Guess what is the first thing that gets cut in a crisis? Innovation must be a strategic project/initiative, located at the Board of Director level or at least CEO level and financed independently from the daily business. It is critical that companies have an ongoing pool of innovation initiatives, not only to create a sustainable business but also to get ahead of the curve during a crisis and/or right after.

While I agree that the entrepreneurial environment is critical for innovation to continue and startups to flourish (via infrastructure, legal framework, tax benefits, a culture that allows failure), I would like to shed light on a supposedly different topic: the startups’ inner workings.

An entrepreneur’s single-mindedness helps drive a start-up to success even through a pandemic but too much single-mindedness for too long can potentially hinder. The entrepreneur’s focus is often not enough of a success factor.

Why do most startups fail despite solid funding and marketability? Because of team issues.

It’s easy to talk about rationally anchored keywords such as strategy, risk management, business development, legal and tax matters etc. (by the way, startups tend to get plenty of support in these areas). But who implements all these? Why do they succeed or fail? Because of the last mile: people.

In general, but especially in challenging times, the pressure founders and their teams experience is immense, stemming from the market, investors, team mates, family, themselves. How to deal with high pressure, with limited resources? How to navigate change, remain agile and creative and still have a structure that allows for growth? How to select and develop the right team? And when and where to acquire the leadership skills needed to provide direction and keep the team on board?

The human element gets underestimated because it is not hard science. I often hear: yes, it’s a risk but it’s a black box. No, it’s not. Hence, it is in this area that we can and need to help the entrepreneurs and founders, regardless of whether we’re a corporate, an investor, board member, accelerator or incubator.

Single-mindedness boosts focus, dedication, commitment and decision-making. Most startups work super hard. But it is a marathon, and a marathon cannot be completed with sprint pace. Yet is not uncommon for and expected of entrepreneurs to work 12, 14, 16 hours a day, without charging or taking ten minutes to look at the bigger picture. Even elite athletes take breaks. We need to help startups occasionally do a critical reality check, a “break pause”, ideally by people who tell the truth, regardless of status or title, like the jester did to the king back in the days to ensure the alignment of environment, strategy, structure, people and culture.

Solution

We must invest in and support the backbone AND the heartbeat, and the leadership thereof.

The Backbone is not only about the vision, mission, strategy but also about the structure and mindset for growth. It is critical to have clarity of roles and responsibilities and to not build organizations around the individual people.

The Heartbeat is about the selection and development of the right team. It is key to build and nurture a culture of trust, manage expectations, initiate and manage communication (not by reading signs) and bring uncomfortable topics to the table early.

Leadership starts with self-leadership. Those founders who succeed in the long term are almost always the ones who learn about themselves the fastest. Leading is not the same as being the leader. The founder’s syndrome often ends tragically. This needn’t be the case.

It’s also wise to look out for the startups that didn’t make it (‘failed’), tap their experience and knowledge and in turn help them grow through it. This knowledge is priceless to use during crisis and uncertainty.

How to learn from a crisis or even a setback

It is not an easy process but certainly a worthwhile one. First, you may deny what has happened, then anger can follows (the others are to blame), followed possibly by thoughts of revenge, loss or weakening of, self-confidence. And hopefully afterwards comes the big chance: the choice to learn from the experience or to forever get stuck in the victim role. Experiences can be painful but if grasped and dealt with wisely, they help you grow and develop, get stronger and more resilient. Priceless.

The future has a way of coming unannounced. Steve Jobs said that dots cannot be connected in advance. How true! It is not about the nature of the experience; it is about what we make of it. We have the choice to list an experience on the negative or on the positive side on our personal balance sheet. Dissatisfaction does not lie in past-related experiences, but in how we deal with them. As Austrian neurologist and psychologist Viktor Frankl wrote, “Between stimulus and response lies a space. In that space lie our freedom and power to choose a response. In our response lies our growth and our happiness.” To ensure innovation therefore, and also nurture entrepreneurship, we should choose a response to the crisis or setback that brings us towards growth and satisfaction.

We can help startups shift focus from the more rational aspects (the backbone) to the more human aspects (the heartbeat). Let us support them, coach them or give them coaches at hand who can help develop leadership skills before the growing team needs them.

Final Words: We want entrepreneurs to think big. They spearhead innovation. Because post-COVID is pre-next-crisis, innovation should not just emerge in a crisis but thanks to strategic leadership and investment. Ultimately, it is people that make it (or break it). Let’s focus on this critical success factor, aside from building the ecosystem. The potential is immense.

In summary

• Do not tie innovation initiatives to cash flow, make them part of your culture.
• Examine innovation inside the company.
• Make innovation a team effort.
• Break and pause regularly. Then go back to innovating.
• Tie your backbone to your heartbeat.
• Learn from mistakes.
• Choose your response.
• Think big.

Two-time Amazon bestselling author, Isabelle Nüssli, is an international senior executive specializing in digital leadership, business strategy, crisis management, and corporate innovation. As the chief energizing officer of Leverage YourSelf AG and the co-founder/chairperson of Responsible Leadership AG, she coaches business leaders and startups in navigating change and capitalizing on their full potential. Isabelle holds master’s degrees from Kellogg School of Management at Northwestern University, INSEAD, and the University of St.Gallen.