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Questions answered: How to overcome challenges and prioritize business activities amidst a global crisis

In April 2020, Sopheon CEO Andy Michuda hosted a panel discussion with Hain Celestial SVP R&D Jeff George, Entegris Innovation Management & Digital Innovation, Office of CTO Steve Moskowitz, Arçelik Director of Product Management Cemil Inan, and Innovation Leader CEO and Co-Founder Scott Kirsner. The executives discussed how the pandemic crisis is impacting their businesses, what they did immediately when it became apparent that they needed to react quickly, what's working and what isn't, and the business challenges they are facing now that virtual workforces have “settled in.”

A lively Q&A session followed the panel discussion; some questions were answered during the live webinar while others were answered offline due to time constraints. Read on to see the pain points businesses are experiencing in this time of disruption and advice from the panel executives as they address challenges.

Question #1 – advance planning

We've been talking a lot about the effect that this environmental disruption has had, how many organizations had various scenarios in-place in order to be able to respond to disasters like this, and of those that have these plans, were they valuable to you? Could you actually use those to move forward and help you plan ahead for what this disruption is, and then tell us, how do you think those plans are going to change now because of the disruption that we are facing?


Response from Jeff George, Hain Celestial:

We do a risk mitigation effort where we look at major risks to the company across all fronts, financial risks, human risks, consumers, the retail environment, and so we plan and map those out, prioritize those. Something like this was on the list, but I don't know that we were fully prepared for the magnitude of what this has now become, so I think the good thing is that once it became evident that this was going to be a significant impact, led by our CEO, we rallied quickly and put the processes and procedures in place and changed our way of working quickly so we've been in a good position to respond to the very dynamic situation that we're in.

So, I think planning helped to some degree, but I think it also helped quickly mobilizing, quickly pivoting.

I can speak to the innovation and R&D. Almost overnight we changed from having a very balanced long-term innovation to short-term to really saying number one priority, after the safety of our employees, is business continuity and I think we've done a couple of things. First, we've helped meet the extraordinary demand that we've had, plus I think we've also demonstrated the value of our group to the organization. If we had said “no, we want to only work on five-year innovation things” while the company and world is going through this, that would have been completely inappropriate. I think our ability to shift, refocus our talent where it is most needed is really benefitting us.

Response from Steve Moskowitz, Entegris:

Like Jeff, we had disaster recovery plans and enterprise risk management. I think the biggest shift for us is to make sure that those disaster recovery plans are more widely distributed so the leaders of sites, the leaders of our team knew about them, but the general population really wasn't aware of what was inside our disaster recovery plans and I think more people will be aware of what is going to happen and be able to provide insights to make those better plans moving forward.

Question #2 – financial markets and portfolio prioritization

We've been talking a lot about innovation and working with our customers and changes to markets and such. We haven't touched much on the changes to the financial systems that we're experiencing as well. We've had mortgage markets being affected, our banking systems, our financial systems being affected, how have changes to the financial markets affected your portfolio management, your decisions of what to go forward with and what not to go forward with?

Response from Scott Kirsner, Innovation Leader:

It's hard for companies when future earnings are really up in the air and at question and when they see what is happening to the stock market on certain days, it's hard for them to still believe, as Jeff was alluding to, in the horizon two, horizon three kind of work. I think right now a lot of companies are living in what we call horizon .25, you know, not even horizon one, but it's like a narrowed – a quarter of horizon one -- and that's where all their focus is. So that's just a start to an answer. Someone else may want to build on that.

Response from Jeff George, Hain Celestial:

For us, I don't know if it's influenced as much by the financial, and I'm not a global financial expert, but I know that in in our world the demand for our products is extraordinarily high right now and we're fortunate. These are problems to have, and people are in demand for our products. I know that other industries and other companies are in a very different place and I have a great deal of sadness for that, but in our case, the idea is to keep our plants open, to keep our production running and to think about how we can meet short term needs, so I think it's probably been less driven by financial and the stock market and more driven by the day to day what's happening with our consumers, what's happening with our retailers and how we can best serve both of those constituents.

Response from Steve Moskowitz, Entegris:

One of the things we were able to do because we have a strong balance sheet and the market, even though it is quite fluid right now, it is still from a lending perspective positive, so we were able to shift funds around and make sure we were able to build up some critical inventory of some of our raw materials and some of our incoming materials to make sure that we weren't interrupted by potentially one of our suppliers having a challenge due to COVID-19. And so that was probably the biggest shift, that we were able to have flexibility to move money around and make some changes in the short-term to essentially mitigate any potential impacts. So we did that both to build up inventory as well as to potentially if we have to shut down a factory to make sure we have enough cash flow to not have to furlough or let people go if we had to shut down a factory for a short period of time. So, we were able to essentially leverage the volatility of the markets in a positive way for the short-term and again, for the benefit of the employees.

Response from Cemil Inan, Arçelik:

We have almost similar conditions here. The more important thing for companies becomes management of cash flow. Therefore, cash is becoming more and more important. Therefore, either inventory, or materials or final product, whatever, it should be liquidized easily. There is big pressure on the product side because we have to define the most sellable products more than ever. We need to scale our energy to focus on the quick moving SKUs that creates some, how you say, management and HR decision-making in the system. I'm not a financial guy, therefore I am looking at this from the product side, but this affects everything in the financial chain, so we need then to make daily decisions to keep our cash safe.

Question #3 – immediate innovation skills

What are the most immediate innovation skills you need to improve in your teams in the next 60 days?

Response from Cemil Inan, Acelik:

Personally, I am believer that in difficult times people do better innovations. All resources are alert for what will be needed most and want to respond for new normal. In this environment I believe the most important skill would be understanding consumer needs and solving it with the lowest cost.

Question #4 – adding value, connecting with consumers

Now more than ever products are sold not only at stores, but directly to consumers' homes, (not only products, but also services). How has this changed the way consumer goods companies provide added value services? How has the way you connect directly with consumers changed (which means not through the retailer only)?

Response from Cemil Inan, Arçelik:

My company Arçelik has global operations with 12 brands. There are different dynamics in different regions. However, increase in online sales is the reality, globally. First actions are updating web pages more frequently, increasing focus on logistics operations to deliver products on time, and adjusting productions with agility to respond quicker for most online selling SKUs etc. All “how to” videos are re-checked to supply clearer info to consumers to help them understand and solve simple problems by themselves. Beyond that, the after sales teams took utmost precautions and declared even quicker service solutions during COVID conditions.

Question #5 – a “new normal” for innovators

As we wait for our lives to get back to normal, there's also a high probability that we'll all have to find a new normal. 1) What do you think a new normal could look like as it pertains to innovation? 2) How do we continue to find meaningful ways to connect with our consumer in times of social distancing?

Response from Andy Michuda, Sopheon:

Several panel members stated now is the time to be more innovative to take advantage of the market shift. Entegris' Steve Moskowitz stated they are preparing to accelerate for when the curve in the road comes.

Response from Cemil Inan, Arçelik:

I see more opportunities than challenges. I expect increased focus on sustainability, connectivity, health as well as value for money solutions for consumer needs.

Value of brands and their messages will be more important than ever. We are very lucky and well prepared in this aspect, since our global brands BEKO and GRUNDIG hold the key messages: Healthy Living (BEKO) and Respect Food & Sustainability (GRUNDIG) which will be serving for new normal, too. They were in our agenda for two years already. So, we will focus on more and create new solutions for post-COVID time on consumer side. Please note that the new normal is not completely fixed, we need to continuously follow things to understand where they evolve. Every company should filter reports from their lenses, as too many conflicting analyses may present during these days.

During Social Distance times, there are a lot of ways for listening to consumers. I do not foresee any critical problem. Consumer insights through online meetings, one to one video calls, and virtual product testing are some of the methods we can apply.     

Listen to Jeff George, Hain Celestial, speak to the topic during the live event:

Question #6 – collaboration and communication

A number of you have talked about the benefits of the changes in team communication and “democratization” within companies. But having more people involved in innovation doesn't always make the process more manageable or efficient. Are there any changes you're making to prevent everyone from becoming an “on-the-go innovator”? Is there a risk that everyone now EXPECTS to be involved in more processes/decisions, and can you help manage innovation/development pipelines to benefit from broader input from the now more-engaged and more-included teams, but to avoid “design by committee”?

Response from Steve Moskowitz, Entegris:

I would say that we are focused on making INFORMATION more democratized, not necessarily INNOVATION.

Our decision making has not changed much in terms of the processes, just that we are making it easier to get the information people need when they need it. This is especially critical when people are working remote – if you are not on the ‘email chain' you miss out on key information. Of course, we saw this even before we went remote when people would have hallway conversations that were never recorded. By utilizing better collaboration tools, we are improving the capture of these side conversations and therefore democratizing access to information, which should improve how we are able to innovate and collaborate.

Listen to Steve Moskowitz, Entegris, speak to the topic during the live event:

Question #7 – financial planning

Post-COVID-19 pricing of products and services will need to adjust to the reality of recession and lost jobs. What are your companies doing to react/plan?

Response from Andy Michuda, Sopheon:

The panel members stated they very much are planning to identify specific areas of opportunity to accelerate very fast. Two of the companies continue to accelerate their investment and growth and the third is throttling and managing cash to brace for a downturn in the markets they serve.

Question #8 – disruption response technology

Does the panel think that technological solutions like Sopheon's Accolade will be even more useful in the future for their innovation processes than in the past?

Response from Andy Michuda, Sopheon:

Hain Celestial, Entegris and Arçelik are current Sopheon Accolade clients and all three have active expansion discussions/work in play.

Interested in how Sopheon's Accolade can help organizations innovate through disruption? Watch this webinar Innovation now: Be prepared to accelerate out of the turn.

Question #9 – spending priorities

Should firms spend more on R&D and advertising during an economic crisis and why? How does the effectiveness of these two marketing instruments differ between times of economic expansions versus periods of economic contractions?

Response from Andy Michuda, Sopheon:

They differ greatly. I don't view R&D spend as a marketing instrument but as an investment to create future value. If my view of the crisis represents a unique opportunity for my business, I will accelerate investment. I will NOT invest in marketing during a crisis if I do not feel the market is able to hear my marketing. Therefore, if I see a bright picture around the corner I invest in R&D now and marketing when the market is able to listen to my message.

Interested in even more on this Crisis Response panel discussion?

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