Key Takeaways
- Identify Your Strongest Pillar: This pillar acts as the foundation for your pivot, providing stability during the change.
- Use KPIs as Your Early Warning System: Regularly monitor KPIs for your product, market, growth, and revenue. Misalignment might signal a needed pivot.
- Aligning the Pillars Marks Pivot Completion: When all four pillars work together towards a clear goal, the pivot is successful. Ensure your team understands this new direction.
- Be Transparent with Your Team: Honesty about the pivot builds trust and helps everyone adjust.
- Make a Clean Break from the Old Model: Allocate resources and leadership focus towards the new direction.
- Embrace Internal Talent: Promote from within whenever possible to fill vacancies and boost morale during the pivot
Introduction
When we embark on our entrepreneurial journey, we envision building a groundbreaking product or service that reshapes an entire industry. This ambition propels us forward as we lay the groundwork for our businesses.
However, the harsh reality of the business world dictates that even the most meticulously crafted plans have to adapt to the ever-shifting landscape. When assumptions about our business veer off course from reality, it signals the need for a business pivot.
Business Pillars
Every successful business relies on four pivotal pillars:
- Product/Service: What problem does our offering solve, and how?
- Target Market: Who are our ideal customers, and what are their needs?
- Go-to-Market Strategy: How are we reaching our target audience?
- Business Model: How does our company generate revenue?
A business pivot is a necessity when one or more of these pillars show signs of instability. A pivot is a fundamental shift in one or more of our business core pillars. We need to bear in mind that pivoting is not a mark of failure; rather, it highlights our business’s ability to adapt to market needs. Multiple businesses owe their success to timely pivots.
Take Titan, for instance. Initially a supplier for other watch manufacturers from 1984 to 1990, Titan recognised the changing landscape of the Indian economy and seized the opportunity to establish itself as a leading watch brand. 30 years later, its pivot laid the groundwork for its current stature. Even its foray into the jewellery sector serves as an indicator of its adaptability to evolving times.
Another notable example is Intel, which transitioned from a memory manufacturer to a chip manufacturer, a transformation detailed in Andy Groove’s book Only The Paranoid Survive.
Identifying Your Strongest Pillar: The Foundation of Your Pivot
Imagine pushing against a shaky wall. It will be tough to push it if the wall is solid. The same analogy applies to a business pivot. When you are making a strategic shift, you need to identify your strongest pillar – the one that’s performing well and resonating with your customers. This pillar serves as the foundation of your pivot, providing you with stability during the change.
Now in the case of Titan when it made its Pivot in the 90’s, you can see that it stuck with its core product i.e. Watch Manufacturing and pivoted around the other core pillars. Now with time as it improved its strength in the other pillars, it could launch a new product i.e. Jewellery, allowing it to cater to a growing trend.
KPIs: The Early Warning System for Your Pillars
You can’t improve what you don’t measure
Just as we monitor our car’s performance through its dashboard when we drive, our business needs to identify Key Performance Indicators (KPIs) for each of our pillars. Once these KPIs have been identified, they need to be measured and tracked. Ensure that these KPIs are regularly monitored as they help you identify potential misalignments – a clear indicator that a pivot might be necessary.
For instance, if the conversion rate from leads to sales for our product or service is low, it indicates the need for a pivot for our product or service. We can choose to do so by adding new features, simplifying functionality, changing our target customer or changing our business model
Remember, your KPIs should be directly linked to the four pillars of your business and easily measurable. If you find a disconnect or are unable to measure it, it’s time to take a step back to work out your plan from scratch.
When the Pillars Realign: The End of the Pivot (and the Beginning of Something New)
A successful pivot is not some magic trick. Simply put, it is a continuous process of monitoring, adapting, and realigning your four pillars till the goal is not achieved. You know your pivot is complete when all four pillars are functioning in harmony, each contributing to a clear path towards your business growth and success.
During the realignment process ensure that the entire team is on the same page. Your employees should be able to articulate clearly what you’re doing in terms of product, market, growth, and revenue. If they are unable to do so, the pivot isn’t quite over yet.
Executing the Pivot: Leaving the Past Behind, Embracing the Future
Now, you are clear that your business needs to pivot, and you know your strongest pillar. The real challenge at hand is planning and executing the shift. Now at this stage, things will be messy and only transparency and decisive action will allow for successful execution.
Be Upfront with Your Team
Don’t sugarcoat it. State upfront why your current model isn’t working, and why there is a need to move in a new direction. Not everyone might agree, but transparent communication with everyone builds trust, allowing them with the mindset to adjust
Kill the Old Company (Fast)
When a decision to Pivot is made, start to divert resources and team focus without any further delay. Ensure that everyone is clear on the new direction.
Unless required by prior customer commitments, your old model needs to be shut down. Communicate the change to such customers and when support will be halted, explaining the benefits of your pivot. If certain customers choose to leave, let them do so as clinging onto them leads to confusion within the team
The Exodus and the Evolution
When a pivot is underway, it’s natural for some team members to opt to leave due to concerns about the unknown or apprehensions regarding their new roles. It’s fine as this provides you with an opportunity to identify passionate individuals who are excited about the new direction.
When undergoing a pivot, never hire anyone externally for the vacant role but focus on promoting existing employees as this fills vacancies faster, boosts morale, and rewards loyalty. External hiring is highly troublesome during a pivot, so leverage your internal talent pool first.
Conclusion
Remember Pivoting is not easy, but it can be the key to unlocking your business growth to ensure survival in a competitive landscape. Countless success stories have been written successful pivots. Don’t fear the Pivot but face it with the same enthusiasm that kickstarted your entrepreneurial journey.
Reference
This post has been written utilizing the advise provided in this blog post