Pivoting quickly is key to helping your business survive a downturn. Though most business leaders know they need to pivot, few know where to begin, and many are worried about the repercussions of taking such drastic measures.
It’s risky, but it also has the potential to elevate your business in ways that following predictable strategies can’t. There are tons of examples of this ranging from Priceline’s comeback from almost being removed from Nasdaq due to poor financial performance to earning over two billion dollars a couple of years later after pivoting into international markets to YouTube’s shift from a video-based dating app to a streaming platform.
To be successful, you need to choose the right idea at the right time and be prepared to execute quickly and effectively. Here are the four steps you need to take to pivot.
1) Stay Close to Your Vision
In a study of fast-growth companies, one thing they all have in common is purpose-driven leadership. This shocked the researchers who expected standard competitive advantages such as innovation, being the first to enter a new market, and other factors to drive growth. While those factors played a considerable role in their success, companies’ purposes enabled them to differentiate themselves from competitors by reshaping the playing field and offer a unique value proposition.
If you haven’t already, spend time honing your business’s vision and reflecting on how it should drive your day-to-day decisions.
Staying close to your vision enables you to pivot quickly by giving you a clear framework for the opportunities and sacrifices you’re willing to pursue, especially when you encounter severe challenges.
2) Build a Team of People Who Can Act Quickly
It’s nearly impossible to pivot quickly without team buy-in. To immediately jump on opportunities, you need to have a team in place that’s willing and prepared to pursue new ideas on short notice.
For best results, your pivot team should be one to two members from every department that may need to be involved. This typically includes marketing, product development, and operations but may consist of people from other departments depending on the types of pivots you plan to pursue. The goal is to create a talented team that is always looking for new opportunities and capable of leading implementation.
Keep in mind that the people who are best prepared to help you pivot fast may not be your managers. Though you should get their input and keep them informed, you should often lean heavily on their top performers since they have the strongest technical capabilities and can be the best judge of how much time and resources are required.
Once your team is assembled, create a method for people to share their ideas. If you plan to pivot frequently, it may be easiest to have a standing meeting once or twice a month to brainstorm options. However, if you just want to make changes when great opportunities arise, you can use email or chat until someone has an idea that’s worth discussing.
3) Choose and Monitor Your Sources of Truth
For most business leaders, the hardest part of pivoting is figuring out what ideas to pursue. If you choose the wrong one and/or the wrong time, you risk wasting resources and damaging your reputation among the audience that the change affected.
To make strong decisions, you need to think like a futurist so you can latch onto new trends as soon as they start to emerge.
One of the fundamentals of futures thinking is constantly observing your market so you can identify shifts as soon as they emerge. To do this, you need to identify a few internal and external sources of truth that provide representation for your market.
Some of the internal data sources you should watch for trends include:
- Changes to purchasing behaviors - pay close attention when your customers start buying different categories and quantities of your offerings
- Sales requests - track the new features and accommodations that prospects/customers are asking for.
- Customer and employee surveys - Ask people who are already familiar with your market what they’d like to see you do differently both from a brand perspective and internally.
Changes among your core stakeholders reveal short-term opportunities to pivot since the data reflects changes that people already want.
To plan long-term pivots, you need to rely on external sources that predict changes to your market, including both product and operational factors. Choose reliable outlets, including:
- Industry reports
- Tradeshows and other sources of information about the latest innovations in your area.
- Economic indicators
You should leverage any reliable data you can find that reveals changes in employee, buyer, and market behavior.
4) Set Milestones and Fail Fast
Pivoting is always a risk. Whether you’re releasing a new product or rolling out more efficient internal processes, there’s still a chance that you’ll pursue the wrong idea or mess up the implementation.
If a pivot strategy is going to fail, you want to find out as soon as possible.
To fail fast, you need to set success milestones at the start of your projects. If your team doesn’t meet the short-term goals, reevaluate if it’s worth moving forward.
The length of time that you let pass before achieving a milestone depends on the project and the amount of resources you’re able to put towards it. Projects like releasing a new product may take a few months to make meaningful progress while you may be able to test internal initiatives on a small group of employees in a week or two.
Closely monitor the results of your projects and if one makes positive progress, run with it since it has the potential to boost your business trajectory.
Set your business up for success post-crisis with our recession planning guide. This interactive worksheet will help you develop an actionable plan to thrive during a recession.
About the Author: Emily leads Prialto's content production and distribution team with a special passion for helping people realize success. Her work and collaborations have appeared in Entrepreneur, Inc. and the Observer among others.