Every time I hear the word pivot I think of the hilarious FRIEND’S episode https://www.youtube.com/watch?v=R2u0sN9stbA, with the couch, the stairs and the plan to get what seems like an impossible task done. I hear Ross’ voice yelling PIVOT, PIVOT, PIVOT as they tried to get the couch up the stairs and the ways they approached the dilemma, adding resources, looking for alternative means and even trying to get credit for sofa that was cut in-half. While the episode is very funny and we can all relate to situations in our own lives when plans we crafted didn’t go the way we intended, the idea of pivoting in business has never been so relevant.
Not since 2008, at the outset of the Great Recession, which left thousands unemployed and many owners saw their businesses close and never recovered, the current COVID 19 Global Pandemic is forcing all businesses to rethink and re-purpose their organizational structures, the products and the services they provide. The time to shift, re-imagine and create new strategies to address the new normal is now. It is not a wait and see game, it is a plan and pivot time.
But pivoting a business can seem as impossible as changing the tides or reversing the earth’s rotation. It is a daunting undertaking and when coupled with the personal stresses of family needs and health concerns many are overwhelmed and left incapacitated which means for them, the end is inevitable. But for those willing to attack the crisis as aggressively as possible, pivoting a business can be the difference between short=term survival and long-term success.
Consider that pivoting an entire organization may not be necessary. There may be only segments of the business which need to shift or some employees or resources that need to be reallocated. Ultimately, if you try eating the elephant in one bite, you may find the task impossible, but if you break it into smaller more manageable pieces to digest, the changes necessary becomes more achievable.
In 2012, Martin Zwilling outlined the areas which need consideration when pivoting a business during dramatic market changes. His article on Forbes.com identify eight areas where businesses can pivot to meet new demands. “The key to pivoting is spotting trends from real data and real market experience, and optimizing the basic product/market fit, without leaving a hole or divot in your market or your credibility” (Zwilling, 2012).
The pivot eight areas include;
- Customer – solving different problems with the same product or service
- Market Segment – solving problems for new customers with same product or service
- Technology – filling gaps to help solve new customer problems
- Product Features – adapting your product to new use requirements or needs
- Revenue Model – find new ways or methods to generate revenue or adding a revenue stream
- Sales Channel – find a new way to get to market or penetrate a new segment in the marketplace
- Product vs. Services – combine your current product with services or vs. versa
- Competitors- evolve your message and marketing to set yourself apart from the competition
Zwilling stressed that businesses need to rely on real data as much as possible so they don’t make knee-jerk or hasty changes for the sake of changing. It needs to be meaningful change lead by metrics and information no conjecture. The decisions business owners will have to make are hard and often will affect the lives of their customers, clients, suppliers, employers and their own families. They should not be taken without first examining options and alternatives.
The shift from brick and mortar sales to online sales will require investment if current online resources are scare. Choosing to furlough employees vs. layoffs may affect benefits and rehiring. Closing distribution points or finding alternative supply chains options could have long-term implications that may not be feasible. It is only through thoughtful consideration and data collection can any business owner hope to create the best possible strategy to navigate the shift in market conditions.
Don’t chase the shiny object. “It takes a certain amount of humility and self-awareness to recognize the need to pivot. It takes a fair bit of street savvy to do it well. Just like deciding initial strategy, a pivot should be based on data, experience, observation, and insight” says Mark Irwin. He suggests that you do the following to ensure you are pivoting most effectively. Irwin says, there are eight areas of considerations.
- Be problem focused- and look at ways to be a solution-based organization rather than just a product or service
- Think broadly about the value you provide to all your stakeholders
- Understand the new competitive environment you may be entering; who are players and access their strengths and weaknesses
- Shift your vision and define success under these new circumstances
- Test and measure as much as you can, but don’t be stunted by analysis paralysis. Move. Make change. Act and then reassess as you begin the pivot process
- Set priorities and be specific about the areas of focus and change
- Reallocate and realign resources including employees, raw materials, distribution options and sales touch points to meet the goals of the organization and to meet the needs now as your customers define them
- Communicate more than ever before – in times of constant, rapid and disruptive change, clear and concise information is critical. Transparent and candid communication with your stakeholder is imperative.
Remember this nugget. “…pivoting doesn’t necessarily mean desperation. It can be a tool to discover additional growth–growth you might otherwise have overlooked. (Spoon, 2012) https://www.inc.com/alan-spoon/what-pivot-really-means.html. And consider yourself and your business in good company. Giant organizations have made massive pivots and have survived and thrive as they meet new demands and customers needs. Starbucks, Twitter, PayPal and Nintendo all faced their icebergs and were able to navigate their organizations to avoid disaster. Many large companies have pivoted a portion of their business such as Amazon offering food deliveries or Nike offering custom shoe designs in addition to mass production. Your pivot need not be so massive or dramatic. You may find quick and effective ways to alter what you do, what you make and how you achieve new goals by simple tweaks and adjustments.
Ultimately, being completely honest with yourself, your staff, your clients and your supplies will be a huge part of your success. If you keep the lines of communication open and are listening, really listening, you may find a path you didn’t expect. Listen to the feedback, keep informed, seek counsel and advice, don’t isolate yourself or carry the burden alone. No one person can make every decision. You have to rely on your team and your support systems to assist. Getting objective input and insight is the sign of a great leader who when faced with insurmountable odds, looks to others for help. A great leader understands and recognizes when it is time to pivot not just for short-term survival but for long-term wins. A great leader has to make in-game adjustments to get the most favorable outcome.
So, don’t plant yourself in panic mode. Plan. Prepare. Pivot. Pronto!