Pivoting for Growth in the New ‘Distance Economy’

The stakes for companies couldn’t be higher, yet they must innovate their business model with less cash, less time and in a competitive environment where everyone else is doing the same. Pivoting must pivot for sustainable growth.

We are all seeing some wonderfully unique, innovative and socially beneficial examples of business ‘pivoting’ at the moment. To highlight but a few; Dyson and McLaren are turning their production lines over to ventilator manufacture, EDF Energy engineers are making deliveries to the vulnerable, restaurants are offering delivery services, Zara is producing PPE scrubs, AirBnB is offering its services for healthcare worker accommodation and David Lloyd is launching a digital gym — the list is as heartwarming as it is long.

However, these ‘pivots’ are all short-term in nature and it is highly unlikely any of these will turn into sustainable business models for the companies concerned. As a Growth & Innovation practice, we are seeing very little evidence that companies are turning their attention to addressing the fundamental changes driven by Covid, either because they are too busy firefighting, or perhaps less likely, they believe that impacts are reversable.

We strongly believe, and there is more than sufficient evidence from other major disruptions (e.g. financial crisis in 2008/09), that the companies who will emerge strongest and most sustainably from this crisis are the ones who are willing to invest NOW in adapting their business model to the likely persistent market changes driven by the Covid-19 epidemic. We call these ‘ambidextrous’ companies — organisations that can firefight disruption and plan for future growth at the same time.

Pivoting has been a broadly accepted approach for businesses under pressure from disruption or unable to scale sufficiently, to modify aspects of their business model for growth. However, the way companies go about pivoting for growth needs to change from how they might have approached it in the past:

· Businesses must be much more adept, innovative and differentiated in their approach to pivoting, primarily because (unusually) almost all of their competitors are being compelled to modify their own business models at the same time.

· Businesses don’t have the luxury of spare resource and cash to minimize the risk of pivoting, yet the potential impact of getting it wrong, or not doing anything at all, is greater than its ever been. Pivoting must be lighter-touch, more experimental and quicker to impact yet still mitigate risk as much as before.

· The primary inputs into the pivot are very unclear and uncertain. The unprecedented nature of the current crisis means we have limited benchmarks to call upon to help us predict how the markets, customers and competitors will react as we emerge from lockdown, and which social, technological, political and economic changes will persist in the medium-to-long term. Pivoting methodology needs to cope better with ambiguity, to allow broader based input assumptions and encourage ongoing refinement as ‘unknowns’ become ‘knowns’. Pivoting shouldn’t be a time-bound, one-off endeavour.

Over the coming weeks, we’ll be sharing insight, methodologies and techniques to help you pivot your business model more effectively and sustainably in light of the implications identified above. We’re not pretending that we’ll be able to predict which persistent changes will manifest themselves, however we will be able to help you design and set the right foundations for growth regardless of the disruptions that may transpire.

We won’t cover ‘what’ pivoting is (there is enough literature out there already) or ‘when’ it’s best to pivot (we’ll assume this is a given), but instead focus on the ‘how’:

· how to take inspiration from adjacent markets to inform your pivoting strategy

· how to put in place an iterative process to adapt to future changes and cope with the ambiguity of the current environment

· how best to overcome the typical (and likely atypical) barriers faced when pivoting,

· how to minimize risk of a pivot from both a commercial and brand perspective

· how to quickly commercialise latent or underutilised IP and assets to diversify your revenue streams

· how to leverage non-traditional and digital channels to reach consumers in different ways

· how to test and refine your hypotheses in a very nervy and uncertain market environment

· how to pivot and scale more quickly, leveraging partnerships, low-priced assets and other go-to-market vehicles

Please feel free to post below any questions or particular themes you would like us to address when ‘pivoting for growth’.