The Power of the Pivot
In today's business environment, large companies could stand to learn from startups' willingness to change direction. But how can it be implemented effectively?
Artjom Jekimtsev, CEO & Founder of Adverttu, offers CEO Today his advice for companies looking to make a successful pivot.
Pivoting is back on the business agenda as lockdowns sweep across the world once again. The startup community loves nothing more than a good pivot. However, nowadays this hunger for rapid strategic change applies to businesses of every size. Many leaders are finding their hands forced by COVID-19. It’s little surprise, then, that pivoting is at the top of board meeting agendas.
It must be emphasised that considerably changing your business’s direction at short notice while delivering sustainable growth is a fine art and not something that should be taken lightly. Pivoting is never a snap judgement or something you decide on a whim, but rather a carefully assessed, strategic decision that happens at pace. Successful pivots involve lightning-fast market analysis, an informed resetting of company values, reallocation of team roles and responsibilities, and clear communication of personal objectives.
These must all work in harmony, otherwise your pivot will fall off its hinge in a heartbeat.
When, Not How
Your first move should be recognising the right time to pivot – too soon and you could miss out on latent revenue that was bubbling under the surface of a directional change; too late and the consequences can be more severe. Accept that there’s no perfect time, but everyone in the company should share the new vision going forward at the same time. Too much friction and you’re destined for trouble.
It must be emphasised that considerably changing your business’s direction at short notice while delivering sustainable growth is a fine art and not something that should be taken lightly.
Next comes people. If your business model dramatically changes overnight, you need to reassess everyone’s strengths, uncover new talent, redefine workflows and systems, and communicate clearly what’s expected moving forward. If you are changing the market you are in, your superstar salesperson may find themselves adrift, yet be ideal for a customer facing role that’s focused on upselling or client management.
It’s vital to lead transparently throughout the change process and accept that people need time to find their feet. After all, you are changing what they signed up for. This will unsettle many if the reasons are poorly communicated or if you adopt a dismissive approach to management.
Every pivot isn’t created equal. Sometimes you shift sector, radically redefining your business model and changing your business’s DNA on a fundamental level. One famous example is Slack, whose founders came up with the idea for the messaging platform when developing a video game. Another is Groupon, which emerged from a social platform to help charitable causes.
On other occasions, pivots manifest as targeted, temporary changes to adapt to sudden changes in the marketplace or a scrappy response to events outside of your control, like restaurant booking service OpenTable’s grocery offering to help people during the pandemic.
Even the most assured, seasoned CEOs have had their skills, experience and intuition tested this year. The world is still changing dramatically day by day and surefire sectors that were once the epitome of stability have been uprooted, disrupted and had their longevity questioned. The longer the pandemic continues, the more acute these pressures will become.
If your decision to pivot falls into this second criteria – a temporary change to calm choppy waters, like when commercial airlines started to run cargo-only flights – then it’s crucial that you build a clear pivot exit path into your strategy.
- When would you reasonably expect to revert back to your original business plan?
- What metrics, if hit, could justify your business sticking to its new path?
- How often should you assess whether extra significant changes are needed?
- Which successful initiatives are worth retaining?
- Do people need incentivising to hit immediate, short-term goals?
- How do you motivate employees through everything?
Your answers will help define your reasoning and vision, which when continually communicated to your team, ensures smoother change overall, better performance and a business ready to capitalise on exciting new opportunities.
The sudden emergence of a second lockdown demonstrates just how agile business leaders need to be in today’s world. Pivoting is a powerful tool in any CEO’s disposal, you just need to be certain when to take it out of the toolbox.