By Hailey Eisen
There’s no question that the COVID-19 pandemic has presented new hurdles and challenges for entrepreneurs and small businesses. Many are still reeling from the impacts experienced over the past 18 months, but there are also those that have made great strides in these unprecedented times, through innovation and reinvention.
What can we learn from the businesses that thrived during the pandemic, and how can we leverage those learnings to help other SMEs post-COVID?
According to Dr Nuša Fain, Director of the Master of Management Innovation and Entrepreneurship (MMIE) program at Smith School of Business, the opportunities coming out of the pandemic will benefit the small business ecosystem for years to come. She has been eagerly tracking COVID success stories, looking for clues as to what other businesses can learn from these experiences.
“Never have changemakers been needed more than they are now,” she says. “Our goal through the MMIE program is to build the changemakers of the future.”
With business consulting experience in the areas of product development and innovation management in both Europe and Canada, Nuša has seen ‘innovation’ become a buzzword that people love to use — but often don’t understand well. “We define innovation as creating something new that generates value,” she explains. “That value can be profit, but it can also be social impact or operational value.”
At their core, Nuša says successful entrepreneurs have the very skills required for innovation. And creating a culture of innovation can improve productivity, reduce costs, increase competitiveness, build value and boost employee engagement.
“Creating a culture of innovation within a team means everyone is encouraged to think outside the box, improve processes and generate value,” she explains. “Those companies that really did well during the pandemic had flexibility and a culture of innovation already in place, meaning employees were engaged, incentivized and rewarded for providing new potential solutions to a particular problem.”
Some of the questions these companies likely asked themselves were: What are our customers’ needs? What are things we can no longer do because of COVID? How can we better serve our customers in this new environment? What can we do to change?
“Not everything needs to be a breakthrough innovation, but those companies that succeeded took time — but not too much time — to reassess and determine what they could do differently in order to continue to thrive and meet the needs of their customers, or potential customers.”
“Take the example of breweries and distilleries that started to produce hand sanitizer in the early days of COVID,” Nuša says. “They understood the capabilities of their manufacturing processes and they had the flexibility to change. Instead of just continuing to do what they had always done, they pivoted to add value, creating something new that was needed at the time.”
The same was true of manufacturers in other fields who quickly shifted to create PPE and ventilators. “Not everything needs to be a breakthrough innovation, but those companies that succeeded took time — but not too much time — to reassess and determine what they could do differently in order to continue to thrive and meet the needs of their customers, or potential customers.”
The ability to identify and create additional revenue streams is another trait that allowed some businesses to stay competitive in this new environment. “Many businesses suffered during COVID when the fixed income they were used to from their loyal customers dried up and they didn’t have an additional stream of revenue to keep them afloat,” Nuša explains.
To counter this, they had to adopt new models. One model that performed really well during the pandemic was the subscription model, taken up by many small businesses in various industries. Many restaurants and food retailers, for example, offered meal subscription services on a weekly or monthly basis, rather than just relying on one-off purchases. “This type of model builds loyalty, is often cheaper for the consumer and ensures consistency in terms of revenue generation for the small business,” Nuša says.
Paramount during the pandemic, and essential for success moving forward, was digital transformation — for sales and customer engagement.
“It used to be that having a website with a contact button or a phone number was enough for many businesses — but that has changed dramatically in the era of social media,” Nuša says. When it comes to communicating with customers and potential customers, social media offers a two-way communication flow that’s proved essential for many SMEs. “Not only do brands need social media to connect with customers, many customers are also engaging in conversations about brands online; if you don’t have a presence in social you’re really missing out.”
“We’ve just begun to scratch the surface of how technology will help shape entrepreneurship and business in the future, which is why all of our MMIE students complete a certificate in disruptive technology which includes everything from engaging in branding on social media to blockchain and AI as future options.”
Some small businesses took their social media presence to new levels during the pandemic, expanding beyond bricks and mortar stores to social auctions and marketplaces. Small retailers held live auctions via Instagram or Facebook when their stores were closed, allowing them to engage with customers, keep them interested in their products and conduct sales in a more personal way without the need for in-person interaction.
“We’ve just begun to scratch the surface of how technology will help shape entrepreneurship and business in the future, which is why all of our MMIE students complete a certificate in disruptive technology which includes everything from engaging in branding on social media to blockchain and AI as future options,” Nuša says. “With the data and analytics available, online businesses can understand their customers better than ever and cater to them in new and innovative ways.”
The shift to a more online-focused presence also opened many businesses up to audiences and customers they didn’t previously have access to. “Yes, the focus during COVID was how to support local businesses, but inadvertently many businesses gained exposure to a much wider audience base.” The key beyond COVID, then, is to stay relevant and find ways to stand out online in an even more global marketplace. While competition may be fiercer, so too is the potential to really grow.
The best ways for any small business to move forward beyond the pandemic is to learn from the efforts that did and didn’t work, and to get comfortable with failure and the idea that risk will always be present going forward. “We know that everything will continue to speed up and the most successful businesses will be those that can innovate quickly and efficiently,” Nuša says. “This time it was a pandemic, next it could be global warming. It’s how you plan, adjust and adapt that will determine your success in these uncertain times.”