Why You Don’t Need To Pivot During A Crisis
The COVID-19 crisis has affected companies in several distinct ways. However, the businesses that pivoted early into markets with more resilience in a global lockdown climate reaped the rewards. Forbes notes that the pandemic forced firms to shift focus, pivoting into new areas to survive. Many businesses are profitable today because they pivoted early and drove into their new sectors with relentless passion and determination. Advising enterprises to shift focus as their only survival strategy might have been a bit premature. Here, we examine alternative ways to deal with the crisis and how other businesses managed to deal with the changing landscape without pivoting into new sectors.
Marginal Changes Can Help The Business
As Inc. informs us, pivoting means capitalizing on areas the business may perform well but haven’t previously explored. Many companies see it as a last-ditch effort to change the direction of the company on short notice. However, drastic changes usually bring many challenges with them. Marginal changes are the polar opposite of drastically changing how a company does business. Some of these marginal changes served as vital methods of reconsidering the business’s abilities and current situation. Relying on them allowed the enterprise to think its way out of the corner that the pandemic put them into instead of using the knee-jerk reaction to pivot.
Slowing Down The Business Immediately
Most small businesses saw companies moving at rapid speed. With the growth rate of many of these industries, it’s expected that they would continue to expand over time. The pandemic put a stop to growth almost overnight as many areas went into lockdown. Many businesses saw their customer base dry up, and that prompted them to pivot into a market that was more conducive to sales. However, other companies simply slowed their business growth down and paid close attention to customer feedback.
One of the most critical comparisons we can make is to the cheetah. The journal Nature informs us that the cheetah only pursues its prey at half the speed it’s capable of. Most times, it never tops out to its maximum land speed because committing that far into the hunt would force it to lose out on other options for an easy kill. Similarly, companies that put the pedal to the metal in their business growth found themselves far too committed down the path to consider slowing down and instead pivoted to retain their momentum. Other companies who were smarter in their expansion slowed down to allow them to examine other options, picking those that appealed to the company’s core values and preserved its business model.
Richard Yuan, CEO, ABC World Pty. Ltd., offered businesses in New Zealand and Australia a chance to slow down while still getting access to a profitable market. The company provides a service that allowed businesses within these developed economies to access the mainland Chinese market through brick-and-mortar establishments or via an online presence behind The Great Firewall. Companies that were moving at a slow enough pace to take advantage of the opportunity didn’t have to adjust their business models but instead could rely on the emerging Chinese market to subsidize the profits lost through lockdowns in both places.
Reaffirming the Business’s Mission and Vision
Slowing down offered businesses a chance to take stock of what they wanted from the market and whether their niche was still applicable in a post-pandemic world. TravelPerk demonstrates an excellent example of this mentality. The Barcelona-based corporate travel agency realized that many of their competitors were cutting their sales and marketing staff. The result was that those businesses started hemorrhaging users, which invariably ended up at TravelPerk because they could handle the needs of those clients more effectively. As more money came in from these corporate clients, they could hire more staff, some of which came from the same companies that the corporate clients came from.
Be Selective About Trimming
Slowing down does require a business to do some trimming. The most vital part of this process is determining what needs to be trimmed and what doesn’t. Many companies operate with the conventional wisdom that crises require deep cuts into the business’s core to conserve payroll and functionality. On the contrary, a problem of this proportion might necessitate a look at more information and alternative ways to cut your expenses. Renegotiation of leases can lower costs since landlords are usually happy to have someone renting their building. Businesses that opt for this strategy keep their operational staff intact while finding other ways to cut their expenses. There is always “fat” to cut that’s not part of the business’s core functionality.
Examine New Data as It Comes In
Data-based decisions are how businesses survive a pandemic. Customer data will change during the lockdowns as consumers start looking at different ways to spend their time. Consumers changed their habits from traveling and visiting other places but used their savings to start working on things like home improvement. Data like the spread of the pandemic in different areas of the world could lead to insights that could help the company alongside the study of verticals. In an unprecedented situation like this, where data is the only way you can make sense of the complete picture, every little bit helps.
Consider the Business’s Weak Points
We never like to admit it, but each business has exploitable weak points. During a global outbreak like this, these weak points can prove to be more than just petty inconveniences. Lockdowns, for example, can highlight some of the glaring inefficiencies the business has with work-from-home infrastructure. Sales may be slower, but it still needs personnel adequately equipped to meet its promises to consumers. Other internal weaknesses may also be pertinent, such as weaknesses in the supply-chain or the manufacturing floor. These need to be addressed to deal with the current situation.
If You Need to Pivot, Do So Aggressively
Pivoting might end up as your fallback position, but it’s not the only option you have. However, if you do decide to pivot, you should lean into it and go full speed into the new market you’re entering. Brick-and-mortar stores feel the pinch of the slowed economy, but many of them have pivoted successfully into an online retail model. To add to their new direction, they’ve also invested in marketing and social media campaigns, going all-in on the idea of an online store, with the brick-and-mortar locations being fallback positions.
Choosing to pivot comes down to how the business sees itself and the market it’s currently in. Is it resilient enough to withstand the buffeting of the pandemic? Is there any way the company can slow down, cut back, and figure a way out of this situation? Is the business ready to change its direction completely? These changes don’t just rely on the company itself, but the consumers and the business’s employees. Strategically choosing not to pivot may open up opportunities to the industry, although it may not lead to massive growth.