To pivot or not to pivot?
“To be, or not to be: that is the question: Whether ’tis nobler in the mind to suffer. The slings and arrows of outrageous fortune. Or to take arms against a sea of troubles and by opposing end them?”
These seem apt words in these times. As a business do we suffer through these times or do we take arms against them and see to end them? In other words, do we pivot or do we try and ride things out?
The first way to answer this question is whether you are looking to temporarily pivot – move to providing business advice and guidance online instead of face to face, for example, or to make a more disruptive change to the business for the long term.
Let’s address this then. Each and every individual industry is affected by external forces in different ways and at different times and as such deciding whether a pivot is temporary or not will need to be considered on an industry by industry basis. Many restaurants are temporarily pivoting to become take ways however its highly likely that once the current crisis is over they will revert back to their old traditional ways. This is simply because the customer needs have temporarily changed and will inevitably change back when the crisis is over.
Tip 1 – don’t be reactive. Look at the long term.
The second way is to understand what the forces for change are. All businesses operate in a very volatile, uncertain, ambiguous and changing world – we have witnessed that not only with the current crisis but also with the effects of Brexit discussions, economic recessions etc etc. As a business do we understand the external forces behind the necessity for change? Where are they coming from? The last thing we want to do is pivot the business towards another threat. We can review these forces by simply looking at a PESTLE model – political, economic, Social, Technological, Legal and Environmental. What is going on or what could go on in each of these areas that could affect your business?
The last external force to consider is that of competitors. The industries we are all in are dynamic. Competitors come and go. Each time potentially offering a new threat to your business. Add to that the potential threat of substitution – i.e. the need for your product or service being substituted by newer products or services. Before you potentially pivot look out for competitor movements and the threat of substitutes.
Tip 2 – understand the external forces for change.
The next way to look at this is to review your business model. Put simply:
- What do you sell?
- To who do you sell it?
- How do your products / services create value for your customers?
- How do you make money from your product / service?
Once you have answered these four fundamental questions we can then try and identify the root of the problem. Have your customers needs changed so your products or services no longer create value for them? Have your customers changed so maybe you are targeting the wrong customers now? Does the way that you are charging for your products / services need updating based on conditions outside of your control?
By understanding this you can create a platform for a potential pivot. Change the part of the model that’s not working without making fundamental changes to the whole of the business.
Tip 3 – understand where the problems lie internally.
So, what can we do if we have decided to pivot? Our simple solution is to experiment and test. Pay attention to the needs of your customers and run potential changes past them. There are lots and lots of ways testing potential pivots, all of which will provide vital information in assessing whether you are pivoting in the right direction.
If you would like to know more about pivoting and testing then do please get in touch.