Perfecting the pivot
Businesses everywhere are in the midst of an unprecedented change. The Covid-19 crisis came along in March and undermined the business strategy of thousands of businesses across Canada.
When there is any dramatic change in society, it becomes increasingly tempting for business owners to switch up their approach to selling products or providing services. The collection of ensuing changes is known as a pivot, which is essentially a major change to operations that aims to adapt to their changing market.
With that being said, what is the best approach to formulating a successful business pivot? How do you strategize for it, and how do you measure its effectiveness? I’m here to fill you in so you have some tangible advice to work with during the Covid-19 pandemic, and in the future!
In each section, we will also give you a brief overview of what Sproing is doing to pivot during the Covid-19 crisis. We always practice what we preach!
THE POWER OF REFLECTION
The first proper step to planning a potential business pivot is being able to honestly and thoroughly reflect on the current state of your business.
Reflection can take many forms, from evaluating key metrics to reviewing past customer feedback. I use the word “honest” at the beginning of this paragraph because without an objective accounting of the state of your business, you are handicapped when it comes to making sustainable plans for the future.
Some great reflection exercises that most businesses can do right now are:
- Complete assessment of KPI’s (key performance indicators)
- Identification of primary cost drivers
- Evaluation of internal processes and their effectiveness
- In-depth analysis of your most current marketing plan
- Enlist another business owner to assess your business from an objective view
Proper reflection is the most time-consuming, but also the most important aspect of putting your pivot plan into motion. It is the lifeblood of your business strategy!
As a company that relies on the success of other businesses for it’s revenue, first we checked in with our clients! We also thoroughly reviewed our KPI’s and financial metrics to try and identify opportunities for improvement throughout our operations from financial processes and HR to marketing and sales.
CREATE A VARIETY OF “WHAT IF” SCENARIOS.
Now that you’ve conducted an in-depth review of your business as a whole, it is time to do something with all that valuable information! While this information doesn’t always provide a solution right away, the aim is to allow that information to inform the development of various “what if” scenarios. Now is the time to get creative and let the ideas fly! Some tips for this process include:
- Be sure to include simpler pivot options, as well as more drastic ones like dropping product lines and changing distribution models
- Research how others in your industries may have pivoted in similar situations and use them for inspiration
- Enlist a trusted business associate to increase objectivity
Remember, proper strategic planning requires many different potential pivot scenarios! The more scenarios you have, the better position you are in for the next step.
Because we conducted our in-depth analysis of the business, and we track the data we need to measure our KPI’s, we were able to develop financial models that could be aligned with our internal processes. With these models in place, we were then able to tweak the assumptions to run various “what ifs” based on informed prediction.
INTO THE UNKNOWN WE GO!
With an internal audit complete and your “what if” scenarios hypothesized, it is time to implement one or more of these scenarios!
Diving into the unknown, especially during an uncertain time, can be incredibly stressful. We’re all human and our businesses often form a large part of our identities and livelihoods. But, just remember the planning process that preceded these actions. The reason we plan every move during uncertainty is to ensure we’ve done everything that is within our control. The reality is that there will always be things outside of our control as business owners. Very seldom can a business determine its destiny based only on the daily choices it makes.
Let go of your fear, trust your instincts, and let your planning guide you. Then, initiate your pivot! Just make sure that your implementation includes some type of objective way to measure progress. Planning a pivot is difficult enough, so be sure you have a way of measuring if it has achieved the success you anticipated. Where possible develop ways to test your assumptions during implementation.
During our discussions with clients and the pivot theorizing that ensued, it became clear that there was an opportunity for different types of marketing packages for new and existing clients. We focused on our clients’ need to increase the effectiveness of their online marketing and do so quickly and cost effectively. We have now begun testing this pivot strategy and have established our methods of measuring its effectiveness.
TESTING, TESTING AND MORE TESTING!
With a pivot plan in motion, now comes the time to close the experimental loop and review your pivot performance!
First things first, you can not test on feeling alone. As a business owner, you are inherently biased and probably a lot more welcoming of positive news than negative news. This is especially true in the case of a pivot because it was an uncertain situation that precipitated this process in the first place. You may have already been temporarily paralyzed by the unforeseen circumstances… so it follows that you might be more prone than normal to welcoming anything positive. Establish your evaluation metrics, and commit to their review. This is your foolproof way to stay as objective as possible.
This is why the testing process is so important in closing the loop. Without it, you won’t be able to determine if your pivot now represents a legitimate path forward for your business.
You took a courageous risk in starting your business and leaning into it. When unpredictability comes, you can make a choice to be calculated in your pivot strategies or base your decisions on gut instinct and what you have experienced in the past. In the case of unprecedented situations like Covid-19, the future is unpredictable to say the least. As a business owner, if you look at various “what if” scenarios, develop a pivot strategy based on your most likely scenario, test that strategy by tracking what is working and what is not, you can effectively reduce the risk of pivoting in the wrong direction. Going in this wrong direction could be costly for your business.
Now is the time to scan your horizon, evaluate your strengths and weaknesses, and work hard to discover the new opportunities presented to you. That is how you pivot like a pro!