Business pivoting during COVID-19 to survive a historic disruption
Ever since it struck, the pandemic has affected almost every industry. From retail to hospitality, airlines and manufacturing, real estate, and education – there was hardly any enterprise that was not adversely impacted by it.
At the same time, we are witnessing some companies successfully adjusting or realigning their core business areas to cope better with the new situation. And they are surviving better than the rest. So, are there any common threads? Can we identify some general principles that enable these organizations to pivot on an unfavourable condition and turn towards success? How to identify such pivots anyway, and make them work? Let us find out.
Choosing business pivots wisely
Not all pivots result in good business performance. Three conditions are necessary for such lateral moves to work:
- First, a pivot must align the firm with one or more of the long-term trends created or intensified by the pandemic, including remote work, shorter supply chains, social distancing, consumer introspection, and enhanced use of technology. For instance, if social distancing remains the rule for the near future, the casual dating platform Tinder will need to follow competitors Bumble and Facebook Dating in offering video dating.
- Second, a pivot must be a lateral extension of the firm’s existing capabilities, cementing — not undermining — its strategic intent. Faced by the sudden collapse in travel, Airbnb moved swiftly to help hosts financially and connect them with potential guests. Hosts can now offer online events focused on cooking, meditation, art therapy, magic, song-writing, virtual tours, and many other activities, with users joining for a modest fee.
This pivot represents one more step in Airbnb’s evolving approach from its traditional business model of facilitating matches between hosts and guests to its move to become a full-range lifestyle platform. In the future, online experiences could help travelers discover new destinations and on-site activities and help hosts offer better service. Airbnb could become a platform that people use not just to arrange their next vacation but to develop a cosmopolitan mindset throughout the year, learning about other cultures from a distance and celebrating the diversity of the world on a daily basis.
- Third, pivots must offer a sustainable path to profitability, one that preserves and enhances brand value in the minds of consumers. The economic crisis triggered by the pandemic does not necessarily spell the end of entire industries or companies. It does weed out business models that fail to pivot toward the new reality characterized by shorter value chains, remote work, social distancing, consumer introspection, and enhanced technology use.
Can technology help in business pivoting?
Most companies are spending more on security and collaboration as they navigate this new normal. For some it’s about bespoke technology—airlines and hotel chains are investing in technology that enables contactless check-in and check-out. Some are even looking at infusing a digital layer at all possible points of contact between employees and customers to ensure that customer.
For instance, developers are offering virtual walk-throughs of properties on sale and negotiations are being conducted via video conferencing, while the government has done its bit by enabling e-registration. Real estate services company Anarock claimed in April that they had successfully closed the digital sale of homes worth Rs 214.6 crore and office spaces worth Rs 37 crore across India.
Carmakers are introducing or significantly beefing up their online car booking and buying platforms, taking them from technology demonstrators to ones that are now expected to deliver actual sales. Auto dealers today offer interactive virtual demos, followed by socially distanced test drives and even paperwork for registration and financing options is handed virtually through these platforms.
What about Indin businesses?
Overall, 64% of Indian businesses reported that they were ready to meet the new workplace demands in the wake of the new coronavirus pandemic and are leveraging collaboration tech tools to ensure uninterrupted work, as per a new survey by leading job portal Indeed. While 43% of small and medium businesses (SMBs) said they are well prepared, 39% of large businesses said they are gearing up for the future.