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The reality of how companies are dealing with the crisis and preparing for the recovery tells a very different story, one of pivoting to business models conducive to short-term survival along with long-term resilience and growth. Pivoting is a lateral move that creates enough value for the customer and the firm to share. 
Consider Spotify, the global leader in music streaming. In principle, this type of platform has all the ingredients for success in the lockdown economy: customers trapped in their homes who would like to escape from a depressing reality by listening to songs seamlessly streamed to a playback device without any need for physical distribution.

And yet the Swedish company struggled to find a pivot that would enable it to overcome a basic issue: Unlike Apple Music, Spotify disproportionately relies on free users who must listen to advertisements. Before the pandemic, the company figured that advertising revenue would grow even faster than the free user base, thus making a key contribution to the bottom line. Although the model was already showing some signs of maturity, its limitations did not become readily apparent until the pandemic hit and advertisers cut their budgets.

One pivot Spotify made in response was to offer original content, in the form of podcasts. The platform saw artists and users upload more than 150,000 podcasts in just one month, and it has signed exclusive podcast deals with celebrities and started to curate playlists. The shift in strategy means that Spotify could become more of a tastemaker. At long last, the company is doubling down on Netflix’s not-so-secret recipe for success in a business in which copyright owners enjoy healthy margins while pure-play streamers struggle to become profitable.

Pivoting definitely works for digital platforms, but does it help traditional businesses? Let’s examine the world of restaurants. They have been battered by the lockdown, with many owners pondering whether to close for good. The usual way to think about restaurants includes envisioning a seating area next to a kitchen. However, restaurants are kitchens whose output can be delivered to customers in a number of ways and using various kinds of business models. Eat-in, take-out, delivery, and catering are just the tip of the iceberg.

One pivot would be to offer a flat rate for a set number of meals per week or per month, with limited menu choices. Restaurants could increase their margins as they learned how to manage captive demand. Another pivot would be to offer a combination of precooked dishes with sides or additions that could be prepared at home using ingredients supplied by the restaurant. The restaurant could send a link to a video that walks the customer through preparation, thus incorporating an experiential and learning element. Deliveries could be in amounts large enough for several meals in a given week. Both pivots would lead to a greater variety of business models, which could become a permanent feature of the restaurant landscape, especially if the trend toward remote work from home consolidates over the long run.

The crisis has also led to broken supply chains, as reflected in the ominous images of empty supermarket shelves — a void that presented small farmers with a unique opening. After seeing their sales to restaurants and specialty stores plummet during the lockdown, many small-scale farms have set their sights on the needs of the homebound consumer. This pivot requires investments in information technology, marketing, and logistics that could prove profitable over the long run if the trend toward shorter supply chains gains momentum. Alternatively, some farmers and local stores are flocking to Shopify, the Canadian e-commerce platform, which has seen a boom in e-commerce activity at distances of less than 15 miles between sellers and buyers — a segment of the online market that behemoths like Amazon have traditionally neglected. Shopify’s key pivot has been to offer a comprehensive cloud-based bundle of services that help vendors manage expenses, pay bills, anticipate cash-flow problems, and optimize deliveries.

We’ve also seen large incumbent companies pivot during the crisis. As demand has soared for essential products, consumer-goods powerhouse Unilever has pivoted to prioritize its packaged food, surface cleaners, and personal hygiene product brands over other products, such as skin care, where demand has fallen. The company does not yet know which changes might become permanent. If the upswing in remote work endures, Unilever might find that some of its pivots will remain in place. In fact, the move toward in-home consumption might require a repositioning of not only food brands but also personal care offerings.

An even bigger threat to established brands is consumers’ increased willingness to experiment with different offerings during the crisis. Consumers are holding brands and companies to a higher standard than previously, favoring those perceived as doing more for society. Companies like Unilever and Procter & Gamble, whose portfolios include hundreds of brands, have no choice but to pivot in response. Brand loyalty can no longer be taken for granted, and brand repositioning may be necessary in many cases. But brand purpose and messaging will need to be laterally tweaked, not overhauled, because consumers are becoming more interested in safety, experience, and comfort as a result of the pandemic.

Not all pivots result in good business performance. Three conditions are necessary for such lateral moves to work. First, a pivot must align the firm with one or more of the long-term trends created or intensified by the pandemic, including remote work, shorter supply chains, social distancing, consumer introspection, and enhanced use of technology. For instance, if social distancing remains the rule for the near future, the casual dating platform Tinder will need to follow competitors Bumble and Facebook Dating in offering video dating.

Second, a pivot must be a lateral extension of the firm’s existing capabilities, cementing — not undermining — its strategic intent. Faced by the sudden collapse in travel, Airbnb moved swiftly to help hosts financially and connect them with potential guests. Hosts can now offer online events focused on cooking, meditation, art therapy, magic, songwriting, virtual tours, and many other activities, with users joining for a modest fee. This pivot represents one more step in Airbnb’s evolving approach from its traditional business model of facilitating matches between hosts and guests to its move to become a full-range lifestyle platform. In the future, online experiences could help travelers discover new destinations and on-site activities and help hosts offer better service. Airbnb could become a platform that people use not just to arrange their next vacation but to develop a cosmopolitan mindset throughout the year, learning about other cultures from a distance and celebrating the diversity of the world on a daily basis.

Third, pivots must offer a sustainable path to profitability, one that preserves and enhances brand value in the minds of consumers. The economic crisis triggered by the pandemic does not necessarily spell the end of entire industries or companies. It does weed out business models that fail to pivot toward the new reality characterized by shorter value chains, remote work, social distancing, consumer introspection, and enhanced technology use.
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The new business as usual is adaptability. Here are 5 examples of how business are pivoting to survive Covid 19.
Everything has gone out of the window – major spending holidays, seasonal planning, store expansions and so on. Physical stores are closed. E-commerce operations are struggling with demand or on pause. Factor in that we don’t yet know when this all might end, and it can all feel a bit paralyzing. Inaction isn’t going to help though. What retailers need is to pivot and adapt their business to the new situation – and to keep an eye on what is happening so they can keep adapting as things change.

Not sure how to do that? Here are five great examples of how businesses are pivoting to survive Covid-19.

Grocery brands turning stores into dark stores

Retailers with physical stores are seeing an interesting challenge right now. They’ve got all these brick and mortar assets that they can’t make use of because of social distancing restrictions.

Some are now pivoting though to turn those shut spaces into dark stores. This means they can use them to fulfil online orders instead.

The trend is strongest in the grocery sector, which makes sense given the huge demand for online food shopping right now. Equally though, grocery is one category where physical stores are still open and operational because of their essential nature. As such, you could question the decision to shut off those spaces in favour of operating them as dark stores.

It’s happening though. Whole Foods has closed its Manhattan Bryant Park store in NYC and Woodland Hills in California to make them dark stores. Sainsbury’s is doing the same thing in the UK with certain spaces in London.

The thing is these store pivots are carefully considered. City centre locations are favoured because they tend to be more densely populated which means greater demand for online services. By turning the local store into the online fulfilment centre you can serve more people faster because the distance from where the order is picked and packed and where it needs to go is way shorter.

In addition, these spaces can serve more customers overall as dark stores than if they continued to operate conventionally. This is because they can deliver to a wider area compared to their normal catchment of people living in walking distance of the store.

Uber starting on-demand retail delivery

Uber is a hugely successful business. It also relies on the movement of people.

So, at a time when people aren’t able to move around and social distancing is the order of the day, it makes sense for the company to pivot its model to transport other things rather than leave its drivers without any work. Those things now include ecommerce orders.

There are two strands to the new offering. Uber Direct offers retailers an on-demand delivery service to quickly get orders to customers at home. So far, products being carried range from pet food to medicine and even postal surplus.

Uber Connect is aimed at the individual customer letting them send items to another address in their city. For example, it might be food or care packages being sent to relatives, or even items sold online via local marketplaces. The service is being tested in 25 cities in the US, Mexico and Australia.

What’s interesting about this pivot is that Uber is looking to capture as much of the market as possible.

It’s not just going for the ecommerce retailers, which would make sense given that ecommerce’s biggest challenge right now is keeping up with demand. It certainly seems like the most profitable option for the business.

Instead, Uber is considering its true audience – human beings looking for convenience. By offering a service to move things on their behalf, Uber is ensuring that its customers don’t forget about it when travel is the furthest thing from their minds.

John Lewis adapting in-store advice services to be online

It’s one thing to pivot your business to sell online, but it’s another to take other in-person interactions and make them digital.

John Lewis offers a wide array of in-store advice and support services in its stores. With customers unable to visit it currently, the brand is pivoting to make these same services available online via video.

The appointments are free, and customers can talk to experts from different departments about things like home design, personal styling and setting up a nursery. After the appointment the customer is emailed further advice, mood boards and a personal shopping list – depending on the service used.

John Lewis is also leaning into the strengths of different communication channels. For example, the personal stylist appointments are booked via its Instagram page where stylists are also sharing tips and answering questions.

We love how personal the experience still feels. By using video, rather than audio only calls or a chatbot, customers can build a real connection with the expert – and therefore John Lewis. The virtual offering is also a great pivot given that – despite current global circumstances – some customers will still be experiencing major milestones, such as having a baby, and need expert advice.

Likewise, other customers may have extra time at the moment to tackle projects around the home or to clear out their wardrobe. Again, John Lewis is making sure that it is a port of call for them. Customers may not be able to visit its stores, but the brand is staying front of mind through virtual connections.

Secret Cinema at home

Secret Cinema is globally known for its go-all-out immersive cinema experiences where participants get to live and breathe the world of the film they’re going to see.

As such, social distancing and new rules preventing mass gatherings have put the brakes on the company’s business.

But instead Secret Cinema has pivoted to bring some of its magic to people at home via Secret Sofa. A different film is the focus of each week with participants signing up to the Secret Sofa newsletter to be part of the fun.

As well as finding out what the film chosen is (with info on which streaming platforms carry it), the email provides the usual Secret Cinema suggestions of costumes and characters to make viewers to feel part of that world. There are also playlists, food recommendations and more, and a different flavour of Haagen-Dazs can be ordered each week from Amazon Prime.

Look, this isn’t the same as a full-on Secret Cinema experience. But we have to applaud the brand for finding new ways to engage with their audience when they’re unable to leave the house.

Secret Sofa retains a social element as everyone starts watching the film at the same time on the same day. There is also a private Facebook group which invites people to chat before, during and after the film. This helps to get people into the spirit and to make the effort to participate fully rather than just watching the film in their pyjamas.

Restaurants becoming wine shops and takeaways

All around the world restaurants are having to close doors. While the need is understandable in helping prevent the spread of Covid-19, there’s no doubt that for many there’s a question of whether they’ll be able to reopen again.

Some, however, are pivoting to find new ways of serving customers at home. The Alinea Group has turned all five of its restaurants into takeout spaces. What’s more though, it has deliberately scaled down and changed the menu to make it simpler and more affordable recognising that most people won’t be dropping a few hundred dollars on one meal right now.

It’s not the only one doing the same thing. What sets Alinea apart though is that it also operates a restaurant reservation app called Tock. It has now pivoted this into Tock to Go allowing restaurants to take orders for collection or delivery.

Meanwhile, in NYC top restaurants are using their expertise and impressive wine collections into wine clubs and bottle shops. Their websites have now become wine shops with good quality wines being sold for a lower price than normal, but still a decent price compared to a convenience store ($20-40 on average).

Others are selling high-end and rare bottles to those with more money to spend as a way of adding a little luxury to quarantine life. Curated wine packages of multiple bottles are also being offered in the style of online wine clubs.

There are some hoops – licensing laws mean that food and snacks have to be sold with the alcohol – but it’s a great example of how businesses can pivot their model to make use of the valuable assets and knowledge they already possess.

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​There is no doubt that the Covid-19 pandemic took the whole world by surprise. Besides Bill Gates and very few futurists, not a single government have predicted such scenario where millions of people will be hit and consequently a global economic meltdown will bring businesses down and unemployment up. While this crisis will have to end better sooner than later, it will leave its marks and some deep scars on the society namely how we work, socialize, trade and entertain.
Focusing on the economic and business side of the equation, would we say that all sectors are being equally affected? Obviously not. Restaurants, hotels, fashion retail and movie theaters are hit hardest. Meanwhile, F&B, Pharmacies, movie streaming (Netflix), online communication platforms (Zoom, MSMeet,..) and last mile delivery to name a few are flourishing. Taking a closer granular look on this thriving segment, we realize that in reality, only brands and companies who built a multi-channel strategy (store, online, click-&-collect, mobile, call center,..) early-on with efficient logistic and seamless delivery process, are the true share winners (growing bigger that their industry average). More interesting is that most of those locals are nimble & relatively small-size companies like totters, Yala grocery stores and other new fast mushrooming players.

The question that comes to mind is: "Why for instance major retailers the like of BHV, ABC, or Aishti to name few, who all basically have the scale & resources to build multi-channel offerings have missed the train? with dire consequences on their revenues, financial health, staff moral, salaries cut, lay-offs and so on.

The answer can very complex like the well-known 'innovator's dilemma' principle that states: Under normal or growth conditions, moving resources to build new uncertain offering will take away from generating more revenues in existing ones. Thus by refraining to invest in emerging products, they left the entire floor open for new players to fill the gap and gradually take on their customers,

But in Lebanon, the most likely answer is yet simpler. They all adopted the old-time famous business inertia:"If it ain't broken, don't fix it."

In other words, why bother to invest in new channels as long as they can have customers coming to them? why canibalize brick-&-mortar revenues by selling online? Their baseline assumption is that customers are a uniform and static entity with minor deviations and overall stable & predictable needs & behavior! We call this having a 'Fixed mindset' or a mental frame of mind that beleive that things are set and no effort can change them.

But then why elsewhere retailers and even the same brands they carry have all provided customers with multi-channel options in most markets despite their widespread geographical stores footprint? Again we often hear the conveniently simplistic answers: Lebanon has a small geography and people can easily commute to their stores. Or there is not enough demand to support alternative channels profitably.

To check, let's put some (pre-Covid-19) facts on the table :
  • According to the last available data, e-commerce generated US$ 341 million in sales in 2016, representing a 9.8% growth from 2015 (US$ 310 million).
  • The market is characterised by a general interest in cross-border trade - for both Pan-Arab and international websites - and the lack of a local general retailer giant. Ali express is one of the leading e-commerce sites in Lebanon, while Amazon only offers limited delivery, mostly of books.
  • 2.3 million people shopped online in 2016, compared to 2.1 million in 2015, which represents an annual growth rate of 9.5% (State of Payments, PayFort 2017). Younger age groups (below 30) are the most active online users (50% of internet users). Regarding income levels, mid-income category (US$ 533 to US$ 1,065) had the most active online shoppers. The top shopping categories were clothing (44% of online shoppers) and travel services (42% of online shoppers) while electronic equipment (tablet, TV) were among the least bought products (PayFort). Lebanese people tend to shop online mainly for three reasons: competitive prices, group offers and exclusive products.

In other words, Lebanese consumers have spent abroad multi-millions $ amounts for things & reasons that could have been easily provided by any enlightened retailer or company. That would also have limited the foreign trade balance deficit at times where hard currency is literally hard to find. We call it having a 'Growth mindset' meaning having the willingness to change status-quo by exploring and opening up to new realities

Back to today with Covid-19 putting its toll on personal revenues, the conventional wisdom might say: "who wants to buy clothes or not-a-necessity items in time of crisis with purchasing power dwindling?" Here again the answer might sound simplistic: No one. Looking closer and according to 'RedPoint' a global IP protection firm recent research on impact of Covid-19 on e-commerce sales reveals different realities:
  • 58% of customers are buying more online than usual
  • 73% of respondents will further increase their online shopping compared to in-store if COVID-19 outbreak continues
  • 59% of U.S. shoppers are making more snap purchasing decisions in light of the pandemic
  • 60% would increase online shopping if they were worried about catching the virus in stores

Here's what it means in terms of some emerging opportunities:
  • The internet is quickly becoming the only place for shoppers to get what they need, whether basic necessities or gadgets to pass the time. Also in a similar category would be board games, puzzles, journals, and musical instruments.
  • Demand for office supplies has grown as more people are trying to work from home, and the same is happening with homeschooling materials.
  • Personal care products, household products, and packaged goods are at the top of the list. This makes sense, as people want to stock up on items that they regularly use or consume in daily life.
  • With more time inside, people can treat themselves to at-home spa days. Home exercise equipment may also see an increase in demand so people can stay in shape while avoiding the gym.

The big question is whether this short-term increase in online shopping will translate into long- term change. If people who are new to online shopping have positive experiences, they may continue to incorporate more ecommerce purchases into their spending habits. More so, brands need to establish a continuous insights-generating mechanism to gauge consumers sentiments, identify the 'over-served or under-served' segments of customers who can represents early wins opportunities and build a proper channel-market fit i.e. matching customers with their preferred channel. Without insight into future growth, companies will drag behind the growth trend rather than ride it from the start.

When combining Covid-19 with a structural weak economy in a downturn, moving may be the last thing on CEO's minds. As revenues slow and margins are squeezed, management switches its focus to cutting costs to maintain earnings. This being legit as survival becomes the #1 priority. Nevertheless smart re-allocation of resources and small scale agile foray into promising new adjacent offerings, prototyping of innovative business models and multi-channels delivery to meet the customer where he is right now (in home) may be an equally important salvation act by generating new revenue streams for the company. Worth mentioning that it will also allow them to re-allocate their idle or unemployed human capital into fulfilling new functions mandated by new model and re-skilling them towrads future business needs and standards.

What should not be an option is inertia which can quickly deplete value for shareholders and even bring the company to a near-death experience ( remember Kodak, Nokia,..). Here lies an important difference between winners and losers. While big gains require big choices (most of share-gain winners had a distinctive business-model with multi-channel advantage), you don’t have to do much to qualify as a loser. Adopting a passive posture may well be enough and the market and everybody will notice it soon enough.

In summary, the Corona crisis just confirmed the famous Darwinian 'Survival of the fittest' theory. Brands that invested in multi-channel delivery & logistic are reaping the greatest rewards while those who adopted a 'Build it & they will come' or a 'wait & see' old fashioned approach have simply ceased to engage with their customers and are completely shut-down proving that nowadays either you are multi-channel or you simply are not existent.

Should you want to have a conversation about this topic & more, do email me at
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As governments make significant interventions in response to the coronavirus, businesses are rapidly adjusting to the changing needs of their people, their customers and suppliers, while navigating the financial and operational challenges.

With every industry, function and geography affected, the amount of potential change to think through can be daunting. We are here to help.

On this page you will find expert perspectives from our leaders that provide insight paired with tangible actions your organization can take to turn massive complexity into meaningful change.
Impact on Systems

COVID-19 is pushing companies to rapidly operate in new ways, and systems resilience is being tested as never before. As businesses juggle a range of new systems priorities and challenges― business continuity risks, sudden changes in volume, real-time decision-making, workforce productivity, security risks―leaders must act quickly to address immediate systems resilience issues and lay a foundation for the future. Leaders in the chemicals industry, for example, are recognizing resilience as a key success factor.

Impact on Experience

The global COVID-19 pandemic has forever changed our experiences―as customers, employees, citizens, humans―and our attitudes and behaviors are changing as a result. Once the immediate threat of the virus has passed, what will have changed in the way we think and behave, and how will that affect the way we design, communicate, build and run the experiences that people need and want?

The answers to these questions will be revealed in the ways people and businesses react and find innovative ways to rise above these challenging times. In consumer goods, this crisis is fundamentally changing how and what consumers buy and is accelerating immense structural changes in the industry, for example.

Impact on Operations

Business process functions across most industries are severely disrupted due to the immense pressure of the pandemic crisis. For many multinationals, complex and business-critical services that are handled by global operations must be reassessed and restructured. Organizations must respond rapidly to maintain continuity and to de-risk their operations to serve their businesses now, and in the future.

Adopting a distributed global services model can help large organizations across industries—from oil and gas to communications and media—to diffuse enterprise risk. And automating routine tasks with human+machine models, where everyone is a knowledge worker, can also help to serve businesses now, and to position them for growth post-COVID-19.

Impact on Commerce

While Direct-to-Consumer and B2B organizations scramble to meet immediate and emergency needs, the Coronavirus pandemic has activated a new wave of commerce innovation. New buying behaviors are forming that are likely to remain after the crisis has passed – and this presents opportunities. Those who viewed digital commerce as a secondary channel, now need to reprioritize their business with a digital commerce focus. For example, retailers are rallying to provide “contactless” delivery and curb-side pick-up services for consumers.

Impact on Customers

The impact of the coronavirus outbreak requires companies to move at an unprecedented speed and that means re-evaluating how contact centers are leveraged, how employees deliver relevant customer experiences, where they work, and how digital channels can be used to support the increase in contact center volume.

During this time, leaders that can shift to new ways of working help to reduce potential revenue loss, forge new levels of trust with their workforce, and position their businesses for renewed growth once the pandemic subsides. Consider banking, for example, where social distancing restrictions will push customers toward digital channels for service and increase the need for a connected, responsive team.

Impact on Supply Chain

Now more than ever, the supply chain is critical. Companies need to supply goods and services quickly, safely and securely—especially to those at risk of infection or who are working at the frontline of the medical response, such as life sciences companies developing COVID-19 tests and treatments. While meeting this unprecedented demand, companies have a responsibility to protect the health and welfare of their employees, their supply chain workers, and the wider communities they operate in, while maintaining the required flow of products and materials.

Companies need to develop a rapid response to address the current disruptions and strengthen operations in preparation for future value chain risks. 

Impact on Leadership

The greatest immediate impact of the COVID-19 outbreak is on people. Organizations are focused on caring for their workforces while rapidly managing the shift to new patterns of work.

At this critical time, leaders must see through these changes in ways that gain and maintain the trust of their people. That trust depends on leaders demonstrating their care for individuals as well as the wider workforce and community. It means sharing a clear plan and transparently showing how decisions are made. And it requires leadership teams who can proactively respond rather than react, anticipating their people’s changing needs. This is particularly important in Public Service organizations, where leadership needs to calm markets and reassure citizens, businesses, government employees and community stakeholders.

Impact on the Workplace

Key initial impacts of COVID-19 are the need to manage an immediate shift to remote working, along with preparing for higher rates of sick leave. These evolving challenges can be addressed by creating an Elastic Digital Workplace. Implementations will differ for each organization, but they should be based on the following foundations: to protect and empower your people, serve your customers, core needs, and to establish business continuity. For example, the now critical need for virtual care messaging and visits in healthcare.
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No one saw it coming, which can be said for any crisis. It’s in times like these that a brand’s true self is exposed. A brand’s core values come to light instantly; as a reflex. For the brands that have a solid foundation in how they treat their customers and employees, it is easier (not easy). For the brands that are posers, retrofitting their values stance is extremely difficult, if not impossible, to come across as believable.
Over the past few weeks, we’ve seen brands and businesses step up in a variety of ways, but each effort aligns with a set of core values that guide a huge segment of our country. I’ve been impressed with how brands have leaned into faith, community and family as this crisis has unfolded. 

From marketing messaging and philanthropic actions to business operations and product innovation, the good brands have redistributed their resources to promote unity when we’re socially distanced. 

Here are nine brands that are doing a phenomenal job:

KFC: The brand is part of YUM Brands, whose CEO, David Gibbs, funneled his salary for the rest of the year into employee bonuses and a fund for COVID-19 relief. At a more local level, KFC donated $400,000 to Blessings in a Backpack, which provides meals to children when they’re away from school, to help the nonprofit with increased demand from school closures. With 1,092 program locations across 45 states, Blessings in a Backpack has direct impact in cities across the country, with seventy-eight percent of kids saying the program makes them feel cared for by their community. In addition, KFC corporate has delivered 1 million pieces of chicken to its franchises to give away as a part of local food drives, especially for first responders. 

Perdue Chicken: As the fourth largest producer of chicken in the United States, Perdue Chicken, employees of plants in Milford, Delaware and Perry, Georgia have recently been exposed to the virus, and the company has implemented appropriate protocol. To show appreciation for the people continuing to power the plants, company Chairman, Jim Perdue, shared two videos on social media, which became T.V. ads. Shot as a selfie, the videos included a heartfelt message from him thanking “the people who feed America” during challenging times. The spots from the company founded by the outwardly religious, Arthur Perdue, were titled “We Thank You” and “A Time Like This,” with the latter headline evoking a message of faith. 

Ford Motor Company: On their journey to become the “world’s most-trusted company,” Ford has made some great moves in response to COVID-19. Putting competition aside, Ford and GE Healthcare joined forces with 3M to assist in the production of health equipment including respirators for those who are having trouble breathing due to the coronavirus. Being sensitive to the fallout from the pandemic, Ford is also shifting its focus away from selling to new customers and towards relieving stress of current customers. The company stopped running ads promoting its Escape and Explorer models and replaced them with informational spots about a car payment relief program that gives customers respite from their monthly expenses. Both moves are consistent with the company’s response to global and national events in the past. During the world wars, the company led manufacturing efforts and built tanks and planes. In response to natural disasters, Ford has offered relief in the form of similar programs that it’s extending to customers now.  

Nike: From nearly every angle, Nike is attacking COVID-19 through community. Headquartered in Oregon, one of the states hit first and hardest by the virus, Nike is showering organizations in the area with donations. They’ve committed millions in funding to Oregon Food Bank, the Oregon Community Recovery Fund and Oregon Health & Science University. The brand also switched up its advertising angle. The brand that equips customers with apparel and other products to get active outside encourages viewers in a new ad campaign to play inside not just for themselves, but for the world. Social posts tapped into customer attitudes of fame and recognition for being the best in their field. One graphic in particular read: “If you’ve ever dreamed of playing for millions around the world, now is your chance.” Influential sports figures including Pete Alonso, Cristiano Ronaldo, Tiger Woods, and Michael Jordan echoed the statement through their social platforms, infiltrating a conglomerate of communities with the message. In another notable community-oriented deed, Nike is giving free access to premium training programs through its Nike Training Club app. 

Mattel: Mattel has an impressive catalog of content from its suite of brands which includes Barbie, American Girl, Fisher-Price, and Thomas & Friends. Through cross-collaboration, the toy manufacturer organized the Mattel Playroom, an online resource chock full of free activities and entertainment for kids. The playroom enriches the lives of children and parents, providing a welcome distraction during a time of uncertainty. Companies like Mattel are translating their missions for the current situation. “Our mission to inspire, entertain and develop children through play is more important than ever,” Richard Dickson, President and COO, Mattel said. 

Spectrum: Imagine that you’ve been ordered to work from home and that your children can no longer attend school, but all of you still have tasks to complete and you don’t have reliable internet. That’s the reality for many people across the country right now. Spectrum has decided to offer families with students in K-12 free internet services for two months. This is a huge sign of goodwill that empowers families during this difficult time. The company is enabling parents to provide for their children and students to continue their education outside of the physical classroom. 

Scholastic: The publishing company presented an opportunity for families to get back to the centuries-old tradition of story time in a modernized format via social media. Its #OperationStoryTime campaign enlisted the help of authors and celebrities who shared videos of themselves reading books with the intent that children would listen in. It’s great to see a company utilizing its resources and networks to build points of connection back into the family unit where it may have been lost in the shuffle of our previously hurried lives. 

Einstein Bros. Bagels: This food chain is taking a micro and macro approach to supporting people who are struggling to access food or balance new stressors during mealtimes. On the macro level, Einstein Bros. Bagels is helping families streamline meal prep with takeout Family Meals designed to feed several people and to make meals a chance to gather and enjoy positive conversation. Locally, however, the company is supporting food banks, fire stations, police departments, and schools by donating 13 bagels for every Baker’s Dozen Box that guests purchase. 

Little Caesars: The company is donating 1 million pizzas to hospitals and first responders across the country in addition to the Pie it Forward initiative where customers can donate pizza. The 1 million pizza donation is made possible by Little Caesars, its independent franchisees and their locally owned stores, and Ilitch Charities. The company’s marketing department is pivoting too, putting a new spin on their product’s features. New spots highlight its pizzas’ from a health angle, showing that they’re cooked at 475 degrees and aren’t touched by a human hand from the time they come out of the oven to when they land on your kitchen table. 

After reviewing the selfless responses brands have had to the coronavirus outbreak, it’s refreshing to see marketing used outside of the process of selling a product. Brands play an important role in bringing people together through values they share with their customers. Thanks to those brands that are living their values.
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The economic situation is very difficult as we know on everyone and on every business, mainly the local ones. This is why the first measure that every Owner/CEO/MD is taking is reducing cost and expenses: laying off employees, stopping training programs, reducing or canceling consultancy & advertising agreements etc…this is maybe understandable because Companies are in a survival mode trying to rescue what is remaining from their business. 
But if we think differently about it for a moment, these measures will fire back because if every company be it small or big, local or regional start doing the same thinking putting their company direct interest first, the result will be affecting more and more the other companies they are dealing with and it will have a ripple effect that will return to hurt them as the whole economy suffers. 

We need to acknowledge that all the pieces of an economy are interconnected and when firms cancel a not-so-urgent investment, they are reducing revenues for a number of people who in turn will not be able to purchase the company’s products or services. It is a circular economy that acts like a boomerang.
A good example is what is happening with the banking sector. Everyone knows that if we keep rushing to withdraw cash to be saved in homes, the faster the banks collapse would be. But yet each individual think for himself without admitting that he/she is part of an ecosystem that is threatening to break down on all of us!

What should be done instead is actions driven by a solidarity spirit, trying to support as much as possible each other in this difficult time by avoiding canceling contracts, reducing wages, firing people but instead re-orienting all resources towards what is needed today, changing the priorities; the strategy not the purpose. Exploring and developing innovations & new business models that the new emerging real economy mandates.

By doing that Companies will win on the mid & long-terms as they play a wiser role in reinventing themselves while supporting the smaller providers maintaining the viability of all business sectors ecosystem, vital to sustaining the Lebanese economy .

Cutting cost, although easiest step to make, must not be done without first rethinking what the near future would look like and rather explore smart & fluid reallocation of resources, Strategic Thinking and Scenario Planning should be though off to find the right solutions that may not be obvious at first. 
Solidarity is one of those key themes that could become an overarching strategic plan that can keep us all on the boat and avoiding the ship from drowning by self-inflicted holes.

This Solidarity Theme was dominant in the October Revolution on social and human levels and should be dominant as well on Business level for Lebanon’s sake. “One for all and all for one” should be our new motto.

Carole Ayoub
Partner & Senior Consultant at Brandcell
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Although it is surprisingly hard to create good ones, they help you ask the right questions and prepare for the unexpected. That is hugely valuable.
Scenarios are a powerful tool in the strategist’s armory. They are particularly useful in developing strategies to navigate the kinds of extreme events we have recently seen in the world economy. Scenarios enable the strategist to steer a course between the false certainty of a single forecast and the confused paralysis that often strike in troubled times. When well executed, scenarios boast a range of advantages—but they can also set traps for the unwary.

There is a significant amount of literature on scenarios: their origins in war games, their pioneering use by Shell, how to construct them, how to move from scenarios to decisions, and so on. Rather than attempt anything encyclopedic, which would require a book rather than a short article, I have put forward my personal convictions, based on experience in building scenarios over the past 25 years, about both the power and the dangers of scenarios, and how to sidestep those dangers. I close with some rules of thumb that help me—and will, I hope, help you—get the best out of scenarios.

The power of scenarios

Scenarios have three features that make them a particularly powerful tool for understanding uncertainty and developing strategy accordingly.

Scenarios expand your thinking

You will think more broadly if you develop a range of possible outcomes, each backed by the sequence of events that would lead to them. The exercise is particularly valuable because of a human quirk that leads us to expect that the future will resemble the past and that change will occur only gradually.

By demonstrating how—and why—things could quite quickly become much better or worse, we increase our readiness for the range of possibilities the future may hold. You are obliged to ask yourself why the past might not be a helpful guide, and you may find some surprisingly compelling answers.

This quirk, along with other factors, was most powerfully illustrated in the recent meltdown.
Many financial modelers had used data going back only a few years and were therefore entirely unprepared for what we have since seen. If they had asked themselves why the recent past might not serve as a good guide to the future, they would have remembered the Asian collapse of the late 1990s, the real-estate slump of the early 1990s, the crash of October 1987, and so on. The very process of developing scenarios generates deeper insight into the underlying drivers of change. Scenarios force companies to ask, “What would have to be true for the following outcome to emerge?” As a result, they find themselves testing a wide range of hypotheses involving changes in all sorts of underlying drivers. They learn which drivers matter and which do not—and what will actually affect those that matter enough to change the scenario.

Scenarios uncover inevitable or near-inevitable futures

A sufficiently broad scenario-building effort yields another valuable result. As the analysis underlying each scenario proceeds, you often identify some particularly powerful drivers of change. These drivers result in outcomes that are the inevitable consequence of events that have already happened, or of trends that are already well developed. Shell, the pioneer in scenario planning, described these as “predetermined outcomes” and captured the essence of this idea with the saying, “It has rained in the mountains, so it will flood in the plains.” In developing scenarios, companies should search for predetermined outcomes—particularly unexpected ones, which are often the most powerful source of new insight uncovered in the scenario-development process.

Broadly speaking, there are four kinds of predetermined outcomes: demographic trends, economic action and reaction, the reversal of unsustainable trends, and scheduled events (which may be beyond the typical planning horizon).

    •    Demography is destiny. Changes in population size and structure are among the few highly predictable aspects of the future. Some uncertainties exist (potential increases in longevity, for example), but only at the margin. Sometimes, the effects of these trends are far off—as with Social Security in the United States today—so they are generally ignored. When these trends grow near, however, their effects can be powerful indeed, as when the baby boom generation is on the brink of leaving the workforce.

    •    “You canna change the laws of economics!” Just as Scotty the engineer could not change the laws of physics when Captain Kirk1 demanded more warp speed, so business leaders cannot assume away the laws of economics. If demand shoots up, prices will too—which will limit demand and drive increasing supply—with the result that demand, prices, or both will drop. Nothing increases in price forever, in real terms. We recently saw oil prices more than double and then sink back again by an equal amount. Price changes of this scale inevitably drive supply and demand reactions in every relevant value chain. As in physics, every economic action has a predetermined reaction. These reactions are often ignored in business strategy. If uncovered through scenario planning, however, they can generate powerful insights.

    •    “Trees don’t grow to the sky.” Business plans often extrapolate into the future trends that are clearly unsustainable. Economies are fundamentally cyclical, so beware of politicians bearing tales about the end of boom and bust. Equally, do not build a strategy based on the claim that the business cycle has been tamed. Often, optimistic projections are accompanied by bold claims of a new paradigm. Strategists need to be very cautious about alleged new paradigms. The appearance of even a genuine new paradigm almost always results in a speculative bubble. The “new economy” was a good example. More recently, securitization proved to be another sound idea that resulted in a speculative bubble. And in the past, many new, innovative technologies—railroads and radio, for example—were hailed as “new paradigms” and then promptly led to investment bubbles. A useful test is to project a trend at least 25 years out. Then ask how long can this trend really be sustained. Challenge yourself to try and prove why the shape of the future should be so fundamentally different from the more cyclical past. Chances are you won’t be able to, and this will open your eyes to the possibility of a break in the trend.

    •    Scheduled events may fall beyond typical planning horizons. There is also a simpler kind of predetermined outcome that does not involve any unalterable laws: scenarios must take into account scheduled events just beyond corporate planning horizons. A recent example, the results of which we have already seen, is reset dates on adjustable-rate mortgages. Well before the event, one could have predicted a spike in resets as mortgages sold in 2005 and 2006—the peak years—completed their low, three-year introductory rates. Something bad was going to happen to the economy in 2008. Right now, there is another important “timetable” to watch: the wave of large bond issues that has resulted from banks having to refinance hundreds of billions of dollars of maturing debt. Although these types of scheduled events ought to be common knowledge, they tend to be overlooked in planning exercises because they fall beyond the next 12 to 18 months. Scenarios should account for scheduled events that could have a big impact in the 24–60 month time frame.

While some errors can be avoided by recalling certain fundamental economic and demographic facts or scheduled events, problems of timing will continue to exist. Your company’s strategic planners may know that a massive dollar value of mortgages is about to reset. But when will the market actually wake up to this reality? Financial services cannot grow as a percentage of GDP forever. But at what percentage will this stop? We didn’t know before, and we still don’t know today. Still, the realization that something must happen, even if it is not clear when, leads to the inclusion of at least one scenario in which, say, financial services stop growing sooner rather than later.

Scenarios protect against ‘groupthink’

Often, the power structure within companies inhibits the free flow of debate. People in meetings typically agree with whatever the most senior person in the room says. In particularly hierarchical companies, employees will wait for the most senior executive to state an opinion before venturing their own—which then magically mirrors that of the senior person. Scenarios allow companies to break out of this trap by providing a political “safe haven” for contrarian thinking.

Scenarios allow people to challenge conventional wisdom

In large corporations, there is typically a very strong status quo bias. After all, large sums of money, and many senior executives’ careers, have been invested in the core assumptions underpinning the current strategy—which means that challenging these assumptions can be difficult. Scenarios provide a less threatening way to lay out alternative futures in which the these assumptions underpinning today’s strategy may no longer be true.

Avoiding the common traps in using scenarios

For all these benefits, there is a downside to scenarios. Inexperienced people and companies are prone to fall into a number of traps.

Don’t become paralyzed

Creating a range of scenarios that is appropriately broad, especially in today’s uncertain climate, can paralyze a company’s leadership. The tendency to think we know what is going to happen is in some ways a survival strategy: at least it makes us confident in our choices (however misplaced that confidence may be). In the face of a wide range of possible outcomes, there is a risk of acting like the proverbial deer in the headlights: the organization becomes confused and lacking in direction, and it changes nothing in its behavior as an uncertain future bears down upon it.

The answer is to pick the scenario whose outcome seems most likely and to base a plan upon that scenario. It should be buttressed with clear contingencies if another scenario—or one that hasn’t been imagined—begins to emerge instead. Ascertain the “no regrets” moves that are sound under all scenarios or as many as possible. Ultimately, the existence of multiple possibilities should not distract a company from having a clear plan.

Don’t let scenarios muddy communications

The former CEO of a global industrial company once suggested that scenarios are an abdication of leadership. His point was that a leader has to set a vision for the future and persuade people to follow it. Great leaders do not paint four alternative views of the future and then say, “Follow me, although I admit I’m not sure where we are going.”

Leaders can use scenarios without abdicating their leadership responsibilities but should not communicate with the organization via scenarios. You cannot stand up in front of an organization and say, “Things will be good, bad, or terrible, but I am not sure which.” Winston Churchill’s remarks about British aims in World War II—“Victory at all costs, victory in spite of all terror, victory however long and hard the road may be”—are instructive. By insisting on only one final outcome, Churchill was not refusing to acknowledge that a wide range of conditions might exist. What he did was to set forth a goal that he regarded as what we would call “robust under different scenarios.” He was acknowledging the range of uncertainties (“however long and hard the road may be”), and he resisted overoptimism (which affected many bank CEOs early in the recent crisis).

A chief executive, a prime minister, or a president must provide clear and inspiring leadership. That doesn’t mean these leaders should not study and prepare for a number of possibilities. Understanding the range of likely events will embolden corporate leaders to feel prepared against most eventualities and allow those leaders to communicate a single, bold goal convincingly.

One additional point about communication and scenarios is worth noting. Scenarios can help leaders avoid looking stupid. A wide range of scenarios—even if not publicly discussed—can help prevent leaders from making statements that can be proven wrong if one of the more extreme scenarios unfolds. For instance, one financial regulator boldly announced, early in the financial crisis, that its banking system was, at the time, capitalized to a level that made it bulletproof under all reasonable scenarios—only to announce, a few months later, that a further recapitalization was required. Similarly, the head of a large bank confidently suggested that the downturn was in its final phases shortly before the major indexes plummeted by 25 percent and we entered a new and even more dangerous phase of the crisis. Many CEOs have given hostages to fortune; scenarios would have helped them avoid doing so.

Don’t rely on an excessively narrow set of outcomes

The astute reader will have noticed that the above-mentioned financial regulator managed to embarrass itself even though it was using scenarios. One of the more dangerous traps of using them is that they can induce a sense of complacency, of having all your bets covered. In this regard at least, they are not so different from the value-at-risk models that left bankers feeling that all was well with their businesses—and for the same reason. Those models typically gave bankers probabilistic projections of what would happen 99 percent of the time. This induced a false sense of security about the potentially catastrophic effects of an event with a 1 percent probability. Creating scenarios that do not cover the full range of possibilities can leave you exposed exactly when scenarios provide most comfort.

One investment bank in 2001, for instance, modeled a 5 percent revenue decline as its worst case, which proved far too optimistic given the downturn that followed. Even when constructing scenarios, it is easy to be trapped by the past. We are typically too optimistic going into a downturn and too pessimistic on the way out. No one is immune to this trap, including professional builders of scenarios and the companies that use them. When the economy is heading into a downturn, pessimistic scenarios should always be pushed beyond what feels comfortable. When the economy has entered the downturn, there is a need for scenarios that may seem unreasonably optimistic.

The breadth of a scenario set can be tested by identifying extreme events—low-probability, high-impact outcomes—from the past 30 or 40 years and seeing whether the scenario set contains anything comparable. Obviously, such an event would never be a core scenario. But businesses ought to know what they would do, say, if some more virulent strain of avian flu were to emerge or if an unexpected geopolitical conflict exploded. Remember too that it would not take a pandemic or a terrorist attack to threaten the survival of many businesses. Sudden spikes in raw-material costs, unexpected price drops, major technological breakthroughs—any of these might take down many large businesses. Companies can’t build all possible events into their scenarios and should not spend too much time on the low-probability ones. But they must be sure of surviving high-severity outcomes, so such possibilities must be identified and kept on a watch list.

Don’t chop the tails off the distribution

In our experience, when people who are running businesses are presented with a range of scenarios, they tend to choose one or two immediately to the right and left of reality as they experience it at the time. They regard the extreme scenarios as a waste because “they won’t happen” or, if they do happen, “all bets are off.” By ignoring the outer scenarios and spending their energy on moderate improvements or deteriorations from the present, leaders leave themselves exposed to dramatic changes—particularly on the downside.

So strategists must include “stretch” scenarios while acknowledging their low probability. Remember, risk and probability are not the same thing. Because the risk of an event is equal to its probability times its magnitude, a low-probability event can still be disastrous if its effects are large enough.

Don’t discard scenarios too quickly

Sometimes the most interesting and insightful scenarios are the ones that initially seem the most unlikely. This raises the question of how long companies should hold on to a scenario. Scenarios ought to be treated dynamically. Depending on the level of detail they aspire to, some might have a shelf life numbered only in months. Others may be kept and reused over a period of years. To retain some relevance, a scenario must be a living thing. Companies don’t get a scenario “right”—they keep it useful. Scenarios get better if revised over time. It is useful to add one scenario for each that is discarded; a suite of roughly the same number of scenarios should be maintained at all times.

Remember when to avoid scenarios altogether

Finally, bear in mind the one instance in which strategists will not want to use scenarios: when uncertainty is so great that they cannot be built reliably at any level of detail.2 Just as scenarios help to avoid groupthink, they can also generate a groupthink of their own. If everyone in an organization thinks the world can be categorized into four boxes on a quadrant, it may convince itself that only four outcomes or kinds of outcomes can happen. That’s very dangerous. Strategists should not think that they have all reasonable scenarios when there are quite different possibilities out there.

Don’t use a single variable

The future is multivariate, and there are elements strategists will miss. They should therefore avoid scenarios that fall on a single spectrum (“very good,” “good,” “not so good,” “very bad”). At least two variables should be used to construct scenarios—and the variables must not be dependent, or in reality there will be just one spectrum.

Some rules of thumb

Obviously, some general principles can be assembled from the points above: look for events that are certain or nearly certain to happen; make sure scenarios cover a broad range of outcomes; don’t ignore extremes; don’t discard scenarios too quickly just because short-term reality appears to refute them and never be embarrassed by a seemingly too pessimistic or optimistic scenario; understand when not enough is known to sketch out a scenario; and so on. But there are some additional rules of thumb that I have found particularly useful.

Always develop at least four scenarios

A scenario set should always contain at least four alternatives. Show three and people always pick the middle one. Four forces them to discover which way they truly lean—an important input into the discussion. Two is always too few unless there is only one big swing factor affecting the situation.
Technically, of course, many scenarios can be sketched out in almost any situation. All possible combinations of just three uncertainties will create 27 scenarios. But many of them will be impossible because the variables are rarely completely independent. Usually, the possibilities can be boiled down to four or five major possible futures.

“Crunch” the quadrants

Often people use a two-by-two matrix when presenting scenarios. But it is not routinely the case that there are just two major variables. In developing scenarios, it would be typical to identify three to five critical uncertainties. How to resolve this tension? One approach is to create multiple two-by-twos using all possible combinations of the four or five critical uncertainties. It will quickly become clear that some uncertainties are highly correlated and so can be combined—and that others are not principal drivers of the various scenarios. At minimum, this will allow for simplification. Sometimes, however, it is possible to uncover a real insight when trying to describe a quadrant created by an unusual combination of uncertainties.

There should always be a base or central case

This point goes back to the chief executive, mentioned above, who claimed that scenarios were an abdication of responsibility. It is fine to put forward scenarios—it is, in fact, the responsible thing to do. But those who must weigh scenarios and reach decisions based on them expect and deserve to get a specific point of view about the future. The scenario that is highest in probability should always be identified, and that ought to become the base case. If that proves impossible, it should at least be feasible to fashion a “central” case—but there must be crystal clarity about the degree of certainty attached to it, the alternatives, and the resilience of any strategy to those alternatives.

Scenarios must have catchy names

The notion of attaching clever names to scenarios may well sound trivial. It is not. Unless scenarios become a living part of an organization, they are useless. And if they do not have snappy, memorable names, they will not enter the organization’s lexicon. Use two to four words—no more. Plays on film titles and historical events are recommended. Some names that I have used, and that appear to have stuck, are “Groundhog Day,” “the long chill,” “perfect summer,” “end of an era,” “silver age,” and “Mexican spring.”
Avoid long, descriptive titles. No one will remember “Restrengthening world economy at a lower level of overall growth.” And avoid boring “bull, bear, and base” scenarios, even though these are used by many stock analysts. If no snappy title seems to present itself (assuming that someone creative is available), the scenario is probably too diffuse and may contain elements of two different scenarios jammed together.

Learn from being totally wrong

Developing scenarios is an art rather than a science. People learn by experience. It is useful to look back at old scenarios and ask what, in retrospect, they missed. What could have been known at the time that would have made for better scenarios? Events will prove that some scenarios were too narrow or that one was thrown out too soon. The more comfortable an organization and its people are with mistakes and learning from them, the less likely it is to be mistaken again.

Listen to contrary voices

This is a good corrective to groupthink. We tend to dismiss the mavericks. Scenarios are there to make room for them. Maverick scenarios have the virtue of being surprising, which makes people think. If a company’s scenarios are all completely predictable (conventionally good, conventionally bad, and somewhere in the middle), they are not going to be valuable. The best scenarios are built on a new insight—either something predetermined that others have missed or an unobvious but critical uncertainty.

On one occasion, when oil was at $120 a barrel, we presented a scenario with oil at $70. Someone asked what would happen if oil dropped to $10 a barrel. We said that was unnecessarily radical. But we probably should not have been so dismissive, as oil promptly fell below $50 a barrel. We should have been more open to the possibility of this radical price swing—after all, oil has been at $10 a barrel well within living memory. Scenarios should not assume a short-term time series; they should go back as far as possible. If a data series going back 300 years is available, you should consider using it (they do exist for UK interest rates and UK government debt as a percentage of GDP and these long-term data series have certainly informed current debates about the possible interest rates and sustainable debt to GDP ratios). Most variables can only be supported by data going back tens of years—but even this is much more instructive than the meager data often used and helps broaden the range of possible outcomes.

Even modest environmental changes can have enormous impact

The best example of this principle is that specialist business models fail when the business environment changes. I call this the “saber-toothed tiger” problem. The saber-toothed tiger was a specialist killing machine, its big teeth perfectly evolved to capture large mammals. When the environment changed and the large mammals became extinct, saber-toothed tigers became extinct too—those large teeth were not as good for catching small, furry mammals. By contrast, the shark is a generalist killing machine—and so has remained highly successful for hundreds of millions of years.

A specialist business model can suffer the fate of the saber-toothed tiger if the environment changes. Many winning business models are highly specialized and precisely adapted to the current business environment. Therefore no one should ever assume that today’s winners will be in an advantaged position in all possible futures (or even most of them). Therefore, scenarios should be based on creative thinking about how predicted changes in the business environment will alter the competitive landscape. If the environment changes in a scenario but the competitors remain the same, that scenario may not be imaginative enough.

None of the above is rocket science. Why, then, don’t people routinely create robust sets of scenarios, create contingency plans for each of them, watch to see which scenario is emerging, and live by it? Scenarios are in fact harder than they look—harder to conceptualize, harder to build, and uncomfortably rich in shortcomings. A good one takes time to build, and so a whole set takes a correspondingly larger investment of time and energy.

Scenarios will not provide all of the answers, but they help executives ask better questions and prepare for the unexpected. And that makes them a very valuable tool indeed.

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The top 6 picks for the best business strategies of all time

Best Business Strategies #1: Tesla
Playing the Long Game

Conventional business logic is that when you're starting something new, you create a 'Minimal Viable Product' or MVP. Essentially that means that you create a version of your product that is very light in terms of functionality, but just about 'gets the job done'. It also means that the first version of your product usually has to be sold at a fairly low starting price, both to compensate for its lack of features, and to generate interest in a new launch.

Some organizations (including many tech startups) take this concept even further and launch the first version of their product completely free of charge, with a plan to 'monetize' later on once they've added more features and feel confident that people will be willing to pay money for what they're offering.

Tesla on the other hand, did things completely the other way around. It's been known for a long time that Tesla's long term goal is to be the biggest car company in the world. They know that in order to become the biggest by volume, they're going to have to kill in the lower-end consumer car space - that is cars costing less than around US$30,000 to buy.

Rather than start with this market though, and create a cheap low-featured version of their electric car to achieve scale quickly (and therefore benefit from economies of scalein addition to reaching their growth goals) - Tesla instead created the absolute most luxurious, expensive, fully-featured sports car that they could muster. That car was the Tesla Roadster, and for context, the newest generation of the Roadster will retail from upwards of US$200,000 for the base model. And this was the first car that they ever produced - knowing that they couldn't achieve the necessary scale or efficiency to turn a profit (even at such a high price).

Fast-forward to today, Tesla just recently beat General Motors in becoming the most valuable car company in the world. So their unconventional strategy certainly seems to be working, but why?


What can we learn from Tesla?

The first thing to note is that Tesla have in-fact made incredible progress towards their goal of mass-produced affordable electric cars. They've even made a genuine annual profit for the first time in their history. The second thing to note is that much of Tesla's business strategy was actually forced upon it. In reality there was no way that they could have created a cost-effective mass-market electric car without economies of scale. And as a startup, they weren't even close to having those economies of scale. Furthermore, because what they were building was so unique they couldn't rely on outsourcing or partnerships to gain those economies of scale.

Actually, Tesla's supply chain strategy is one of the most brilliant moves they've made. They knew early on that batteries would present not only the biggest technological hurdle to their car, but also the biggest bottleneck to production. Rather than let this derail them however, they took complete control of their supply chain by investing in factories that made batteries themselves. This had the additional benefit of allowing them to use those same batteries in parallel business ventures such as their Powerwall.

Of course, all of these strategies required vast quantities of capital and outside fundraising (Elon is rich, but not quite rich enough to fund it all himself!). And that's where the marketing genius of Tesla kicks in. Except that for the most part, their marketing efforts are only partially about the cars themselves. It's Elon Musk's personal brand that had more sway on whether or not they got the investment they needed. He's smart, divisive, wild and ambitious. But whatever you think about Elon Musk, you'd be hard pressed to traverse more than a couple of consecutive news cycles without seeing him on the front page. And that's a fantastic recipe for getting the attention of investors.

Best Business Strategies #2: AirBnb
Forgetting all about Scalability

I love the story of Airbnb. We know them today as one of the fastest growing tech companies, valued at over US$38bn, who have changed the way we travel probably forever. But did you know that they started out about as low tech as you can get?

The first Airbnb rental that ever took place, was the renting out of 3 air mattresses on the floor of co-founders Brian and Joe's apartment. They made $80 per guest. It seemed like a great idea for a startup, so they put up a website and started inviting other people to list their own mattresses for hire.

They got a few bookings here and there - but for the most part, things didn't go well. So much so, that in 2008, they resorted to selling cereal to make some extra cash.

They had plenty of listings on the site, and plenty of site traffic - but too few people were actually making bookings. They were frustrated about the lack of effort they perceived in the listings people were making. So they took matters into their own hands.

The co-founders grabbed their camera, and went to knock on the doors of each and every one of their NYC listings. When someone answered the door, they would persuade the owner to let them in, and then take a ton of photographs of the inside.They touched up the photos a bit and uploaded them to the website in place of the old photos the owners had taken. Within a month of starting this strategy - sales doubled. Then tripled. Then....well, the rest is history.

best business strategies

What can we learn from Airbnb?

The thing I love the most about this story, is that it confounds one of the most commonly stated principles of building a tech startup - that you must make everything scalable. What Brian & Joe did was anything but scalable. But it got them enough traction to prove that their concept could work. Later, they did find a way to make this solution scalable, by hiring young photographers in major locations and paying them to take professional photos of owner's listings (at no charge to the owner).

Best Business Strategies #3: Toyota
Humility can be the Best Business Strategy

In the year 1973, the 'Big Three' car makers in the USA had over 82% of the market share. Today they have less than 50%. The main reason for this, is the aggressive (and unexpected) entry of Japanese car makers, led by Toyota into the US market in the 1970's.

Cars are big, heavy and expensive to move around. That's one of the reasons why the US market was so surprised when Toyota started selling Japanese-made cars in the US, at prices far lower than they could match. The car industry was a huge contributor to the US economy, so one of the first reactions from the government was to implement protectionist taxes on all imports of cars - thus making Japanese cars as expensive as locally made cars.

But the tactic failed. Within a few years, Toyota (and by now others too) had managed to establish production plants on US soil, thus eliminating the need to pay any of the hefty new import taxes. At first, US car makers weren't all that worried. Surely by having to move production to the US, the production costs for the Japanese car makers would rise up to be roughly the same as those of the local car makers. But that didn't happen. Toyota continued to output cars (now made locally on US soil) for significantly cheaper than US companies could.

Their finely honed production processes were so efficient and lean that they were able to beat US car makers at their own game. You've probably heard of the notion of 'continuous improvement'. In the world of manufacturing, Toyota are pretty much the grandfather of exactly this.

best business strategies

What can we learn from Toyota?

Most business success stories that you read - especially in the western world, involve bold moves and against-all-odds tales of bravery. Which is what makes this particular story so unique. Toyota spent years studying the production lines of American car makers such as Ford. They knew that the US car industry was more advanced and more efficient than the Japanese one. So they waited. They studied their competitors and tried to copy what the Americans did so well. They blended these processes with the strengths of their own, and came up with something even better.

Toyota proved that knowing their own weaknesses can be the key to success - and be one of the best business strategies you can ever deploy.

Not just that. Can you name a single famous executive at Toyota? I can't. And one of the reasons is that Toyota's number one corporate value is humility. Not even the most senior plant executives have named car spaces of their own. The humility that helped them to crack the US market runs deep in the organization, from the executives to the assembly workers.

Best Business Strategies #4: HubSpot
Creating an Industry then Dominating it

HubSpot aren't as famous as Airbnb or Toyota. But, they're worth over US$2bn, and more impressively, they've achieved that valuation in an industry that didn't even exist before they invented it themselves. That industry is known as 'inbound marketing'.

Most of the marketing that we experience is known as 'interruption' marketing. This is where adverts are pushed out to you whether you like it or not. Think tv adverts, billboards, Google Adwords, etc. In 2004, HubSpot created a software platform that aimed to turn this concept of marketing on its head. The HubSpot marketing platform helped companies to write blog posts, create eBooks and share their content on social media. The theory was that if you could produce enough good quality content to pull people to your website, then just enough of them might stick around to take a look at the product you're actually selling (behind the blog).

This was a big deal. I can tell you from personal experience, that 'interruption marketing' is really really expensive. We pay Google around $10 each time someone clicks onto one of our AdWords adverts. Remember, that's $10 per click not per sale. That adds up pretty fast. On the other hand, this blog receives approaching one million clicks per year - at a cost of zero. I've written before about how inbound marketing basically saved our business - so it's fair to say that this example is pretty close to my heart!

They coined the term 'inbound marketing' - and long story short, they're now one of the biggest SaaS companies in the world. But that's not the interesting part of the story.

best business strategies

What can we learn from HubSpot?

The interesting part of the story is this: HubSpot created a new type of marketing. They then used that type of marketing to market their own company, who's sole purpose was to sell a platform that created that new type of marketing. Head hurting yet? Mine too.

In a nut-shell, HubSpot had an idea for a cool new way of marketing. Most companies would have taken that new way of marketing, and applied it to something that they were already selling. But instead, the HubSpot guys decided to monetize the marketing strategy itself. They took a whole bunch of concepts that already existed (blogging, eBooks, etc) and packaged them into a 'new way of doing things'. Not only that, but they created an awesome narrative, and then proved how powerful this new way of marketing could be, by building a $2bn business from it. They smoked their own dope, and made themselves very very rich in the process.

Best Business Strategies #5: Apple
iPhone Launch Shows Tremendous Restraint

Ok I hear you - this is such an obvious inclusion for the 'best business strategies'. But as one of the first people to adopt smartphones when they came out in the 1990's this is something else that's pretty close to my heart. I remember using Windows Mobile (the original version) on a touchscreen phone with a stylus - and it was horrible. I loved the fact that I had access to my email and my calendar on my phone. But I hated the fact that my phone was the size of a house, and required you to press the screen with ox-like strength before any kind of input would register.

Thankfully, a few years later, BlackBerry came along and started to release phones that were not only smart, but much more usable. Sony Ericsson, Nokia, HTC and a whole host of other manufacturers all came out with reasonably solid smartphones, all well before 2007 when Apple finally released the iPhone.

I remember arriving at the office one day and my boss had somehow gotten his hands on one of the first iPhones to be sold in the UK. I was shocked. Normally I was the early adopter. I was the one showing people what the future looked like. And yet, here was this guy in his mid 50's, with his thick glasses, showing off a bit of technology that I'd never even seen before.

And that is the masterstroke that is the iPhone. The reason why every single smartphone I'd ever owned had sucked in comparison to the iPhone, is because there's no real market in selling phones to geeks like me. We're too few and far between - and either too poor or too stingy to drop any real cash on new tech. Apple could easily have created a phone much earlier than it did and sold it to me. But it didn't. Instead it waited until the technology was mature enough to be able to sell to my boss. Someone who is far less tech savvy than me. But also far more financially equipped.

best business strategies

What can we learn from Apple?

The big learning here is that first mover advantage is often not an advantage. A well executed 'follower' strategy will outperform a less well executed 'first mover' strategy every single time. One of the most common misconceptions in the startup world is the concept that it's the 'idea' that matters the most. The truth is, the world's most successful companies were rarely the first ones to innovate. I'm looking at you Nokia. At you Kodak. And at you too, Yahoo.

In fact, being first is probably a disadvantage more often than it's an advantage. Why?

  • Your market isn't well defined and doesn't even know your product type exists
  • If you have a market, it's probably the early adopters - by definition, that's a niche market
  • The technology will hold you back rather than power you to success
  • Every single person that comes after you will have the advantage of learning from your mistakes

People, and especially tech companies, get carried away with being first. But you need to think very seriously about whether 'first mover' or 'smart follower' are the best business strategies for you.

Best Business Strategies #6: PayPal
Daring to Challenge the Status Quo

There are certain industries that you just don't mess with. Industries like Aerospace, big Supermarkets, Semi Conductors, and Banking. Actually, banking is probably the hardest industry of all to try to disrupt, because the barriers to entry are huge. You need mountains of capital, a ton of regulatory approval, and years of building trust with your customers around their most important asset - their cash.

Banks are old. Their business models are largely unchanged in hundreds of years, and they make huge amounts of profit, without actually making a single thing. They're insanely powerful and almost impossible to displace. But for some stupid crazy reason - PayPal didn't seem to care. I can tell you from personal experience (I worked for a bank), that the name that strikes the most fear into the executives of the banks is PayPal.

Here's why:

  1. PayPal spends less money on technology than even a medium sized bank does. Yet its technology platform is far superior.
  2. Consumers trust PayPal as much if not more than they trust their bank. Even though PayPal has been around for a fraction of the time.
  3. When a customer buys with their PayPal account, the bank has no clue what the customer actually bought. The transaction appears on the bank statement as merely 'PayPal'.That gives PayPal all the power when it comes to data mining.
  4. PayPal is quicker to market with just about any kind of payment innovation going.
  5. PayPal refuses to partner directly with banks - instead opting to partner with retailers directly.

In a very small space of time, PayPal has managed to insert itself as a whole new method of payment on the internet (and offline) - giving a very real alternative to your trusty debit or credit card. But how the heck did it manage to do it? Let's take a look at why PayPal had one of the best business strategies ever.

best business strategies

What can we learn from PayPal?

There are two huge pillars of success to PayPal's story. The first is simple - stone-cold balls. They got a fairly lucky break when they accidentally became the favored payment provider for eBay transactions. This was followed a few years later by their US$1.5bn acquisition by eBay themselves. eBay were smart enough to mostly leave them alone, and their newfound sense of boldness saw them strike a series of deals with other online retailers to try and replicate the success they'd had with eBay.

This is where the second pillar of their success comes in. Partnerships. Banks had always been wary about forming partnerships directly with retailers - instead they relied on their scheme partners (Visa / MasterCard) to do that for them. They didn't want the hassle of managing so many different relationships, and were extremely confident about the fact that credit and debit cards would always be at the heart of the financial payment system. But the problem was that MasterCard themselves were already working on a partnership with PayPal. Leaving the banks out in the cold. Today, PayPal commends an amazing 20% market share of online payments in the US - and 62.7% of the eWallet space. Almost all of that growth has come from their direct relationships with merchants large and small.

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How can you today in Lebanon build a strategic plan for your company if you don’t have certainty about the future? what should Lebanese retailers, Mall owners, industrials, distributors and services providers do in the wake of the systemic shifts in the economy post-crisis?
That’s like laying the foundations of your house on a ground that might move or shift in any direction as you move towards the future.

The reality is that today every Lebanese organization is finding extreme difficulties in formulating what should be their next decision and what will the future holds.

Shall we continue to wait & see? Will our business shrink? Should we start looking into alternatives & substitutes? Which ones? What could be the legal & financial restrictions impacts? Etc.
We all normally agree that decision making should be based more on data and analysis than simple intuition and gut feelings. But there are two problems here: First, data and information will be difficult to gather as things change by the hour. Second, in the current country turmoils, previous data will tell us more about the past but gives us absolutely no indication about the future.

Make it Plausible with Scenario Planning.
Scenario Planning is not about predicting the future in a crystal ball but making assumptions on what the future is going to be and how your business environment will change overtime in light of that future. Scenario Planning aims to define your critical uncertainties and develop plausible scenarios in order to discuss the impacts and the responses to give for each one of them.

Among the many tools a manager can use for strategic planning, scenario planning stands out for its ability to capture a whole range of possibilities in rich detail. By identifying basic trends and uncertainties, management can construct a series of scenarios that will help to compensate for the usual errors in decision making — Low or overconfidence and tunnel vision.

The issue could be a narrow one: whether to make a particular investment, for example, Should a supermarket put millions into more out-of-town megastores and their attendant car parks, or should it invest in secure websites and a fleet of vans to make door-to-door deliveries?
Farmers use scenarios to predict whether the harvest will be good or bad, depending on the weather. It helps them forecast their sales but also their future investments. The scenarios that Royal Dutch/Shell used to anticipate the drop in oil prices in 1986. The scenarios a major computer manufacturer used to navigate its transition from products to services. The scenarios Xerox used to anticipate the convergence of the copier and printer or American Express used to deal with the replacement of traveler's checks by credit cards. Each organization needs its own scenarios to face its own challenges.
Other well known examples include when blue chip companies explored the end of the Berlin Wall, OPEC oil price rises, bombs and terrorist attacks. Asking the great What if? helps Identifying risk and opportunities that could arise from such events puts companies in a better situation to adapt & thrive.

So how to use scenario planning?

As you can see from the above illustration, scenario development process holds 4 critical steps. After identifying the driving forces and critical uncertainties for the months or years to come, the objectives is to develop 4 distinct scenarios that are most likely to happen. The best way to perform all of these steps is to organize workshops during which all the participants brainstorm together, it will help you find creative solutions.

The process to create scenarios is to:
  • Identify your driving forces: To start, we discuss what are going to be the big shifts in society, economics, technology and politics in the future and see how it will affect your company.
  • Identify your critical uncertainties: Once we have identified your driving forces and made it a list, pick up only two (those that have the most impact on your business). For example, two of the most important uncertainties for agribusiness companies are food prices and weather forecast. 
  • Develop a range of plausible scenarios: The goal is now to form a kind of matrix with your two critical uncertainties. Depending on what direction each of the uncertainties will take, we are able to draw four possible scenarios for the future. 
  • Discuss the implications: During this final step, we discuss the various implications and impacts of each scenario and start to reconsider your strategy: set your mission and your goals while taking into account every scenario.
It sounds simple, however, building this set of assumptions is probably the best thing you can ever do to help guide your organization in the long term.

If you're interested in learning more about how to do scenario planning, how to get alignment on your strategic plan, or learn how to lead your team through the process with our help, do contact us today!

Joe Ayoub- brandcell consulting
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In February I wrote an article describing how even if political stability is ensured, it will not solve the economic crisis and companies turmoil unless some radical mindset shift is operated.
Today we are in the middle of a mega multi-sided crisis (political-financial- social), the post- October 17th Lebanon will not only witness a radical shift in political, macro-economical & social aspects but also and especially in business.

Companies have to accept that that it will not be able to re-ignite their operation with a 'Business as usual' mindset. The young generation that defied the legal authorities and shook the grounds beneath a corrupt and outdated system will do the same inside the institutions where they work. They will demand transparency, equality, rights to learn & progress and be aware about the vision & purpose of their entreprise.

On the other spectrum, companies that innovate in terms of employee engagement and business models will reap unique competitive advantages. therefore, it is imperative to connect these two facets in a new social contract to liberate new energies and certainly new growth opportunities that will benefit both stakeholders.

How can that be accomplished? While businesses are in the 'wait & see' mode for political solutions, they must urgently use this time to rethink their modus operandi on all levels:

What are the opportunities to change & innovate that you would not have done in normal circumstances due to inertia and lack of time?
  1. Will your value proposition be relevant in the post-thawra time? do you need to shift your model from products-to-service-to experience or vice-versa? are the current channels to market still viable or you need to explore new more cost effective ways (digital & other)
  2. Will your Strategy stand within the new market changes? What new offerings, new customers or Customer Experience can you design & develop with the current ressources & capabilities that you acquired?
  3. How can you re-allocate your human & financial resources to support the new directions? How can you leverage your key people to play an active part in shaping the company of tomorrow? what skills they need in strategic thinking and analytics?
  4. What new partnerships you can forge to spread risks and explore new market potential?
The common answer to all the above is INNOVATION. Not in terms of technology or invention as some might think of it but in terms accepting and applying new mindset, methods, tools & approach to solve such problems that this crisis unleashed upon the country. Traditional thinking & solutions will simply fail to address these wicked challenges.

The new solutions will have to be designed around:
  • Empathy for employees and customers
  • Co-created with employees and customers
  • Prototyped to fail quickly & learn fast
  • Implemented with utmost engagement and with appropriate systems & procedures.
The good news is that you are not alone. You can always get the help of experts and we at Brandcell amongst others have been helping progressive companies to thrive in difficult & unpredictable times by showing what strategy & innovation can do to unlock new growth so that times of troubles are turned into opportunities.

Joe Ayoub- Brandcell consulting
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