How Leading Companies Are Innovating Remotely

The “new normal,” the “next normal,” and “the great reset” are phrases used by business leaders and politicians to describe the world in which we now live. Whatever your preference, there is widespread consensus that employees and customers won’t be returning to the old normal, ever. And how could they? Thousands of businesses, including Cirque du Soleil, Hertz, J. Crew, J.C. Penney, Le Pain Quotidien, and Virgin Atlantic, have already filed for bankruptcy — a 43% increase over this time last year — and thousands more are about to. Take HSBC, for example, which just accelerated its plans to cut 35,000 jobs across several countries. While this desperation isn’t surprising, given that the pandemic nearly collapsed the global financial system, other multinationals are behaving very differently, even when facing the same existential shock.

Within these more successful companies, the pace of innovation is actually accelerating, leading to better outcomes for employees and customers. During the first wave of COVID-19, for example, Mastercard and Microsoft collaborated to accelerate innovation across digital commerce and startup ecosystems, PepsiCo launched a new era of operational agility, and Apple committed to becoming entirely carbon neutral.

To understand how and why these innovations occurred, we studied 1,000 innovation leaders across 17 countries between April and August 2020. Given recent scholarly research and executive insights that suggest innovation requires face-to-face interaction, we sought to understand how these companies successfully innovated in a remote work environment. By drawing on and analyzing data from multiple sources — including interviews, observations, and surveys — we were able to identify two innovation clusters, suggesting that companies worldwide typically responded to the disruption sparked by COVID-19 in one of two ways.

A cluster we’ve termed mourners adopted a conservative approach to change. These businesses struggled to adapt because the global pandemic triggered feelings of loss and void among workers, many of whom experience high rates of depression (53%), anxiety (55%), and even PTSD (32%), which are associated with loneliness, isolation, and low distress tolerance. For these reasons, 87% of mourners focused primarily on what they could control: firstly, re-creating and repurposing their offices, and secondly, expending enormous cognitive load pontificating about what work used to be like and what it might become.