How to Pivot Your Business - Keys to Keeping Up with the Latest Trends

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What is Pivotability in Business?

In the context of business, a pivot refers to a significant change in a company’s strategy or direction.

It involves making a fundamental change to the company’s strategy, operations, or product offerings in order to better align with market demand or address emerging trends.

Pivots can be risky and challenging, but they can also be necessary for companies that want to stay competitive and grow over the long term.

By being open to pivoting when necessary and executing pivots effectively, companies can position themselves for success in today’s dynamic business landscape.

Why Should Your Business be Able to Pivot?

Pivoting is a critical skill for businesses of all sizes and industries.

According to a study by CB Insights, 70% of startups fail due to premature scaling or pivoting too late.

➤ MORE: Fast track your business growth by using scalability strategies in your business model!

Here are some reasons why your business should be able to pivot:

• Adaptability: In today’s fast-paced and ever-changing business landscape, companies that can adapt quickly to new circumstances are more likely to succeed.

Pivoting allows you to respond to changing market conditions, customer needs, and competitive pressures.

• Innovation: Pivoting can inspire innovation by forcing you to think creatively about new products, services, or business models.

It can also help you identify untapped markets or customer segments that you may not have considered before.

• Growth: Pivoting can be a powerful tool for driving growth by expanding into new markets, acquiring new customers, or developing new revenue streams.

It can also help you stay ahead of the competition by anticipating and responding to market trends.

According to a study by CB Insights, startups that successfully pivoted raised 2.5 times more funding than those that didn’t pivot.

• Resilience: Pivoting can help your business weather unexpected challenges, such as economic downturns or disruptive technologies.

By being able to pivot quickly and effectively, you can minimize the impact of these challenges and emerge stronger on the other side.

By recognizing when a particular strategy or product offering isn’t working and making the necessary changes, businesses can position themselves for long-term success.

Types of Pivots

Pivoting can take many different forms, depending on a company’s goals, resources, and market conditions.

By understanding the different types of pivots that are available, businesses can make more informed decisions about how to pivot and what approach to take.

➤ MORE: Learn how to select your ideal business model!

Let’s explore some of the most common types of pivots that businesses may consider.

By becoming familiar with these pivot types, you can be better equipped to navigate the pivot process and achieve success.

Strategic Pivot

A strategic pivot involves a fundamental change to a company’s overall business strategy.

This can include changing the target market, repositioning the company’s brand, or pursuing new growth opportunities.

According to a study by McKinsey & Company, companies that make strategic pivots are twice as likely to outperform their peers in terms of revenue growth and shareholder value creation.

Operational Pivot

An operational pivot involves a fundamental change to the way a company operates.

This can include changes to the supply chain, distribution channels, or manufacturing processes.

A survey by Deloitte found that 94% of companies that underwent an operational pivot were able to achieve cost reductions and operational efficiencies.

Market Pivot

A market pivot involves shifting a company’s target market to a different segment or demographic.

This might be necessary if the original target market is saturated or if there is untapped potential in a new market.

According to a report by McKinsey & Company, companies that pursue new markets through targeted customer segments achieve revenue growth that is 1.6 times higher than companies that rely on more general marketing approaches.

Product Pivot

A product pivot involves a fundamental change to a company’s product offerings.

This can include changes to the features, functionality, or pricing of existing products, or the development of new products to better align with customer needs.

According to a study by CB Insights, 66% of startups that fail do so because they fail to develop a product-market fit.

Revenue Model Pivot (a.k.a. Business Model Pivot)

In this type of pivot, a business changes its revenue model in order to better align with customer needs or market demand.

This can include shifting from a one-time purchase model to a subscription-based model, or from an advertising-based model to a freemium model.

A report by App Annie found that apps with a subscription-based revenue model generate 2.5 times more revenue per user than those with other revenue models.

Channel Pivot

A channel pivot involves changing the way a business reaches its customers.

This can include moving from a direct-to-consumer sales approach to selling through distributors or retailers, or vice versa.

A study by Accenture found that companies that embrace multichannel sales strategies are able to achieve 9.5% higher year-over-year revenue growth than those that do not.

Acquisition Pivot

An acquisition pivot involves acquiring another company in order to expand into new markets or gain access to new technologies or resources.

According to a report by PwC, the number of M&A deals in the tech industry has increased by 64% over the past decade, indicating that more companies are turning to acquisitions as a way to pivot and drive growth.

By considering these additional types of pivots, businesses can identify new opportunities for growth and adapt more effectively to changing market conditions.

When is the Best Time for a Business to Pivot?

Pivoting can be a risky and challenging process, so it’s important for businesses to carefully consider when it’s the best time to pivot.

Here are some signs that your business may need to pivot:

• Declining revenue: If your sales have been consistently decreasing over time, it may be a sign that your current strategy or product offerings aren’t resonating with customers.

• Lack of growth: If your business has reached a plateau and is struggling to grow, it may be time to explore new opportunities or markets.

• Changing market conditions: If there have been significant changes in your industry or market, such as the emergence of new technologies or competitors, it may be necessary to pivot in order to stay competitive.

• Customer feedback: If you’re receiving consistent feedback from customers that your products or services aren’t meeting their needs, it may be necessary to pivot in order to better align with customer demand.

• Internal challenges: If there are internal issues within your company, such as high employee turnover or low morale, it may be necessary to pivot in order to address these challenges and position the company for long-term success.

It’s important for businesses to regularly assess their strategies and performance and be open to pivoting when necessary.

By staying attuned to market trends and customer needs and being willing to make changes when appropriate, businesses can position themselves for long-term success.

Examples

Looking at real-world examples can be a great way to understand how pivots work in practice and gain inspiration for your own business.

In this section, we’ll explore some of the most successful pivot stories from well-known companies.

By examining how these companies navigated the pivot process, we can learn valuable lessons about what works and what doesn’t when it comes to executing a successful pivot.

Netflix:

The company started as a DVD rental-by-mail service, but it successfully pivoted to become a leading streaming platform.

This pivot was fueled by the company’s decision to invest heavily in original content, which helped attract a large and loyal audience.

Today, Netflix has over 200 million subscribers worldwide and continues to dominate the streaming market.

Wrigley’s:

Originally a soap and baking powder company, Wrigley’s pivoted to focus on chewing gum and became one of the world’s largest gum manufacturers.

The pivot was driven by the company’s decision to include a free stick of gum with each purchase of baking powder.

This proved so popular that Wrigley’s decided to shift its focus entirely to gum production.

Nintendo:

Started as a playing card company before pivoting to video game consoles and software.

Nintendo is now one of the most successful video game companies in the world, with iconic franchises such as Super Mario Bros., The Legend of Zelda, and Pokemon.

The company’s pivot to video games was fueled by its desire to stay relevant in a changing market and its willingness to take risks and innovate.

Twitter:

Twitter was originally founded as a podcasting platform called Odeo.

However, when Apple announced that it would be integrating podcasting into iTunes, the founders realized that their original business model was no longer viable.

They pivoted to become a social media platform focused on short-form messaging, which has since become one of the most popular social media platforms in the world.

Instagram:

Instagram was originally founded as a location-based check-in app called Burbn.

However, the founders quickly realized that the app was too complex and difficult to use.

They pivoted to become a photo-sharing platform, which has since become one of the most popular social media platforms in the world.

Slack:

Slack was originally founded as an online game company called Tiny Speck.

However, the founders realized that their game wasn’t going to be successful and decided to pivot.

They eventually developed Slack, a communication and collaboration platform for businesses that has since become one of the most popular workplace tools in the world.

Key Factors for Performing a Successful Pivot

Performing a successful pivot requires careful planning, execution, and evaluation.

While there is no one-size-fits-all formula for pivoting, there are certain key factors that can increase the likelihood of success.

In this section, we’ll outline some of the most important factors to consider when planning and executing a pivot.

By keeping these factors in mind, you can navigate the pivot process more effectively and achieve your goals more efficiently.

🔑 Market Research

Market research is an important factor to consider when deciding whether or not to pivot.

By analyzing market trends and identifying areas of opportunity, businesses can determine whether their current strategy is viable or if a pivot is necessary.

This can include conducting surveys, analyzing industry reports, and monitoring competitor activity.

🔑 Customer Feedback

Customer feedback is another important factor to consider when deciding whether or not to pivot.

By listening to customer concerns and identifying areas for improvement, businesses can determine whether their current product offering is meeting customer needs or if a pivot is necessary.

This can include conducting focus groups, analyzing customer reviews, and monitoring social media activity.

🔑 Develop a Clear Plan

One of the most important tips for executing a successful pivot is to develop a clear plan.

This should include identifying the areas that need to be changed, setting clear goals and objectives, and defining the steps needed to achieve those goals.

A clear plan can help ensure that everyone involved in the pivot is aligned and working towards the same goals.

🔑 Test Your Assumptions

Another important tip for executing a successful pivot is to test your assumptions.

This involves gathering data and feedback from customers, stakeholders, and employees to validate your assumptions about the new direction.

By testing your assumptions early on, you can identify potential issues and adjust your strategy accordingly.

🔑 Financial Projections

Financial projections are also an important factor to consider when deciding whether or not to pivot.

By analyzing revenue streams and projecting future growth, businesses can determine whether their current strategy is sustainable or if a pivot is necessary.

This can include conducting financial analyses, monitoring cash flow, and projecting future expenses.

➤ MORE: Learn how to properly monetize your business and maximize revenue!

🔑 Communicate with Stakeholders

Communication is key when executing a pivot.

It’s important to keep stakeholders informed about the changes that are happening and why they are necessary.

This includes employees, customers, investors, and partners.

By communicating openly and transparently, you can build trust and ensure that everyone is on board with the new direction.

Tools

There are many tools available that can help businesses implement and execute pivots effectively.

These tools can range from simple templates and frameworks to more sophisticated software solutions.

By leveraging the right tools, businesses can streamline the pivot process, minimize risk, and maximize their chances of success.

Here, we’ll explore some of the most popular and effective tools for business pivots.

By utilizing the right tools and recognizing when a pivot may be necessary, businesses can position themselves for long-term success in an increasingly competitive landscape.

• Strategyzer: This tool provides resources and templates for developing business models, value propositions, and growth strategies.

• Google Analytics: By tracking user behavior on their website, businesses can gain insights into customer needs and preferences that can inform a pivot.

• UserTesting: This service allows businesses to get feedback from real users on their products or website, helping them identify pain points and areas for improvement.

• Pivotal Tracker: This project management tool is designed specifically for agile development teams, allowing them to track progress and prioritize tasks during a pivot.

• HubSpot CRM: By tracking customer interactions across multiple channels, this tool helps businesses better understand customer needs and tailor their offerings accordingly.

• Trello: This project management tool allows businesses to create boards, lists, and cards to organize tasks during a pivot. It also offers team collaboration features to keep everyone on the same page.

• Qualtrics: This survey platform provides businesses with valuable customer feedback that can inform decision-making during a pivot. It also offers advanced analytics tools for data-driven insights.

• MURAL: This digital workspace allows teams to collaborate visually during a pivot, using templates and frameworks to brainstorm ideas and map out strategies.

• Zoom: With remote work becoming more prevalent, this video conferencing tool can facilitate virtual meetings and communication among team members during a pivot.

• Slack: This messaging platform allows teams to stay connected and share information in real-time during a pivot. It also offers integrations with other tools like Trello and Google Drive.

• Asana: Another project management tool, Asana helps teams track progress and manage tasks during a pivot. It also offers automation features to streamline workflows.

In Summary…

Pivoting is an essential strategy for businesses looking to adapt and thrive in a constantly changing market.

By recognizing the signs that a pivot may be necessary, businesses can identify new opportunities for growth and success.

Whether it’s changing their product offering, revenue model, or sales approach, pivots require careful planning and execution to ensure success.

By utilizing the key factors for performing a successful pivot, businesses can position themselves for long-term success in an increasingly competitive landscape.

These key factors include:

• Market research
• Customer feedback
• Financial projections
• Developing a clear plan
• Testing assumptions
• Communicating with stakeholders

In addition, businesses can use the right tools to help them pivot effectively.

Some of these tools include:

• Strategyzer
• Google Analytics
• UserTesting
• Pivotal Tracker

By leveraging these tools and factors, businesses can increase their chances of success and thrive in a constantly evolving market.

By applying the information outlined in this article practically to their business strategy and decision-making process; business owners gain valuable insights into customer needs and preferences that can inform a pivot.

They also learn how to prioritize tasks during a pivot while keeping everyone on the same page using project management tools.

If you need help identifying whether your business could benefit from a pivot or executing one successfully to drive growth; schedule a consultation call with Business Initiative today or use our contact form.

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FAQs - Frequently Asked Questions About

What is a pivot?

A pivot is a strategic change in direction that businesses make to adapt to changing market conditions.

When should a business consider pivoting?

A business should consider pivoting when it's facing declining sales, stagnation, or other signs of trouble.

How can market research inform a pivot?

Market research can help businesses identify new opportunities for growth and success.

What are some important factors to consider when performing a successful pivot?

Important factors for performing a successful pivot include developing a clear plan and testing your assumptions.

What are some tools that can help businesses during a pivot?

Some tools that can help businesses during a pivot include Google Analytics, Slack, and Asana.