You’ve spent years, and countless hours, building your business and this is finally going to be your year. If you’re an entrepreneur, you may be very familiar with this turning point.
Early in the first quarter of 2020, this is how First West Capital client Dominik Desbois was feeling about his Metro Vancouver business Spin Society.
“We started the year really strong and hopeful,” Desbois said, during a call from his BC-based office recently. “It was going to be the best year yet, after six years of grinding it out and taking on so much risk and expanding; we were finally on our way to having breathing room.”
And then, as Desbois puts it perfectly, “all hell breaks loose and we hit COVID-19.”
Anyone who has been keeping up with the daily government updates in BC will know that in November spin studios were named as a potential danger for spreading COVID-19.
Like many businesses, with the recent spike in infected rates across Canada, this meant yet another pivot was required. Another pivot. Another review of the business. Another change in protocol. Potentially another shut down.
“This second one is especially brutal,” said Desbois who is having to once again reassess and determine the best way to run his business.
Desbois’ year of non-stop pivoting began in the spring when he shifted from offering in-person spin classes to renting out spin bikes and offering online classes, followed by a summer reopening under strict COVID-19 protocols (like operating at 50 per cent capacity), followed by November’s shift back to more stringent rules. Today Spin Society is operating an open gym model where members can work out on the small number of available bikes without instruction.
Amidst the turmoil, Desbois collaborated with two other premium studios in the Vancouver area to launch a new online fitness subscription service called Revel Fitness Group, enabling members of each studio to continue to work out with their favourite instructors from the comfort of their home.
While Desbois admits this rapid period of change was a “shock to the system”, his entrepreneurial past has equipped him to handle the unknown and approach these challenges with a level head.
“There is the kind of entrepreneur who knows adversity has a tendency to bring more out of them,” said Ian Chisholm, partner at leadership development firm Roy Group. “They just know that adversity makes them more creative. More focused. More resilient.”
But Chisholm said no one is immune to the impacts of COVID-19. The only thing everyone has in common is that it has hit us all, hard. While some leaders took a step back during the pandemic, others “threw it into overdrive”.
Those who succeeded found a way to balance taking time to observe what was required and then then moved quickly to implementation, perhaps reducing or changing their high expectations around outcome.
“The strongest businesses were able to take a step back and think about the pandemic in the context of their overall strategy,” said First West Capital’s Senior Associate Zahid Gani, pointing out that for some this meant accelerating a longer-term strategy while for others it meant making a complete shift.
For most this meant cultivating a relationship with failure and being comfortable with being in a cycle of experimentation and evaluation.
“Both success and failure are chock full of information,” says Chisholm, adding that the real strength in experimentation and change lies in the ability to harness the power of the team.
In a given year, Gani points out, one or two areas of the business may need to shift. This year every area needed to shift, which meant bringing the entire team together to work through the change was often a necessary and effective strategy.
Taking time to learn from each failed trial or test with the same rigour as one would apply to a successful strategy will also ensure the business continues to move forward. Having a leader who is willing to communicate openly about how things are going is just as critical.
“Communication is a valuable tool that helps everyone to get aligned and on the same page, said Gani. “If you are communicating with employees, suppliers, customers and financiers, it gets everyone on the same page.”
Chisholm agrees and takes it one step further, advising businesses to tap into their networks for collective wisdom from those who may traditionally be viewed as competition. It’s a strategy Desbois employed as he united with other gyms and fitness groups to create a BC chapter of Fitness Industry Canada for the first time.
“If one of us succeeds, many of us succeed,” he said ” We are all coming together to show that there is a better way and for us to be a part of the solution.”
Lessons learned: Five ways to master the pivot during times of crisis
As 2020 draws to a close, Desbois, Gani and Chisholm are each reflecting on what this year has taught them and what they can bring into 2021. While the new year does not signal an end to the pandemic, for many it is a fiscal year end that will allow them to reflect, review and refocus as they look toward what will likely be another year filled with pivots.
Here’s a few key takeaways they learned about what it takes to pivot successfully during a pandemic:
1. Relationships are critical to the success of a business. Bring an open, sometimes vulnerable, communication approach to everyone from your employees, customers and suppliers, to your bank. It will allow everyone to empathize and support you as you adjust to change. It can also have a rallying effect that could outlast the pandemic.
Recognizing there may be impacts on staffing, Gani recommends: “As best as you can, try to look after your people.”
2. If you don’t know it yet, figure out your value proposition. Chisholm says small giants are companies that “choose to be great instead of big.” This means determining what is fundamental to your business and determining your core competencies. What makes your business unique, what makes it effective and how can you leverage that? For Desbois, part of that was focusing on the strength of his fitness community – from his loyal customers to his neighbours – and bringing them to an online platform. This allowed him to diversify his business and create long term resilience.
3. Assess your operations in detail and stop doing anything that isn’t bringing value or is no longer needed in the current reality. This means trimming your overhead everywhere you can, from renegotiating your rent and pausing your coffee order while your team works from home, to larger and more difficult decisions around human resources.
“We are keeping things lean,” said Desbois. “Asking, what do we actually need to bring value and growth to the company?”
4. Careful cash flow management and taking into account the operational efficiencies. For example, retail operations may need to reduce their inventory, which will impact the supplier. The supplier, in turn, will need to reduce their order of raw materials. Gani said the best companies were also able to have open conversations with their customers to see what they needed and then acted as a real partner to their customers. This not only allowed them to shift their inventory but also their expectations around sales. Desbois also pointed out that creating a strong financial cushion was also critical during the adjustment period.
5. As we look to planning for next year, the last piece of advice from the team is to get comfortable with the new reality. Don’t go back to the way things were. If you have shifted to online, don’t go back. Find a way to balance the two.
Given the current world economic and political realities, Chisholm says, this is just a dress rehearsal.
“We had better learn well and lead well.”