Ninjacart, the fresh produce agriculture supply chain company in the B2B space, during last year got funded by the world’s largest retailer – United States based Wal-Mart. It was a sign of phenomenal progress that Ninjacart could achieve as Wal-Mart tries to expand its presence in the B2B segment in India. But, maybe Ninjacart would not have been able to come this far, if they had been what they had started as. It all boils down to a successful business stransformation strategy. Ninjacart started as a B2C fresh produce company, which calls for extreme deep pockets with the cost of acquiring and retaining a customer highly expensive.
Ninjacart realised that pretty early on and pivoted quickly and established a highly integrated supply chain through which they could partner with thousands of neighbourhood shops to fulfill their needs of fresh produce on a daily basis, taking out significant pain of sourcing fresh produce.
These kinds of business transformation strategies are increasingly being explored by many start-ups after they realise that either their primary business model may not see them through or for some of them pivots are essential to take on fresh competition and maintain the edge in the market-place.
Many start-ups face this dilemma on a regular basis. They face numerous challenges of declining revenues – some due to internal and some due to external factors. As an entrepreneur when you are up against such a wall, there are options on how you can pivot, how you can transform your business- totally changing the face of the existing business model, add on a new flavour to re-energise the business, or go for radical changes of exiting non-performing business divisions.
There are many instances of companies which started as a pure online market-places but had to create a hybrid model of also having physical brick and mortar presence and create a differentiation in the minds of consumers. Pepperfry, Zivame and a host of online businesses transformed their business and added significant brick and mortar presence to differentiate and be ahead of the competition.
There is a constant need to be innovating and one should not shy away or hesitate from pivoting which helps one in being nimble and relevant.
Asian Paints, which for decades has been focusing on paints, underwent a well-thought business transformation. It added home décor as a new category. Asian Paints has a phenomenal understanding of customers’ requirements, their tastes and the spending patterns. It was only logical to expand and add a new line of business and stay relevant in the fast-evolving marketplace.
Many entrepreneurs hesitate to pivot their business models as there may be an impression that their initial business model was a failure. It never is, as the world is changing fast and one cannot have legacy issues plaguing us. Entrepreneurs need to innovate aggressively and proactively to be ahead of the curve and identify trends which the consumers will be keen to adopt.
The aspect of business transformation is increasingly being embraced by many entrepreneurs who are agile in their thinking to capture new areas of growth and don’t want to hand over their market to competition on a platter.
The shift to shared economy across the world – shared mobility, shared living spaces – are all a testimony on how legacy business ideas are being turned upside down.
Mahindra and Mahindra Group is aggressively transforming the business and innovating to be in the shared economy space. They are aligning with brilliant entrepreneurs in the shared mobility space. Hero MotoCorp is aligning with start-ups in alternate fuel mobility.
These are only some of the instances of how large companies are open to embracing change. Start-ups should have a keen sense of what is working and what is not and the quicker you address the faulty part, the better it is.
As an entrepreneur, one must realise that disruption is the name of the game and how innovative thinkers are constantly bringing in disruptive solutions to manage their business for change.
It is not only during a crisis in an organization that one has to look at business transformation. Given the fast-evolving ecosystems, transformation – major or minor, entrepreneurs need to be always awake to changes.
Transformations not only help an organization to be future ready, it will empower one to reorient how one’s organisation will create value to all stakeholders.
It is not only during a crisis in an organization that one has to look at pivoting. Given the fast-evolving ecosystems, entrepreneurs always need to be on their toes.
Importance of Business Transformation
Start-ups which look to revamp the business model should take the opportunity to bring paradigm change in how the organization approaches new problems. Incremental changes may not suffice in the highly disruptive business ecosystem. One needs to put in significant strategy frameworks for the sustained transformation process and be ready for disruption and nimble turnarounds.
Business transformation is not a one-time step. It is a process which has to blend seamlessly and the team should be clearly aware of the process and exact role they should be playing. It is a perfect platform for a start-up to clearly understand the prowess of the team and to what extent resilience and stamina can be proved.
The transformation process involves decisions that will clearly indicate the path towards sustained growth, how the culture can be ingrained to take on challenges and the range of improvements a start-up has to go through.
When should you look for pivot?
It is not only during crises that one should think and implement a strategy towards pivoting the business model. Pivots can be implemented even when an organization is growing steadily and should be thinking about how to look at the next big transformation. Start-up entrepreneurs should be keenly observing the winds of change sweeping the sector in which they are playing and how they can be ready for the next big disruption. Another important aspect which will force the entrepreneurs to pivot can be as a result of regulatory and policy changes.
Business Transformation Strategies
Pivoting plays an important role in how institutions are built and expanded. It should be a rather deeply thought-out process of how and when a start-up should pivot and what strategies should one adopted as one goes through business transformation. Blindly, either getting into a new business model just for the sake of survival is fraught with dangers and all impulsive decisions are best avoided.
A calibrated and deliberate method of analysing the weak areas should be identified and should be given a fair bit of understanding on how it can be mended as soon as possible.
It is essential that entrepreneurs assess current strengths and how they want to explore and get into new business segments. One needs to have the right mindset to effectively balance between the old and new business model as dumping the legacy business lineage on a spur is best avoided.
Ideating on the new business model requires greater propensity, requires forethought to position better in a new business and then to disrupt the segment. Transforming into a new business on the likes of Ninjacart requires relevant skill sets of resilience and if you are pivoting like Pepperfry to build in an extension to your business model you need to bring in the experience wealth of building the right ecosystem partnerships and has to tread cautiously about over investing in silos which do not create business value.
While ideating on extending the business model with a pivot, it is essential to have the capacity of new investment and should not be overstretching to damage the core business through reduced focus. Start-ups need to plan to expand themselves as they create additional capacities by finding new avenues.
Another interesting business transformation is that of Swiggy and Zomato extending their services from delivery from restaurants to pick and delivery of various things besides enabling last mile delivery of essentials from various retail outlets.
It was more of a reaction during the onset of Covid-19 that Swiggy and Zomato accelerated this pivot and quickly enabled these new services and have since established, to take the competition right to Dunzo’s door step.
Start-ups which are staring down a barrel need to pivot into new business models to capture the resulting new opportunities and strive to reinvent ahead. For many entrepreneurs, this pivoting will require a transformation focused around growth, which is the main driver of long-term success in transformations.
Entrepreneurs who are against the Covid-19 crisis and thinking on how effectively they can sustain their businesses should not be dissuaded by the external crisis and should aggressively push for growth by business transformation. Reimagine your business models for the post Covid-19 world and you will find opportunities to transform for growth.
The path to pivot is extremely tricky. One needs to take a fresh look at your business. One of the ideal suggestions is to try to get an outsider’s perspective which can be helpful when identifying opportunities and challenges. This will help break free of the traditional process and mental blocks. This fresh perspective will help the organization fine-tune the pivot, identify the silos which are creating obstacles to the growth and lead the company towards transformation.
It is important as start-ups initiate the pivot strategy, they should be taking a long-term view, an exploratory approach to growth, and investing in a company’s capabilities.
The path to pivot is extremely tricky. One needs to take a fresh look at your business. One of the ideal suggestions is to try to get an outsider's perspective which can be helpful when identifying opportunities and challenges.
Entrepreneurs should also still value the values of culture which shape the team to respond to change by influencing how individual employees handle decisions. Start-ups should invest heavily on building cultures that instill a sense of purpose and think holistically about change.
Entrepreneurs who embark on the pivots should also be still the thinking that the process of re-energising as an ongoing capability, especially since the basis of competitive advantage is changing faster than ever. Start-ups should lay the groundwork and be ready for subsequent transformations, if required, and develop an adaptive nature. Each step of pivot should be added into the knowledge base as the start-up scales in the fast-changing ecosystem.
The execution of the business transformation process in a start-up should ensure that it can address not only the immediate challenges but should enable you to be prepped up on a stronger platform to innovate and pursue new opportunities.
Pivot is a tight rope way and it should be done with utmost caution. The impact of transformation can go pretty awry if executed with haste. It requires perfect integration, alignment that the teams should be prepared to manage.
The risk of tripping during the process is high and entrepreneurs need to have focus and stamina to see that the disparate segments can focus towards an alignment for the tide to rise for all. This will lead to sustainable change that endures.
The management should put in place proper roadmaps for the pivot and think through the process to get it right rather than just defining the goal of pivot.
It demands a comprehensive approach and links business strategy to the goal and executional regimen to create new value. Entrepreneurs embarking on the pivot should lead from the front and importantly prioritize to extract value. It is not enough to have a plan and let it roll, but entrepreneurs should regularly monitor, measure and analyse value being created on a regular basis.
Pivots are a significant exercise in the lifecycle of a start-up and the entire process is better managed if it is broken down in digestible capsules with each segment having its own targets which dovetails into the larger vision. This kind of
step-by-step approach to keep solving one challenge after another will lead to better project management of complexity which will be incremental backed solid grounding.
Transparency is another extremely important aspect which is required for successful pivots. The senior management should articulate the vision and strategy pretty much clearly across the organisation and ensure that everyone is onboarded in the journey. If the same is not done, there is lack of clarity which will ultimately result in less efficiency and dilution in value creation. Resourcing and aligning managers to be champions of the change initiative is the next key for smooth execution.