More than a hundred years ago, Roald Amundsen of Norway planned an expedition to the North Pole. He managed to get backing from the Norwegian government, got scientists to share time and equipment and attracted sponsors to pour in huge sums of money for the project. But just before embarking on the journey, Amundsen got to know two Americans Robert Peary and Frederic Cook had just beaten him to the North Pole. Now what?
Aren’t we all too familiar with Amundsen’s predicament? For a start-up company or for an established business we have to garner a lot of resources, sometimes very painstakingly. Then something beats us to our goals. Or a disaster strikes. What do we do then? We pivot.
It will take us some time to understand the full impact of COVID-19 pandemic. We are perhaps dealing with the biggest shocks to international trade since the Great Depression. But even in times of severe economic crises and downturns, history has repeatedly shown that some of us are readily able to convert a problem into an opportunity. These are the individuals or companies that pivot well and in time. Changing directions is not a bad thing for businesses and sometimes the only recipe for survival in times such as these. We have heard the oft-repeated cliché; change is the only constant. Clichés are there for a reason. The path to success is rarely a straight line and companies that change course, even multiple times, reduce their chances of failure considerably. Twitter was launched as a podcast directory and YouTube a dating site. How many times must they have changed course to reach where they are?
Changing course is not always easy and a lot many haven’t been successful at it. In the 1800s the biggest enterprises in the world were the railroad companies. In the 1900s airplanes came and took charge of transportation. Railroad companies were no longer the force they once were. But a course correction or two has mostly proved rewarding for those who have had a well thought-out strategy even before there ever was a need to pivot. It depends on how well are the objects of business articulated. Well known Indian mobile phone brand LAVA has a tagline ‘power in my hands’. Vishal Sehgal, my friend, former colleague, co-founder & CEO of LAVA once told me; political environments change, regulatory frameworks change, diplomatic relations change, technology changes; but under no condition do we change our ambition to put more power in people’s hands. I find Vishal’s thoughts resonating so well in these times of a paradigm shift. You pivot better if you prepare for it in times of peace. In the late 1990s, Netflix saw the future in streaming and started with a stated purpose; ‘best home video viewing for everyone’; and not DVDs by mail, which was the actual product. Change was easy and how. Reed Hastings’ once rickety start-up is now one of the biggest media companies of the world. Microsoft always was ‘modernizing the workplace’. So the shift to cloud based services in 2013 was easy.
We are facing headwinds – is what we say to justify an external deterrent to business. Often forgetting that an aircraft can take off only against a headwind. My case here is the three Es that have taken off so brilliantly against this headwind called COVID-19. Education, Entertainment and E-Commerce.
Years back we lived in a nice apartment in Gurgaon in a housing complex called Hamilton Court. Touching the boundary of our tower was the campus of The Shriram School, where Purushottam, my son went. He would hop out of the tower, skip the steps and jump into the school. And we thought it couldn’t get any better. Now we know how mistaken we were, when I see him jump off his bed, switch on his computer and log on to his college lecture. Education has stepped up its act and has gone so far online that we never thought was possible before the pandemic hit us. So has entertainment and e-commerce. Netflix and Prime were already entering our homes; music was already synonymous with YouTube and Gaana; Flipkart and Amazon became integral part of our lives; Swiggy and Zomato were becoming bare necessities already; but the pace at which they turned the problem into an opportunity, the level at which consumers embraced the change during the past locked-down months is quite remarkable.
I have immense faith in people’s ability and willingness to change. A change that will be even more necessary in the post pandemic world. Just as the 3Es, all other sectors and their stakeholders will adapt to a new way of living. Here I list 5 steps to rebuild and reinvent a brighter future.
- Protect people. As we open up, the affected count is likely to increase. Only way is to prevent and protect. Importance of masks, distancing, sanitization, testing and contact tracing cannot be over-emphasized. And in medium and long terms, more investments necessary in social infrastructure. If COVID is teaching us anything, it is the importance of a robust social infrastructure – essentially healthcare and education.
- Reassess growth opportunities. There is going to be huge disruption in global consumption patterns. Companies seeking to emerge stronger out of the crisis must develop a systematic understanding of changing habits.
- Reallocate capital. Now is the time to take some well-informed risks. Easier said, particularly during times when cash flows are stressed. But it’s a good time to recognise that a crisis offers a way to carve out new competitive advantages.
- Make technology a game changer. The pandemic has undoubtedly accelerated our digital journey. In addition to the 3Es, there is a need to leverage technology in all sectors; healthcare, government; to improve transparency, efficiency.
- Strengthen globalisation. All of us need all of us. This is not a one country or one region problem, neither can we solve it independently. In the recent times, there seems to be a trend away from globalisation. The crisis is more complex, with intertwined shocks to our health and to our economies.
Throughout history, great companies and great leaders have understood, if there is a dire threat to humanity, it has to be met up with great solidarity. As COVID 19 capsizes industries and alters consumer habits and behaviour, businesses of all sizes will face the need for strategic reorientation. Explorer Amundsen recognised this. Upon hearing that he was beaten to the North Pole, he decided to change course. It wasn’t the route or destination that mattered. He stayed firm on his mission of scientific discovery. Amundsen became the first person ever to reach the South Pole.
