One in three businesses expects to keep those changes in place long term. Is it time for your business to follow suit?
Kevin Nuttall, Founder and Director of strategy facilitator organisation Waterfield, shares the key indicators it’s time to change – and what to do if you think pivoting is on the horizon.
A strong value proposition is critical to standing out from the crowd. If your business model has been replicated or outdone by competitors, it could be a sign you need to rethink your approach.
“When more and more competitors are coming in, you become commoditised,” Nuttall explains. “So your value proposition is no longer differentiated because it’s not innovative. Once someone else replicates your value proposition, it starts to create price pressure and you can’t charge at the same margins you could before.”
The impact of technology on the business landscape was already significant prior to the coronavirus, but with the shift to remote work, it’s now reshaping industries at unprecedented speed. If technology is transforming your sector, pivoting your business could be a logical next step.
“Often, changes are technology-driven,” Nuttall explains. “Where suddenly everybody is operating in a completely different way due to new technologies entering the sector.”
He also points out that, aside from declining demand, it’s important to look for signs your market is shifting – and consider what that might mean for your business.
“One of the things we ask organisations to do is scan the future and ask: what might change in your business? If you’re starting to see there’s a step change coming in your market, it’s a signal that it’s time to change.”
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If the signs above sound familiar to you, adaptability will be crucial to coming out on top. “If you want to repurpose or pivot, you’ve got to think differently,” Nuttall says. “Think about the market first, then come back to your organisation.”
Maintaining a startup mentality can be helpful here, no matter the size or age of your business. “Startups are just trying to get market fit. It doesn’t have a core business. It’s absolutely focused on what product or service will fit the market. That attitude of continual reinvention, innovation and scanning the future is a fundamental competency, regardless of how big you are as an organisation.”
Next, finding your growth markets will be key. “In a normal recession, everybody is subject to a downturn. What’s different about this moment is it’s a K-shaped recovery. So some businesses are going absolutely gangbusters and others are completely drying up. What that says to someone operating in a declining market is there’s a need to generate new revenue, and it clearly has to come from a growth market,” Nuttal explains.
“To give you an example, one of our clients is an industrial shelter company. They looked at market demand and saw an opportunity to repurpose their product for COVID-19 testing stations. It was just a scaled-down version of their industrial shelters, and it took them less than a week to make the switch.”
Once you’ve identified those relevant growth markets, moving quickly is essential.
“If you think there’s a growth market and you can repurpose existing assets and capabilities to suit that market, take your minimum viable product and get out and talk to real customers,” Nuttall counsels. “Test your ideas as fast as possible for the lowest cost and the lowest risk. You don’t have to get clever to find new revenue – you just have to move fast.”
If your market is changing and it’s affecting your business, chances are change might be on the horizon. But keeping a close eye on the signs and acting quickly can help pull your business out on the other side of a downturn.
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