Pause, Pivot or Persist?
There is no doubt that the COVID-19 pandemic is testing the leadership skills of businesses both large and small.
Many have seen a dramatic cliff-edge drop-off in revenues, whilst others are struggling to keep up with demand.
Speaking with clients and contacts through my network, we’re all seeing this unfold at lightning speed, with critical decisions being made against a fast-moving picture and backdrop of uncertainty.
Broadly, there 3 tactical decisions that businesses are inevitably making – Pause, Pivot or Persist
You could think of these as the business equivalent of the Fight-Flight-Freeze responses we all have when faced with a perceived threat.
Pause – this is a tactic that many self-employed and small businesses are taking, often not by choice. If your revenue stream disappears over night and your market is frozen, then this may be the only option available to you.
For example, we’re aware of a number of small businesses (think freelancers, consultants, etc) where all their work has been cancelled over-night. If you are in this situation, where market conditions are extremely volatile, then investing in new client acquisition activities may simply end up burning through cash that you need to ride out the storm.
So, pausing may be a sensible tactic, although we’d advocate keeping the flame alight for when we’re all out the other side.
Pivot – this is where a business changes tack and either re-designs their existing offer, or pursues new opportunities that open up in the market.
Some of our clients are following this option, as the world of work switches to WFH.
In addition, there are some great examples out there where businesses are reacting to new market demands, such as distilleries producing hand-sanitiser, manufacturers creating parts for ventilators, etc.
Seeing many closed pubs and restaurants switching to take-outs is another perfect example, and one that we should all try to support.
Unlike a planned pivot strategy, this is very much a tactical response to immediate market challenges and opportunities.
Persist – the last tactic we’re observing in businesses is carrying on, as much as possible, with “business as usual”.
Obviously, BAU is an overstatement, but essentially, companies are carrying on with staff working from home, reduced capacity, etc.
For clients that are in this situation, whilst there may be some shift in their revenue streams (more online orders, for example) the core business is still operational.
Each of these tactics will require a different approach to risk management.
Pausing involves dramatically cutting costs, where possible, and conserving resources for when the economy re-boots.
A tactic to Pivot an existing offering will involve some uncertainty, unless you are responding to the draw of huge market demand. Taking a lean start-up approach to managing risk and testing before committing significant resources would be advisable.
This is where recognition of our own Fight-Flight-Freeze responses is essential.
What may seem like a potential way out of a crisis could be a diversion that sucks up precious resources needed for later.
Decisions made under stress can be unreliable, so sense-check this tactic and then test your assumptions rigorously before investing heavily in time and resources.
For those Persisting, many of the usual rules around a down-turn are pertinent. These may be unprecedented times but, remember, cash-flow is still king and ignoring it is like expecting the law of gravity to be suspended temporarily.
Of course, all this is simplified and the situation is always more nuanced, as many businesses have diversified offerings and revenue streams.
Some may pause one aspect of their business and focus on another.
The UK government’s support package which enables companies to furlough workers during this period is effectively a Pause tactic for the nation.
There is no doubt that the COVID-19 pandemic will pass and that, just as economic activity has rapidly shut down it will be re-booted in the coming months.
Once more, this will create opportunities and challenges as the UK economy rebuilds itself and businesses adapt to what will inevitably be a changed economic landscape.
Some of us will un-Pause, some will find that a tactical Pivot becomes a permanent revenue stream, and those that have managed to Persist through all of this will be more readily able to take advantage of the upturn.
Whatever the tactic(s) you pursue, we will get through this together.
Stay safe people.