Why pivoting your business is not always the answer
What does it mean to pivot your business?
The pandemic has had a lasting impact on businesses globally. The companies that survived the onslaught of Covid -19 are generally the ones that pivoted. The term pivot has become a staple in our business vocabulary. It is somewhat overused and often misunderstood though, so what does pivoting actually mean in terms of business? If you pivot your business you shift or turn it in a new direction. In 2020 a McKinsey survey found that 90 percent of executives said they expected the fallout from COVID-19 to fundamentally change the way they do business over the next five years. As we were hit with national and localised lockdowns, pivoting became the buzz word for struggling businesses. The hospitality sector was hit hard with many closing their doors for months. Again the ones that survived were the ones that pivoted to take aways. However many businesses panic pivoted. They didn’t realise that pivoting a business under pressure takes a lot of nerve as well as careful and strategic planning.
I saw many pivots fail.
There was no data to work with. Businesses were forced into changing direction with no research or strategy behind them. They lost focus as they pivoted into the unknown, sometimes into an industry landscape they weren’t familiar with. Many tried to change their business model entirely. If your markets were starting to diminish, CEOs and founders did what they had to survive. We saw all sorts of businesses suddenly diversifying and selling hand sanitiser or masks, goods that people needed at the time. However, businesses didn’t consider coming out of the pandemic and what the long term damage would be to their core business.
Pivoting is still happening.
In my work with different businesses I am still hearing people use the term pivot. The market is slowly recovering but it isn’t particularly strong. As furlough ended and we started our journey back to a new kind of normal, companies reflected on their losses. The ramifications of Covid – 19 are now beginning to show on businesses globally. Many are struggling and trying to pivot currently – but it is important that we think carefully about the actual need to pivot. Consider the different ways to get your business back on an even keel without resorting to a complete pivot. To do this you need to take a deep dive into your business and assess exactly where you can make changes to make more money.
Do you need to pivot your business?
A client I have just started working with is an example of a business that wanted to pivot but actually didn’t need to. Their advisors, who are part of their non-executive board, were saying that they needed to diversify and go for different vertical or horizontal markets. They started to consider going down an entirely different route with the business. I asked them, trading as they currently are, what their market share is? They said they had just under a 5% market share. They really should have been able to demonstrate more than a 5% market share. This told me that there was a problem within the business somewhere. We ascertained they only had 5% of the market share because not enough people knew about them. This was a marketing issue. They didn’t need to pivot, they needed to work on their existing business and get more of the market share.
Very often the chink in the armour of a business is marketing, or lack of it. The reality is that most businesses are only doing half the amount of marketing they should or need to be doing. It is important to understand how strong marketing can grow and strengthen your business base. Look at it this way: If you haven’t got around 20 or 30% of your market share, you shouldn’t be pivoting because you’ve got so much opportunity to still gain on your existing business. Marketing is a tool to help you become more visible in the marketplace. If your visibility is combined with a strong message and a clear idea of who you are, you will attract more people. That should translate into sales and eventually more of the market share. Spend time on how marketing can grow your business. It is very often overlooked but in my opinion one of the most important parts of a business to get right.
You are an expert in your field.
Businesses should remember why they started the business in the first place. Generally people start a business because they are experts in their field. To pivot means you have to suddenly become an expert in another field. It is not easy to go out into a new market place and start again. Pivoting is not easy. There is a time to pivot and a time NOT to pivot. Sometimes you need to look at how to fix your existing business. Fix what you have otherwise you may find yourself jumping from pillar to post and not really succeeding at anything.
If you want more help with deep diving into your business and finding where you can make it stronger then get in touch.
Remember, failing to learn is learning to fail.