The past few months had more or less the same trends happening everywhere around the world – an emergence or escalation of Covid-19 cases, some variation of a movement control order, a constant stream of indistinguishable news about the virus, potential economic downfall, and suffering businesses
On top of that, many businesses, especially SMEs, are taking very big economic hits
As a result, one constant topic that I always encounter online these days are businesses trying to ‘pivot’
I’ve seen many clever ideas, some of them which I have never thought of before:
- People from the tourism industry trying to sell a combination of food products from their suppliers via Facebook live channels
- Business owners trying to digitise and bring their businesses online
- Entrepreneurs trying to pre-sell products or services with an extended delivery time or usage period
- Selling of products and packages through social appeals (save the passionate entrepreneur, adopt an animal) etc
However, it seems to me that a majority of the ‘pivoting’ means making small changes to the way that a business operates, activating a new not-so-related source of revenue, and bringing certain parts of the business online. (These includes myself trying to make some minor changes to how we are currently operating)
What does pivoting mean?
All the talk got me thinking – What does pivoting really mean and are businesses (myself included) really pivoting?
I dug a little deeper, and after reading through some articles and books – it seems that the majority of authors agree that pivoting is making big, fundamental changes when things aren’t working.
The keyword here is – BIG and FUNDAMENTAL
As for me, I define pivoting as:
A fundamental change of a business direction – be it in terms of product, operations, sales channels, and any key aspects of a business – to meet the current consumer needs
But this is not exactly what the majority of businesses are doing nowadays
Don’t get me wrong. Making the aforementioned small changes will bring in some additional cashflow, or in better cases, extend your business runway by a few weeks or a month.
… but that’s hardly pivoting, and the fact of the matter is that these efforts are not enough to pull a majority of the businesses out of their hardship
We have to remember that this is not a gradual change in trends, nor is it a gradual shift in consumer behaviour – this is a full on pandemic disrupting the world economy, causing an overnight change in how consumers think and behave (and in most cases worldwide, how consumers are allowed to behave)
Opening an umbrella in a tsunami
How can businesses expect to survive when they are opening an umbrella in a tsunami, whereas what they really need is an underground shelter with food plus their own electricity supply?
We can’t exactly control a tsunami, can we?
The point that I want to make is that entrepreneurs do not have to beat themselves up if their ‘pivoting’ doesn’t work. My opinion is that, at times like this, small pivots aren’t workable.
Instead, this is a time for radical change, now is the time to:
- First evaluate whether the fundamental business model is still worth pursuing
- Cost cutting, runway extension, making difficult decisions of which parts (or people) of the business to let go
- Secure funding, scouring for any available governmental or private grants, then evaluating and taking calculated risks on whether these debts can be recovered when the market recovers
- Have the clarity and knowledge to bring forward your best ‘guesstimate’ on when the market will start to turn around and making plans to be one step ahead of the competition when that happens
- Restrategize and rethink the fundamentals of our business models, strategies, and what most of us learned the hard way – the importance of building a huge-ass pile of contingency cash reserve
- Ponder on the question – If we’re not prepared for a pandemic this scale, what do we do to make sure that we are prepared for the next one?
These are big and fundamental changes that we need to progressively make, and these pivots do not happen in a day or two
Incremental change is still a must
Having said all this, should we stop our small incremental changes and idea generation to save our businesses?
We’re entrepreneurs, we’re business owners, it is in our blood to have the mental toughness to embrace big challenges and constantly think of ways to overcome them and make changes. Plus, there are a tonne of businesses that were started out of a recession or born through a crisis
In this pandemic, I think what separates the really good entrepreneurs from the average joes are the ones having the clarity to see this situation as a test revealing parts of the foundation of our businesses that aren’t strong; and having the courage to tear apart these foundational pillars and rebuild them in a way that is stronger and more resilient if ever a pandemic of this scale happens again
That, to me, is pivoting