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How Resource Constraints may Stimulate Rather than Impede Innovation in a Crisis
Ulrich Lichtenthaler • 16. Dezember 2020
Many firms need to innovate with relatively limited resources in response to the coronavirus crisis – and some specific conditions favor innovative solutions.
During the initial wave of the COVID-19 pandemic in spring 2020, the story about an innovative hack, which saved lives by turning scuba masks into ventilators, received a lot of public attention. In light of shortages of ventilators, the head physician of an Italian hospital came up with the scuba mask idea and got in touch with 3D printing experts at the Italian company Isinnova. The idea was to make a 3D printed adapter that enabled the hospital to turn a snorkeling mask into a mask for oxygen therapy in case of severe COVID-19. In this regard, the hospital could use snorkeling masks that were already available at the sports chain Decathlon.
The inventors emphasize that this solution should only be used under emergency conditions because it is an uncertified medical product. Of course, it is not a perfect long-term solution, but it fulfilled the intended function in extraordinary times. Beyond this specific example, this story underscores the need for innovation in order to cope with the economic consequences of the coronavirus pandemic. Currently, many firms could benefit from innovation, for example to simplify processes, to offer new digital solutions to their customers etc. However, many companies now have only very limited budget and time for these innovation activities. Accordingly, this situation puts the topic of innovating with scarce resources on top of the agenda.
Excess resources
Overall, there is a long history of innovation research with regard to the relationship between resources, such as budget and time, with innovation outcomes. Basically, prior research suggests that companies may successfully innovate because and not despite different levels of resources. With regard to excess resources, there is the concept of slack resources, i.e. resources that are in excess of the minimum necessary for achieving a certain output. A classic example for an innovation that was developed with such slack resources are 3M's Post-It notes. In a similar vein, selected technical employees at Google spend some 80 percent of their available time on the main business and some 20 percent on other initiatives that they select on their own. These '20 percent projects' led to various new products, including Gmail and Adsense.
Limited resources
With regard to limited resources, there is research and anecdotal evidence about the positive effects of resource constraints in innovation. In this regard, fewer resources may stimulate rather than impede innovation. A well-known example here is GE Healthcare’s electrocardiograph MAC 400, which democratized access to medical care. The engineers had only 18 months and a relatively limited budget in order to come up with a high-tech portable device that enabled very low-cost scans. This challenging situation strengthened the team’s focus and creativity, which led to a successful outcome. However, these positive effects of resource constraints do not always materialize, but only under certain conditions.
Target
One key condition for positive effects of resource constraints on innovation is that the limited resources actually lead the development team to direct all activities to a very clear target. Usually, a strong vision and purpose for this type of development project helps companies to profit from limited resources in innovation. Under such conditions, it is impossible to pursue additional options or side activities. Rather, the constrained resources may help to focus all attention and activities on the core target of the project.
Thinking
Another major condition for positive consequences of limited resources is the innovative thinking of individuals and the entire development team. In fact, resource constraints may spur the creativity of key inventors and of all other team members. In the context of a growing importance of artificial intelligence, resource constraints may also lead to a more effective combination of human intelligence and artificial intelligence in order to achieve completely novel solutions and competitive advantages based on an integrated intelligence architecture.
Team
Finally, resource constraints may enhance innovation outcomes if they positively influence team dynamics. For example, a team may choose to leverage complementary skills and knowledge of its members more thoroughly when resources are very limited. In addition, scarce resources may increase the commitment of the team members to accomplish highly challenging innovation tasks. Thus, limited resources may actually strengthen the results of innovation projects if they positively affect team behavior.
Post-pandemic period
Several of these favorable conditions most likely affected the successful innovation of turning snorkeling masks into emergency medical equipment in the Italian hospital. Beyond this specific example, executives should continue to invest in innovation if they can somehow afford it with regard to their company’s financial situation. Even in these cases, however, inventors and innovators will usually face limited resources in terms of development time and budget. Therefore, a thorough understanding of the conditions under which resource constraints stimulate rather than impede innovative solutions is essential in 2021 and beyond. If executives manage to continue their firm’s innovation activities and effectively handle limited resources, they may well enjoy a sustainable competitive advantage in the aftermath of the Coronavirus crisis – the post-pandemic period.
The inventors emphasize that this solution should only be used under emergency conditions because it is an uncertified medical product. Of course, it is not a perfect long-term solution, but it fulfilled the intended function in extraordinary times. Beyond this specific example, this story underscores the need for innovation in order to cope with the economic consequences of the coronavirus pandemic. Currently, many firms could benefit from innovation, for example to simplify processes, to offer new digital solutions to their customers etc. However, many companies now have only very limited budget and time for these innovation activities. Accordingly, this situation puts the topic of innovating with scarce resources on top of the agenda.
Excess resources
Overall, there is a long history of innovation research with regard to the relationship between resources, such as budget and time, with innovation outcomes. Basically, prior research suggests that companies may successfully innovate because and not despite different levels of resources. With regard to excess resources, there is the concept of slack resources, i.e. resources that are in excess of the minimum necessary for achieving a certain output. A classic example for an innovation that was developed with such slack resources are 3M's Post-It notes. In a similar vein, selected technical employees at Google spend some 80 percent of their available time on the main business and some 20 percent on other initiatives that they select on their own. These '20 percent projects' led to various new products, including Gmail and Adsense.
Limited resources
With regard to limited resources, there is research and anecdotal evidence about the positive effects of resource constraints in innovation. In this regard, fewer resources may stimulate rather than impede innovation. A well-known example here is GE Healthcare’s electrocardiograph MAC 400, which democratized access to medical care. The engineers had only 18 months and a relatively limited budget in order to come up with a high-tech portable device that enabled very low-cost scans. This challenging situation strengthened the team’s focus and creativity, which led to a successful outcome. However, these positive effects of resource constraints do not always materialize, but only under certain conditions.
Target
One key condition for positive effects of resource constraints on innovation is that the limited resources actually lead the development team to direct all activities to a very clear target. Usually, a strong vision and purpose for this type of development project helps companies to profit from limited resources in innovation. Under such conditions, it is impossible to pursue additional options or side activities. Rather, the constrained resources may help to focus all attention and activities on the core target of the project.
Thinking
Another major condition for positive consequences of limited resources is the innovative thinking of individuals and the entire development team. In fact, resource constraints may spur the creativity of key inventors and of all other team members. In the context of a growing importance of artificial intelligence, resource constraints may also lead to a more effective combination of human intelligence and artificial intelligence in order to achieve completely novel solutions and competitive advantages based on an integrated intelligence architecture.
Team
Finally, resource constraints may enhance innovation outcomes if they positively influence team dynamics. For example, a team may choose to leverage complementary skills and knowledge of its members more thoroughly when resources are very limited. In addition, scarce resources may increase the commitment of the team members to accomplish highly challenging innovation tasks. Thus, limited resources may actually strengthen the results of innovation projects if they positively affect team behavior.
Post-pandemic period
Several of these favorable conditions most likely affected the successful innovation of turning snorkeling masks into emergency medical equipment in the Italian hospital. Beyond this specific example, executives should continue to invest in innovation if they can somehow afford it with regard to their company’s financial situation. Even in these cases, however, inventors and innovators will usually face limited resources in terms of development time and budget. Therefore, a thorough understanding of the conditions under which resource constraints stimulate rather than impede innovative solutions is essential in 2021 and beyond. If executives manage to continue their firm’s innovation activities and effectively handle limited resources, they may well enjoy a sustainable competitive advantage in the aftermath of the Coronavirus crisis – the post-pandemic period.
As sustainability and ESG are on top of many firms’ strategic agendas, there is a growing need for specialized trainings, workshops, and keynotes.
Nachhaltigkeit und ESG stehen bei vielen Unternehmen ganz oben auf der Tagesordnung, daher wächst der Bedarf an spezialisierten Schulungen, Workshops und Vorträgen.
ChatGPT und generative KI werden uns nicht überflüssig machen – auch wenn die aktuelle Berichterstattung genau diesen Eindruck erweckt. ChatGPT hat uns allen verdeutlicht, wie schnell sich manche Felder künstlicher Intelligenz (KI) aktuell weiterentwickeln. Auch wenn einige dieser Entwicklungen schon seit Jahren erwartet wurden, ist die Geschwindigkeit vieler Verbesserungen selbst für manche ExpertInnen erstaunlich. Der aktuelle offene Brief des Future of Life Institute, der von über 1.000 Personen unterzeichnet wurde, ist daher grundsätzlich nachvollziehbar. Darin wird insbesondere auf die Risiken von KI hingewiesen und eine sechsmonatige Pause für das Trainieren leistungsfähiger KI-Lösungen gefordert. Eine ausreichende Beachtung der Risiken von KI ist unbedingt erforderlich, auch wenn die aktuelle Berichterstattung dazu oft zu kurz greift. Noch erstaunlicher ist aus betriebswirtschaftlicher Sicht jedoch das Medienecho der letzten Wochen und Monate zu den Auswirkungen von KI auf die Arbeitswelt, das sowohl in klassischen Medien als auch bei Social Media zu beobachten war. Dort wird häufig gefragt, ob wir als Menschen noch schlau genug sind im Vergleich zur KI. Auch wird diskutiert, ob KI künftig die meisten Führungskräfte ersetzen wird. Besonders oft steht also wieder einmal die Frage im Mittelpunkt, wie viele Personen durch KI ihren Job verlieren werden. Diese Frage ist auf den auf den ersten Blick vielleicht nachvollziehbar, weil durch KI-basierte Automatisierung in den nächsten Jahren tatsächlich in nennenswertem Umfang Jobs verloren gehen werden. Insbesondere werden auch solche Büro-Jobs betroffen sein, die bisher noch nicht automatisiert werden konnten. Dadurch sind mit offensiven Schlagzeilen sicherlich hohe Klickzahlen zu erreichen. Außerdem werden auch Arbeitsplätze in der Medienbranche automatisiert werden, wodurch sich die Berichterstattung zusätzlich erklären lässt. Integrierte Intelligenz strategisch oft wichtiger als eigenständige KI Dennoch wird viel zu oft ein einseitiger Schwerpunkt gelegt und damit auch ein falscher Eindruck vermittelt. Der wirklich entscheidende Teil der Entwicklung für die meisten Unternehmen und ebenso für die meisten Arbeitskräfte liegt in der Kombination von KI mit menschlicher Arbeit – und eben gerade nicht in der vollständigen Automatisierung von Jobs durch KI. In den letzten Jahren kamen verschiedenen Studien immer wieder zu ähnlichen Ergebnissen. Der Grundtenor ist dahingehend identisch, dass sich deutlich mehr Jobs verändern werden als komplett wegzufallen (vor allem, wenn die Zahl der Arbeitsplätze berücksichtigt wird, die durch KI zusätzlich entstehen). Diese Kombination von menschlicher mit künstlicher Intelligenz wird auch als integrierte Intelligenz bezeichnet.
Despite the massive attention to sustainability and ESG, many firms still underestimate the opportunities for innovation beyond reducing CO2 emissions.
The GREEN GRASS STRATEGY goes beyond traditional sustainability, and it refers to developing innovative solutions for a ‘net positive impact’. What is the GREEN GRASS STRATEGY? The GREEN GRASS STRATEGY is a sustainability strategy that focuses on innovation and new business opportunities rather than limiting sustainability programs to resource efficiency and the optimization of established processes. As such, the GREEN GRASS STRATEGY goes beyond traditional sustainability concepts that often focus on avoiding harm (no net loss) to consider positive sustainability and to embrace doing good (net positive impact). The GREEN GRASS STRATEGY enables you to leverage sustainability for innovation and value generation, and it can be systematically developed with the SUSTAINABILITY INNOVATION MAP , which helps firms to achieve a competitive advantage by systematically pursuing sustainability innovations in all ESG dimensions – environment, social, and governance.
Generation Z – and what is next? Many of today’s students are ‘sustainable natives’ and expect companies to make a positive contribution to solving ecological and social problems. In an international survey of more than 27,000 people, GlobeScan found in 2020 that for 60% of younger participants, climate change and social inequality are top priorities, combined with the expectation that companies should contribute to solving these challenges. Very importantly, the young generation expects positainability , i.e. making a positive contribution and not just reducing negative effects of doing business, for example by reducing CO2 emissions. To implement this positive sustainability approach, companies would need to pursue a GREEN GRASS STRATEGY . So far, however, many companies are hardly prepared for the future changes due to the ideas of those persons that will be starting their careers in the next few years. In fact, this new generation of ‘sustainable natives’ presents new challenges and opportunities for companies (as I have explained in more detail in a recent article in the Haufe Personalmagazin ). In particular, the following typical perspectives of this ‘Generation PI’ – Positive Impact – have to be considered. 1. Sustainable natives Many current students are ‘sustainable natives’ because they perceive sustainability as a core topic since their early youth. In contrast to the extensive public discussions about ‘digital natives’, the role of ‘sustainable natives’ has been mostly ignored so far. 2. Doubtful prospects Typical for ‘Generation PI’ are doubts whether their future standard of living will remain as good as their current situation and as the life of their parents, especially due to climate change. 3. Expected limitations Many current students expect restrictions on possible behaviors to enable a more sustainable economy and society in the future, for instance bans or massively increasing prices for air travel or the consumption of less sustainable food. 4. Positive contribution Beyond the goal of no-net-loss, ‘Generation PI’ is ready to make a positive contribution in terms of a net-positive-impact. Here, companies need to focus on major innovations rather than limiting themselves to reducing CO2 emissions in established processes.
Positainability – or positive sustainability – refers to the combination of doing good and avoiding bad to arrive at innovative solutions.
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