In a constantly changing and evolving business environment, business owners, entrepreneurs, and business managers are always seeking innovative ways to manage threats that could potentially ruin their business. Growing a business entails creating solutions to everyday problems such as constantly identifying your target market in order to increase your revenues, sourcing suitable talents as employees, ensuring efficient business operations, and surpassing client’s expectations with minimal resources. There are however the not-so-everyday challenges that businesses must respond to; these sometimes come in form of disruptions and they have the potential to suddenly change the way a business has been operating. Disruptions can generate positive results especially if a business is built to respond and not only react to sudden changes.
Disruptions could come in the form of infrastructural changes which can impact the physical location of a business, the shutdown of a supply chain, entry of a competing business in the market, regulatory changes, etc. In recent years, startups and even established businesses have had to grapple with disruptions from the covid-19 pandemic, change in government policies, regulations or laws, and technological innovations. Irrespective of the model of disruption, businesses should be built to anticipate, respond and thrive through the uncertainties that disruptions bring.
In Nigeria, disruptions caused by changes in government policies and regulations have been the bane of many Startups. Notable examples include the ban on motorcycle and tricycle operations by the Lagos State Government, CBN restriction on the use and trade of cryptocurrency, the restriction placed on Fintech companies by the Nigerian Securities and Exchange Commission, prohibiting these companies from offering foreign securities (listed on other countries stock exchange) via their digital/online platforms. We cannot forget the most recent regulatory disruption – the suspension of the use of the Twitter app in Nigeria which has not only disrupted the marketing strategies of many startups but also thrown spanner in the works of alternative customer service channels used by many businesses in Nigeria.
Disruption has the potential to cripple business operations but businesses can be proactive to ensure that they remain adaptable to take on any challenge posed by such disruptions. Some tips for adaptability are:
- Business Diversification- Having a single product line in a volatile business environment may not be advisable. To survive, Startups can begin to diversify their businesses by offering new products/services to their target market. It is also important to diversify different segments of your key operations. This for instance could be by having multiple supply chains, different communication channels for customers, and different marketing strategies for different customer segments.
- Business Model Reinvention: Businesses must ensure that their business models are flexible and innovative to enable them to enter into new markets. Reinventing the business could mean connecting with your customers and clients using technology in order to expand your reach or packaging your products differently using different brands.
- Explore possibilities of partnership: Businesses can explore the opportunities of collaborating with existing businesses using integrations. You can collaborate with your suppliers, retailers, or other businesses, thus creating complementary products/services. This collaboration can also lead to the creation of a diversified product/service for a different market.
- Constantly analyze the business environment: In order to predict disruptions and act in time, businesses need to analyze both internal and external operational risks which can hamper their operations. Businesses must simulate possible disruptions, and create make-shift solutions which can ensure that the negative effect of disruptions is better managed. Businesses can also have a business disruption and continuity plan.
- Seek professional Advice – Businesses can engage professionals who will help them identify the inefficiencies in the different segments of their business. Professional advisors can also help businesses put in place mechanisms that can make a business better suited to adapt to disruption. For instance, for regulatory disruptions, a legal professional can engage the regulator so that the regulator is better able to appreciate the non-traditional business models in that industry. Disruptions to your contractual transactions and relationships (e.g non –performance of contractual obligations due to the pandemic) can equally be managed when armed with sound legal advice.
Businesses must come to terms with the fact this is a disruptive age and any business which will be sustainable must be built to adapt to change and respond quickly to challenges using innovative techniques.