The impact of the pandemic and the associated economic recession is touching businesses around the world. Most are facing major changes in customer behaviour. Impacts to supply chains and challenges with sales channels. In these troubling times some companies will fail and others will apply the pandemic pivot to transform through innovative opportunities.
By now most firms have assessed their business strategy and considered vulnerabilities and if there is an opportunity to pivot existing operations to address new demand. Where these pandemic pivot opportunities exist, which markets and segments can be best addressed.
Strike a Balance
Executives and strategy teams look at how to best set the firm up for success and experience shows that taking a very strong position either in defensive (cost cutting) or offensive (acquisition and growth) is likely to lead to poor results. A HBR study in found that those firms that struck the right balance between offensive and defensive were most successful. These companies cut costs and achieved efficiencies while still developing new markets.
Dr Robert Cooper offers these lessons:
- Be ready to pivot, to re-imagine your business, or to innovate. The wrong strategy is doing nothing at all or having no strategy
- Recognize that in the darkness of any crisis, there is always opportunity – an opportunity is simply a threat that is flipped over
- Don’t cut R&D and new-product spending. While it is prudent to cut some discretionary costs, don’t curtail those activities that provide the way out of the crisis, namely R&D, new product development, and marketing.
Stay Close to The Customer
Voice of Customer (VoC) is often quoted when reflecting on firms that have made successful pandemic pivots, customer needs have changed and firms need to make sure they understand how they can create opportunities in the value chain.
Leverage Your Strengths
Companies that can make the jump apply the skills and resources they have to build on what they already do well. Rather than trying to enter an entirely new market, extending the existing business model to grow.
While there were automotive manufacturers who started producing ventilators and gin distilleries that started making hand sanitiser. These were fairly obvious and short term pivots. The opportunity comes from those who build profitable and sustainable businesses.
The digital transformation has been accelerated around the globe by the pandemic and successful organisations are using the opportunity build new digital channels with customer and to cut cost and complexity out of the service chain.
Keep the Business Agile, Flexible and Ready to Pivot
Successful firms have reduced costs and are looking for opportunities. They are dynamic and are ready to take advantages to changes in business models and where they can create differentiation in the value chain.
Change creates opportunities, businesses that have available resources, clarity of vision, a deep understanding of the voice of customer and are ready to commit will be most successful at the pandemic pivot.
DIGEST of an article from INNOVATION MANAGEMENT The Pandemic Pivot: The Need for Product, Service and Business Model Innovation By Dr. Robert G. Cooper Published: 2nd December 2020 https://innovationmanagement.se/2020/12/02/the-pandemic-pivot-the-need-for-product-service-and-business-model-innovation/