The article first appeared in Forbes.
To pivot or not to pivot—that is the question.
In today’s hyper-competitive environment, business agility can be very important for capitalizing on new opportunities, adapting to rapid changes and ultimately driving sustainable growth. Every company pivots at some point and navigates uncharted territories, whether it’s a nimble startup or a legacy enterprise attempting to stay relevant. As Kevin O’Leary, a.k.a. Mr. Wonderful, puts it, “The most important skill for an entrepreneur to know is how to pivot.”
What It Means To Pivot
People often associate pivoting with failure. But a well-strategized pivot can be critical for survival and innovation. A pivot represents a strategic shift in a company’s direction to better align with shifting market demands, evolving customer needs or new technological advancements. For established companies, maintaining relevance and leveraging current opportunities is important. A study by Duet Partners found that “startups that pivot once or twice raise 2.5 times more money, have 3.6 times better user growth, and are 52% less likely to scale prematurely than startups that pivot more than two times or not at all.”
While pivoting can lead to significant growth, it is not without risks. One in ten failed startups partially attribute their downfall to a poorly executed pivot. Risks include customer confusion, overburdened staff and the spread of resources, which can be too thin.
Having had the privilege of helping transform several companies—both startups and established enterprises—here are eight takeaways based on my experiences that can help you ensure a successful pivot.
1. Identify the reason for the pivot.
The first step is to understand the specific reason your business needs to pivot. Having led transformation strategies, I’ve learned that while a pivot can be crucial to success, it needs to be done for the right reasons. Companies typically pivot for several reasons, including stagnation, the need to penetrate new markets or the need to become relevant in today’s dynamic market. In my experience, growth-phase companies often pivot to adjust their business model, especially when they’re preparing for fundraising, acquisitions or IPOs. Startups tend to pivot to refine their product-market fit or better meet customer expectations. Establish a clear vision for your company before taking the plunge.
2. Successful pivots start at the top.
I believe CEOs must drive transformation. They need to clearly communicate the vision and rally stakeholders to embrace the change. To drive impactful change or reinvent your company, step back from day-to-day operations and get a 30,000-feet view of the market.
Also, be accountable for the process and results. You should be ready to make strategic changes, take calculated risks and consider large-scale investments in emerging tech, talent and programs to drive growth and innovation. Yes, a pivot is a long-term commitment, not a short-term project.
3. Affirm your conviction.
A successful pivot begins with a careful evaluation of the specific market segment in which the business operates. Start by analyzing emerging trends, new customer behaviors and potential gaps your business could fill. Engage with field sales teams, customers and new target demographics to understand their evolving needs. By assessing your industry’s trajectory, you can identify market opportunities to realign your products, services or value proposition.
In addition to extensive and reliable market research, get insights from trusted industry partners to help validate your vision. It’s important to avoid simply jumping on a trend bandwagon.
4. Position the company right.
Corporate positioning is often a critical market differentiator. It can be the foundation for growth and brand equity, reflecting the essence of the business and its long-term vision. Strong positioning sets the stage for messaging—internal and external.
I like to define a company’s positioning in three to four words. This may sound easy, but it can be the hardest part of the process. It requires a thorough understanding of the business and customer preferences, extensive research and a keen sense of market predictability. Once established, your company’s positioning will likely not change for at least the next five years unless a major milestone (such as an acquisition) necessitates a shift.
5. Develop clear and concise messaging.
Once positioning is solidified, design the core message to encapsulate what the company stands for—preferably within 10 words. Next, identify the top two or three target audiences and develop messaging that will resonate with them.
For example, let’s say your three tiers are influencers or C-suits, budget owners or VPs and users. The messaging for the C-suite could focus on the business impact of your product or service; the budget owners would need clarity on the ROI, and the users will want to know how it’ll benefit them.
Finally, craft a one-page messaging platform so everyone can speak in one voice. I also advise you not to overcomplicate messaging, as this can cause it to lose traction.
6. Empower a cross-functional task force.
While the process starts with the CEO and the leadership team, identifying cross-departmental champions is important. This group should include champions from sales and customer success to HR and finance—employees who can drive momentum across the organization.
Mobilize the team by educating them on message roll-out and providing regular coaching on the change management framework to help accelerate the transformation. In addition, consider engaging with external industry partners and select customers who can amplify your message to a broader audience.
7. Plan regular check-ins.
Schedule recurring meetings to monitor progress, identify areas needing improvement and foster collaboration. Key objectives of this group could include tracking milestones, addressing roadblocks and ensuring alignment with the overall vision. I’ve also found that regular check-ins can enhance transparency, decision making and accountability—essential factors for driving sustainable growth.
8. Finally, stay the course.
Transformation is a continuous process and needs to closely align with your company’s vision. It should remain an integral part of your operations plan rather than being treated as a short-term project. Also, if you work with an external consulting team to develop your pivot strategy, avoid disengaging them too early; handing execution over to internal teams without proper oversight can be a costly mistake if those teams lack the expertise needed to successfully execute a pivot. The external team will typically also help ensure seamless implementation, provide consistent oversight and track progress and adjust strategies as needed to achieve results.
Restructuring an organization, changing culture and entering new markets are hard tasks. According to Harvard Business Review, only 22% of companies in their sample successfully transformed themselves. So, trust the vision, empower your team and remember that transforming an organization is a marathon, not a sprint.
Parna Sarkar-Basu is the founder of B&B Consulting and writes about entrepreneurship, transformation, innovation & tech for good.