This is part 2 of pivoting your business in view of the COVID-19 crisis.

This post describes some legendary pivots and the strategies that can make your pivot a success. Here is post 1 — Pivoting Success Factors.

These are some famous and successful pivots:

  • Wrigley did not always sell gum. William Wrigley Jr. stumbled on gum’s value while giving it away for free. He gave away chewing gum with purchases of his soap and baking soda. Gum proved more popular than his actual product. He then produced his own chewing gum brands.
  • Avon products are sold by beauty reps. Its founder originally sold books and realized that his female customers preferred the free perfume that came with the books.
  • Suzuki renowned for high-performance motorcycles and sports vehicles was known in the early 20th century as the inventor and purveyor of weaving loom machines powering Japan’s silk industry.
  • Western Union was the telegram service (200 million telegrams worldwide at its 1929 peak). The phone and internet killed its business, so the company pivoted to several diverse interests, most notable — its money transfer service.

Some more recent pivots include:

  • Slack – Glitch, a multi-player online game.
  • Shopify – online storefront for snowboard business called
  • Flickr – pivoted from an online role-playing game platform to photo-sharing platform.

Inspired yet?

When considering a pivot, you can’t fear change. A pivot might be just what you need to survive and eventually grow your business to higher levels.

Here is how to pivot strategically and grow your business:

  1. Broadly share your new direction with your team, partners, suppliers, vendors, customers, etc. This prevents surprising and confusing consumers looking for your original product or service. Be especially considerate of your early adopters whose passion about your previous offering drove your original success. To gain trust, you might guide them to competitive products or services offering the same features and benefits. Keep in mind, they might come back for future offers that are more relevant to them. EOS calls this strategy Shared by All™ (SBA) and it means consistently sharing pivoting updates openly and honestly. This assures everyone is rowing in the same direction. Being aimless and closed about pivots with your team is a formula for pivoting failure.
  2. Align your team with right people who are engaged, enthused, and energized about the pivot. This can mean changing your vision. If team members are not aligned with this pivot, it may be better for both to make a change with a new person. It is essential to appropriately onboard people to keep them focused on your pivot as well as how leadership is taking steps to achieve this vision and a smooth transition. This is about getting Right People in Right Seats, originally coined by Jim Collins in Good to Great and now one tool in the EOS People component. Essentially, it means getting people who consistently exhibit your values (Right People) in seats or jobs in which the get it, want it, and can execute their roles (Right Seats).
  3. Match your resources and expenditures to your pivot — metrics are essential here. Your new pivot could thrive at first, but that doesn’t mean ongoing success. PayPal has experienced multiple pivots. It began as a service that enabled personal digital assistants (PDA) to send payments to other PDAs. After many pivots, it is now an online payments business. Besides revenue and profit (lagging numbers), track numbers like customer acquisition rate and sources, customer retention rates and customer referral rates. These measurables will help you focus on what numbers drive results, and in discovering additional processes to realize your new vision. The EOS Scorecard™ is perfect for tracking numbers (5-15 and less is more) that give you an absolute pulse on your business.
  4. Address real challenge and genuine need — your current customers’ input will shape your pivot and convert your solution into something that addresses a real challenge and genuine need. This is a typical issue for many companies considering pivoting. They create a product they feel customers will want, but it doesn’t really solve a need. You might also learn that your product solves a customers’ needs, but then your customers’ needs evolve. You may not have to change your product, so you might pivot to solve a different, more pressing problem. Listen to your customers and discover how they use your product, what it might be missing, what new or additional features they want. Customers could be using your product in new ways that you never considered. That could be make for a successful pivot.
  5. Change your marketIf your product won’t sell, maybe you’re selling it to the wrong market segment. Maybe your product isn’t right for smaller customers, but it’s the perfect solution for corporations who have more use for it and more money. So, you don’t have to change your product; you simply change who you market it to. You may recall Eloqua, a product that started as a financial services’ chat and messaging application for financial services, real estate and insurance. It never took off with those industries. It pivoted their market segment to companies who were looking for a simple and easy way to generate more leads. Oracle bought Eloqua for $871 billion. Without really changing their product, they found a new customer segment needing its product.
  6. Convert your product into a service — sometimes when entrepreneurs create a product, it can be too difficult to sell to the consumer and demonstrate how to solve their problem. Maybe your product could succeed as a service. When you help customers by investing in support and education, you might want to consider delivering a service instead. Likewise, your service might need to be converted into a product to scale your business.

 

Sometimes, pivots happen often for companies as customers’ needs change or the company discovers new opportunities for their business.

 

Be aware that while pivoting can be the smartest and maybe only option, it is filled with risks. When it comes to planning for success, the more you prepare, the less you need to waste time and other precious resources.

 

Making decisions without thought breeds disaster, so before pivoting your company in a new direction, be sure to prepare. The EOS Vision Traction Organizer (VTO) is a powerful and simple tool for envisioning and planning a successful pivot.

 

Many thanks for the contributions made by the following:

Jason Nazar

Steve Glaveski

Jeff Desjardins

NJ Falk

Syed Balkhi

Founder Institute

Miles Jennings

Jennifer Spencer

Forbes Coaches Council

Forbes Coaches Council