Syed Gilani is the CEO and President of Safr, rideshare startup focused on women empowerment.
When our businesses come under direct or indirect threats due to unforeseen circumstances, we’re faced with a dilemma: to continue on our chosen business path or to pursue complementary opportunities in order to introduce new revenue to the company.
Some entrepreneurs might call this a “V-shape” or “fork” conundrum, at which they are forced to choose whether to continue walking on their preliminary path or pursue a different goal altogether. I would call such a challenge a “stackable event” in your business life cycle.
A stackable event refers to when businesses find opportunities to add new products to their existing line, whereas a V-shape conundrum is when a business finds itself at a point where it has to choose whether to give up its existing business goal in pursuit of a completely different objective.
Sometimes it’s not easy to distinguish between a V-shape conundrum and a stackable event in your business, as market and business conditions force us to make difficult choices. But I believe entrepreneurs need to be highly adaptive to changing winds and show their capacity to identify unique opportunities in any circumstances. The art of identifying and evaluating various opportunities while understanding your business conditions is valuable, as you can ensure you make the most out of the opportunity at hand.
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Below are my recommendations on how you can navigate decision-making in the midst of crises or changing business conditions:
Clearly identify the most profitable opportunity.
Enterprises are presented with a wide range of opportunities every day, and leaders evaluate these options based on their understanding of current and future business status. For instance, while Uber saw a decline in its core ride-sharing business, demand for its food delivery business grew significantly during the pandemic.
Having options at hand might translate into more power; however, some opportunities can simply turn into unnecessary noise. It is imperative for entrepreneurs to isolate such noise through the process of elimination so they can arrive at a clear option for their business.
When you are presented with an opportunity, ask yourself:
• Will this opportunity distract from the current business, or will it add to it?
• Will you be able to keep your core business, or will you need to make significant changes?
Trusting your instincts, among evaluating facts, can come in handy.
Carefully evaluate your business status and market conditions.
Before you arrive at any conclusion, you must carefully evaluate your current business status vis-a-vis market conditions. For instance, the pandemic greatly impacted businesses in the restaurant, hotel and travel industries.
You must evaluate the magnitude of change in market conditions and whether a particular change is a short-term blip on your path or if it will have a lasting impact on your business’s future. Your business might be in a condition to financially and operationally overcome a short-term hiccup, but it might not be ready to deal with long-term winds of change. By assessing market conditions and how any changes could affect your business, you can determine what the next best course of action is for your company, such as whether it’s time to make a pivot.
Answer the question: to pivot or not to pivot?
Now comes the million-dollar question: to pivot or not to pivot? Should you take a completely different path to success, or should you try stacking additional opportunities onto your existing business model? Difficult questions like these must be carefully evaluated. It’s important to be highly flexible and prepared to make such difficult decisions on short notice.
Of course, this is easier said than done, but if the core of your business would benefit from adding complementary pathways to success, your decision should be obvious: pivot. However, if you are required to change the foundation of your business in the midst of crises to ensure your survivability, a lot more needs to go into your decision, such as your current liquidity position, your access to bridge capital, the length of the crisis and whether there’s been a change in market demand. All these factors can play a significant role in your decision making.
Consider, for example, how many clothing businesses pivoted to creating face masks and other personal protection equipment when the pandemic began. From my perspective, this was a smart move to adapt to the immediate market needs while addressing a major call for social engagement during the pandemic. This move allowed these brands to remain relevant while engaging their existing workforce.
Putting It All Together
Regardless of industry, it is important for an entrepreneur to identify new opportunities, evaluate the market and pivot when necessary. In my experience, not making a decision usually costs more than making the wrong one. Therefore, to be a successful business leader, it’s important to improve your ability to process complex datasets and make swift decisions.
In tough times, explore every business opportunity. Go on a combat mode, and evaluate your pathways. Be ready to call the shots. Just remember, in everything you are doing for your business, it is not the end of the world if a decision doesn’t bear fruit as you’d hoped. There is always another day to fight the fight.