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Geoffrey Moore: Three innovative paths to recovery

COVID-19 forced most companies into a state of course correction and innovation in order to stay afloat.

COVID-19 forced most companies into a state of course correction and innovation in order to stay afloat. You’ll find examples everywhere. Amazon set up on-site testing labs and beefed up staff to handle ordering surges. John Deere created new safety measures for its warehouse teams. Wineries are offering virtual tastings and many, like this spice company, are shifting to identify entirely new target markets. 

Whether you’re a decision-maker at a large corporation or a small independent retail shop – Geoffrey Moore, the best-selling author of Chasing the Chasm and a respected marketing consultant and innovations expert, discusses three models for innovation to help you move your business through the pandemic.

The following are lightly edited excerpts from our conversation with Moore.

Three ways to innovate

There are three ways you can make a return on innovation right now. You can differentiate: “I am the new amazing thing. And you’re going to buy me and my company is going to be successful because what I’m offering is really, really wonderful.” This would be like the iPhone going up against the Nokia smartphone. That’s great. It doesn’t happen that often, but when it happens, it’s amazing. More commonly, particularly for established companies, the return is not on differentiation. It’s on the second way – innovation that neutralises, meaning it reduces the gap between your product or service and outside innovations.

In my book Zone to Win, we talked about Microsoft doing this with its cloud computing service Azure. Amazon differentiated by nailing cloud computing first, but Microsoft neutralised incredibly rapidly. And it’s created a very interesting duopoly because Microsoft was able to come back so quickly and bring most of its installed base with it. So then the key to neutralisation is to get good enough fast enough. You don’t create anything. You just copy. Just get back in the game, which is what Google did with Android and what Nokia did not do with Symbian.

I’m nowhere near as powerful as I thought I would have been. I need to reconstruct my power base. I need to go back to first principles, and be in service to my customers and to my ecosystem.

And then the third option right now is to optimise: “We don’t have any very good alternatives in front of us right now. We need to just lower our footprint, lower our profile. We need to get innovative about how to do what we do much, much less expensively.”

Startups that are venture-backed should be focused on differentiation. This is a great time to differentiate for them. I think established companies like Salesforce, Cisco or Accenture would say this is a time to neutralise – make sure they catch up on systems where they’ve been behind. And then if you’re in trouble, like many small businesses right now, you just stop the bleeding and that’s kind of an optimised innovation.

It’s important to prioritise right now. All three are useful, but in a crisis, you can only do one well.

Recovery patterns

It’s important to be clear about what the recovery path is, and there are different models: 

  • V recovery – comes back quickly.
  • U recovery – takes a long time.
  • L recovery – looks more like a depression.
  • Y recovery – it comes back in two parts, one of which comes back quickly because it’s more digitally enabled and plays to its strengths.

As a leader in your company, you have to say which of these most probably reflects your industry. You have to build a temporary plan based on that recovery pattern and start acting on that plan now, but you have to be willing to say you could be wrong. So you’re always having this course adjustment. And this is a time when agility is really, really demanding, but it’s what crisis does.

Get your power back

When you get knocked completely off-plan, your performance commitments for the year have been knocked away. The tendency is to scramble back, to try to pick up as many pieces as you can and bring back at least something. And that’s actually the mistaken priority. 

What you want to do when you take a body blow is set down your performance objectives for a moment and think about power because you need to build enough power to come back. Power metrics are very different from performance metrics. They’re much more about: 

  • Where do you have support from your customers? 
  • Where can you build new ecosystem relationships or strengthen the ones you already have? 
  • How do you get back into the game? 

So think about your priorities in terms of ‘how do I get my power back?’ as opposed to ‘how can I eke out some amount of performance?’.

The problem with being reactive is when you go back to your performance mindset, that performance was based on a lot of inertia you had last year coming into this year. It’s not there anymore. And so you’ve got to think, “I’m nowhere near as powerful as I thought I would have been. I need to reconstruct my power base. I need to go back to first principles, and be in service to my customers and to my ecosystem”. Then let it build back naturally from there.

Focus on your loyal customer base

The first thing you have to do is stop the bleeding. Once you have some sort of stability, what you would say is, “I want to now create the best return. The returns I’m going to create in the near-term are not going to be great. We got that. So what constructively can I really accomplish in this window of time, which might be the rest of this year or even longer?”. I think the answer is, I need to become more important to a smaller group of people. 

The idea behind this is you don’t want to dilute your limited amounts of energy. You want to focus. And when you focus, the object is to get a disproportionate share of a market segment. The rule we use is: the market share has to be big enough to matter to a company your size, but small enough to win. So in other words, it’s more about picking a subsegment of your customer base. Go for your existing customers as opposed to trying to get new customers and do something to secure that relationship.

The best example of that paying off was Apple. If you remember when Steve Jobs came back to Apple in 1997, it was a mess. It was a PC company with 2-3% market share and nothing else. But it had this incredible loyal Mac faithful, based on desktop publishing and marketing people making presentations, this whole graphic artists creative group. And that loyalty, that 3% loyalty, is what Steve Jobs was able to build on to reconstruct the company. So it’s a very powerful thing. You really do want those people to get in the boat with you and help row.

Be a part of the solution

Most companies have to come forward to the new normal and help create it. That’s less scary if you are clear about your vision, your values and your mission. If you realign with those principles, then even when you make mistakes, you’re making mistakes with a good heart. Your customers and partners understand that and they’ll help you course correct.

But if instead you get scared and start to get very self-optimising – like I heard about the landlords who are not going to forgive any rent – then you’re going the wrong direction. That’s not right.

Maybe just work less

Stay safe and be smart. The emotional drain of this is happening to everybody. My last piece of advice: if you’re having a really bad day, don’t show up. Just don’t go to work. Because it’s actually worse for you to be there than not be there. Take care of yourself. Give yourself a day or two and then come back. 

For more content, tools and tips to help your business thrive in the current climate, visit Work.com.

Leading Through Change

Helping businesses accelerate out of crisis.

Salesforce Staff

The 360 Blog from Salesforce teaches readers how to improve work outcomes and professional relationships. Our content explores the mindset shifts, organizational hurdles, and people behind business evolution. We also cover the tactics, ethics, products, and thought leadership that make growth a meaningful and positive experience.

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