Pivoting in business has become a popular topic in the corporate world. As if every business owner must be ready to change the course of her business if the original idea fails. The idea gives some comfort and false security in mind. Ideally, it would be best if you took precautions to avoid such a situation by validating your pivoting ideas initially.
Pivoting in business is a science. If applied after following a standard operating procedure, you can expect fail-proof results.
You can read about business validation in my article, 8 Amazing Steps to Your First Level of Business Idea Validation.
I’m giving below some instances that fall under the gamut of pivoting.
Markets are dynamic, and situations change. Whether your company is a startup or an established business, it’s integrated with its surroundings.
Your business will face changes in the industry, customer preference, use of new technology and many other foreseen or unforeseen changes. Therefore, every business, old or new, will evolve gradually over time.
At the fundamental level, when an established business needs pivoting, the situation becomes similar to a startup. You’re going into an uncharted territory.
Sometimes, the business pivot at the beginning may not be correct. In such instances, you should not worry. You can pivot before the new business avatar is launched with full-throttle. It’s like making a wrong take-off after going to the point of no return. I’m considering that you’ve validated your new business idea before going doing market launch.
Still, you may keep your sensors on and be prepared to pivot at the turns and twists of the market.
What are the tell-tale signs to consider pivoting in business?
Here are some examples.
Once you realize the need and decide to pivot your business, you’ve to get into action without delay. Here are some tips.
Pivoting takes time. Almost all businesses have to pivot more than once. The thought that your startup may fall from the frying pan to fire should not dampen your spirit. If your first pivot doesn’t work, fail fast. Pivot again. Speed is the essence of success in pivoting.
A business can have a lot of emotion and passion involved in it. But navigating a business is like navigating an aircraft. When it hits turbulence or air pockets, it needs skill, not emotion, to pivot the business commercially. You must have an honest and unbiased view of your goal to correct the direction.
A startup idea may not work as you expected. That’s why you might have decided to pivot your business.
Does that mean your earlier idea was wrong? That’s an infrequent possibility, especially if you’ve checked the validity of the business even partially.
Pivoting takes cost, effort and time. Why drain all your past works if you could salvage some of those resources?
Great companies like Apple, Sony, IBM, Ferrari, Coats plc, and many textile behemoths have pivoted many times. But they leveraged their existing resources while taking the turn. Ferrari’s pivoting into manufacturing medical ventilators for Covid-19 patients is a recent example.
Listening to your customers and other stakeholders can give you valuable insights into which areas need correction. There is a proverb that if you don’t have open communication with all stakeholders, especially users, you lose your business.
A bright example is the case of the creation of a highly successful Multi-Purpose Vehicle in 1984 by Sumant Moolgaokar. He was the then MD of Tata Motors. Sumant spent weeks of his lunchtime in a small roadside restaurant where drivers used to drop by for lunch. He interacted with the drivers to know about their experience and feedback on the vehicles they drove.
His extensive interview with them gave him the idea of pivoting Tata Motor‘s business. Owing to his persistence to promote their vehicles according to market demands, the company named one of the vehicles in his name.
Tata Sumo, India’s first affordable Multi-Purpose Vehicle, took its name from Sumant Moolgaokar (SU of Sumant & MO of Moolgaonkar). You can read the story HERE.
After receiving prima facie favorable inputs for your idea, the final step would be to check if the business is viable and scalable. Otherwise, it may hit a roadblock in the future.
To avoid this pitfall, you must check the possibilities of vertical and horizontal expansion.
The market should be large enough and in line with the trend, and the customer base should be diverse enough for expansion. Both are important to sustain the business for a long enough time to justify the investment.
Leading businesses often change their business models to use technological advancement to a disruptive level. That is a way of life there.
The companies like Apple, Netflix, Amazon and Adobe are some examples.
One way to develop this culture of constant innovation is by following the examples of successful startups.
It would help if you created a business model canvas as a critical tool to design your business model. Alexander Osterwalder’s famous template can give you some cues. Watch it now.
The model is quite effective. It compiles all the activities to create the business in one segment and the selling activity in the next segment. The video visually shows how a business value is created.
You can’t create pivot canvas alone. You’ve to look inside-out, and outside-in, along with your stakeholders to get insights into areas which you might not have been aware of.
There are three critical steps that you can take to speed up the pivoting process.
Video conferencing with stakeholder is the best way. In the event,
Some ideas may be unrealistic. Strike those off. The list will be shorter.
At this stage, create selection criteria to pick up the best ideas that can be realized in practice.
Moving fast is the Essence of Pivoting
Don’t wait to refine too much. If you repeat the process fast, you’ll find the best option also fast. If you have to fail, fail fast, pick up the ball and run.
The model is quite effective if you keep following the above three steps throughout the process. To pull off a successful pivot, you must focus on the following two components.
Managing the activities to generate great ideas is the first step.
Challenging conventional thinking, and identifying pivots that can make a difference by asking intelligent questions about what can be done, is the second.
Next, decide which pivot option is best for you and implement it. During this challenging period, the organization needs a trailblazer who can guide it to safety. Making an innovative, fast pivot can recharge the team and move the organization in a better direction.
Before we close, let us have a recap of what we’ve discussed.
1. Definition of Pivoting in Business
2. How to Know if You Should Pivot
3. How to Pivot Successfully
4. Reinventing the Model is Everyone’s Business
5. Rapid Pivot Framework
6. Making your Pivot idea a reality
Hope you’ve got some insights into the area of pivoting in business.
If You’re an entrepreneur or an aspiring one and want to know in more detail, we can help. You can book a Free 30-Minute Consulting Call by Clicking the link below.
