A business owner will pivot for one of two reasons.
Either something wasn’t sitting right with the business model, or a global pandemic sweeps through almost every country in the world and cripples the economy.
We hear about the manufacturing companies who heard the cries of governments and have pivoted to make ventilators. What about the Canadian hockey equipment supplier, Bauer Hockey, who is now making face shields for our frontline workers? Then there are the restaurants who - since they can’t sustain themselves on takeaway service and Uber Eats premiums - have decided to make their own community grocery stores. While all of these businesses seem to have gotten the jump on COVID-19, it’s easy to commend them and their ability to pivot completely amidst these trying economic conditions, but it can be hard to establish your own business’ action plan. We’re here to help with these 3 steps in order to pivot your business strategy for COVID-19.
Before you start thinking about how you can turn your industrial painting business into a hand sanitising centre, stop and take a moment. A good exercise to do is a business process triage. In medical terms - especially topical in today’s environment - triaging is used to sort the severity of cases to ensure resources are allocated where they will be best utilised. In a business setting, a triage helps to define both processes and resources needed to meet your business objectives. This is especially valuable in startups or organisations where resources are constrained. So, make a list of the top 5 relationships (whether it’s vendors, advisors, key clients that you want to keep etc) that are imperative to your business surviving over the next several months. Take a deeper look into your audience demographic and see whether any of your customers are thriving (in B2B businesses). Now think, is there any way to make your product or service imperative to this segment? You can triage your production lines, operations, as well as annual revenue in order to see where there is space to reallocate resources.
From your list, is there anything you can pinpoint that you know has a chance to work?
If you do plan to pivot, the most important part is to maintain open and honest communication channels with your key relationships as it will define how you come out of COVID as well.
Here’s a closer look at someone who did it right.
Image Source: https://www.timberlane.com/
Rick Skidmore’s sales were down 75% and the CEO of Timberlane was staring down the barrel of laying off 60 employees. So how did this business owner go from the brink’s doorstep to making $50,000 in revenue a day? (Yes, in the time of COVID).
He acted immediately.
Timberlane is a very niche business that specialises in exterior shutters for very well-known landmarks. Disney Land, the White House, and many historical buildings throughout the United States. While the business model was healthy and consistent, this all dried up when the U.S enacted its safety precautions and essentially stopped the economy in its tracks.
Skidmore instantly stopped almost 90% of his marketing and was faced with having to lay off his employees when he had an ‘a-ha’ moment.
By laying out what Timberlane’s core capabilities were, and overlapping it with what supplies he knew were needed in the market, Skidmore was able to triage his business and reallocate resources to what he knew was needed most: Medical supplies.
Armed with his new proposition, he went through local hospitals and government agencies. Now, instead of standing down 60 employees, he’s had to hire 167 additional temporary employees. 50% of which are making masks, intubation cases and other needed personal protective equipment. Soon this will ramp up to 100%, with an output of 100,000 units a day.
Took a step back and analysed the resources he had available to him.
Used his knowledge of the market to see where realistic and achievable overlap could happen
Leveraged his networks to get in front of the right eyes
Made sure he had the right people and the right infrastructure for the job
But Skidmore went beyond just switching from one business model to another. The key to a sustainable business strategy is to ensure your business is set up for success based on both short and long term trends.
Skidmore didn’t just want to make masks and intubation shields. He wanted to make great masks and intubation shields. By bringing together a group of pulmonologists and ER Doctors who are helping with the next iteration of his design, he can rapidly innovate and cement himself as a real player in the game for when the COVID crisis ends. Which means he won’t have to make another pivot once demand dies out.
If you think you’re ready to pivot, make sure you ask yourself these questions first:
Once you’ve identified your business strategy needs to change, we challenge you to unleash your creativity. Start by rethinking what your business can provide. Perhaps you can partner with others in your industry you know and respect and find a way to collaborate.
More than likely, this will require major adjustments and have major repercussions - both positive and negative and will push you far outside of your comfort zone. Even without a pandemic, that’s what pivoting is all about.
If you’re apprehensive, or unsure about what your business options are, speak to an adviser. We have a wide array of experience helping business owners make strategic moves so they can sustain, scale and successfully exit when the time comes.
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