Thinking of pivoting? The seven situations where a pivot can be justified

Hands-up if you’re tired of the word pivot, not even sure what it means or have been questioning if pivoting is the right thing to do?

If you raised your hand to at least one of these questions, you’re not alone.

Pivoting has been hotly discussed during Covid-19. If you Google: “Should I pivot because of Covid-19?” you’ll get over 84 million results.

Today, in the first of our mini-series on pivoting, we’re going to demystify the term and discuss the situations which justify a pivot.

 First off, what is a pivot?

A pivot is a proactive strategy change based on planning, preparation and market research with the focus on achieving business sustainability and growth. Done well, the benefits of a pivot can be long-lasting and transformational. But the decision to pivot should not be taken lightly – they can be difficult to pull-off.

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Pivoting indicates a change in direction, not an add-on or tweak. It’s not something that was already planned down the track and brought forward (that’s acceleration) or a short-term band-aid to sustain your business through a difficult period (that’s disaster recovery or business continuity).

Eric Ries, one of the first to make the term pivot join popular business lingo, is the author of The Lean Startup. Riesdefines a pivot as:

“A structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.”[1]

A pivot doesn’t have to be a drastic overhaul of the whole company, though. You may have one pressing issue that needs to be addressed, and so you only need to transform one aspect of your company.

 When is pivoting the right thing to do?

To pivot successfully requires thoughtful analysis, preparation, and the right timing and mindset. Pivots can be costly and risky and should, therefore, be approached with caution.

When you’ve tried other tactics, and they haven’t hit the mark or are short-term or unsustainable, these seven situations below are compelling reasons to pivot:

1)     Customers: Research what your customers want. Discover their pain-points. How do your services or products address these desires or pain points? What features or services do they use the most? Which features or products are slow-moving or obsolete? Market research is key to discovering if your thoughts of changing direction are viable and based on what consumers actually want. Don’t rely on guesswork: seek the facts. Send those surveys and ask for reviews.

The successful transformation of Burbn to Instagram[2] is an example of how a pivot works when you research your customers. This example demonstrates why you should investigate and then maximise the parts of your offering your customers love and get rid of the features or services they largely ignore.

2)     Culture: Does your culture need an overhaul? Are your mission and vision, and the strategy you’ve laid out to achieve them, still relevant? Have you got buy-in from your staff? Is the plan your people follow still inspiring and stimulating? If morale and productivity are low, and you spot inconsistencies and inefficiencies, dive deep and find out what the problems are, then brainstorm solutions to address them. Don’t lay blame solely on your people, though. Steve Blank, a Silicon Valley entrepreneur, says a pivot is “changing (or even firing) the plan instead of the executive (the sales exec, marketing or even the CEO)”.[3]

3)     Complaints: If you have experienced a spike in complaints, try your best to look at them objectively and take away the emotion. Can a change in strategy address these complaints? Equally, review your compliments. In which areas do you receive the most praise? Consider reducing or eliminating the parts that aren’t serving you and investing in the features and services that are most sought after and celebrated.

4)     Competition: Even if you started your company because you identified a gap in the market and your product or service was one-of-a-kind or niche, everyone runs the risk of larger competitors swooping in on your territory and beating you on quality or price. If the competition is too fierce, and it’s no longer sustainable to fight for your target market’s attention, you may need to consider pivoting to new markets, new offerings, or new revenue streams.

5)     Costs: Are your strategy and business model lean, agile and cost-effective? Are there technologies, suppliers or manufacturers that can help you provide an equal or higher quality product or service with lower overheads? Could transitioning your staff to remote working save you money because you no longer need to own or lease a physical space? Be careful when pivoting to cut costs, though. Check to see if any changes will harm your brand’s reputation or customer experience.

6)     Change: We all know that change is the only constant. But is your business strategy keeping up with the times or are you lagging? Have you hit a wall and you’re struggling to grow? Or, worse still, is sticking to your existing business strategy losing you money? External changes can drive the need for internal transformation – perhaps you need to reinvent yourself to move on from your stagnating business model. With new digital and remote ways of doing business and interacting with customers, keep your eyes open for new opportunities, new technologies, or new markets to pursue.

7)     Community and connection: Businesses must be sensitive about their marketing and communication strategy as we are more cynical of the hard sell – we want to hear a statement of service, not a sales pitch. In what ways do your brand or company contribute to a sense of belonging and service? Does your messaging and brand strategy need transforming to create more connection and engagement?

As we start to transition from business continuity to focus on a long-term strategy for the new world, take time to consider if you are on a faulty or outdated course.

We all need some direction and accountability to navigate course correction. The IT Psychiatrist is here to partner with you and guide you through a structured, considered and fact-led business transformation.

Watch this space for our next blog in our pivoting series, where we dive deeper into what makes a successful pivot.

[1] Eric Ries (2011) The Lean Startup.

[2] https://www.theatlantic.com/technology/archive/2014/07/instagram-used-to-be-called-brbn/373815/

[3] Steve Blank and Bob Dorf (2012) The Startup Owner’s Manual: The Step-By-Step Guide for Building a Great Company

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