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Pivot 246Pivoting your business in response to Covid-19 

From an article on

The Covid-19 crisis has made it necessary for many commercial companies to shift their business models quickly. Many are repurposing their assets to create new value, protect the brand and survive.

This is an extraordinarily difficult time for every organization. The current situation is chaotic, and we are unsure of what lies ahead. For your (and almost all organizations), it means the existing business model has been disrupted – maybe even obliterated – and your cash flow is drying up.

The Miller Center for Social Entrepreneurship has been working with organisations around the world to help navigate a way through the crisis. Over the past three weeks, one message has come across loud and clear: Pivoting the business model into survival mode is foremost on the minds of leaders.

Innovation and pivoting

Pivoting a company’s business model is not new. It has been an integral part of business innovation for many years. Some companies are forced to pivot defensively because their original models are doomed. Examples are Odeo pivoting into Twitter, Starbucks, the coffee shop, did not start out selling brewed coffee - they started off in 1971 selling espresso makers and coffee beans.

Pivots generally carry significant risks, but leadership 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.

Due to the Covid-19 crisis, many commercial companies to shift their business models quickly. Many are repurposing their assets to create new value, protect the brand and survive. Examples are:

  • Gap, Nike, Zara, Brooks Brothers, and smaller manufacturers are using their factories to make masks, gowns and scrubs.
  • Bicycle and sports equipment manufacturers are shifting to make personal protective equipment for frontline healthcare workers.
  • LVMH, which owns luxury perfume and makeup brands, and P&G have shifted to hand sanitizer production; many alcoholic beverage producers are following a similar path.
  • Warterfield, a trucking company, is partnering with logistics companies to replenish ransacked grocery and retail shelves.
  • Hotel booking platform,, has partnered with hotels to create isolation centers across Nigeria, an added buffer for the country’s limited quarantine facilities.
  • Extensio in Mexico provides agronomic advice via a mobile app for farmers; it’s now deploying its app to push public health advice and critical information.
  • MaquaOnline, employing at-risk women as household maids, has pivoted to sanitation services.
  • EllieFunDay, which sells baby clothes made by artisans, is now making fabric facemasks; the company is donating masks to hospitals and rolling out a buy-one-give-one model.
  • Everytable, a Los-Angeles-based healthy food chain, has shifted to making home deliveries and started a Covid-19 helpline to link its services with schools, senior centers and homeless shelters in need of healthy, affordable meals.
  • Lifebank, a health startup in Nigeria, created a national register for ventilators and respirators for hospitals.

Looking for pivots in your business

All good pivots start with great questions. There are three business model aspects you should explore when deciding on potential pivots.

  • Value proposition: What value do you deliver with your product or service?
  • Value networks: How do you deliver and monetize your product or service?
  • Target customers: Who receives and benefits from what you provide?

Value proposition

  • Fulfill unmet needs. Shift to supply what people need today (health, nutrition, safety, and in-home education)
  • Create solutions. Provide complete solutions to meet people’s needs, not just a partial solution. (The trucking industry works with logistics companies to supply food.)
  • Create new value with existing assets. Shift from nice to have to must have. (MaquaOnline is focusing on offering sanitation services rather than its full line of domestic services.)
  • Rethink product/service dichotomy. Make your service a product or vice versa. (Deliver home school education products rather than provide education services.)
  • Focus on what customers love about what you do. Make this a business. (Wrigley gave away gum to support the original business of selling baking goods and realized people liked the gum more than the baking goods.)

Value network

  • Find new ways to deliver your value. Is electronic delivery of your product or service an option? How about direct to customer?
  • Shift to a radically faster, better, cheaper supply chain. Are there options that you would never consider under normal circumstances?
  • Connect through partners. Can you deliver needed value working with partners?
  • Repurpose assets. What new products or services could you create with existing resources?
  • Monetize differently. Can you find novel ways to get paid? Consider subscriptions or alternate payment methods.

Target customers

  • Find new clients. Who else could use your products and services? Healthcare providers or food services? (Everytable added schools and seniors to its customer base.)
  • Reposition offering with existing clients. The best way to retain customers is to set them free. For example, consider delivering educational tools for home schooling and explore novel ways to get paid.
  • Orchestrate the ecosystem. What can you do with partners that you can't do alone? Can you collaborate with supply chain members and local operators to overcome barriers like Warterfield?  If we have X and a partner has Y, can we collaborate to deliver Z?

There could be multiple pivot options in the value, network and customer areas.

The article by Rob Shelton, Executive Fellow at Miller Center for Social Entrepreneurship, then goes on to define a framework and approach for generating and implementing a pivot.

Read the full article here.

In the meantime, the bottom line for entrepreneurs is: shift immediately into survival mode and help your staff. To help you in this, this guide might be useful - the Survival Guide for Social Enterprises Checklist.

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From an article on, 15/04/2020

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