Stick or twist? The business transformation conundrum

When the world changed last year, so did the UK’s 6 mil­lion busi­ness­es. Shopfronts closed and office build­ings went dark on 16 March as the first nation­al lock­down took hold, ren­der­ing many busi­ness mod­els obso­lete overnight. Many firms decid­ed to trans­form dig­i­tal­ly, mov­ing com­mu­ni­ca­tions online or shift­ing how they oper­at­ed, while oth­ers com­plete­ly recast them­selves – restau­rants became food deliv­ery ser­vices and bars turned into green­gro­cers.

As the econ­o­my shows signs of recov­ery and we ven­ture back towards nor­mal life again, enter­pris­es of all stripes are faced with as big a conun­drum as they encoun­tered in March 2020: do they stick with what they’ve become or return to pre-pan­dem­ic mode?

“At the start of the Covid cri­sis, we thought: ‘This is an exis­ten­tial prob­lem,’” says Fir­daus Nagree, founder and CEO of FCI Lon­don, a fur­ni­ture store near Wem­b­ley. “We’re a show­room-based busi­ness and we’ve just been told to shut down.” 

He sent his staff home with their IT equip­ment and altered the busi­ness to run dig­i­tal­ly. While cus­tomers couldn’t come to see the firm’s wares in situ, they could still look at them online. Ini­tial­ly, busi­ness was slow, but it start­ed pick­ing up as cus­tomers who also couldn’t vis­it FCI London’s com­peti­tors – such as Har­rods and Heal’s – sought it out instead. 

See­ing an oppor­tu­ni­ty, Nagree tripled FCI London’s mar­ket­ing bud­get. “We realised that there’s so much work that can be done vir­tu­al­ly. It needn’t be done in a show­room,” he says. 

Matt Atkin­son, chief mem­ber­ship offi­cer at the Co-op, came to a sim­i­lar con­clu­sion. “While we were already on the way to digi­tis­ing all of our ser­vices, Covid fast-for­ward­ed this change, mak­ing it hap­pen much soon­er than we’d been antic­i­pat­ing,” he says. 

Cus­tomers have been com­fort­able going online to access its range of ser­vices – from gro­cery deliv­ery to funer­al care – accord­ing to Atkin­son, who doesn’t think they will change their new way of inter­act­ing with the Co-op after the pan­dem­ic ends. 

“We plan to keep push­ing on down this route, ensur­ing that we’ve got the right lev­el of invest­ment in our new plat­forms and capa­bil­i­ties to keep grow­ing,” he says.

Redrawing the business

FCI London’s dig­i­tal trans­for­ma­tion has gone so well that Nagree has no inten­tion of chang­ing course either. His com­pa­ny has devel­oped soft­ware that enables design­ers to bet­ter imag­ine its fur­ni­ture in their designs. Plans that the firm had been mak­ing before the pan­dem­ic to open satel­lite show­rooms in the Mid­dle East remain on hold.  

“We’ve realised we don’t need that,” he says. “We’re just going to keep devel­op­ing our vir­tu­al plat­forms.”

Dr Vern Neville, founder and MD of Lough­bor­ough-based firm ESG Fit­ness, faced a sim­i­lar quandary when the Covid cri­sis struck. Most of the busi­ness is based on design­ing and installing equip­ment for com­mer­cial gyms, oper­at­ing on a B2B basis. 

“All of a sud­den, that all stopped,” he says. “We thought it might be the end of our busi­ness.” 

As gym busi­ness­es closed their doors around the world, Neville and his team realised that they’d have to tar­get con­sumers who want­ed to do their work­outs at home. A six-fig­ure bank loan enabled them to buy more mate­ri­als and design small­er machines more suit­ed to domes­tic use. 

Neville esti­mates that his staff were work­ing between 10 and 12 hours a day at the start of the pan­dem­ic. “Every­one was total­ly com­mit­ted. It was either that or the com­pa­ny was going to go down,” he says. 

Pro­fes­sion­al ath­letes and stressed exec­u­tives became ESG’s new cus­tomers. “The way we func­tion as a com­pa­ny has total­ly changed – and we won’t be going back to how we oper­at­ed before,” Neville says.

From B2B to B2C

Veg­an bak­ery Cake or Death is anoth­er firm that’s been forced by Covid to tar­get a whole new cus­tomer base. It wasn’t well known to the gen­er­al pub­lic before the pan­dem­ic, because it was a whole­sale man­u­fac­tur­er, sup­ply­ing restau­rants and cafés across Lon­don. 

“I did have a cus­tomer-fac­ing web­site set up, but that wasn’t doing any­thing,” recalls the firm’s founder and head bak­er, Katie Cross. “No one knew about me.” 

The site used to receive a cou­ple of orders a week, most­ly from rel­a­tives and friends. Cross says that it was impos­si­ble for her to devel­op this part of the busi­ness while her core whole­sale oper­a­tion was so busy. Then, as the first nation­al lock­down took effect in March 2020, all but 10% of Cake or Death’s cor­po­rate cus­tomers can­celled their orders. 

Cross post­ed a blunt mes­sage on Insta­gram about her predica­ment. “It was pret­ty straight,” she says. “I went on and wrote: ‘You’ve got to sup­pose I’m going to lose my busi­ness.’”

But the pub­lic began sup­port­ing her. In April, May and June she was send­ing out hun­dreds of brown­ie box­es a week. Deal­ing with retail cus­tomers’ foibles for the first time was a steep learn­ing curve, as was han­dling the large increase of small orders, yet she made it work. 

“I’m think­ing very dif­fer­ent­ly now,” Cross says. “I’ve built a brand in a way that I hadn’t before. The pan­dem­ic has taught me to diver­si­fy, because you nev­er know what’s going to hap­pen.” 

She has since relo­cat­ed the oper­a­tion from the cap­i­tal to a busi­ness park in rur­al Devon, hir­ing her hus­band, who worked in the film indus­try, to help her mail out the orders. 

“I realised that I didn’t have to be in Lon­don any­more. I no longer need­ed this com­mu­ni­ty of cafés and restau­rants,” Cross says. “I can be any­where, with­in rea­son, that has a decent postal ser­vice.” 

She is now a more cau­tious entre­pre­neur, hedg­ing her bets and con­scious that the past year has proved that any­thing can hap­pen in busi­ness. While she’s not stick­ing sole­ly with her new busi­ness mod­el, she’s also not twist­ing back to what it once was. 

“I’m try­ing to have a busi­ness that works in lock­down and a busi­ness that can work out of lock­down,” she says. “Oth­er­wise, I’d be swing­ing like a pen­du­lum between being incred­i­bly busy and not very busy at all.”