You will be pivoting your business in your lifetime, whether you are a new startup, or a mature company like Motorola or IBM. Plan for it, or you wait for the next survival crisis brought your way by this rapidly changing world. You can even give it a more elegant name, like “market-focused reinvention,” but it will not be graceful, if you do not take the lead.
“Pivoting” is changing a fundamental part of your business model. It happens on the front end for startups to get traction, and then later for every company as the economy, competition, and culture changes. The pivot can be as simple as changing the pricing model, or as complex as moving from a product business to a services business.
It is more effective and less painful to do it as a planned process. A recent book “Resurgence: The Four Stages of Market-Focused Reinvention,” by Gregory S. Carpenter, Gary F. Gebhardt, and John F. Sherry, Jr., outlines the required steps below:
- Recognize the need for change. This is often the most difficult step. Resurgence begins when entrepreneurs and top executives stop trusting only themselves, and build a coalition with customers to see what is and is not working.
- Reinvent the vision for change. Real change demands new goals based on new market realities. That means market-focused, rather than marketing-focused. For startups, it means adjusting your new dream to reality; for mature companies it means becoming the new reality.
- Formalize change through structure and rewards. Symbols of the new market coalition have to permeate every communication, formal process documentation, and the reward system for everyone. Formalizing change involves distributing authority, to make important decisions to the team members most able to add direct customer value.
- Team, market, and cultural maintenance. Entrepreneurs and team members are quick to forget why change was needed at all. The antidote is to establish ongoing processes for staying connected with the market, like social media, customer visits, and focus groups. Then, successful startups and resurgent firms can avoid the next crisis.
There are no shortcuts to becoming market-focused, The change takes time, effort, and commitment. The benefits are worth it. The gains are both personal and financial. They can make your startup an inspiring place to work. They can help your team see their role in achieving something substantial, good, and fun.
If you are certain that your startup or enterprise is already market-focused, then look for the warning signs, that signal a need for change. Here are a five of the key signs:
- Financial results plateau or show a growth slowdown.
- You struggle to meet industry growth projections.
- Competitors are surpassing your own results.
- Your market segment has lost its luster.
- The excitement of leading is gone.
Author Eric Ries of “The Lean Startup first made the term “pivot,” as part of the business vernacular for entrepreneurs. He was not focused on the challenges of larger companies to re-invent themselves on a regular basis, to maintain their synchronization with the market. To me, pivot is a more natural and less intimidating term than business reinvention.
For all businesses, the art of the pivot is all about changing course, of the original business goal. You can incorporate this capability into your business processes from the very beginning. The change can indeed be a graceful and fulfilling part of the business journey, rather than a near-death experience.
Image credit: CC by Neil Turner
