Is the much-hyped “pivoting” relevant for your company?

Is the much-hyped “pivoting” relevant for your company?

Is the Much-Hyped "Pivoting" Relevant for your Company?

1. What is "pivoting"?

"Pivoting" is word that is very much "in vogue" at the moment, particularly with challenges like COVID-19. 

However definitions and discussions on pivoting have been out there since 2012 and even earlier.  

One definition came from Inc magazine in 2012:  "Businesses can grow beyond their initial dreams by re-imagining their assets and talents, thinking more broadly about the customer problems they solve, and accessing growth capital to seize the new high ground." 

Some relevant updated thoughts on pivoting come from Steve Blank, Guest writer for Entrepreneur magazine in 2014.  He stated: 

"Many CEOs at our portfolio companies have re-imagined their companies and discovered lucrative pathways. Most asked themselves:

  • What do we do--whether based on talent, technology, or culture--that is distinctly valuable and defensible and might be extended to other customer needs? 
  • How can our customer interactions be made more lasting and valuable?  Are there recurring revenue services and products that can extend beyond the initial sale?"

"A pivot is a fundamental insight of the Lean Startup. It says on day one, all you have in your new venture is a series of untested hypothesis. Therefore you need to get outside of your building and rapidly test all your assumptions. The odds are that one or more of your hypotheses will be wrong. When you discover your error, rather than firing executives and/or creating a crisis, you simply change the hypotheses." 

"A pivot is not just changing the product. A pivot can change any of nine different things in your business model. A pivot may mean you changed your customer segment, your channel, revenue model/pricing, resources, activities, costs, partners, customer acquisition -- lots of other things than just the product.

A pivot is a substantive change to one or more of the 9 business model canvas components." 

Similarly, I have found through many years of consulting that the conduct of fun and effective "short-and-sharp" business workshops using the business model canvas and similar tools can be very helpful for companies wanting to achieve better business outcomes.  These workshops can be fun and insightful.

As Steve Blank notes, " Alexander Osterwalder's business model canvas puts all the complicated strategies of your business in one simple diagram. Each of the nine boxes in the canvas specifies details of your company's strategy. (The business model canvas is one of the three components of the Lean Startup.) "

?Lessons Learned on pivoting:

  • "A pivot is not just when you change the product
  • A pivot is a substantive change to one or more of the nine business model canvas components
  • Almost all startups pivot on some part of their business model after founding
  • Startups focused on just product pivots will limited their strategic choices -- it's like bringing a knife to a gunfight."
  • Pivoting is relevant to other organisations wanting to dramatically improve their bottom line and business outcomes.

2. Is pivoting relevant to your company?

If your company has all the prospects, sales and return customers that it needs -- with the appropriate revenue and profit margins - then perhaps pivoting isn't for you.  (However, I note that putting in place processes for "continual improvement" e.g. of existing processes, can be helpful in any case).

However, if you experience some of the following issues, then some form of pivoting is likely appropriate:

  • Poor pipeline or not enough leads?
  • Poor sales conversions?
  • Not enough brand awareness?
  • Worrried about competition?
  • Problems with operations?
  • Want to scale your business?
  • Technology or reporting issues?
  • Personnel or Human Resources issues?
  • Poor financial performance or visibility?
  • Legal issues or intellectual property issues?
  • Business start-up or re-staring issues?

These are all opportunities for improvement that many companies have experienced at different points in time.

For example, one of my Clients/Mentees pivoted from selling fresh produce to cafes to selling fresh product to individual retail customers.  The unexpectedly advantage included substantially improved cash flow because of the requirement to for retail customers pay up front (vs the cafes paying on terms -- and requiring chasing for payment).

Another Client/Mentee had to pivot during COVID to meet demand of vegan catering that "went through the roof"!  They had to finally document Standard Operating Procedures (SOPs) to get the "info out of the head" of the owner and to share it collaboratively with the rest of the team -- which then allowed scaling and the bringing on of additional resources in a planned manner. (Tip: By using the clever app, Process Street, it makes the development and implementation of Standard Operating Procedures fun and easily maintainable -- truly!  I used to hate documenting these but now it is quite enjoyable!)

procedures

So pivoting doesn't have to be the complete reinventing of your company but can include dramatically improving some of the processes that are "broke" or sub-optimal. Often there are "digital transformation" mini-projects that can be planned and implemented -- projects that can improve the experience of Customers and of Team members.  The common element of such digital transformation mini-projects are that they are ultimately customer-centric and result in demonstrable improved business outcomes.  For more information on this, please see my blog:  ?How to Get Started with Digital Transformation

If you also want to discuss if pivoting is relevant for your organisation, you can book a free consultation call via this link:  Book A Free Call with Ken 

If you want to know more about what goes on in this call, please check out the following link: Ken's services and what to expect on the free call

3. How can one plan and implement pivoting?

One of the most effective ways that I have found for companies and organisations to get a relevant understanding, plans and traction for pivoting is the use of time-effective workshops with all of the relevant team members together.  Tools such as the business canvas (mentioned above) can be very helpful to focus discussion, to leverage the existing information about the business, and to explore and brainstorm in a fun and enjoyable way the areas of the business that can be better understood and leveraged.

team

These workshops can include an agenda such as:

  • Introductions
  • Objectives of the workshop
  • Review of current understanding of the business (via a "desktop" review of the company website, existing documentation, etc)
    • Key partners
    • Key activities
    • Key resources
    • Value proposition (and unique selling proposition)
    • Customer relationships
    • Channels
    • Customer segments
    • Cost structure
    • Revenue streams
  • Takeaways/Agreed actions/Next steps

It is interesting that many of my clients/Mentees initially think that it is overwhelming and "too difficult" to tackle these understandings, but by getting the relevant team together to discuss and brainstorm this -- with facilitation -- I have been told that it can be easy, enjoyable and enlightening!

With this understanding of the business and an action plan to "fill out" gaps in understandings and plans, this then can service as the basis of a "Lean" and "holistic" business plan that can be simply reviewed, e.g. quarterly, to then incorporate new understandings, e.g. of the market and customers.  These new understandings then provide information for decision-making on what actions are indicated for a "change in course" or re-prioritisation of activities.

By building in this planned "continual improvement" process, i.e. What is going well?, What can be improved?, What (if any) are the blockers?, then this mindset helps to ensure that "pivoting" as required and improvement will occur on a continual basis.  It becomes "embedded" in your company's DNA.

For more information on Lean and Holistic business plans, please see my blog: ?Are Business Plans Relevant Any More?

If you also want to discuss if pivoting is relevant for your organisation, you can book a free consultation call via this link:  Book A Free Call with Ken 

If you want to know more about what goes on in this call, please check out the following link: Ken's services and what to expect on the free call

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