Failure” is a word no CEO or business owner is comfortable with. But inevitably, failure occurs all the time (in lesser or major ways) in business. Small companies can’t get established in the marketplace, larger companies fail keep their loyal customer base and even the “big boys” (i.e., Debenhams) sometimes collapse under the weight of debt and loss of traction in the marketplace.
On the plus side, as we’ve noted previously, “failure paves the way to new strategies and risk-taking techniques that build on what’s gone before.” In other words, successful business leaders embrace the hard lessons learned from missteps in the past. They understand that “without taking risks, change and innovation simply aren’t possible.”
In response, many nimbler business leaders adopt a pivot strategy—that is, as Entrepreneur explains, making “changes that are gradual or small and other times [are] earth-shattering shifts selling into new markets or unveiling new products.” Other pivoting strategies focus on:
- Attracting new types of customers
- Employing technology in new and different ways
- Adopting a significantly different revenue model
Whatever the strategy, pivoting isn’t something that “just happens.” It involves planning and a willingness to entertain ideas that may previously have seemed unimaginable in your company culture.
How do you know when pivoting is necessary? Here are some red flags:
- An unexpected wave of customer complaints and negative online feedback
- An influx of new and/or more aggressive competitors
- Price under-cutting by the competition
- Too much internal focus on one product line over other possible revenue sources
- Consistently bad employee morale and lack of productivity
- Long term trends of competitors going out of business while your market size is static
- Falling long term turnover despite many initiatives to gain market share.
If one or more of these elements are in play, it’s time for some serious self-evaluation. But it’s also necessary to tap into planned pivot strategies that might best address problems that threaten your business.
Want additional insight? Best Ways to Secure Capital for Your Business now to learn moreDOWNLOAD
Keep these tips in mind:
Identify the key issue. Before choosing to pivot, it’s essential to know why you’re doing so. Conduct a campaign of enquiry, checking in with everyone from your loyal customers to your sales team. Look closely at what’s been successful up to now and where your company’s efforts are falling short.
Without this preliminary questioning, “you run the risk of making highly impactful decisions based on only part of the facts or, worse, the wrong facts,” Paddy Power CEO said that they did not ask sufficient questions about their entry into Spain. The CEO of Blue Insurance said that they did not sufficiently investigate the Australian market before entering it. Very successful companies will tell you about their regrets and mistakes down the line.
Have a plan in place. Make a plan with all the right elements in place based on your learnings to make that all-important pivot—new financial obligations, the need to recruit new staff, a realistic timescale to complete the pivot.
Preserve functions and processes that still work. “Pivot” doesn’t mean tossing out all of your established operations and starting from scratch. As part of the planning process, “identify what aspects of your company can be salvaged, kept, and reused once you’ve settled on the new direction.
The decision to pivot should never be made lightly. In fact, it’s best if you consult with others prior to making this leap. We all have a certain level of “tunnel vision” which can prevent us from seeing all of the possibilities available to us. Seeking the insights of your peers is a proven way to gain a broader perspective of the big picture, thus enabling you to pivot in the right direction at the most opportune time.
For a practical approach to creating and implementing a strategic plan, check out the TAB Business Builder’s Blueprint. You’ll get a fresh outlook on how to increase revenue and profit by taking control of your business, empowering employees, seizing new opportunities and operating more strategically.