CEO Today Magazine April 2020 Edition

17 PIVOTING A BUSINESS: A POINT OF VIEW www.ceotodaymagazine.com execution must align very quickly behind the new value proposition of the product. A good pivot also has some secondary levers such as human capital (getting the right skills and people) and finance (an appropriate level of capitalisation and funding). Alignment of the secondary levers is critical to make sure a pivot can succeed. Leading practices for successful pivots: 1. Capitalise: Planning for the pivot without having adequate funding and capitalisation is futile. A shift in direction entails a shift in work, processes, roles, KPIs, people and assets; all requiring financial resources that are prioritised, allocated and sequenced. Without enough funding, a pivot is likely to end up being incomplete or unsuccessful. 2. Focus on solving the problem: Do not build a problem around the product, analyze the problem to be solved and then build the right product with the right features. A pivot is successful only when focused on “what you solve” not “what you sell”. 3. Understand specificity and magnitude of change: Change efforts must be very specific and sized in the plan with well-defined success criteria, measures and expectations. What is changing cannot be fluffy—don’t just say that you are changing, get down to what specifically is changing and where (sales processes, technology, reporting lines, pricing, etc.). 4. Test quickly: Adopt a “fail fast, fail well, fail cheap” strategy and create some test runs with customers and partners; they maximise the organisation’s chances of success. 5. Execute the pivot holistically: Most pivots fail because organisations fail to consider all of its dimensions (Commercial, Financial, Operational, Technical and Talent), not weaving them into a cohesive plan. Partly undertaken pivots rarely succeed. There are also times when you should not pivot - a lot of companies pivot for the sake of it and prematurely adopt a trajectory that is very deviant from reality. Sudden, unplanned and gut-feel based decisions can result in failure, losing customers and burning cash at a faster rate to a point of no return. Premature and unplanned pivots don’t always result in scale and could elongate the path to profitability. My counsel is to always evaluate the need, look at all the anchors, align the right anchors and pull the right levers in a well-informed manner. “A pivot might be rooted in the new understanding and focused on unlocking opportunities that were previously not visible.” “Sudden, unplanned and gut-feel based decisions can result in failure, losing customers and burning cash at a faster rate to a point of no return.”

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