Is it Time to Pivot?

Maybe, maybe not.

Is it time to consider a pivot? Absolutely.

Markets shift — sometimes gradually, sometimes dramatically. Seismic changes in economic conditions, customer demand, and sentiment create both pressure and opportunity. Some effects may be short-term, while others reshape the landscape for good.

Much is uncertain, but one thing is clear. Waiting for circumstances to “return to normal” is a squandered opportunity.

Now is the perfect time to consider a strategic pivot for two reasons:

• An opportunity to explore. What better time to explore possibilities when so much of what we know to be true is open for discussion, and everyone is searching for a path forward!
• Sense of control. Just the process of exploring what options might be available helps you regain some power and focus on what you can control.

Pivot is a term most used with startups, but what I mean by a pivot is “a significant shift to your business model without a change in your mission or purpose.” This would include changes to the target customer, channel, product/service offering, value proposition, revenue streams, and cost structure.

So is it time to pivot? The grass often looks greener on the other side of a crisis. But pivoting is complex, and the grass isn't always greener.

Still, it's smart to take a fresh look at your industry, your strategy, and your business model. At best, you might identify the need to pivot while everyone else is waiting for things to “return to normal.” At worst, the simple process of exploration can lead to ideas and opportunities that strengthen your existing strategy.

There are many factors you'll weigh in evaluating a pivot, but below are three factors I'd like to highlight for your consideration.

Get Closer to Target Customers

First and foremost, use this opportunity to get even closer to your target customer. It's tempting to think the answer to all of our revenue or profitability problems is to find more customers. New customers are great, but the cost of new customer acquisition is rarely understood. We vastly underestimate the cost, time, and complexity of acquiring new customers even under normal conditions.

Connect with your target customer to understand how the current market conditions are affecting them and how they are responding. How do they see the future landscape, and how will they be planning? What are their new objectives and goals? Uncover:

• Pains: What is causing your customer pain as it relates to the jobs they are trying to do or the goals they are trying to achieve?
• Gains: What outcomes or benefits are your customers expecting as it relates to the jobs they are doing or the goals they are trying to achieve?

The objective is to get aligned with your target customers' new expectations and needs to understand how you can best serve them now and in the future.

Are You Still Creating Meaningful Value?

Once you understand your target customers' new needs, expectations, and challenges, you can evaluate the strength of your value proposition. Evaluate how well your value proposition is a:

• Pain Reliever: How exactly does your product/service alleviate these specific customer pains? Focus on the essential pains and not the nice to have.
• Gain Creator: How exactly does your product/service create functional utility, social gains, positive emotions, or cost savings?

Make these assessments internally, but then find out from your target customers how well your value proposition addresses their new pains/gains.

Your customers' evaluation is the only one that matters.

Great Read
Value Proposition Design: How to Create Products and Services Customers Want by Alex Osterwalder

Discover Possibilities by Challenging Assumptions

Challenging assumptions and deeply-held beliefs about your business or industry will unearth innovative ideas. It's why disruption so often comes from outside the industry. Market disruption challenges our norms and forces us to be more open-minded and innovative.

So let's challenge some assumptions! Here are a few questions you can ask in challenging your strategic assumptions. (Be sure to check out my Challenging Assumptions guide.)

• What are the generic business “tests” that a new concept, product, or business idea must pass to move forward in the organization? What are the assumptions underlying those requirements?
• What are our limiting beliefs? What are the things we believe are not possible? What do we believe we cannot or are unwilling to do?
• Create a stakeholder list. Who are the stakeholders in the business, and what are the assumptions we make about their behaviors and needs?
• Look at the latest SWOT analysis. What are the assumptions behind what you consider to be internal strengths and weaknesses and external threats and opportunities?

Tip: Ask these questions with a team of diverse middle managers. Often the executive team can become too vested in the strategic assumptions. Middle management might be more open to the challenge, and they bring the added perspective that comes from being closer to the customer and market realities.

A pivot isn't something to take lightly. It's disruptive, painful, and you never want it to be the result of a panicked overreaction. It's easy to think everything will change forever when markets are in turmoil.

We have historical examples that can inform our future. Certain things change forever, but in the end, humans stay human. Our memories are rather short.

That said, we shouldn't wait for a crisis or other life-altering occurrence to take a hard look at our strategy and ask ourselves, “is it time to pivot?”

The answer is usually “no,” but as a result of the evaluation process, we emerge stronger.

Please share your thoughts with me on this, and if you've found this helpful, share it with a colleague. Thanks!

Work well,

Adriana McLane

I help privately held distributors build strategy that holds up through growth, leadership transition, and what comes next. Fifteen years running Fulfilling Strategy — the last six spent deep inside distribution, working alongside the leadership of privately held distribution companies to build strategy that holds when a competitor moves in on your territory, when a President steps back, and when the next generation takes the lead. More about Adriana →