WHAT TO EXPECT FROM THIS ARTICLE:

1) Different types of Pivot with cases relevant from current pandemic times.

2)The Process of Pivot: As a case study, below is a note by a team of accomplished economists on their plans for global Covid-19 vaccine production. Through this case study, we will see how one can learn the process of Pivot.

Pivot or Perish is a common phrase in the business lingo now. Eric Ries, in his book, The Lean Startup, defines Pivot as ‘a structured course correction designed to test a new fundamental hypothesis about the product, strategy, engine and growth.’

Eric talks in detail about the phase when startups should either pivot or persevere and he gives some areas in the business process that can be used to pivot the business around.

Here are some examples of types of pivot in the context of Covid-19.  

1. Zoom in pivot– In this case, what was previously considered a single feature in a product becomes the whole product. For example, e-commerce was just another feature of distribution for some businesses. In some cases, there was no e-commerce. The business models that considered digital commerce as a feature are now making e-commerce the main business. This can be achieved by zooming in on one area of the product or service. The release of film Gulabo Sitabo is a pivot in distribution. OTT release used to be one of the many channels for film distribution business. Today, for the movie, it is the only channel. Zoom-in. Pivot.

2. Customer – segment pivot– New Zealand’s Prime Minister Jacinda Adern announced a four-week work culture to encourage domestic tourism. New Zealand’s economy is dependent on International tourism and due to global travel curbs, government is pivoting the customer segment and looking at domestic tourists in lieu of international travellers. Pivot.

3. Service or Product Pivot: The SnapBar, a photo booth rental business based in Seattle, was named one of the country’s fastest-growing companies by Inc. “Either shore up expenses by downsizing their team, or try to pivot into something new and outlast the situation. We decided on the latter,” said the founders in a press release. Within four days, they had launched a project called Keep Your City Smiling, which sells gift boxes “filled with high quality products, sourced from local small businesses in each city where we operate.” The site encourages consumers to purchase the boxes for themselves, their loved ones, or their employees. It also offers a healthcare gift box that individuals can send to frontline workers. They have also launched Virtual photo booths in line with their core offering. Pivot.

The Process of Pivot

You may say it is much easier for small businesses to pivot. What about big firms or large projects? Let me bring your attention to how planning for the most anxiously awaited product, the Covid-19 vaccine, is being done.

You will agree that, like large business, the vaccine development space, is facing a similar set of variables:

• Opportunity size: Giant
• Chances of failure: Extreme
• Production facilities: Customised & delicate
• Urgency- Yesterday

Now, let me take you to the Economist’s Alex Tabarrok’s idea on Covid-19 vaccine production:

Written by  Alex Tabarrok¹ May 30, 2020 :

“I’ve been working with Michael Kremer², Susan Athey³ Chris Snyder⁴ and others to design incentives to speed vaccines and other health technologies. AcceleratingHT is our website and now features a detailed set of slides which explain the calculations behind our global plan. A global plan is ideal since there are significant benefits to coordination. If each country invests in vaccines independently they will each choose the vaccine candidates most likely to succeed but that means all our eggs are in a few baskets. The key idea is that the global economy is losing $350 billion a month so speed pays. There are over 100 vaccine candidates^(a) and they have different scientific and production risks so you want to choose the 15-20 which maximize the probability of success for the portfolio as a whole.”One way to speed a vaccine is to invest in capacity^(b) for 15-20 vaccine candidates before any candidates are approved^(c), so that the moment a candidate is approved we can begin production (one can store doses in advance of approval). Most of the capacity will be wasted^(d) but that is a price worth paying. As Larry Summer says if you will die of starvation if you don’t get a pizza in two hours, order 5 pizzas.

Allow me to show you how to translate this knowledge into your strategy to pivot. To pivot your business in directions that are yet ambiguous, like the vaccine industry, you have to think if you have the following on your to-do list:

1. Multiple ideas at work: Do you have multiple, cross-functional teams brainstorming and developing ideas to avoid any marginal thinking?
2. Start small– How soon can you start testing those ideas? Like vaccine candidates, the business ideas need to be tested at a small scale first.
3. Capacity to scale– In parallel, you need to develop capacities to scale. If you are big enough, you can even eye some acquisitions to scale up.
4. Ability to fail more, to succeed in one or two areas. Failing is hard and the fear of failure stops from trying new ideas. It is important to develop a corporate mindset that will allow teams to think big, start small and fail fast.

• 
  ¹Alex Tabarrok of George Mason University, blogs at Marginal Revolution
• ²Michael Kremer, a 2019 Nobel laureate in economics, is Professor of Developing Societies at Harvard University.
• ³Susan Athey of Stanford’s business school, was the first female winner of the Clark Medal, which is given to outstanding U.S. economists young than 40;
• ⁴Christopher Snyder of Dartmouth College

Additional read: Vaccine Success Story for Malaria

Kremer got into the vaccine game in 2004 with an article he wrote with Rachel Glennerster that proposed “advance market commitments” as a way to develop vaccines for diseases such as malaria that primarily afflict poor countries. A year later the Center for Global Development put out an influential report on the subject by Kremer, Ruth Levine, and Owen Barder called Making Markets for Vaccines: Ideas to Action. In 2007, Canada, Italy, Norway, Russia, and the U.K., along with the Gates Foundation, committed $1.5 billion to developing a pneumococcal vaccine using advance market commitments developed by Michael Kremer and team. In 2010 pharma giants GlaxoSmithKline PLC and Pfizer Inc. began manufacturing doses, joined a year later by Serum Institute of India. By last year approximately 700,000 lives had been saved by the vaccine.