You Don’t Have to Pivot in a Crisis

 

In an earlier article  When It’s Time to Pivot, What’s Your Story? we explained the need for pivoting and how to manage them properly to gain the best results. However,r it would not be appropriate to apply in all situations. 

At the beginning of the epidemic and implementation of the shutdown, many startups faced dramatic shifts in the market and strategic agility made a lot of sense. It was considered appropriate to make fast and decisive adjustments to the dynamic circumstances. However, in many cases, it would make better sense to opt for stability and stay the course with some minor tweaks. Many companies followed the process of slowing down, reaffirm your basic mission statement, trim fat and watch the market data closely, examine internal process es, and iron out any serious deficiencies.

Slow down

Initially, when the markets collapsed or disappeared, many companies slowed down rather than downsize, listen to their customer better, track the market, conserve resources, tightening credit policies and be alert to change direction if required. This allows the company to save its strength, not over commit to the wrong direction in case the market undergoes permanent changes.

Reaffirm your mission statement

This would be the right person to examine the mission statement and make sure that their view of the future of the marketplace was still valid. Examine the changed circumstances and fine-tune your strategy to meet the changed circumstances ensuring theta your basic strategy remains intact.

Trim fat, not muscle

Do not resort to lay-offs en-masse, as it would be difficult to get trained manpower once the crisis blows over. Trim the manpower costs, making marginal adjustments to the payroll by fine-tuning the performance management criteria. Negotiate better prices from suppliers and other outsourced expenses. Keep track of employees laid off by competitors and identify potential candidates for future requirements.

Watch market data closely

When the market demand collapses suddenly, examine the data closely across industries, territories and identify shifts in demand and identify new opportunities that may emerge due to market shifts. You may also identify new products based on your capabilities and infrastructure that would serve the new emerging market.

Tweak for weaknesses and prepare internally.

Companies should examine their internal processes and procedures, identify the lacunae, and take remedial measures. Examine the impact of remote work and take immediate measures to modify processes to accommodate the new realities. Strengthen your infrastructure and take measures to eliminate any other fundamental issues.

If you pivot, do it decisively

In the right markets, not-pivoting can pay off in the long run. Resist knee jerk reactions on how to handle external shocks and examine what will work best for the company, based on its market dynamics.

However, after examining all alternatives, it is decided to pivot - change direction, do it decisively, and with total commitment, rapidly.  

You Don’t Have to Pivot in a Crisis

by Daniel Isenberg and Alessandro Di Fiore

HBR 2009/09