For years, we’ve all said that we’re in unprecedented times; times of tremendous, constant change. In fact, we founded The Garage Group over 10 years ago based on the foundations that organizations needed to embrace change, and that it was here to stay. We believed (and still believe) that adopting the mindsets, approaches, and tools of successful startups would be the way to ensure that their brands were able to create innovating and strategy that stayed relevant even with the constancy of change in the market.
Fast forward to 2020 and we find ourselves living in a world of forced change. Organizations who learned that art of the pivot were prepared, even if they didn’t realize they were. This moment in history is exactly what they’ve been training for.
We see evidence of companies using their assets for the greater good:
- Large F500 companies like Anheuser Busch and Procter & Gamble pivoted their manufacturing facilities (even before they were asked to) to make PPE for frontline healthcare workers.
- Google and Apple teamed up to enable folks to know if they may have been exposed to COVID-19.
- Lyft has launched a food and medical supply delivery service.
- Dyson pivots from developing vacuums to designing a ventilator in 10 days.
But, potentially even more challenging are the examples of companies shifting their business models to adapt as the market is adapting. Interestingly, in this group of examples, the companies are noticeably smaller; less F500 and more SMB:
- AirBnB, now offering digital experiences; pivoting their entire business model.
- Yaymaker (formerly PaintNite), who organizes craft events, led by local professionals, pivoted their primary channel of delivery (in person parties), and shifted to all virtual events. This shift opportunistically now enables a broader selection of events for thousands of folks sheltered-at-home, and looking for something creative to do.
- Hoteliers offering packaged quarantine stays, pivoting their target market away from travelers to those who need to stay away from home to protect their families from infection.
- Torchy’s Tacos, a fast emerging new restaurant chain, quickly pivoted to curbside service, pivoting away from in-restaurant dining.
- In the UK, Heinz quickly created Direct to Consumer home delivery for a bundle of their most popular products, pivoting their business model from a reliance on retailers.
- Kroger (grocery retailer) piloted its first pickup-only store.
What sets these teams apart?
- They seize the opportunity. Certainly, smaller organizations have less runway to wait for business-as-usual to return. The benefit of that built-in hunger is that they recognize the need to act quickly. A market change is a market reality, and they don’t wait around wondering if they really have to change; rather they see new reality each day, each week; and they recognize it as an opportunity to innovate.
- They operate as interdependent teams. Companies that are able to pivot quickly are characterized, among other things, by practice of working together. Individuals on these teams are adept at seamlessly moving from specialization in their functional expertise to generalist, more transcendent strategic thinking which allows them to see what’s best for the company, and leverage their expertise to operationalize new approaches quickly.
- They play by a startup-inspired, multi-method playbook. Consistently, as a regular practice, they listen for consumer/customer pain points, explore business ideas and business models to solve those pain points, and quickly launch and learn in market while they iterate and optimize. Importantly, these teams don’t only look at pain points once a year, they regularly listen and stay in touch with their customers so that the cycle doesn’t end. Our Lean Growth Playbook was built for turbulent times like these, taking the best from the startup world like Sprint and tried and true methods like Jobs to be Done.
Have you noticed a change in your business? An uptick or downturn in sales? These are leading indicators that the time is ripe for a pivot. Explore what’s working about your current model and pivot to do more of that. Pay attention to what’s not working or not selling, and pivot to new products, services, or business models. You might need to change what you are selling, you might need to change who you are selling to, or you might need to change the way you are interacting with your customers. As you can see in the examples shared above, companies are pivoting their business models, even more than offering new products. Here are a few specific examples of business model pivots you may want to consider:
- Sell to a new customer segment. For example, office products or services once sold to businesses may now be more relevant to those working from home. Or, consider bundling services for companies to offer their employees who are working from home.
- Change your delivery channel to go DTC. Many products rely on retailers to generate awareness, trial, and repeat purchases; or agents to sell in services. Consider finding a way to offer your product or service directly to customers.
- Change up how you get value to your customers by making it virtual/digitizing it. Especially true for service providers, how can you digitize or offer a virtual service to replace in-person services?
- Offer a new product or service. Tap into a new need (see our report on changing consumer needs here) and re-purpose your assets to create a more relevant product or service.
You need to pivot. Whatever business you are in today, you need to pivot. If you are a large company, pivoting to have an impact on the greater good is imperative: you are needed. But, don’t forget that your own business model needs your attention as well. This pandemic has ushered in a new reality. One that will continue to shift and change.
Let us know how The Garage Group can help. We work with teams like yours every day. From designing an innovation strategy and plan to generating new product or business model ideas, we’ll work with you to design the right approach to enable you to pivot now, and as a way of working going forward.