Why Do Innovation and Creativity Thrive in Crisis?

Listen

“Innovation and creativity love crises and constraints.”

According to Professor Jay Rao, the current global health crisis is catalyzing innovation in organizations around the world.

For example, James Dyson, of vacuum cleaner fame, designed a new ventilator in just 10 days. Ford, GM, and Tesla are teaming up to produce ventilators for GE. Google and Apple are collaborating on contact tracing efforts for COVID-19. In every industry, organizations are bringing their most creative and solution-oriented ideas to market in record time.

In a series of webinars, Rao explored why companies are able to step up and innovate in times of crises. He also made a case for why entrepreneurial leaders are so good at navigating the uncertainty of the current business landscape to problem solve and take swift action.


Discover online programs from Babson Executive Education designed to help you navigate today’s uncertainty and grow as an entrepreneurial leader.  


Catalyzing Innovation and Creativity

“In good times, companies get fat, dumb, and happy when it comes to innovation,” says Rao. “There are no boundaries, and it’s chaos.”

In contrast, a crisis situation offers the chance to laser-focus all the innovation and creativity toward a very real problem. “The problems are much more in your face,” says Rao.


“At its heart, entrepreneurial leadership is about problem solving.”
Professor Jay Rao

Innovators should constantly ask themselves if they’ve correctly identified the customer’s pain point. Normally, Rao says it’s easy to fall in love with a solution first and back into the problem it solves. “In a crisis, we make fewer mistakes in the choice of the problem, and we do a much better job about picking solutions.”

Another silver lining is that people become both more open minded and efficient. Rao describes “more openness to broad scanning for possible alternatives, and radical, novel solutions.”

Entrepreneurial Leaders Take Action

Turning innovation and creativity into action is essential in times of crisis, and Rao says that entrepreneurial leaders are among the best at activating their teams.

“At its heart, entrepreneurial leadership is about problem solving,” he says.

According to Rao, entrepreneurial leaders share three defining traits that make them different from other leaders: they are amazing risk managers, they are great uncertainty navigators, and they thrive in exploring ambiguity. Consequently, entrepreneurial leaders can innovate their way into the future.

Rao argues that today’s conditions are perfect for spotting your company’s future entrepreneurial leaders. “Look for those who step up, those who take initiative,” he says.

“Entrepreneurial leaders are some of the fastest learners because they are among the best experimenters. They aren’t worried about being wrong, but will very quickly change directions when they are. They know inaction is worse than making a mistake.”

Posted in Insights

More from Insights »

Latest Stories

A woman points to a presentation in a meeting
Why Analytical Thinking Is the Cornerstone of Strategic Business Decisions Business decisions are rarely simple. Analytical thinking is critical for leaders to identify and navigate the options in front of an organization, so it’s important to develop analytical thinking skills in order to make smart decisions.
By
October 7, 2025

Posted in Insights

a row of electricity meters
The Price of Power: What’s Driving Rising Electricity Rates? Electricity rates have been steadily increasing. Ryan Davies, a Babson professor of finance, unpacks the many reasons for that, including the massive data centers popping up across the country.
By
John Crawford
Senior Journalist
John Crawford
A writer for Babson Thought & Action and the Babson Magazine, John Crawford has been telling the College’s entrepreneurial story for more than 15 years. Assignments for Babson have taken him from Rwanda to El Salvador, from the sweet-smelling factory of a Pennsylvania candy maker, to the stately Atlanta headquarters of an NFL owner, to the bustling office of a New York City fashion designer. Beyond his work for Babson, he has written articles and essays for The Philadelphia Inquirer, Notre Dame Magazine, The Good Men Project, and other publications. He can be found on Twitter, @crawfordwriter, where he tweets about climate change.
September 30, 2025

Posted in Insights

The Babson community and mascot celebrate at the Roger Babson statue last year
No. 2 Again: Wall Street Journal Ranks Babson the No. 2 Best College for the Second Year in a Row For the second year in a row, The Wall Street Journal ranked Babson as the No. 2 Best College in the United States, lauding the College for its impressive impact on student outcomes.
By
Eric Beato
Editor / Writer
Eric Beato
Eric Beato is the Editor of Babson Thought & Action and Babson Magazine. A native of Chicago and a graduate of the University of Missouri School of Journalism, Eric has worked as an editor and writer at newspapers across the country, including the Chicago Sun-Times and Boston Herald. Eric joined Babson College in 2019 after working as the communications director for a private educational travel company and as the managing editor of six regional sports publications.
September 29, 2025

Posted in Community, Entrepreneurial Leadership, Insights, Outcomes