Considering the COVID-19 crisis, it might be time to pivot your business. Survival and future growth might hinge on that decision.

This is part 1 of two-part blog series on legendary pivots, factors affecting pivots, and strategies for successful pivoting. Part 2 on pivot successful strategies covered here.

What’s A Pivot?

 A pivot is making a fundamental change to your business after determining your product or service is not meeting the needs of your target market. This is especially relevant considering this unprecedented pandemic.

We are seeing some successful pivots:

While many companies have pivoted and experienced huge success, some leaders believe that pivoting is a magic pill for any problem. It’s critical to realize that pivoting should only be considered when necessary and can deliver a competitive advantage the current organization can’t currently deliver.

Check out these successful pivots:

  • Starbucks was selling espresso makers and coffee beans in 1971 as the first venture for Starbucks’ founder Howard Schultz back. That was long before it sold coffee on almost every street corner.
  • Hewlett-Packard shifted focus since launching as an engineering company in 1947. It created electrical testing products, including audio and signal generators. In 1968, it introduced the first large-scale personal computer.
  • Nintendo innovated and inspired an era of mass-produced video games, such as Super Mario and Donkey Kong. The company existed several centuries before, and dabbled in playing cards, vacuum cleaners, instant rice and a taxi company.
  • Big Blue was the personal computing giant until cheaper ‘IBM compatible’ models arrived. Boldly, IBM pivoted to consulting services for large organizations.
  • Honda hoped its Supercub motorcycle would compete with Harley. They were wrong as its design and comfort weren’t appealing and dealers made more money on Harleys. Honda found customers riding its bikes unconventionally — off-road. It began selling bikes through sporting goods retailers. The dirt biking phenomenon began.
  • Play-Doh was a post-depression wall cleaner, designed to clean residue that black coal heaters left on walls. Oil and gas heaters took off and Play-Doh’s sales dropped off. The company pivoted when the company learned that a relative was using the product in her arts and crafts classes.
  • Here are some recent successful pivots by famous brands and their original offerings:
    • YouTube – was originally a dating service.
    • Groupon – originally was a social platform for rally for social and charitable causes.
    • Yelp – was an automated system to ask friends for direction recommendations.

Pivoting Success Factors

When ready to pivot, you must consider the numerous factors that make pivoting a success. This advice can help reduce the risks of pivoting and improve chances of success:

  1. Pivot as soon as possible — most companies pivot more than once, so don’t give up on a new direction if you think you may have to change paths often to get on track. And you might have to pivot twice or even multiple times. You will benefit from pivoting as early as possible as this can help avoid wasting precious time, energy, and money on wrong pivots.
  2. Identify new goals that meet your vision — entrepreneurship is hard, and it demands that you be cautiously optimistic and brutally honest with yourself because starting, especially pivoting, and managing a company is a long-term proposition (See Stockdale Paradise). When your path doesn’t feel right, you will benefit from pausing to re-assess your vision because you might find that you need to invest more time, energy and money to assure your pivot is the right one for you. The Vision Traction Organizer™ is a simple and powerful tool for helping refine or recreate a vision. This tool is from the Entrepreneurial Operating System (EOS)
  3. Preserve the work you have done so far — some pivots do not always mean a serious change of course. It’s valuable to know what parts of your company can be saved, preserved, and deployed again when you’ve determined your pivot. Think about how much you have already invested in processes, structure and teams as well as the time, energy and money on creating and building a healthy business. You could easily redirect your existing resources and talents to accomplish your new vision and goals.
  4. Pay careful attention to your customers – their input should indicate whether you should pivot or not. Their bad (and good) feedback should be expected, but if you’re constantly getting criticisms like “costs too much,” “limited features,” “too difficult to buy,” “there are similar better products” or any other meaningful and consistent feedback, you are probably ready to pivot.
  5. Be clear and confident that your pivot means real growth opportunities — pivoting is a smart decision for a company that is hitting obstacles, stalling or even failing. But when you pivot recklessly without well-conceived goals and strategy it’s highly likely that you will face other obstacles with different circumstances and challenges. Make sure that you not only consider pivoting from your original path, but also consider the opportunities for expansion with your new direction. If the market is smaller, the customer base isn’t diverse or the market is too competitive, it’s not worth risking a pivot.

This unprecedented crisis for your business actually might be a catalyst for a successful pivot.

You should act fast on pivoting but give it careful consideration and prepare and plan thoroughly to achieve success.

Special thanks to ideas and insights for this post to the following:

Jason Nazar, Steve Glaveski, Jeff Desjardins, NJ Falk,Syed Balkhi,Founder Institute,Miles Jennings, Jennifer Spencer, Chuck Cohn, Forbes Coaches Council