Nexba co-founder and co-chief executive officer
Humans are social beings and for the majority it is not normal that we are required to conduct business remotely. Humans are also incredibly adaptable and throughout history businesses that can survive through unprecedented times will be the businesses that thrive when markets reopen.
As a founder, one of the biggest personal growth opportunities I’m facing is learning to be comfortable with being uncomfortable again and how to ask great questions, for my team and for the business.
Pivoting is another way of saying adapting your execution because new data suggests it can reduce performance risk.
Pivoting fast requires founders to live in the unnatural state of tension where we are externally looking to drive our vision optimistically and with passion, while internally needing to scenario-plan every potential challenge that could derail us.
A way of thinking most founders and small business owners are well versed in.
Pivoting through adversity requires even more tenacity. Many small businesses and startups have no choice but to pivot for survival. I’ve heard horror stories from overseas of food and beverage businesses losing 90% of their weekly revenue overnight. It’s shocking and it’s heartbreaking, but by the same token we only have to look to our backyard where some cafes and restaurants are not only surviving but discovering new mediums and revenue streams through seeking online direct deliveries of their goods.
From a practical point of view, I believe the key to successful pivoting is good governance. Preparation and forecasting with known assumptions mean you can better manage cash flow and where possible, businesses should always have access to six to 12 months’ worth of cash.
While each day presents challenges, understanding our business levers and core strategy is essential to accelerate change, as we may need to pivot faster to find new revenue streams and growth. And startups and small businesses have the mindset to do this better than anyone else.
Icon Agency managing director
As a business owner and founder, change is constant. Good managers prepare for the worst, but the unprecedented nature of the COVID-19 global pandemic means we’re all in unchartered territory.
The COVID-19 outbreak is a global human tragedy. Compounding the tragedy is a growing economic crisis. For business owners and founders, moving quickly to adapt to the current crisis – and preparing for life after COVID-19 – is likely a matter of survive or perish.
So how do business owners navigate the crisis and what does the path to the ‘new normal’ look like? Here are three steps to pivot your business for survival.
Pivot your business to maximise value and income
Examine every part of your business to identify the services or products that best align with the changing business and consumer landscape. Prioritise those with the highest margins; be prepared to shelve poor performing products or services that are unlikely to benefit from the expected post-COVID ‘bounce’. For example, if you offer digital services, focus on products that support the quarantine economy and post-COVID economic landscape.
Reimagine your business for the new normal
The post-COVID world economy will be dramatically different from the old. Carefully assess these affect your business and reinvent products or services accordingly. The possible effects of the crisis include a retreat from supply chain globalisation, heightened technology adoption, and an increased reliance on virtual and digital networks to conduct service businesses.
Carefully weigh up the risk versus reward
For founder-led businesses, mitigating and managing risk in a time of crisis can be more complicated and personal. Founders typically have much more to lose and are more exposed when cash flow tightens, and capital markets shrink. Scenario planning is a valuable tool to help guide important decisions – and never more so given the current uncertainty. Now more than ever, business owners need to invest in good business intelligence and data to help identify post-COVID-19 economic trends and future opportunities.
GO1 co-founder and head of growth
With the impact of COVID19 on society globally, healthcare systems and economies, the way we react as business leaders can be the difference between business survival and business demise. I posed the question to a colleague today: “What if Pokemon GO (the global phenomenon that it is or was) was released today instead of a few years ago?”
The reason I pose this question is, because as with many things in business, experienced entrepreneurs will tell you it’s about timing.
As the leaders in our businesses, we need to understand that in terms of all the opportunities in our arsenal to mould and grow our businesses, which opportunities we will hold, fold or play. For many businesses, the focus should not be on ‘pivoting’, which in my eyes is a complete change in your business, but a ‘pivot-shift’ — a term I use to describe the process of not undergoing a complete pivot, but a refocus on areas where previously there was a small amount of opportunity to now much larger opportunities.
This doesn’t just apply to repurposing manufacturing machinery to help the fight against COVID-19 either. For many businesses, they just simply can’t operate due to lockdowns and physical distancing laws. When talking to government, I stress that we need to help businesses survive, and those who can’t do, should learn.
With an earn or learn mentality, we can shift our focus towards research and development, improvement of our products or services or even up-skilling and training ourselves and our teams. I know this isn’t for everyone, but it’s important to think of not just how we survive, but how to maintain productivity of some form with long term benefits during what can be a very unproductive time.
Finally, in many circumstances pivoting isn’t required at all, with only simple adjustments needed to capture opportunities that may present themselves. The best example I can think of is how people are now more used to communicating remotely via teleconference, phone and email than ever before. This means the opportunity for some companies to expand globally is at their fingertips given now a physical presence in a new market may not be needed to conduct business.
So ask yourself: “Do I need to pivot or just simply have a closer look at the opportunities at hand and hyper-focus accordingly?”
Never waste a good crisis.
Luxury Escapes co-founder, angel investor and former corporate lawyer
The pivots we’re seeing at the moment are not the same as the pivots we’ve talked about start-ups executing over the last decade.
A ‘pivot’ last year was when a startup couldn’t get product-market fit, so they changed their business to meet what the market was telling them. The pivoting we’re seeing at the moment is much more short-term, with businesses that had product-market fit suddenly needing to do whatever they can do to survive a demand shock that we haven’t seen in a century.
As a startup guy, amongst all the tragedy of lost jobs and lost businesses, the small silver lining is witnessing businesses change so quickly to meet this new paradigm. Attica, one of the top 50 restaurants in the world, is now selling takeaway lasagna, garlic bread and ice-cream. Atlas Dining has created food boxes and helps budding chefs prepare their meals with instructional videos featuring world-class chefs. LVMH, the $250 billion luxury giant, is making hand sanitiser for French hospitals.
Clearly, businesses are ignoring the minor negative brand impacts and have realised, survival is the key. Utilise your goodwill, customer relationships and know-how to meet the changing market. We don’t know if this calamity will last a few months or a few years, so founders and CEOs need to do everything they can to earn revenue, while reducing costs.
It’s hard to think of a risk not worth taking when the alternative is not having a business at all.
Airwallex co-founder and president
Offline businesses should look for ways to shift online wherever possible. If your business has traditionally been reliant on physical locations and on-site staff, you can continue to keep your doors open by leveraging digital channels to deliver your products or services. It is now easier than ever to take your business online through e-commerce platforms like Shopify or virtual meeting tools like Zoom.
For those businesses that are already online, look for ways to scale even further by tapping into online communities and marketplaces. Over the last few years, the number of online marketplaces has exploded due to the convenience and variety they offer to consumers. Participating in these marketplaces can also be a great way to super-charge your customer base during these times, as they can generate mass awareness and access to a large global customer base quickly.
Synergie Skin founder and cosmetic chemist
Businesses looking to pivot need to focus on their own specific strengths. They need to look at how those strengths are relevant to the current social and economic climate.
Now is not the time to reinvent your business. These times are too uncertain to take large risks. Calculated risks based on your experience as a leader, current market needs, and a strong understanding of your business and its demographic is a more prudent course of action.
My Australian company, Synergie Skin, is an ISO accredited skin care manufacturing business. My background is cosmetic chemistry and I have a sound understanding of formulating effective hand and surface sanitiser. During this crisis I have pivoted my business from manufacturing skin care and makeup to full scale production of hospital grade sanitiser for aged care, health care and the general public. I have a full-scale laboratory and manufacturing facility, and most importantly I have a committed team who are dedicated to making a difference at this time. I knew I had the knowledge and resources to create a something that will keep us all safer during this time.
During this ‘new normal’ I have changed my entire operation. All my managers have set up home offices and we communicate via Zoom meetings. My incredible Melbourne-based production and manufacturing team are split into two separated groups working week on/week off shifts. We all exercise social distancing and use appropriate protective clothing during the workday. The demand for sanitiser is growing each week but the team is coping extremely well.
I am so proud that my team still have job security and are making a significant contribution to this situation. A sense of purpose is the drive that makes us all want to get up in the morning.
You can help us (and help yourself)
Small and medium businesses and startups have never needed credible, independent journalism and information more than now.
That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.
Now, there’s a way you can help us keep doing this: by becoming a SmartCompany supporter.
Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.