With lower revenues and profit, many entrepreneurs mainly resort to cutting costs in order to survive the deadly COVID-19 pandemic-recession twins. Unmindful that such a move, without market development, will continue to depress revenues and profit, they may end up in the worst state of their self-fulfilling prophecy. They may be taking a short term orientation instead of reframing how to recover and thrive faster than their competition and finding new and relevant opportunities after the COVID crisis is over.
The answer they need is to pivot, the type that is not just temporary in their business, but one that will sustain them as another business and revenue source even after the pandemic. During the first ECQ, I studied 45 companies from 17 countries and found patterns that fit into 11 building blocks of a business model. Many of these companies were in industries classified as non-essential products and services, yet they were able to pivot beyond the low hanging fruit of just moving operations online. This was their critical life line that helped give them a higher survival rate, protect cash flow, gain new revenue sources, continue operations, and retain employees. Out of necessity, these companies pivoted quickly to launch new (and relevant) initiatives. They did not have to go through the usual 3 day – 2 night strategic planning ritual of many companies prior to COVID-19.
The pattern of pivot can be seen through the lens of a firm’s business model, not just in a firm’s value proposition, hence, it is called a Business Model Pivot. After all, a business model is how a firm creates, delivers and captures value, not just in the marketplace, but also to the stockholders. Pivoting can happen in any of these building blocks.
1) Target market
2) Value proposition
4) Customer bonding strategy
5) Revenue model
6) Value chain
7) Key processes
8) Key resources
10) Reconfiguration (innovating a strategic move)
Here I share with you a 1-page Business Model Map that incorporates all the 11 building blocks above.
One of the questions I am asked most often is what business one should enter during the pandemic. The premise is it is the industry that matters, but the evidence I have gathered is that there is no bad industry, only bad marketers and bad entrepreneurs!
RG Gabunada of Louder PH shared an appropriate video with me that we need a new lens, a new map if we want to see the world with a fresh perspective.
On June 29, 2021, I will present companies that successfully pivoted in order to inspire attendees to recognize patterns and do their own pivot. Some of these pivots may look totally unrelated but actually are, you just need to know how to connect the dots. The online seminar “Finding Opportunities When Growth is Difficult” will be on June 29, 2021, 10-12nn with a live Q&A. Register now via the Continuum Academy website, click here.