27 April 2020 by Nasir Baki
Since the COVID-19 outbreak, many businesses have had to adapt quickly to change and redesign their products or services or even create new ones to respond to the demands of millions of people self-isolating around the world.
As a business owner, the decision to pivot depends on several reasons:
- Something isn’t quite right with the existing model.
- An opportunity to change the competitive environment and seize an advantage.
- External influences force us to rethink their operations.
The global coronavirus outbreak has tested people, industries, governments and supply chains unlike any crisis since World War II. This has been a catalyst for countless pivots. For businesses that have been lucky enough to pivot, here is how we have adapted to this new environment, innovating our services or products along with finding ways to give back to those who need it most.
INNOVATION AND PIVOTING
As our biggest asset, IPSB people know that we want them to stay safe, that we will support them as they deal with the impact of travel restrictions, school closures, the need to care of relatives, and being responsible citizens within their communities.
HOW IS THE INDUSTRY RESPONDING?
Pivots generally carry significant risks, but I believe any leadership role recognizes that the potential benefits outweigh the risks. For companies looking at defensive pivots, it is clear that changing business models is less risky than doing nothing. This is the situation many organizations face today – inaction will lead to a failed business. This crisis makes defensive pivots essential for many companies. For example, a recent video of Malaysian nurses using plastic bags as personal protective equipment (PPE) suits has gone viral on social media.
Manufacturers globally are engaged in a historic effort to ramp up production of the vital equipment needed to respond to the coronavirus outbreak.
Many local and global brands are repurposing their assets to create new value, protect the brand and survive.
- To answer the call for PPE shortages, local designers Radzwan Radziwil, Innai, Melinda Looi, Salikin Sidik, Khoon Hooi, Alia Bastamam and others are using their factories to make masks, gowns and scrubs.
- FashionValet also launched FVBazaar, an initiative to help food vendors earn an income with zero fees and commissions following the nationwide cancellation of food bazaars. This is a similar act launched by Food Panda for their online Ramadhan Bazaar and Lazada, helping vegetable sellers from Cameron Highlands overcome their logistic issue.
- Hotels are opening their doors to create isolation centres across Malaysia and globally, an added buffer for the country’s limited quarantine facilities.
- Global brands LVMH, which owns luxury perfume and makeup brands, and P&G have shifted to hand sanitizer production.
- In Brazil, Havaianas & parent company Alpargatas has temporarily repurposed and adapted their factories in Brazil to make protective equipment for healthcare professionals. The company has already begun production on masks, hand sanitizer, COVID-19 test kits, and more.
- H&M USA made an in-kind donation including bedding, sheets, children’s and adult clothes amongst other pieces, to help these communities meet their needs in this hard time.
WHERE TO LOOK FOR PIVOTS
Value proposition: What value do you deliver with your product or service?
Are you able to fulfill an unmet need by shifting to supply what people need today (health, nutrition, safety product supply, and online education)? Or perhaps with existing assets, you are able to create new value; Shift from want to need (sanitizing service, antiviral products, online delivery)
Value network: How do you deliver and monetize your product or service?
Is there a new way to deliver your value? Digital delivery should be an option for your product or service this COVID season but some essential services require the old school route. Can they be delivered directly?
Consider opting for an efficiently faster, better, cost-effective supply chain. Explore ways and options that were never an option under normal circumstances. Work with partners and figure out ways to repurpose existing resources to create needed value.
Lastly, alternative payment methods can be considered. Even local deliveries stop using COD (Cash On Delivery) and adapt to online banking. For enterprises, our clients have been on pay-per-use agreements and this is implemented all across the industry.
Target customers: Who receives and benefits from what you provide?
Now that the value propositions and networks are answered. Businesses should explore who else could use your products and services, hence creating new clients.For existing clients, explore repositioning current offerings by providing complimentary trials.
Making your pivot idea a reality
In the face of such extraordinary times, we can make a conscious choice to make the most of this situation, stay focused on the two essential elements of a successful pivot. The first is to manage the activities to generate great ideas.
Then a leader should be able to be bold in selecting and implementing the best pivot option. It also requires a trailblazer that can move the organization to a safe harbour to ride out the storm. Acting decisively with a smart, fast pivot can re-energize the team and move the organization to a safer place, and create a shelter during the storm.
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