What Every CxO Should Learn From this Small Business About Business Transformation
by Betsy Burton
This year I had the opportunity to collaborate with my colleague, Jim Lundy, and several small and medium size organizations that were changing their business model due to impacts of the COVID-19 pandemic.
One of the small businesses we got the opportunity to work with was Erika Abrahamian. Erika is an extremely well-regarded and popular yoga teacher in the bay area who was immediately faced with the need to change her business model due to COVID-19 in March 2020.
I asked Erika to share with me some of the lessons she learned during this business transformation. And, while Erika’s business is a small business, many of the lessons she learned should be taken to heart by every CxO.
Immediate Need to Transform
Erika was faced with the need to change her business model almost overnight. She went from in-studio classes with 30-40 regular students to no classes due to shelter-in-place (SIP) orders. The urgency of her situation was both a blessing and a curse. She had no choice—she had to transform immediately.
In early March 2020, she began to record video classes and send out daily newsletters to her regular students. In a matter of weeks, she migrated to a content platform, Mighty Networks, and started a business, Practice Yoga With Erika, offering yoga classes, writing prompts, blogs, and community collaboration. By combining a daily newsletter with online content, she kept her students/customers inspired and connected during the SIP.
Since this time, she has evolved to support small social distance classes on an outside deck, which she and her friends/partners built to support her new business model. In addition, she has over 260 students online.
Part of what made her online services unique is that she encouraged people to contribute rather than charge a subscription service. This was key to her business model because it reflected her personal integrity and brand.
Over a few weeks, she transitioned from being an independent yoga teacher to an independent business owner with a rich set of video, written content, and a space that support both online and small in-person classes.
Survival Lessons Learned During Business Transformation
I asked Erika to share with me some of the lessons she learned during her business transformation. She sent me the following list:
1. Act fast. Don't halt.
2. Ask for help.
3. Be excited about creating something new.
4. Everything is a resource.
5. Showing up counts more now than it has before.
6. None of the old rules apply. This is a good thing.
7. Relationships matter.
8. People want to help. You have to let them.
9. Pivoting may mean changing the delivery method, but it's actually doubling down on the essentials of what you do well.
10. Chaos is an opportunity for creativity.
These are lessons that every CxO should consider, regardless of the size of your business.
Pivot From What You Do Well
I thought this was a really powerful lesson, and not one I had heard stated so clearly before. This is an important lesson because in yoga, and any movement, if you do not have a grounding axis to pivot on, you risk completely falling off course.
For business, your grounding axis must be the core value of your business and business strategy. There's the rub. Most businesses don't actually know their business value or strategy. Do you know your brand? Do you know why your customers keep buying from you?
Organizations must identify their strengths, brand, value, and values in order to pivot to a new business model.
Act Fast; Don’t Halt
A significant business disruption demands that you take action. Don’t allow yourself to become frozen with analysis or reactive responses.
Understand the context of the disruption, its short- and long-term scenario and impact on your business, determine your overall strategy, brand and customer value, define your new business model, and take action. And then iterate again, and again, as the context and the impact of the disruption becomes clearer, and as you refine your business model.
Particularly during a crisis or in response to a disruption, organizations must continually explore and evolve their business model.
Everything Is a Resource and Ask For Help
These two lessons are critically important during this crisis because the majority of businesses are going through the same crisis. Ask for help. Your partners, and customers all want you to succeed, and you need your partners and customers to succeed. Let them know what you need, and what you can offer them. Barter. Give. Trade. Negotiate.
Think in terms of your business ecosystem, and what resources, skills, and assets exist within that ecosystem. Consider your competitors as well. Understand how their business model is changing. Yesterday’s competitors may be tomorrow’s customers and partners.
The lessons Erika Abrahamian shared with us regarding her business transformation should be heeded by small and large organizations alike. Now is not the time to get stuck in organizational politics, become frozen with analysis, or fall into react mode.
Figure out your business vision and strategy, your strengths, and your brand, and start to evolve and iterate toward new business models. Experiment. Explore. Innovate. Be willing to let go if a business model doesn’t work and be willing to evolve business models that do work.