What exactly is a business pivot, and why is it so important?
A business pivot occurs when a business modifies its current direction, while still leveraging what it has built to the extent possible. This minimizes any squandering and is particularly useful when conditions change, or the market is lukewarm to your offering.
Some famous pivots of recognizable brands include:
YouTube: It began as a video dating site and, upon near failure, morphed into a video uploading platform for less-technical users.
Twitter: It started as Odeo, a podcasting network, but redefined itself as a micro-blogging platform when iTunes entered and dominated the podcast market.
Avon: Founder David McConnell was a traveling book salesman who realized that his female customers were most interested in the free samples of perfume given to them after a book sale. He kept the business’s door-to-door focus but pivoted from books to cosmetics.
Pivots are an essential maneuver when a market is in flux or on the decline. With that in mind, I surveyed 20 senior managers across industries to explore their pivots during COVID-19.
I asked two questions to characterize the magnitude of potential change: On a scale of one to 10, low to high, what degree of change do they anticipate for their business post-pandemic, and also, if their business were typified by a car, what type would it be, pre- and post-pandemic?
I heard the following:
— The change index: Managers rate the degree of expected post-pandemic change at 6.5, suggesting the business will be fairly different, though with some things held constant.
— The car metaphor: Cars that typified a business pre-pandemic were usually high quality and expensive, such as a Lexus, Audi or even Maserati. The vehicles identified for the post-pandemic era were efficient, able to go off-road smoothly, and embodied value and reliability. Examples offered included Tesla, Subaru and a hybrid SUV.
Two types of pivots were described: those that were ordinary, to-be-expected, and course-changing moves. The ordinary pivots included:
— Making the business more virtual: Safety considerations, smaller budgets and restricted travel made this a common refrain — from sales and training to operations and logistics. In the process, platforms and analytics are being upgraded to manage the change.
— Identifying new business partners: Supply chains, manufacturing and operations are getting a fresh look and, in some cases, being recreated with partners that exemplify reliability and preparedness.
— Calling on new customer channels: Different calling points have resulted. An artist teaching in a community setting has pivoted to a B2B model. One of her first customers was a social media giant who retained her services as part of their wellness plan. She discovered that “I love B2B! In many ways, it is easier and more satisfying.”
MORE DRAMATIC PIVOTS
There were some “game-changing” pivots, designed for long-term survival.
— A business that sold identity biometrics to hospitals needed to reboot since they were considered a “non-essential” service during the pandemic. They have turned their attention to a sanitation device in their portfolio, which has garnered significant interest and will eventually serve their other products well.
— A business that makes non-invasive patient monitoring technologies will be working with customers to manage patients remotely using predictive analytics. They envision partnering with customers in a whole new way.
— A funfest business of painting while sipping has gone virtual, added children’s programs to their mix, and is now preparing to trial a monthly subscription. Their multiple small pivots have repositioned the company for the times.
— A clinical trial software company will use the current flux to create a new technology that promotes dynamic trial design. Says the founder, “We need to be nimble and help our clients be nimble to meet unexpected challenges.” In his world, this pivot represents opportunity for all.
Pivots are everywhere because, as one respondent summed it up, “We can’t save our way to greatness.” Instead, managers are following a different section of the playbook, one that stresses agility and creativity.
These surveyed managers all embrace change and mostly feel optimistic about their future. When asked to rate their confidence that their business will thrive on the same 1-to-10 scale, their response averaged 8.5 — not slam-dunk territory but hopeful.
One final observation: Pivots do not need to be as large as that of YouTube, Twitter or Avon. Small moves count too. Going back to the car analogy, one manager explained, “We will embody domestic manufacturing — old school but with American ingenuity. Constant, nimble, and reliable, like for Ford Escape.”
In the era of COVID-19, pivots are often a business’s best dance step. Consider asking yourself, what car can you imagine your business becoming?