Pivoting is paramount for Founders in crisis
Pivot! Pivot! Pivot!
You must be thinking of that Friends episode where Ross, while moving his new sofa up the stairs, gets stuck at the landing and screams "pivot" at Rachel and Chandler who were helping him!
But no, for entrepreneurs pivot means a great deal more.
What does Pivoting mean?
Pivoting is basically shifting to or adopting a new strategy to adapt with the current times or circumstances. While in certain cases, it can be a complete overhaul of strategy, it may also be changing just certain aspects of it, which needs to be addressed immediately.
The pandemic has affected almost all businesses, to varying extents, many have had to rethink their business strategy
Pivoting unnecessarily is never a good idea, and is something that should be considered only when absolutely necessary, and all other options have been examined. A company should be thinking about pivoting if they are always lagging behind their targets, or there is too much competition for them to sustain themselves. They may also pivot to go with the flow and follow some trend or if their growth has been slow to almost nil.
Pivoting is also common when there has been a complete shift in perspective, values and goals of the company.
Pivoting can be changing the features of a certain product, or the product itself, focusing on a different demographic, making accessibility-related changes or even adapting to a new revenue model. If a decision about a pivot has been made, the company should do it as soon as possible, and not waste precious resources like time, effort, and money.
The new goals that are envisioned as a result of this pivot should be in sync with the values of the company.
While a pivot maybe like a clean slate when it comes to certain aspects of the plan of action, it's not a good idea to discard the work already done. You never know when they come in handy, and can be reused.
Companies will also have to make sure that their pivot results in sustainable strategies and is future-proof, with ample opportunities of growth.
Customer feedback is also very important when considering a pivot.
How is it inevitable in crisis situation?
We have seen many industries making a complete shift in how they operate around the coronavirus-induced Lockdown.
We have seen schools and colleges shift to online classes. Academia has worked almost digitally, hosting conferences on digital platforms.
We have seen trials being held online and offices going into the work-from-home modes.
Many businesses and companies have also had to rethink their strategies and innovate accordingly to survive in such unprecedented times.
A recent survey conducted by NASSCOM reports that, 70% of Indian startups have enough cash liquidity in the banks for just three months.
A recent report by Gartner says that in the tech sector, 55% of CEOs were not expecting the downward spiral of the economy.
Many established companies have had to cut down their operations significantly and are having to work with reduced workforces or reduced revenues. So not just for startups, it has also become evident for the established big companies to devise a new and innovative business strategy without hampering on its foundation.
We have seen quite a few instances in this regard.
Swiggy which was originally just a food delivery service, introduced "Swiggy Genie", now delivering groceries, essentials and even stuff from house to house.
Rapido, a bike taxi service has started a delivery service which allows one customer to send something to someone, without having to go out.
Free users of Spotify used to listen to advertisements while streaming their music but as a result of the pandemic, advertisement budgets have been cut. Therefore in a lateral move, Spotify has now introduced podcasts by celebrities and a myriad of other topics like news, pop culture and sports.
The aviation industry has also been affected tremendously, due to the pandemic. Many commercial flights have changed their strategy by now carrying freight for items like PPE.
Many fashion brands and now designing masks, gowns and other protective gear to suit the times and needs.
We have seen hotels offering staycation packages to sustain themselves.
What now? Pivot or not...
This crisis is also the best time for small and big companies to re-evaluate their resources and focus on growth based on innovation. Businesses are being forced to regroup and utilize their core-expertise in ways which are not only sustainable but also somewhat pandemic friendly.
That being said, it must be kept in mind that a herd mentality here would be more detrimental to the company. Don't run towards a pivot if everything is running more or less smoothly. It may not be necessary for all players in the innovation ecosystem. It is also not a sure shot answer to all the business problems that a company might have. Before a pivot is rolled out, an extremely thorough study must be conducted outlining the projected pros and cons.
Recent developments indicate that venture capitalists are funding those companies more which are adept at grabbing new opportunities. On a worldwide scale, investors are trying to identify and support such innovations that have the potential to be groundbreaking, under these new circumstances.
Adapt, innovate, overcome
This is our moment to shape the new normal. It is through pivoting and adapting to the needs of the times that companies and startups can continue to be relevant and at the top of their games.
For corporates, this is the time to get rid of dead weight and inefficiencies. It is also crucial that all eyes and ears are focused on the very dynamic changes that are occurring in the world right now.
Startups can utilise digital transformations to their benefit to come up with business models which are sustainable. Companies that have not pivoted to a smarter strategy in the course of the pandemic run risks of stagnating and missing opportunities to develop their businesses as per this changing times. While it's important for startups to think on a global scale, big corporates should be mindful of how the market evolves in order to keep up with that.