Making Lemonade from Lemons: How to Position Your Business to Thrive in Uncertain Times, Today and in the Future

The global pandemic’s disruption on the business landscape has presented challenges for companies large and small. During the early days of the pandemic, companies focused on what they must do to survive. After several months spent ensuring the safety and well-being of employees and managing cashflow, including reducing expenses, many pivoted, turning their attention to delivering value to customers and growing their customer base. For example, restaurants that primarily operated as an in-person dining business made the wise transition to scaled-down menus and launched or expanded their takeout or delivery services. Some restaurants chose to partner with new takeout and delivery businesses, providing the ghost kitchen that supplied the food while they focused on promotion/marketing, customer acquisition, and order fulfillment.

As another example of businesses adapting, grocery chains and retail stores began offering curbside pickup. This adaptation provided customers looking to minimize interactions with people outside of their household the option to order online and pick up without stepping inside a physical location. In addition, some retailers, like Apple, demonstrated their flexibility by allowing customers in store by appointment only. The common thread among these examples is (a) the companies’ resilience and ability to adapt to market conditions, (b) the discipline to focus on the customer needs and expectations, and (c) the courage to pivot or swerve to capitalize on emerging opportunities. Despite the dire, unchartered business climate, they managed to survive and, in some cases, prosper beyond their imaginations. Their real-world stories underscore the importance of the right mindset and values: “When life deals you lemons, make lemonade.”

As business leaders, you have the capacity to turn lemons – setbacks, unexpected challenges, and problems – into lemonade – opportunities, pivots, and new directions. Whether you do will depend on your ability to reimagine and reposition your business model to address the needs of a rapidly changing and complex environment. For this purpose, think of a business model as the unique way your company creates, delivers, and captures value in the market.

The business model is a powerful concept. A business model consists of four interconnected and interdependent domains:

1. Target Customers – Your customer base may be brimming with customers who have purchased your product or services. However, the target customers are the customers with whom you have been intentionally trying to cultivate relationships and attract. In fact, you created your products, services, and experiences with their needs, expectations, and feelings in mind. The target customer is also the source of inspiration for your marketing and channel-related decisions and actions.
2. Value Proposition – Once the target customers are identified, the value proposition is the combination of products, services, values, and brand reputation, that your company offers. It is the unique formula of value that your company promises to deliver consistently to its target customers, and for which customers are willing to make the first and repeat purchases.
3. Value Network – The value network is the “how” of the business model. It is the set of interrelated activities, resources, and partnerships that are essential to fulfill the customer value proposition with the quality of goods & services and the certainty your target customers expect. With this goal in mind, the delivery of activities and resources may be done internally, outsourced, or in collaboration with a partner.
4. Financial Model – At the end of the day well run businesses make money. With a clearly defined financial model, the company will make its assumptions around the business’ cost structure, pricing strategy, and revenue streams explicit. Like the value network, a good financial model will enable consistent delivery of the value proposition and customer loyalty.

The work to define and articulate a business model helps business leaders align themselves on the most important value-creating and differentiating elements of their business. Unfortunately, too few leaders of established businesses use it regularly to analyze, grow, and reimagine their businesses. Instead, most leaders speak in terms of products and services and organizational structure, emphasizing the work of individual silos at the expense of cross-functional activities to achieve company-wide goals. This inside-out perspective, where companies treat customers as means to an end as opposed to constituents they need to serve, is common. Despite the reality that, without customers, companies would no longer exist.

The pandemic has forced companies into a collective awakening. More than ever before, they are reckoning with the truth, that customers (and employees) are the cornerstone of their business. In this environment, forward-looking leaders are recognizing the immense value of assessing their business with a holistic framework and are increasingly receptive to a thorough evaluation of their organization’s business model. They are doing this work to uncover weaknesses or vulnerabilities that have been laid bare or further exacerbated by the pandemic as well as opportunities to transform the business to meet the existing and emerging demands of customers and inchoate (nascent) markets.

Is your business at a crossroads? You are not alone. Many companies are wondering if their business model is robust enough to survive the shock caused by the pandemic. Others have adopted a growth-mindset and are looking to the future and how to capitalize on the emerging opportunities. Despite the uncertainty of the global pandemic, the latter group has decided to make lemonade out of lemons. They are investing time and resources to evaluate how well each domain of their business model has handled the blows from the pandemic economy. Like them, assess each of the domains; ask yourself, has this domain, compared to its pre-pandemic state, become weaker or stronger? Describe the reasons (relying on facts, observations) that led you to answer the way you did. For areas that you conclude are weaker than their pre-pandemic state (that received the most criticism or negative feedback), work with your team to document known issues and challenges and identify potential root causes and corrective actions to address them.

On a positive note, the areas you identified as strengths are the best source of potential opportunities. Think about how these strengths, when delivered consistently, might deliver value to customers, employees, suppliers, or partners. The objective of this exercise is to discover creative ways to further leverage these strengths in service of stakeholders in a manner that will enable you to pivot or reposition your business to capitalize on the new market realities.

One of the most effective ways to generate rich, value creating opportunities is to focus on the customer. In contrast to the above-mentioned inside-out perspective, this outside-in approach will put your business in offensive mode, helping you to understand the changing needs and preferences of customers and develop value-creating solutions and experiences to address them. By doing a deep dive of the first two business model domains (target customers and the value proposition), you will strengthen connections with existing customers and potentially uncover new customers and trends resulting from the conditions of the pandemic. As you analyze each target customer group, expect to be brutally honest about how well your business is serving the needs of that segment. If customer demand declined dramatically during the pandemic, think of innovative ways to connect with these customers. If necessary, be prepared to redefine the value proposition, in particular the customer experience, to better resonate with the customer.

Any changes to the first two business model domains will have ripple effects for the next two domains (value network and financial model.) In the case of the value network, think about the resources and activities you need to deliver the revised value proposition. The activities should be organized in a way that leverages your organization’s strengths and capabilities and that differentiates your business.

The pandemic has wreaked considerable damage on the US economy, causing tremendous pain and devastation. But it also has generated new, unexpected opportunities for some industries and businesses. The successful leaders have embraced the idea of taking lemons and making lemonade. They view this crisis as an opportunity to analyze all aspects of their business. They see their future and long-term success tied to more than cost-cutting and place greater emphasis on better serving customers by innovating the customer experience. Their willingness to innovate their way out of this crisis will ensure their businesses not only survive the pandemic but thrive into the future.