New Business Models, Born of Crisis
Updated: Jun 20
Along with danger, crisis is represented by opportunity.John F. Kennedy
The Business Model Conversation
For many years I’ve had discussions with innovation teams about business model choices and making pivots. It’s a tough conversation, especially since in any normal business climate there is little impetus to change business models. Most companies have an established business model that works, and every minute of their existence is spent honing, refining, and sharpening that model to be ever more efficient. The further down that track you are, of honing, refining, and sharpening, the harder it will be to pivot to even a slight variance of that original model.
A Whole New World
Now comes SARS-CoV-2 and the disease it causes, COVID-19. In a relative instant the world has transformed in a way I haven’t seen in my lifetime. A business crisis of epic proportions is upon us and we do not know how this will play out or how long it will take to recover. In the meantime, we have businesses just trying to survive, and in that desperate survival mode emerges creative brilliance and adaptation. In a matter of weeks, millions of businesses, large and small, have been shut down. Customers are gone. Supply chains are disrupted. Consumer preferences have changed overnight.
What has fascinated me is seeing so many of these businesses attempting major and immediate business model pivots. Shifts that would have taken months or years to accomplish are being implemented in a week or a day. For the moment, the risk of trying something completely new and different is lower than the risk of maintaining the status quo. Think about that! Those of us in innovation roles have often said that businesses need to consider the risk to their future business of doing nothing, but it’s practically impossible to get teams or companies to internalize that concept. But here we are, in an extraordinary moment in history, where the risk of doing nothing is well understood, and the creativity and gumption of our business community is on display.
The Birth of New Business Models
Here are just a few examples I’ve collected of these massive pivots (business models and otherwise):
Dine-in restaurants becoming take-out and delivery services overnight (including a Portland strip club that now has the dancers making food deliveries!)
Mental health professionals transitioning from in-office visits to operating as telehealth providers
University professors having to convert their courses to remote learning with almost no training or practice
Public schools, including the NYC system (largest in the country) going virtual, while still having to provide for children of essential workers, still having to find ways of feeding needy students, and figuring out how to equip thousands of low-income students with laptops and internet access
Craft projects and subscription boxes retooling their messaging towards helping you and your children manage during lockdown (even labelling them “Quarantine craft kits”)
Airbnb taking their travel experience offerings virtual
Small farmers changing to direct-to-consumer sales
Creativity Can’t be Shut Down
These are just a few of the many examples of people applying their grit and creativity to keep themselves, or others, afloat. I wonder which of these pivots will stick around after we emerge from this crisis (I suspect several). If ever you worry that innovation is dead (as many articles have told us), just look around. Amongst this colossal struggle is a raging fire of ingenuity that’s always been there.