A business pivot comes from the world of startups. Lean Startup methodology defines a pivot as a “structural course correction” which tests fundamental new assumptions about the product or service you are creating or your business model.
Do you have it right or wrong? Did you have it right at a time in the past, but for some reason you have it wrong now? Is a major shift in store or will minor modifications in product, process, people and business model get your company humming along in the right direction?
Startup founders become so devoted to their original startup ideas that they become unrealistic when things do not go according to their vision. The realization that it is time to make a business pivot comes after a lot of soul-searching and teeth-gnashing. Their business pivot reality check is an emotional decision, not taken lightly.
Business pivots also are particularly applicable to established small and very small businesses as well as solo and small entrepreurships. These companies are selling to real, live customer bases. They are selling products and services. They often are stuck in (and devoted to) “what got us to where we are today” mindset. They become reluctant to leave their beloved first customers and first projects in order to head towards “where we need to be tomorrow.” It’s an emotional decision, not taken lightly.
This situation happens more frequently than I like to think. Consider the following dysfunctional scenarios:
- Your gross annual revenue has remained stable for more than 7 years. Why do I say 7 years? Because it takes at least 3 years to get your business on the “initially course correct” in terms of product, customer, financial model and marketplace traction including revenue generation. If you have a solid set of customers representing stable, predictable and unflinching revenue the bulk of your business more than likely is repeat business of old orders. You are either not looking for new customers or have lost the capability to acquire them. Time for a business pivot reality check if you want to increase your revenue stream and grow your business.
- If your gross annual revenue has not stabilized during a 7 year time period, and resembles a chart of manic depressive mood swings, you are allowed to take that business pivot reality check sooner (more like after 3 years and for obvious reasons). Your business model doesn’t work. Your products and services are not what the marketplace is yearning for. The quality of your deliverables falls short. Your workforce lacks important competencies. Bottom line: you may have great intentions, but you have your head buried in the sand.
Regardless of whether you are successful or unstable, business pivot reality checks are extremely healthy for every facet of your organization.
Business pivot reality checks are part of healthy business models and corporate cultures. Even if we have to work together as an “intervention” to get you unstuck from business dysfunction, here’s what I recommend for the future.
- Take a business pivot reality check at least once a quarter. Yes, that frequently. Even when you are at the top of your game. Business pivot reality checks keep you current, in touch and in tune with customers, marketplace, and technology and workforce trends.
- These reality checks help businesses remain lean, highly functional, collaborative and innovative. You will be able to keep your business (and individuals working for you, including yourself) from becoming complacent. Instead, you and your team continuously rekindle a startup mentality, passion and sense of urgency.
Even if you are at the top of your game, you owe it to yourself, your colleagues, your employees and your customers to keep asking yourself “What’s Next?” A business pivot reality check is an excellent strategy for keeping things realistic and keeping them fresh as well.
Babette Ten Haken is a management consultant, professional development coach, analyst and content creator. Babette has one of the most distinctive voices in today’s workforce, professional development and customer success communities. She traverses the interface between human capital strategy for hiring and developing technical and non-technical employees focused on customer success. She catalyzes compelling strategies and processes for cross functional communication and collaboration. She is the author of Do YOU Mean Business? – her playbook of technical / non-technical collaboration hacks to drive revenue through your organization.
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