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By Kathleen Sullivan Garman

The Introduction of Covid-19 and Small Businesses

Many say our current economic climate is uncertain; I would argue that it is the opposite. It’s quite clear what is happening, and what the damaging result will be for small businesses. This is the inflection point at which a business can employ the “art of the pivot” to change the outcome.

For large companies, the C-level team generally works as if they’re playing a game of chess. All the potential outcomes for any given scenario and engagement are reviewed and corresponding actions are planned. The plans are written out and filed away, to be pulled out during times when the standard ways of doing business are not in play. The team’s objective is to stay 4-5 moves ahead of the market in order to easily shift when necessary.

For smaller companies, those with less experience in leadership positions, or whose rapid growth has the team solely focused on day-to-day management, any change to the trajectory feels more like a game of checkers. They make one move at a time and create a reactive environment rather than a proactive one.

The introduction of Covid-19 created business environments where the chess or checkers moves are now in play. Companies are implementing either their pre-planned strategy or they are reacting to the impact in real time. For those with the strategy, the long game is part of the process. They pivot to the strategy laid out long before implementation and make their move at the right time.

For companies without a proactive strategy in place, it’s not too late. Often smaller companies are more agile when creating a new space. The pivot is the key move here! For example, Canlis is a well-known restaurant in Seattle. They quickly pivoted once the threat of the virus started to sequester people and removed them from fine restaurant dining. Rather than bemoan the lack of reservations, Canlis announced a new strategy. They would offer 3 meals a day – breakfast on the go, lunch, and dinner delivery rather than having the customers come to them.

In changing their strategy and execution of how the restaurant would operate, Canlis created a new business model that fit inside the emotional and economic climate of their customers’ needs. Companies like Zoho and Zoom are offering their services to new markets (e.g. schools, non-profits and telemedicine) at free or reduced prices. The office workers who once roamed the streets of Seattle are now working remotely from home and using video conferencing, remote tools and delivery services.

The Covid-19 virus will have a huge economic impact worldwide. When the Chinese government implemented the unprecedented move of restricting travel during the biggest holiday of their year, factories were unable to open while their employees were quarantined. U.S. retailers importing products from Chinese manufacturers realized that the dependence on those relationships would hurt their ability to provide products. Now that the factories in China are back up and running, and products are moving into the supply chain, the virus has spread worldwide and the stores that are carrying those products are seeing less customers.  Companies that proudly proclaimed their products made in the USA are now seeing the impact as their factories are shutting down in order to curtail the spread of the virus. The cycle that started in China will continue over the next few months as U.S. manufacturers are unable to get their products completed and into the supply chain, while their Chinese counterparts are fully operational.

One company practicing the art of the pivot is Forever Green Indoors. They sell products made both overseas and in the U.S., They are weathering the storm better than most competitors as a result of their multi-dimensional supply chain. Additionally, they worked with their supply chain, customers, and financial partners to create a balanced compromise. When the entirety of a large order couldn’t be produced in time for a deadline, they communicated with the customer and reached an agreement for a partial delivery. They negotiated supply chain schedules to satisfy the customer, and then worked with the entity helping finance the project to see if approval could be given to break up the payment based upon delivery in part rather than in whole. This type of communication, pivot and rallying is what companies need to do to survive the coming months of economic downturn.

I work with companies whose mission in sustainability is being impacted by quarantines and fear created by the virus. Companies that make reusable items are suffering due to the general perception of cleanliness and sanitary concerns. Reusable items are now seen as a luxury item rather than something that fulfills a mission. Utility companies are seeing increased energy usage as people shift from office to home and are heating their homes and powering their devices during times that were previously dark.

The pivot for these companies now is critical. Reusable items are more important now than ever before. They can give consumers peace of mind that their container, straw or fork are their own and haven’t been touched by someone who could be sick. Energy efficient appliances and lighting will also come into play as consumers start to see higher than normal energy bills. Biological lighting, usually considered a luxury item, could replace standard home lighting to help ease anxiety or depression, or help a worried person sleep better. Service providers, once restricted in the hours they could come to someone’s home for a repair appointment, will now be able to come at any time. It’s all about how the pivot is marketed and communicated to a target audience.

From the smallest companies to the largest ones, employing the art of the pivot will determine how quickly a recovery can be made. The pivot isn’t necessarily financial, often it falls on the marketing, PR and operations teams to employ creative thinking and course shifts. This time could be one of fear for a company, or it could be an opportunity for growth that they would have never anticipated if the need hadn’t arisen. The right pivot gives a company new direction…if the leadership team is willing to take the chance.


Kathleen Sullivan Garman

Kathleen Sullivan Garman

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