Rondi Allan, a supply chain expert and leading IBD-accredited business adviser, this week shared six great examples of how enterprises she works with are pivoting to return to growth.

Her bite-sized presentation in the weekly IBD Business Clinic was thought-provoking. She highlighted one of the world’s classic business pivots, executed by Kutol Products in the 1950s.

Putty in your hands

Family-owned, Kutol makes hand-soaps today but it is famous for its cleaning product launched in the 1930s. Kutol had great success with a pliable putty that removed coal dust from wallpaper. However, when people stopped using coal fires in the 1950s it looked to be the end of the road.

The pivot was to remarket the product as a toy and to come up with a brilliant name for this toy – Play-Doh.

Today’s game changers

Last week, Venture capitalist Fred Wilson picked one of his portfolio companies, Duolingo, to be a winner from the lockdown.

It may win because of a pivot in its marketplace. Until now, Duolingo’s growth had been hampered by the fact that competitor TOEFL was the recognised qualification for people who wanted to certify they were proficient in teaching languages.

Wilson invested in Duolingo because he believes it is a better product. It is a quarter of the price and takes one hour versus three. The big difference is that you do it at home on your computer rather than in-person at a centre.

Today, as a result of the lockdown, its delivery method has become a strength. The number of tests has gone up by a factor of 10. The number of university programmes accepting its certification has increased by 50 per cent. The competition (TOEFL) has also had to start offering online tests.

But will it last?

In a separate blog, Wilson observed from his experience as a venture capitalist that those businesses in food delivery, e-commerce and so forth that are gaining from the lockdown are likely to hold on to some of their gains.

He advises owners to take their pre-event sales baseline and the new level and then assume that when things return to normal they can hold on to half the business.

“That won’t be right of course,” he says. “It’s a model.”

The important thing is to have a model. Use this to work out if the new business you are doing will be profitable as you move forward.

Customer focus

All enterprises need to build their business models on an understanding of the jobs that their products and services help customers with. This is true for new products but equally for existing products too.

As we anticipate business moving back to normal sometime in the next month, we cannot bank on normal being the same as it was before. You have an opportunity to design your enterprise for success and there are people who can help. 

Why not check out the next IBD Business Clinic for some ideas.

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