ECONOMIC DOOM AND GLOOM?

Ruchitha Perera urges businesses to innovate to overcome prevailing challenges

A silver lining seems to be appearing through the dark clouds hanging over local businesses as they settle into the ‘new normal’ – so while employees are returning to work, health and wellbeing, and physical distancing, remain a priority.

Declining revenues, redundancies and furloughs seem inevitable, but savvy organisations know that it’s time to adopt alternative business strategies to challenge the doom and gloom affecting their survival.

Yes indeed, now more so than ever. Innovation plays a pivotal role in the growth of business, promoting products and services, and gaining a competitive advantage. However, due to its ambiguity and misinterpretation, not many businesses see the value of innovation especially during a pandemic.

So the thought-provoking question is how can businesses apply innovative strategies to allay fears arising from market challenges while ideally creating value as well?

It is worth acknowledging that technology can be the most appropriate innovation driver through which local businesses have a choice of innovating their products, processes and/or business models. Innovation can step up business functions towards creating sustainable growth.

For product or service innovation to be successful, it has to not only be relevant to the market and distinctively different from that of competitors, but also solve specific customer queries and requirements.

In post-COVID environments, businesses remember that product innovation is an ideal way to expand range, uphold quality and increase value. Customers will expect products to be safe, conveniently accessible and provide value for money.


Consider for instance, several product innovations that are currently available to the hospitality sector. Digital POS products connecting business information and customers through smart devices, mobile technology payments and interactive restaurant menus have taken the world by storm.

Collaboration with connected partners is an innovative way forward for tourism. The time has come to create synergy between airlines, local hotels and tour operators, creating product bundling or clustering complementary products that include tickets to tourist attractions will help draw and retain customers in the coming months.

Technology driven businesses can also consider utilising contact tracing apps and smart wearables that could monitor the temperature of customers.

However, businesses must note that competitors are ever ready to imitate and the only way to overcome this is through innovation as a solution.

Needless to say, this will help businesses achieve cost reductions and maximise the value that would capture the attention of customers, thereby creating an opportunity to apply technology for businesses struggling to remain competitive and meet customer needs.

The local retail fashion industry can embrace process innovation through augmented reality to entice customers to try out clothing before purchase. Furthermore, offering virtual and immersion activities in the tourism industry can elevate travel experiences to unforgettable heights.

Contactless payments utilising mobile technology can reduce long queues and comply with physical distancing guidelines. The demand for home delivery that sprung up due to COVID-19 restrictions seems to be worth taking note of as it continues to hold steady. It might also be worth considering if there would be an equal demand for kerbside pickup of online orders.

The advantage of innovating a business model is that it can substantially increase profitability, instead of relying on product or process innovation only. A total innovation model can be used to gain a competitive edge in several industries.

Converting customers from making one-off purchases to a subscription model in advertising and PR should be considered.

Freemium products are also good options whereby local businesses can thrive on tempting customers by offering a free core product or service, while additional features and upgrades would be charged a premium. Moreover, the local tourism industry can promote customised immersion experiences that highlight Sri Lankan hospitality.

There are several benefits to innovating either product, process or business models individually or as a combination. Entrepreneurs have made innovation competitive and profitable through cost reductions and improved productivity, leading to higher revenue and profits through positive stakeholder relationships.

The bottom line is that innovation must be applied with care, avoiding excessive waste of resources and finances. Any decision to apply product, process or business model innovation depends on factors such as customer value, core business strengths and the objectives of the business.

While local businesses will find the next few months challenging, it is a chance for the brave to begin innovating. Innovation is the lifeblood of an organisation so businesses must develop and lead with it.