Students from EADA Sustainability Club have been speaking to a range of professors and experts from the EADA community to discuss how we can learn about COVID-19 and the what implications are for sustainability and business. In this article, Felipe Jánica shares his thoughts on entrepreneurship and innovation in times of COVID-19.
Felipe Jánica is a global partner of EY (Ernst & Young). He leads the Financial Accounting Advisory Services (FAAS) and Climate Change and Sustainability Services (CcaSS) in LATAM. Felipe has been working for the United Nations (ISAR and UNCTAD) in the preparation of case studies related to sustainability. He has been responsible for consulting in IPO (Initial Public Offerings in the U.S.A.) services, audit and specific reviews, under IFRS and US GAAP, and of important economic groups in Colombia and Latin America.
Felipe has developed a conceptual framework explaining the effect of Corporate Entrepreneurship, that encompasses Innovation and Strategic Renewal, on Business Performance (in terms of Business Failure or Organizational Decline) in Colombian companies. With the disruption brought by the global pandemic, I sought to find out what this means for sustainability and the challenges of maintaining the entrepreneurial spirit.
Business leaders have arrived at an intervention point
The main focus of struggling companies right now is how to maintain cash flow levels and avoid bankruptcy. With society on lockdown, many companies are facing liquidity issues due to loss of customers and should therefore consider what efforts and activities they can employ in order to maintain sustainable growth, even post-COVID19. If companies are stagnant and do not respond fast enough, they will face dire consequences.
Cash flow issues are representative of something larger at stake, which can be a consequence of product or company life cycles coming to an end. By engaging in Corporate Entrepreneurship and Innovation (CE&I) and strengthening their entrepreneurial spirit, companies can seek to differentiate their offering and bring something more meaningful (and competitive) to the market. Felipe explains this process as “bringing in additional ideas into the core business or rethinking their core business” – can this maybe be a wake-up call for more sustainable products and activities?
By basing their strategic renewal on the ‘New Normal’ brought on by the crisis, this can bring more opportunities for the company.
Strategic Renewal: companies need innovation to adapt to COVID-19
70% of Latin America’s economy is dependent on informal small businesses. Traditionally, these businesses rely on “in-person” mass-consumption and are currently facing massive difficulties. Felipe proposes to look for measures in the short-term that companies can take in order to extend their company lifecycle. By rethinking their strategy, they can identify and evaluate other alternatives to generate revenues: particularly focusing on digitalisation and e-commerce. By exploring e-commerce solutions, SMEs can build resilience and agility to tackle organisational decline. When resorting to online channels, they can reach their existing customers or even attract new ones in new and creative ways. It is crucial to remember that the lockdown is not going to last forever, and online services can be a helpful intermittent solution, for example retailers (such as hairdressers) who are currently finding means to generate revenues through pre-payment services and vouchers, even via WhatsApp groups.
What does this mean for Sustainability?
Sustainability is how a company can create Return on Investment not just for shareholders but also for its stakeholders. COVID-19 has been a major heads-up for leaders who need to revisit their strategy and rethink their current business in a more broad and holistic manner. Felipe states that this time we “should be putting not only clients at the centre of the strategy but also taking into account the wider stakeholders.”
One concrete way to bring stakeholder capitalism into reality is through corporate social entrepreneurship. By basing their strategic renewal on the ‘New Normal’ brought on by the crisis, this can bring more opportunities for the company, as they realise that they can develop more products and services, or diversify their existing ones, in a way that can be more meaningful. Enterprises should align themselves with future trends that will continue as the crisis progresses in order to build resilience. They can begin to embrace the concept of longevity by extending their lifecycle, as this “is perhaps the best treatment to avoid business failure or decline”.
Entrepreneurs as the leaders of the “New Normal”
Social entrepreneurs can play an important role in aiding and future-proofing communities. Thanks to digitalisation and online tools, we have limitless opportunities to be entrepreneurial – even when working from home. Felipe encourages the exploration of e-commerce matters as a useful tool to remain productive. For future entrepreneurs, this is a time to remain informed and try to track and understand the needs that have arisen during the lockdown. Here are a few questions to leave you with…
- What have we been missing, needing, and searching for during these times?
- What are people in the market looking for in this ‘New Normal’ we are living in?
- Are people’s needs being met? What gaps have you noticed?
- What tasks have we struggled to achieve?
About the author
Julie Colibeau is currently enrolled in the International Masters Sustainable Business & Innovation and is one of the contributors to the EADA Sustainability Club Newsletter. She holds a BSc in Management from the University of Bath (U.K.). Julie speaks English, French, Italian, and Spanish and has a background in media and humanitarian innovation.
About the interview series
In this series of interviews, contributors to the EADA Sustainability Club Newsletter explore how the role of business in society is shifting and adjusting to these unpredictable and complex times with COVID-19, covering topics such as digital data technology, emotional intelligence and global governance. Other articles include: Managing the Transition with Professor Joan-Miquel Piqué, Future of Fashion, Leading with Empathy, Technology as an “enabler” with Richard Ferraro and Back-to-basics with Associate Dean Jordi Díaz.
