How To Make A Business Pivot at the Right Time
Recognizing Opportunity for Successful Growth
Whether a better idea has come to rise or the original one simply isn’t working out, it may be time to pivot the direction of your company, project, design, or strategic implementation. As defined by Eric Ries in The Lean Startup, pivoting is “a structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.”
Being knowledgeable about sound business strategies, such as pivoting, is known to help businesses reach new heights of success. The act of pivoting is highly regarded by some of the most successful and well-known business leaders and can be one of the best options when performance isn’t meeting expectations, yet a solid business foundation remains. The need to pivot is situational and sometimes inevitable in today’s ever-changing world of IT. Listed below are general observations and strategies to consider when deciding if it’s time for your business to pivot.
Pivoting Is Not a Business Move to Fear
It’s hard to recognize and accept when something you’ve worked so hard on isn’t meeting its full potential or reaching your business goals. However, as defined above, pivoting isn’t necessarily changing your entire business line, completely tossing original, and starting from scratch – it’s adjusting the aspects holding your business back from being exceptional. The point is, pivoting is not one of the business strategies to be afraid of — in fact, it’s likely that you’ve made minor pivots already without even realizing it.
From large enterprise companies to small startups, pivoting is a strategy that’s been used successfully for decades. For example, in Amazon’s early days, their focus was selling books, then they decided to pivot their business to what it is today; their success now is monumental. IBM got its start as a major computer manufacturer and had expanded into personal computer systems, but they pivoted back to focus solely on enterprise-level business systems and services with massive success as well. Blockbuster, on the other hand, took a huge defeat when they decided not to pivot their business strategy after the ever-popular streaming service, Netflix, first made its debut in the market.
Signs That Pivoting Might Be the Best Option
Numerous factors such as a decline in customers, poor results, new openings for an opportunity, lack of relevancy, a change in the market itself, or a loss of internal satisfaction are all signs that it may be time for you to make a business pivot. Holding a desire to improve business growth, surge profits, and appeal to a different target market, are other sure signs of a call to pivot. Another need could be to uphold a competitive advantage as new competitors enter the market – like the Blockbuster and Netflix case.
You may also need to pivot if your strategic business goals and current operations don’t align. The best thing to do is look back at your original goals. Does the effort, investment, and progress accomplished align with these goals? If not, what is hindering you from meeting those goals? You’ll want to think about how much you’ve invested in the current idea or business, and how costly it would be to either continue the investment or move forward with another option.
Sometimes, a pivot might be what is necessary to find a business’s perfect niche. Keeping an eye open for opportunities to improve and pivot a new way can be beneficial. Groupon, for example, originally began as ThePoint.com, which was a platform where anyone could start a campaign and receive donations. Groupon realized that many people weren’t interested in this idea, then made a pivot to what they’re known for today and are now a $25 billion company. Pivoting can help find and create the right niche for a business and open doors for opportunities and growth.
Strategies for Success
A pivot can take place in the order of changing technology platforms, channels, prices, resources, costs, customer base, and other business factors. Once you begin to recognize the signs that a pivot is necessary, you need to make quick, strategic action steps. Below are a few strategies for success to keep in mind when pivoting your business.
Keep Everyone Involved and Agile
Define what’s changing and evaluate the options with everyone involved. There needs to be the assurance that it’s clear what needs to change and that everyone shall remain agile throughout the pivot.
Isolate the focus: Be honest when redefining everything and think about the concrete ways in which this concept will be more successful than the previous approach.
Reviewing important data regarding your business: Know the current statistics regarding customers and performance and truly understand where change is essential.
Build a basic prototype: This can be extremely helpful in playing out the vision. This is not changing the core goals and entirely ripping up a model; it’s like changing the “sub-points.”
Don’t Remain Silent
During the process of pivoting, it’s vital to maintain transparency all around. Communication is critical, especially when major changes are happening. Everyone involved, such as employees, consumers, and investors, should be completely in the know about what is going on, why it’s happening, and what to expect from this pivot. A failure to maintain transparency during this process will prevent beneficial feedback and input, hinder opportunities to garner support, and create unnecessary friction during the transition. Not having everyone involved on the same page may also result in the development of what will be an unsuccessful transition plan negatively impacting your opportunity for success.
Goals and Measurement
Planning what you want to achieve from pivoting is crucial. It’s essential to look at real data and make decisions based on those factors. Start by setting attainable and measurable goals for the pivot. Use these to assess your progress and use them as a guide for decision-making along the way. Take time to listen to employee and consumer concerns throughout the pivot, accept all forms of criticism, and stay alert to internal and external noise to evaluate the success of the pivot.
Staying on top of the waves of innovation, disruption, and economic turbulence is crucial for long-term business success. Maintaining an internal focus on what once was or current business models rather than what could be will only hinder your potential for growth and opportunity. Knowing and understanding what the signs are that a pivot may be required and having a general idea of what to do when it is time to make a pivot can be crucial for business success. Keeping this information in mind is key when it comes time to make the next pivot for your business.