Pivoting in a Pandemic
Experience and expectations change dramatically when your business falls to zero
By Andy Hughes
Entrepreneurs know well that, no matter how well you plan, the path your business follows will be influenced by unexpected factors, often ones beyond your control.
The coronavirus pandemic is one such example, and on February 4, the American Chamber of Commerce in Japan (ACCJ) Information, Communications, and Technology Committee welcomed Australian/Kiwi entrepreneur Terrie Lloyd to share how his company Japan Travel K.K. has met the challenge of Covid-19 and pivoted some parts of the business while doubling down on others.
Terrie Lloyd, Founder & CEO, Japan Travel KK.
In the virtual presentation entitled Pivoting in a Pandemic: Experience and Expectations Change Dramatically When Your Business Falls to Zero, Lloyd shared how he continues to maintain optimism during such trying times, always looking for silver linings and taking advantage of opportunities that otherwise wouldn’t have arisen.
Pivot and Double Down
Lloyd has lived in Japan for 37 years and has established 17 companies here over that period, so he is no stranger to having to reinvent his businesses in response to the unanticipated. He has seen three cycles of boom and bust, but the advent of the coronavirus pandemic marks the first time that one of his businesses has gone from millions of dollars of annualized revenue to zero—at least for several divisions. In response to Covid-19, all businesses have had to adjust and rethink their strategies, as if starting from scratch, facing the same risks of failure.
“If you can turn your hobbies into business and combine that with a business that is ailing, perhaps something worthwhile will happen."
“This past year probably should have been a trying one, but I found it extremely satisfying. And the reason is that I found many of the challenges the pandemic produced are the same challenges that you have when you start a company,” he explained.
The inbound travel sector has been hit hard by the pandemic, but Lloyd is of the firm opinion that it will come roaring back. Even with the current travel restrictions in place, Japan Travel is still attracting a high number of visitors. If people aren’t currently traveling, they’re certainly window-shopping digitally and making plans for the future. While many competitors are cutting staff and laying low, his team continues to push ahead with business development plans that will support a rapid recovery. If he is wrong? Well, he has a Plan B.
Stool with Three Legs
Not only does Lloyd have a Plan B, he has a Plan C as well. “I learned that there’s always something unexpected, the kind [of thing] that tries to kill you. Usually, it’s another competitor. This time around, it was a disease,” he said. “It’s always good to have a stool with three legs, not one. If somebody tries to kick one of the legs from under you, you still have a chance of surviving.
Japan Travel was designed from the beginning, Lloyd explained, to be a vertically integrated company with software as a leverage point. His passion for building solutions to problems, which he attributes to having been given a Meccano building set as a child, has been one of the key factors to Japan Travel’s survival over the past year.
Lloyd has lived in Japan most of his life, so he has witnessed events that forced reinvention in the face of disaster, such as when the Great East Japan Earthquake and Tsunami struck on March 11, 2011. “This is kind of a repeat of 2011 in a way, where an existential threat made us think about what our values are and what we were going to do to survive.”
Rebound
Similarly, when making comparisons to 2011, the main question that cropped up during the pandemic was how long the situation would last. Would it last six months? A year? It was all conjecture. It was, and still is, impossible to predict.
“I thought it was more like the flu, but a serious form of the flu. So just like the flu, it would go away when summer arrived,” Lloyd said. “Little did I know that Covid-19 has some very deep tentacles, and it has caused a lot more havoc and fear than I first expected. Then, when it became summer, we thought, maybe it would last until the end of the year. And now here we are in February.”
With this sort of event, he subscribes to the idea that the bottom of the cycle is the right time to start a new phase of a business, not only to rebuild but to improve past efforts with new lessons learned. Referring to a meeting he had with Japan Airlines Co., Ltd.—a discussion focused on what they were going to be doing this year—he described the situation as being faced with an exciting challenge. It’s a surprising description considering he had seen several divisions of his business hit by such a drastic revenue dive. But as a man with a passion for creating solutions, Lloyd says that the future has never looked brighter. “It’s a really weird situation. It feels like a spring day, where it rains and shines, both on the same day.”
His optimism stems from his belief in a strong rebound, and he expects that 2022 will be a year of recovery, with things starting to look economically stable by 2023.
“What we saw after the 2011 earthquake was a year timeout,” he recalled. “Then, suddenly, things started to move forward. By 2013, we had a strong economy again. I think the same thing will happen this time.”
The same positive outlook correlates with his thoughts about the upcoming Tokyo Olympic and Paralympic Games. He believes there is a good chance the events will still occur—something that looks all but certain from media reports that have followed Lloyd’s ACCJ presentation—albeit not in a normal fashion.
“The [Tokyo] Olympic Organising Committee must have watched what Australia had done with the Australian Open,” he suggested. “They basically were able to keep things under control. Of course, the Olympics is a bigger event than that. But if anyone can do it, Japan can do it.”
Reducing Uncertainty
With the trauma caused by the pandemic, Lloyd knew that the most crucial action, for the well-being of his staff, was to reduce fear. He told his team that the plan was to hunker down and then assured them that their jobs were secure. This was made possible when the government announced it would be providing subsidies for companies affected by the pandemic.
It was uncertain at the start what exactly these subsidies would cover and when they would go into effect. Would Japan Travel be eligible? The application process, being newly integrated, wasn’t immediately clear. Without the subsidy program, he explained, there would have been a domino effect. Once the travel agencies go, the restaurants fall next. There would be nobody to spend money on products, so the manufacturers would be gone, too.
With the subsidy providing a safety net to protect the livelihood of his staff, he had another problem to tackle—figuring out how to make use of idle hands if the company was unable to operate as it previously had. He made a rule that no one was to do their regular job. Instead, they would begin training to do somebody else’s. Utilizing this cross-training system would prove to have a wonderful impact.
“We now have people who understand other jobs and appreciate the amount of work that went into doing those jobs,” Lloyd explained. “It also means that when people get sick, or as people start to leave, or whatever may happen, that we’ve got staff cross-trained and able to slot in and take over.”
Two Directions
“I think there are always two directions: optimism and pessimism,” Lloyd said. “For the economy going forward, I happen to be optimistic. For Japan Travel, my digital marketing and sales teams will remain busy. When I do think about the pessimistic side, I envision further business opportunities.”
He reiterated how the lessons learned and applied as a result of this pandemic were valuable to strengthen and reinforce against adversities that may arise down the road—especially those for which there is no reference point.
With the same unwavering optimism, he answered a question about what happens if there is no rebound in inbound travel.
“I’m staying physically and mentally ready. During the pandemic, we had opportunities to practice new hobbies,” he said. “We’re trying to bring science to agriculture—in particular fermentation—which is a hobby of mine. I’m pretty good at making sourdough bread, and I’m making cheese at the moment. I figured that I would turn that into a business. The plan is to get people into the fermentation locations and get them thinking about the process. If you can turn your hobbies into business and combine that with a business that is ailing, perhaps something worthwhile will happen. Just like with fermentation..”
THE JOURNAL
Vol. 58 Issue 3
A flagship publication of The American Chamber of Commerce in Japan (ACCJ), The ACCJ Journal is a business magazine with a 58-year history.
Christopher Bryan Jones, Publisher & Editor
