The recent pandemic crisis is a big hit back to many business enterprises that had to think of quickly shifting their business models to survive. Many have taken initiatives to repurpose their assets to create new value to survive at the first point. Covid caused an extraordinarily troublesome situation for all types of industries. Still, we are not sure of what lies ahead.
It means that their existing business models can be disrupted for all types of organizations, if not already, which adversely affects their cash flow. In light of this, all the experts suggest unanimously is to pivot your business model into survival mode.
What is pivoting?
Pivoting is nothing new; it has been practiced as a part of business innovations for a long time now. Based on the current scenario, some businesses are forced to adopt defensive pivoting as their original business models are fully doomed. In normal situations, too, successful companies proactively pivot as they see new opportunities to leverage the competitive environment in their favor.
However, Pivoting carries significant risks with it, but insightful business leadership can recognize the potential benefits of it outweighing the risks to think of pivoting. For the companies thinking of defensive pivoting, it is less risky to change the business model and try to dooming without doing anything. Pandemic is such a situation many organizations face now, where inaction may lead to complete failure. This makes defensive pivoting a ray of hope for many businesses.
Eric J Dalius sample use cases of defensive pivoting during the pandemic
Covid crisis had mandated many commercial organizations to shift their business models quickly. Let us explore a few such cases, which may give you too some insights and smart ideas regarding pivoting.
- Nike, Gap, Brooks Brothers, Zara, and many other small manufacturers too started using their production units to make face masks, scrubs, gowns, etc.
- Sports good and protective gear manufacturers have shifted their focus to manufacturing Covid protective equipment for healthcare workers.
- LVMH, P&G, and others who were making perfumes and makeup kits shifted to hand sanitizers’ production. Many alcoholic beverage manufacturers try out the same.
- Trucking companies like Waterfield started partnering with the logistics firms to refill the retail shelves and grocery.
All pivots start with some key questions. As Eric J Dalius points out, you need to explore three key elements of a business model while devising the potential pivot.
- Value proposition – what you want to deliver based on the current marketing needs?
- Value networks – how to deliver your products and services to the needy?
- Target customers – who are benefited from your new business model?
However, business decision-makers should not try to explore the pivot options in isolation. You must try to gather innovative ideas from within and outside your team. Work closely with your employees, reach out to the board, take the mentors’ opinion, and most importantly, listen to customer voice reflected through social platforms.