Using adaptability as a sustainable advantage

January 13, 2021

We must be prepared to accept that change is now necessary and the previous ways of doing things is no longer possible. This is an opportunity for businesses to reinvent, as consumers and competitors alike are all in the same situation: disrupted by an extraordinary event whose full effects are still unclear and uncertain.

Commutes have become nonexistent for many as they work from home, while most shopping has shifted to online, and there are many other universal disruptions. These factors left many executives to assume these changes are here to stay.

Organizational agility

Organizational agility has evolved from being a superfluous corporate competency to a vital skill for survival. Agility also encompasses the capacity to adjust priorities and face market deviations head on, rather than trying to maintain a business system that is no longer sustainable.

In cultural terms, agility is flexibility, or the ability to evolve and survive by honing one’s fitness. As such, a business (culture) must be flexible to adapt effectively to environmental, social, economic, and technological changes. Now, more than ever, the rapidly evolving landscape means that businesses need to adjust quickly.

Why isn’t every business agile?

An organization’s ability to adapt and respond to changes in external market conditions includes not just speed, but remaining in touch with customer needs. Businesses with a stable consumer base that have not faced major market disruptions may not have felt the need to consider agility, until now.

As the pandemic continues to wreak havoc across the globe, we are increasingly realizing this crisis will permanently change the world. The scale of this crisis resembles significant events of the past, such as the tragic events of 9/11 or the 2008 financial crisis. Each of these events also reshaped society in lasting ways. Most will agree that the unprecedented state of affairs likely has forever affected the way we live, work, and the way we behave as consumers.

The extensive and abrupt impact of COVID-19 on the economy and social structures created a forced flexibility opportunity for many businesses, including those who did not see their operations come to a halt and revenues plummet. As we prepared for the “new normal,” the resulting sense of urgency forced many organizations to embrace agility. Those who seized the opportunity, in turn, spurred a trend toward innovation. At the same time, the agile companies who fought hard to gain that capability before the pandemic, may certainly be reaping the benefits in the short-term (or, simply, losing relatively less compared to their less nimble counterparts).

The time to pivot

This reality can be related to Kurt Lewin’s 3-Stage Model of Change, based on the analogy of an ice block changing shape. Lewin explained organizational change using the analogy of the different states of water. If one needs a cone of ice instead of a large ice cube, the ice must first be melted, in order to change it (unfreezing). The melted ice needs to be molded into the desired cone shape (change) and finally solidified (refreezing) to make the change permanent. Due to COVID-19’s impact on businesses large and small, a communal state of “unfreezing” and wide-ranging adjustments are necessary in order to execute change and achieve a viable renewed business model in the “refreezing” state.

While the pandemic indisputably imposed “unfreezing” on the business community and society as a whole, business owners and executives will now have to make choices related to change. To arrive at the most optimal business transformation, businesses will need to identify opportunities and evaluate alternatives.

Avoiding pitfalls

To pivot effectively, companies must transform to business models that are both favorable to short-term survival and designed for long-term resilience and growth, consequently generating enough value for the customer and the firm to share. According to the Harvard Business Review, the following three circumstances need to be fulfilled in order to achieve positive business results:

  • A pivot must support the firm with one or more of the long-term trends generated or exaggerated by the pandemic
  • A pivot exploits a business’ current strengths and does not take away from its overall strategic vision
  • And finally, a pivot must generate a viable path to profitability, while still maintaining brand equity

Progressive shifts

Many businesses shifted gears amidst the pandemic by adapting manufacturing operations to produce PPE or replacing dining room revenues and focusing on take-out business, for example. Another interesting example involving a successful pivoting strategy is Horderly, a reputable professional home organization company. Prior to the onset of COVID-19, Horderly specialized in on-site decluttering, organizing, and unpacking homes and businesses. With COVID-19 social distancing rules and restrictions in place, it became virtually impossible for the professional organizers at Horderly to make house calls.

Therefore, Horderly set out to make some changes. Their adjustments included introducing a virtual organizing service with multiple service packages to help customers get organized, stay healthy, and keep their homes clean. This change actually improved their sales, as their customers’ spending all day at home meant they were spending more time organizing their spaces.

BDO Pivot Playbook

During this difficult time, businesses have recognized the need to adapt. As the situation evolves and disruption itself becomes the status quo, they’re looking to sustain their changes and adaptability into the future. What differentiates the nimble transformers from those who don’t make viable changes? Certainly, the ability to maintain clarity during change implementation will allow companies to preserve and protect the agility that made the change possible.

Stay tuned for our next article on “The BDO Pivot Playbook," a nimble transformation canvas, which will help you structure your approach and minimize ambiguity as you define your pivot.

For more information on Growth Insights from BDO Management Consulting, please reach out to:

Chris Diepdael, Vice President Management Consulting, National Leader of BDO’s Go-to-Market Strategy Practice

Sourcing: Harvard Business Review; How Businesses Have Successfully Pivoted During the Pandemic. HBR.org 2020/07

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