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Netflix, Instagram, Slack. All three companies have one thing in common. That is, even though their original business plan was not sustainable, they chose to pivot in a new direction, making them the formidable company they are today.
Reorienting a startup culture is a strategic business decision to pivot to take advantage of new needs in the market where products and services can respond to calculated changes. Doing this successfully requires a high degree of organizational adaptability and flexibility to achieve long-term success.
In the ever-changing world of business, it's easy to pull the plug when things don't go as planned. But successful entrepreneurs and investors who truly understand their markets can find innovative ways to discover new opportunities by tweaking their current business models.
Is it time to pivot your business? Let's take a look at when it makes sense, how to do it well, and what it looks like in both success and failure .
Related: Knowing when and how to pivot is the key to business survival. Here's what you need to do:
It's time to make a change
I've forgotten how many businesses I've seen set everything up for success only to have the market pull the rug out from under them. Even the most business-savvy and well-prepared business ventures can be taken by surprise by changes in the economy.
A number of external factors, from market changes to new technological advances to economic shocks, can force companies to consider pivoting their business models. Internal factors, such as plummeting performance metrics or changes in consumer behavior, can indicate it's time for a change.
The truth is that very few successful companies have gotten to where they are today by following the same strategic plan they started with. It is essential to keep your organization agile while always maintaining your core values (what makes your company unique). You should always be prepared to make the necessary transitions to keep your company relevant and financially stable.
decision time
Recognizing the need to pivot is one thing, deciding to do so is another. There are many factors to consider and will probably need approval from multiple parties. Therefore, it is essential to conduct extensive market research, data analysis, and forecasting before deciding on your next steps.
Some businesses may be facing tough times, but with some adjustments and perseverance they can even out. For other companies, survival may require a fundamental overhaul of their business model. There are no quick fixes or easy answers. Decisions of this scale require due diligence and trust in your team and product.
A great example of pivoting based on informed decisions is Netflix.
Initially, in the early 2000s, the company operated a DVD mail order service. Although the company had established a corner in the home entertainment market, it was feeling the strain of increasing competition. While management focused on current industry trends, they also had an eye on entirely new, untapped markets to conquer.
In 2007, the company launched a streaming platform that allows you to enjoy many of the same movies and shows you received in the mail on demand. They pioneered the streaming revolution and continued to adapt as they began developing new and original content.
Sure, many other companies eventually followed suit, but the important thing is that Netflix's executives have a deep understanding of the market and their company, know when to pivot, and navigate the industry. They did it in a way that disrupted and continued to increase their own profits.
Related: What Tennis, Microsoft, and Founding My Own Company Taught Me About the Role of the Mind in Achieving Success
successful implementation
The next step after pivoting is getting everything moving. Implementation can be one of the most difficult aspects, as businesses are likely to face scrutiny and pushback from all angles, including internally.
This is the stage where clear and effective communication becomes important. You will experience resistance from employees who are uncomfortable with change. Stakeholders who are not involved in the decision will feel neglected. Industry experts may think this change is bizarre. No matter what anyone says, your company's message and commitment must remain unwavering.
If you do the proper research, consider all options and scenarios, and get buy-in from the right stakeholders, there is no need for other forces to change their stance unless there is a legitimate threat to the future of your business.
Communicating this change from a point of empathy and care, while respectfully sharing the need to pivot and how it works, is essential to stabilizing the process. Pivoting a business is never easy, but success can be achieved if the process is effectively planned and implemented.
There are no guarantees
Notice I said “could” be successful. As with any original business plan, even if it is perfectly planned and executed, things can go wrong.
The unfortunate thing about business is that there is always risk involved. Nothing is promised. Indeed, pivoting may protect your business from failure. Or, what looks promising may lead to further dead ends. If so, learn from it. It could mean the end of the road to your company's true potential, or another detour. In any case, don't let a single failure go by without gaining insight for improvement and wisdom about what works and what doesn't.
Failure feels miserable, but it's a great teacher. Even if your pivot is successful, it doesn't mean you don't always need to be on your toes to be able to adapt when the market changes again. Business is never safe. Industrial change. Competition will intensify.
Never stop innovating. Don't worry. Keep your eyes on the path ahead and watch for obstacles next time.
Change isn't a bad thing. Changing direction is not a sign of weakness or failure. Leaders who embrace change in direction tend to be the most successful. They are the ones who are cautious and ready to jump on the next opportunity before others notice.
Stay flexible, be ready to adapt, and make the right pivot at the right time.
