How to Do a Quality Strategic Pivot to Address Covid

Maximize your chances of not only surviving but also thriving in these troubled times

Published: Monday, October 26, 2020 - 12:03

‘It’s not going away, and we have to face that reality.” That’s what the CEO and founder of a quality-centered high-tech manufacturing startup with 180 employees told the leadership team in early July 2020 to convince them of the need to do a strategic pivot to address Covid-19.

Previously, the startup’s executives took things one step at a time, putting out the various Covid-related fires that flared up more and more often: supply chain disruptions, cancelled orders, employees having difficulties with work-from-home setups or needing flex time to manage kids or elderly relatives.

Seeing more of the broad picture, the CEO realized the company was going in the wrong direction. One of the members of the board recommended my recently published book on strategic pivoting to adapt to Covid and plan for the post-pandemic recovery. After a quick read, the CEO convinced the other leadership team members that the company needed to do a strategic pivot to address Covid. He then had his executive assistant contact me and arrange for a facilitated strategic retreat on the subject.

Using this startup and several others as examples, this article summarizes my experiences helping a range of companies pivot for our new abnormal reality.

Challenging business model assumptions

Invariably, the first step involves reassessing assumptions about the organization’s business model. That means an initial couple of brief meetings with the leadership team, where we discuss the kind of fires they have faced recently.

For example, a manufacturing startup faced a new challenge in selling its high-tech products, which were known for their high quality. Traditionally, the products had flown off the shelf because operations managers who made purchase recommendations demanded the startup’s products; the company had trouble keeping up with demand.

Now, however, the startup’s salespeople reported that the decision-making process had changed. Budgets were tight in this Covid environment. Their clients’ accounting departments put pressure on operations managers to prove that the quality of the recommended products brought sufficient ROI. Couldn’t they get by with lower-cost options?

While the manufacturing startup invested in innovation to ensure the quality of its high-tech products, it didn’t have a clear measurement of ROI for the innovation. After all, it was focused on quality, not ROI. As a result, some of its customers, with apologies, chose to buy lower-cost alternatives.

Other companies faced a range of similar problems in sales and other areas. Often, the news came as a surprise to other members of the leadership team, even the CEO; all were busy fighting fires in their own areas. 

Gathering internal information

With more awareness of the business model assumptions challenged by the pandemic, the next step involves gathering internal information for a revised strategy and business model. This information will be used during the two-day strategic retreat.

Each of the top leaders who led a department and would be present at the retreat gathered feedback from their direct reports on how to revise each department’s goals, structure, and relationship to customers (both external and internal) in light of the challenged assumptions in either of three scenarios.

• In the first scenario, a vaccine with more than 90-percent effectiveness would be found by spring 2021, with the pandemic mostly over by spring 2022.
• In the second scenario, this vaccine would be found by spring 2022, with the pandemic mostly over by spring 2023.
• In the third scenario, we would never find a vaccine more effective than 50 percent, just like we haven’t found a vaccine more effective than that for the flu.

Day 1: Strategy day

The strategic retreat is a two-day event, with one day for broad strategy and another for operationalizing the strategy. Day one should focus on identifying problem areas and the strategies needed to address those problems.

Facing reality
The high-tech manufacturing startup’s team had to struggle extensively with accepting the changing marketplace demands. Its operations team had established a sense of identity and team spirit around innovation as a core value; its marketing and sales teams made innovation a fundamental element of their pitches. They kept veering away from reality and the need to shift from innovation to ROI measurement.

The CEO and I kept steering them back. I had to use the full range of my facilitation skills to keep the conversation on the right track, an especially challenging task since this was a virtual retreat.

Work-from-home fatigue
The leadership team members of a late-stage SaaS startup with more than 500 employees were surprised when work-from-home burnout and “Zoom fatigue” were reported among the most serious problems. In this area, versed in emotional and social intelligence, I could provide substantial support.

It’s key to realize that the issues stemmed not simply from burnout, but from much more. These include dealing with:
• Pandemic-related mental health challenges such as anxiety, depression, trauma, and grief
• Covid-related pragmatic challenges, such as kids staying home
• Social isolation from friends, family, and community events, as well as previous outside hobbies and entertainment
• Poor work-from-home environments with inadequate home-office setups
• Lack of skills in effective virtual communication and collaboration
• Being deprived of basic human needs—a sense of connection, tribe, meaning, and purpose—that we naturally get from work

Even worse, the vast majority of us fail to realize what’s actually going on. We feel we’re simply experiencing work-from-home burnout, and don't recognize the true nature of what’s bothering us and what we’re missing. To address this requires more than financial support for home office setups or flex time. It also requires professional development in effective virtual communication and teamwork. Moreover, it requires professional development in emotional and social intelligence, to enable employees to recognize and address the emotional and social gaps left by the pandemic.

Day 2: Operations day

The second day is focused on operationalizing the strategic changes in the business model. Companies should address potential threats and opportunities in a variety of future scenarios, and revise the previous day’s strategy if needed. These scenarios need to include at least the three different Covid futures described above, and several different potential economic recovery scenarios (K, U, W, V, L).

Leveraging the pandemic response
An enterprise data analytics startup with more than 120 staff recognized an unexpected opportunity. It had long been trying to get some lucrative client accounts held by several competitors. The startup’s CEO knew that most of the competitors’ leaders had a dismissive attitude toward Covid.

The startup decided to adjust its marketing and sales to demonstrate the steps it took to be pandemic-proof. It would then have its salespeople call on the competitors’ clients and tell them about these steps. Then, it would offer to provide support if the pandemic lasted longer than the most optimistic predictions, and the competitors couldn’t uphold their previous high standards.

Next steps and follow-up

At the conclusion of the operations day, specific next steps are determined for each new initiative that is discussed. The team decides on the approximate resources required and the metrics of success. One member of the leadership team is chosen to be accountable for implementing the initiative, with others potentially involved in the effort. Finally, a report is prepared for the board of directors about the retreat, highlighting how the strategic pivot will help the company adapt to various scenarios of Covid and the economic recovery.

Follow up on all the next steps happens in the weekly leadership team meeting or whatever other leadership team forum the company uses. Then, in a month, a half-day event is held to assess the strategy shift and make any corrections to strategy and implementation as needed. This is repeated in three months.

Here are the key takeaways:
• Remember, the first step, always, is challenging assumptions.
• Gather internal information; don’t skip this step by assuming your leadership team knows what’s truly going on.
• Spend at least a day revising your external and internal strategy.
• Operationalize your strategy, addressing threats and seizing opportunities in a variety of potential future scenarios.
• Commit to next steps, determining resources required, metrics of success, and who will be responsible for implementing each step, with a report to the board of directors on the event.
• Follow up on all steps once a week, with one-month and three-month half-day follow-ups revising both strategy and implementation as needed.

Although nothing can guarantee success, I can guarantee that taking these steps will maximize your chances of not only surviving but also thriving in these troubled times.

About The Author

Gleb Tsipursky

Gleb Tsipursky is on a mission to protect quality leaders from dangerous judgment errors known as cognitive biases by developing the most effective decision-making strategies. A best-selling author, he wrote Never Go With Your Gut: How Pioneering Leaders Make the Best Decisions and Avoid Business Disasters (2019). His expertise comes from 20+ years of consulting, coaching, and speaking and training as the CEO of Disaster Avoidance Experts, and over 15 years in academia as a behavioral economist and cognitive neuroscientist. Contact him at Gleb[at]DisasterAvoidanceExperts[dot]com, Twitter@gleb_tsipursky, Instagram@dr_gleb_tsipursky, LinkedIn, and register for his Wise Decision Maker Course.