Agility in Action

Agility in Action

The Fast 50 demonstrated agility in their response to changing markets. Many implemented alterations to their product/service offering, pricing, business models and/or target market, with the majority successfully doing so within four weeks of hearing about the pandemic. Product/service offering alterations were the most popular, with over half of those who did so expecting the changes to remain going forwards.

In this section, we examine how the Fast 50 have demonstrated agility through business action historically, its importance to long‑term success, and how they have adapted to the COVID‑19 pandemic.

One of the underlying themes amongst the respondents has been their resilience, alongside their ability to adapt and thrive as global market conditions and consumer expectations have continued to evolve. This has been evident historically, with one example highlighted by Andrew Bone, CEO of Dayshape (30th place overall, three‑year growth rate of 1,008 per cent, Scotland’s winner) “Dayshape evolved through a series of iterations from focusing on developing a logistics planning and optimisation tool, to become an AI‑powered planning platform for professional services firms”.

This ability to adapt is one of many factors alongside strategy, talent, and customer relationships that contributes to the performance of a business and is expected to play a more prominent role now, given the speed at which UK consumer markets are evolving.

This ability to adapt is one of many factors alongside strategy, talent, and customer relationships that contributes to the performance of a business and is expected to play a more prominent role now, given the speed at which UK consumer markets are evolving. Notable changes include the rapid acceleration of digital channels and the shift in consumer preferences. An example of this manifesting itself was highlighted by Jo Balsamo, Chief Marketing Officer at DivideBuy, this year’s Fast 50 winner and interest‑free credit provider, stating “We saw increased levels of demand as a result of the pandemic, with more individuals purchasing internal and external home furnishings”. The speed of change has seen companies benefit, as Zoom announced that profits had increased to £138m in the second quarter of 2020, compared to £4.1m a year agoviii. Conversely, many businesses have been negatively impacted, with an estimated 51,498 dissolutions across the UK in March 2020 (a 70 per cent increase from the same period last year).

Reacting to change: Altering the offering, pricing and business models

95 per cent of the respondents made at least one change across business areas including: Product/service offering, pricing, business model, target customer base, target market, workforce and supplier payments. In this section we will focus on four of these areas including:

1. Product/Service Offering,
2. Pricing,
3. Business Model and
4. Target Market.
    

Product/Service offering

Product/service was one area impacted by COVID‑19, with 35 per cent adjusting their range, or focus within it. Respondents indicated that a key benefit of a change to offering was to capitalise on new and emerging customer demand.

Rob Gamlin, CEO of the communications specialist, VoCoVo (11th place overall, three‑year growth rate of 3,217, South West and Wales winner), said “The pandemic and the introduction of social distancing has increased focus on the self‑service part of our business. It’s a growing part of customers’ demand, and we are reacting to that”.

Large organisations should also ensure they monitor and track how their consumer preferences are evolving. Accurately tracking this evolution using digital channels can embed more of a test and learn culture within these companies, enabling them to make informed decisions around innovating their product and service offerings. Alongside this, potentially implementing devolved decision‑making practises during extenuating circumstances in an attempt to enable quicker decision‑making to drive change.

The respondents demonstrated an ability to make changes quickly, with over half (51 per cent) of the companies bringing changes to market within four weeks of the initial pandemic. According to the Deloitte report on The Heart of Resilient Leadership, prompt action over perfection is key during crises. This is also referenced by a range of businesses, with some seeing significant reductions in customer demand practically overnight due to restrictions put in place because of the pandemic. Evidence across other businesses include Hexigone, a chemical manufacturing start‑up, creating anti‑ corrosion coatings for buildings. However, its core business was impacted by restrictions enforced by the pandemic and so it shifted fully to the manufacture of sanitiser. The company mentioned that this manoeuvre allowed them to avoid furloughing staff by charging hospitals on a non‑profit basis.

Another example includes Cheeky Food Events, a company that offers corporate  team‑building  activities  orientated around cooking, which shifted to offering delivery‑based catering to remote workforces. It was able to generate demand for this new offering from its current customer base when demand for their original product had significantly fallen.

Looking to the future, over half (67 per cent) of the companies that have made changes to their offering expect these to be permanent (Figure 9). The reasons for this highlighted in our interviews with the Fast 50 CEOs, include bringing forward updates previously on their longer‑term roadmaps, into current production.

Pricing

Across the respondents, 25 per cent adjusted their pricing in response to COVID‑19. There have been examples of pricing adjustments across businesses, many of which are within the restaurant industry. The UK government launched the ‘Eat   Out to Help Out’ scheme throughout August to support UK restaurantsxv, with a range of restaurants funding additional discounts across September. An example of this is Bill’s, rolling out further discounts onto its new set menu. Restaurants have implemented additional discounts for select workers, such as Krispy Kreme, offering free doughnuts and hot drinks for NHS and key workers.

A few of the CEOs described pricing changes as smaller adjustments for specific customers as opposed to wholescale pricing updates across the business.  Unlike other changes made during the pandemic, only 21 per cent of respondents anticipate pricing changes to be permanent (Figure 10).

These changes have been seen as a short term response to encourage demand for their offerings, however the expectation remains for prices to eventually return to pre‑pandemic levels.

Extensions to supplier payments is another action the respondents have implemented in response to the pandemic. 28 per cent confirmed an extension in supplier payments between 15 to 90 days. 77 per cent of the respondents expect these extensions to remain in place for less than 6 months, however it will be interesting to see how this evolves given the rapidly evolving conditions within UK consumer markets.

Unlike other changes made during the pandemic, only 21 per cent of respondents anticipate pricing changes to be permanent. These changes have been seen as a short term response to encourage demand for their offerings, however the expectation remains for prices to eventually return to pre‑pandemic levels.

Business Model

A smaller total number of the respondents (14 per cent) initiated changes to their business models in response to the COVID‑19 pandemic. We have defined changes to the business model as any change in how a company aims to make a profit.

There are some well‑publicised examples of companies that have evolved their business model including Pret a Manger. In addition to selling individual cups of coffee, they launched a coffee subscription model in September 2020, allowing consumers to have unlimited coffees for a monthly fee. This offering saw 16,500 signups in the first day.

Of the Fast 50 respondents that made changes to their business model, 64 per cent were able to bring these to market within 4 weeks of hearing about the pandemic. Over half of our survey respondents expect these changes to be permanent (Figure 11). During our CEO interviews the financial implications and benefits of being able to  implement these changes quickly was referenced as important in their overall response to the pandemic. Of the Fast 50 respondents that made changes to their business model, 64 per cent were able to bring these to market within 4 weeks of hearing about the pandemic. Over half of our survey respondents expect these changes to be permanent.

Target Market

This year saw a truly global makeup of Fast 50 respondents with only 53 per cent generating over half of revenue from within the UK. A quarter of the respondents made changes to their target market in direct response to the COVID‑19 pandemic. Examples from other businesses include Decorte Future Industries, a company that makes wearables that provide real‑time, 24/7 measurements of the users’ vitals. Before the pandemic, their target consumers had been the Ministry of Defence and the wider public looking for preventative or predictive health tracking. In response to the pandemic, the company changed course and began rapidly developing a more basic version of the product that can remotely detect COVID‑19 among the vulnerable and elderly within the care sector.

For the Fast 50 respondents that implemented these changes, 76 per cent successfully did so within one month of hearing about the COVID‑19 pandemic and over half (57 per cent) expect these changes to remain in the business on a permanent basis. Some of the reasons cited in our Fast 50 CEO interviews reflected on how markets and consumer habits have changed for the long term and by adjusting their business model, these companies are lining up for success in the future.

For the Fast 50 respondents that implemented these changes, 76 per cent successfully did so within one month of hearing about the COVID‑19 pandemic and over half (57 per cent) expect these changes to remain in the business on a permanent basis.

Outlook

Agility has been a key enabler for the outstanding growth seen by the Fast 50 cohort over the last three years, and a central driver in their response to the COVID-19 pandemic. In this period of change and uncertainty, our CEOs’ outlook on the future remains positive, yet they acknowledge they will need to adapt and innovate quicker than ever before.

As these businesses grow, we expect to see them responding to consumer and market developments, positioning themselves for success.

Explore more of our findings on resilience and agility within the high growth industry, and the Tech Fast 50 more specifically, in our 2020 CEO Insights Report. Or see the 2020 Fast 50 winners here.