Art of the Pivot– Shift in Strategy to Reposition the Business: Mapping a New Path– Course Correction…

A ‘pivot’ in business is a shift in strategic direction… it’s a course correction for mapping a different path forward… The term ‘pivot’ is a metaphor derived from basketball, where a player keep one foot planted firmly, while changing direction with the other foot… in business, a ‘pivot’ keep one foot in the existing strategy, while pivoting the other foot to engage various elements of a revised strategy…

Envision a leader standing firmly with the existing business vision, while pivoting to test– new markets, new products, new services, and even new customers… According to Steve Blank; pivot can be a substantive change to one or more of many different elements in a business model, for example; a pivot can change the– customer segment, channel, revenue model/pricing, resources, activities, costs, partners, customer acquisition… A pivot is a deep breath, critical action to map a different course for the business…

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According to Eric Ries, who introduced the business term ‘pivot’ in his book ‘The Lean Startup’ writes; few companies ever create an original business plan that sustains it for very long… a business, typically, transitions through a continual series of course corrections to stay competitive and/or engage new opportunities… a pivot is making a change in strategy without a change in vision According to Amar Bhide; 93% of all companies that ultimately become successful abandon their original strategy, because the original plan becomes obsolete in a continually changing business environment …

In other words, successful companies don’t succeed because they had the right strategy in the beginning, but because they pivoted and tried other approaches, which were better aligned with the changing competitive environment… A quote from Wayne Gretzky (great hockey player); a good hockey player plays where the puck is, whereas, a great hockey player plays where the puck is going to be…

In the article The Real Pivot by Ben Yoskovitz writes: The term ‘pivot’ has been bastardized to the point where it doesn’t mean much to people anymore… Often, when you hear the word ‘pivot’ you will groan or shrug, knowing there is a good chance that people are using ‘pivot’ as an excuse. So what is a pivot? A pivot is shift in one or more aspects of existing focus based on ‘validated learning’… whereas, if you are changing the entire business that is a ‘do-over’…

A pivot is much more narrow than a ‘do-over’; it starts with learning something new, different… it’s called– ‘validated learning’… presumably you gained insight through ‘learning’, which will tell you– where to pivot and why... but without ‘validated learning’; you are just pivoting blindly…

That is called a ‘lazy pivot’; and it will most likely lead to failure. The ‘lazy pivot’ thought process goes something like this; well since this thing I’m doing isn’t really working and I’m not sure why, but this other thing over there looks really interesting and cool, so I’ll go do that and see if that works... Ugh. Apparently you have not put enough rigorous effort into understanding your existing business, and it certainly doesn’t sound like you have the necessary insights to move to something else…

Hence, you jump from one shiny object to another and repeat your failures… To pivot successfully you need focus and learning: Pivot is a cycle of ideas… it’s a process of testing and deciding whether– ‘to pivot or not’, and a critical question you must ask: Do you really know what the hell you are doing?

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In the article Art of the Pivot: Successfully Shift Business Strategy by Nicole Fallon writes: When a business start going south, business leaders face a critical dilemma: They can stay the course and see if their current strategy just needs a little more time, or recognize that a change in direction is necessary for the business to survive… Shifting gears and finding another strategy to achieve business goals is what James Reinhart calls; Art of the Pivot: It’s about changing course in pursuit of your same original business goal, but with a few course corrections… Pivots aren’t about moving from one business model to the next; they are about evolving a different– service delivery model, or monetization, or growth strategy…

The only way to guide the business through these changes is to continually evaluate, both the internal and external factors affecting the business, and remain flexible enough to adapt to them… A business must be willing to constantly disrupt itself to remain relevant… Hence, be paranoid and don’t tune out the world around you… When it’s time to change, then make a strategy– shift, or pivot… all with the goal of  realigning the business… Quote from Winston Churchill; to ‘improve’ is to change; to be ‘perfect’ is to change often…

In the article Classic Strategies For A Fast, User-Focused Company Reboot by Eric Ries writes: Pivots are a permanent fact of business for any growing business, and even after a company achieves initial success, it must continue to pivot to be sustainable, for example; according to Geoffrey Moore in his book ‘Crossing the Chasm’ he writes; there is a vast ‘chasm’ between the early adopters and the early majority… the challenge for business is to narrow this chasm and ultimately accelerate adoption across every segment…

According to Clayton Christensen; companies fail to pivot when they must… The critical skill for managers today is to match these theories to their present situation so that they apply the right advice at the right time… Modern managers cannot escaped the deluge of recent books calling on them to– adapt, change, reinvent, up-end their existing business… But, many of these same works are long on exhortations and short on specifics… A pivot is not just an exhortation to change; its special kind of structured change designed to test new fundamental hypothesis about, e.g.; product, business model, growth engine… If you take a wrong turn, then you must have the agility to find– another path, another ‘pivot’…

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In the article The Strategic Pivot by Dave Kellogg writes: A ‘complete’ strategy change is not a pivot, it’s a traveling violation: In a complete strategy change you– entirely abandon the old strategy, as opposed to a pivot where you– change direction while leaving one foot in the old strategy and one foot in the new… The pivot metaphor is meaningful because its basic premise is that a business from its very inception will need to pivot multiple times to sustain itself– it’s continual process of adjustments, reinvention…

Then an interesting question become: How you know if the ‘pivot’ worked?  The answer is by evaluating revenues and margins contributed by the– old strategy vs. new ‘pivot’ strategy: If the old strategy is driving all the revenues, margins… this means that the pivot is not working… whereas, if the new strategy is driving the lion’s share of revenues, margins… then the pivot is working… at least for now, until the next pivot…

In the article To Pivot, Not to Pivot by Ashkan Karbasfrooshan writes: Although the concept of pivoting has become more commonplace in many organizations, it’s good to separate the fad from its core concept, such that you can answer the question: To pivot or not to pivot?  A ‘pivot’ works for most organizations, but before you engage the process, consider the following:

  • Pivoting is a Function of Your Employees: As much as I dread quoting Donald Rumsfeld; you go to war with the military you have, not the one you might want or wish to have at a later time… Time is crucial in any company and hiring is a challenge… So initially you must use the people you have as effectively as possible, and improve things as best as possible, and don’t assume that you have to nuke the entire joint…
  • Focus on A Different Target: While the concept of the pivot may refer to a radical and transformative change in a company’s– direction, strategy, focus, product line… it’s important to note that sometimes it’s prudent just to pivot on a single element of the business, rather than the whole business…
  • Timing and Externalities Matter More Than You Think: After 9/11 many companies repositioned themselves to engage new opportunities, e.g.; homeland security, national defense market… and some companies hit the jackpot. This isn’t so much chasing a fad but realizing that the broader macro-economic environment and trends can affect your company, more so than you think… hence stay alert, and be prepared to pivot when new opportunities present themselves…
  • Success Comes From Incremental Gains, Not Hail Mary’s: Apple is the ultimate ‘pivoter’… Most of its revenues come from iPhone and iPad; products that didn’t even exist five years ago, and they were all born from the iPod… Hence, the best pivot for many companies is not a radical overnight change, or 180-degree turn… but the execution of a well-conceived, progressive strategy of; shifts, extensions, adjustments…

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The effect of a ‘pivot’ is shifting the business ‘bet’… it’s a process for changing course when the current direction is not working… According to Harshdeep Rapal; when the ‘going gets tough’; pause, rethink… pivot: The whole concept behind the ‘pivot’ is to enhance the effects of what is working, and minimize the effects of what is not

According to Steven D. Peterson, Peter E. Jaret, and Barbara Findlay Schenck; business must under-go continual change to stay competitive, or to engage new opportunities… it’s remapping the business path forward… Hence, don’t wait until your business is up-ended by change before you refocus; be proactive by annually assessing how well the business is doing, e.g.; products, technology, sales, marketing,  operations, staffing…

And, continually watch for (or, better yet try to anticipate) signs that might indicate that a major business redirection, or even a total reinvention is needed…