In the business world, change is inevitable. Market demands shift, technologies evolve, and new competitors appear, swiftly reshaping your industry as you know it. So, even if your company is at the top now, you could easily fall behind if you don’t adapt.
To achieve long-term success, being ready and willing to pivot is essential. When executed correctly, business pivots can turn industry changes into pathways for growth. But you must time it right to stay ahead of the curve rather than playing catch-up when it’s too late.
If you’d like to prepare your company for potential disruptions, you should learn how to adapt with a business pivot. Here’s everything you need to know about using a strategic business pivot to secure your path to long-term success.
What is a successful pivot in business?
A successful business pivot involves changing your strategy to meet new market demands or solve internal issues. It can range from minor adjustments to a significant shift in your brand’s direction. This could mean updating your product line, targeting a different audience, or altering your business model completely.
For example, a music store noticing a decline in CD sales might introduce vinyl records and turntables, catering to the growing demand for vintage music experiences. Or a magazine publisher might pivot to becoming a digital content platform after seeing a decrease in print subscriptions.
The goal is not just to change for the sake of changing—but to change for the better, ensuring you deliver value while remaining profitable. When done thoughtfully and proactively, a pivot can lead to renewed growth and a stronger position in the marketplace.
Most common business pivot types
Like many small businesses, you’ll face various challenges and discover new growth opportunities. The way you handle these changes holds the key to your success. The good news is that there are numerous ways to pivot and adapt, such as:
- Product: In this pivot, you change your core product or service. You might upgrade an existing product, add new features, or even change entirely what you offer in order to better meet customer needs.
- Target audience: This involves narrowing your focus to serve a more specific niche or expanding to reach a broader demographic. Redefining who your ideal customers are helps improve your marketing strategy and competitive positioning.
- Channel: A channel pivot is all about changing the way you get your products or services to customers. For instance, to reach more people, you might decide to sell online instead of having brick-and-mortar stores.
- Internal hierarchy: The internal hierarchy pivot involves changing the organizational structure of your company. It might include redefining roles, responsibilities, and reporting relationships to enhance communication and decision-making.
- Technology: This pivot focuses on using new technology or changing your tech systems. You might make this switch to improve product features, boost business efficiency, or enhance the customer experience.
- Operational processes: In this pivot, you enhance internal workflows and procedures. The changes may involve automating manufacturing processes, adopting Agile methodologies, or revamping employee training programs.
- Supply chain: In a supply chain pivot, you adjust how you get your supplies, make your products, or deliver them. This move can help your company save money and offer the best value to your customer base.
- Revenue model: A revenue model pivot is when you alter how your company makes money. For example, you might transition from one-time sales to a subscription-based service to create a new revenue stream.
- Business model: The business model pivot involves making a big change in how you run your company. This could mean moving from selling products to offering services or teaming up with others to gain traction and grow.
Choosing the right pivot for your brand depends on your unique situation and goals. Before you can do that, however, you must first recognize the signs that point toward a need for change.
Signs you may need to pivot your business
Knowing when to change direction in your business can make or break its success. The following examples are just some of the signs indicating that you could benefit from a business pivot. By noticing the signs early on, you can make proactive adjustments that change the course of your business.
For example, indicators such as negative customer feedback and decreased team productivity could signal that you need to change. Keep an open mind as you watch for signs of trouble so you don’t miss the chance to pivot at just the right moment.
A noticeable drop in sales
A noticeable drop in sales is a surefire sign that something’s wrong. It could stem from internal factors like outdated product features, an ineffective pricing strategy, or a marketing approach that isn’t connecting. Externally, it might come down to changes in target market trends, consumer behavior, or the competitive landscape.
High manufacturing costs or overhead
Are expenses starting to eat into your profits? When the cost to make or deliver your products grows too high, you’ll likely feel the squeeze and maybe even have trouble staying afloat. The potential causes are numerous and may include high material costs, inefficient processes, and staffing expenses.
Market changes due to new technologies
If new technology is on the horizon, you likely need to take action. Emerging technologies have the power to reshape industries and consumer expectations in a flash. Just look at the internet’s impact on how people live and work. Or consider how electric cars are redefining transportation, from personal vehicles to the trucking industry.
Decreased customer engagement or loyalty
Pay close attention to any changes in customer loyalty or engagement. If customer interest starts to wane, it’s often a sign that they’re finding more value elsewhere. Oftentimes, this happens when competitors offer better products, lower pricing, or a more rewarding loyalty program.
Increased competition in your niche
An influx of competitors in any niche is bad news. More product choices for customers means fewer sales for each business. While success stories might lure these competitors in, their entrance into the niche can quickly backfire, reducing customer loyalty for all the major players.
Tips for making a strategic shift in your business strategy
Recognizing the need for change is one thing, but acting on it is another. It’s natural to feel both excited and nervous about leaving behind a once-successful strategy. Moreover, uncertainty about what lies ahead might make you hesitate to abandon an otherwise failing business model.
While it’s a big decision, remember that you’re not alone in this. Many other companies have faced similar challenges and successfully adapted—and you can, too. To help you navigate this path, here are some tips for taking your current strategy in a new direction.
Embrace change as a growth catalyst if you need to pivot your business
Having to pivot to save your business doesn’t mean your original idea or approach was a failure. Instead, think of it as a catalyst for growth based on new insights, target market shifts, or unforeseen challenges.
Embracing this positive mind-set primes your brain for the work ahead. It helps you think more creatively, improve problem-solving skills, and decrease stress. Overall, positive thinking boosts your ability to adapt to change, even when things don’t look like they’re going your way.
Do a thorough SWOT analysis for your current business model
You cannot make meaningful changes until you know where you stand with your existing business model. To get those insights, complete a SWOT analysis. This process involves closely examining your company’s Strengths, Weaknesses, Opportunities, and Threats.
When completing the analysis, you can either work alone or in a team. Either way, use the SWOT analysis results to pinpoint where to focus your attention as you create a business pivot strategy.
Here is how you might explore each area:
- Strengths: List all the ways your company excels and stands out from the competition. Think about things like your unique selling points, brand reputation, talented workforce, or proprietary technologies.
- Weaknesses: Identify the factors that impact your business performance and prevent you from reaching your potential. Consider all the areas where you might be lacking, like financial constraints or resource allocation limitations.
- Opportunities: Highlight the market trends and other opportunities your company could capitalize on. Perform market research to identify industry disruptors like technological advancements, emerging trends, and new customer segments.
- Threats: Look at the challenges that could negatively impact your company in the coming years. Include things like target market saturation, regulatory changes, and shifts in customer preferences.
Gather valuable insights from your stakeholders and loyal customers
Your stakeholders and loyal customers hold a wealth of knowledge that can help your brand pivot successfully. To gather their insights, simply open up a conversation and pay close attention to what your customers say.
You could do this by:
- Conducting one-on-one interviews with key stakeholders
- Creating surveys with both open- and closed-ended questions
- Putting feedback forms on your website or delivering them by email
- Organizing focus group discussions for select customer base segments
- Gathering info from mentions, comments, and reviews on social media
As you collect and analyze the data, look for common themes and sentiments. Explore the opinions, concerns, and suggestions objectively to discover ways to stay relevant through all the industry changes.
Verify that your small business finances will support a well-executed pivot
No matter how well you plan to pivot, your efforts could fall short without enough funding. Make sure your company can handle the upcoming changes by checking your finances. Look at your income, expenses, and cash flow on a balance sheet to determine where you’re at.
Also, estimate what a pivot might cost you now as well as in the future. If you plan to switch your revenue model, it might not cost much money at all. But a complete overhaul of your business model could cost nearly as much as you paid to enter the startup world.
If the money’s not there, see where you could cut costs or move funds to support the change. You could also think about finding investors or getting a loan. Set clear money goals and plan how to achieve them to keep your company strong through the pivot.
Prepare employees with targeted training as your business pivots
When taking your company in a new direction, ease your employees through the transition with targeted training. For the best results, they should feel well supported and prepared to implement the new plan from day one.
Begin this process by clearly communicating why you plan to pivot and what you hope to gain from it. Then, share a clear plan outlining roles, responsibilities, and potential challenges. Following that, set up on-the-job training or consider paying for skill-building courses and the time off needed to complete them.
Maintain open communication lines using your core technology
As a business owner, it’s your job to maintain open communication lines, and using your core tech system can make it easier. Project management tools, email, and even messaging apps let you send out updates, resolve concerns, and answer questions on the fly.
These fast and efficient communications keep your team, vendors, and suppliers on the same page. Everyone can access up-to-date info about the latest developments and timelines without asking. This helps promote unity and effective collaboration to keep everything running smoothly through the transition.
Test your new strategy on a small scale to pivot successfully
If possible, consider testing your new strategy on a small scale first. This practice run lets you try your idea, see how it works, and make necessary adjustments before going all in. It minimizes the risk of major setbacks and helps everyone prepare for the official launch.
How you carry out this small-scale trial depends on the changes you’re introducing and your pivot plan. For example, if you’re adding photo-sharing capabilities to your software, you might initially test its functionality with a small group of users to gather feedback. If you’re reworking project management processes, you might start with a single team before moving forward.
Set SMART goals and track progress with key performance indicators
Adapting to change is often difficult. To ensure you’re on the right track, let SMART goals and key performance indicators (KPIs) guide you. Using these tools, you get the objective data needed to confirm your efforts align with your objectives.
SMART goals are Specific, Measurable, Achievable, Relevant, and Time-bound. For instance, if you’re the cofounder of a small bakery facing too much competition from larger chains, your SMART goals might look like this:
- Boost daily foot traffic by 10% in the next month using eye-catching signage and daily specials.
- Increase sales by 20% in 6 weeks by adding 2 new signature baked goods to the menu.
- Reduce operational costs by 8% in the next quarter with better inventory management.
Verify that you’re reaching your goals by tracking KPIs such as daily foot traffic, sales revenue, and operational expenses. The data lets you actively measure progress and confirm that your company has pivoted successfully.
Top 5 examples of successful business pivots
A successful pivot is a true sight to behold. When done right, the shift in direction can rejuvenate a struggling company or propel a successful one to even greater heights. Just witnessing the insight, innovation, and guts it takes to switch gears is genuinely inspiring. To see it for yourself, check out the following remarkable examples of businesses that saw an opportunity and seized it.
Nintendo began its gaming journey in 1889 as a handmade hanafuda playing cards producer. Through the decades, the company navigated several shifts in focus until it uncovered its true passion in electronic gaming. Nowadays, Nintendo is a major player in the gaming industry, with millions of consoles sold. It’s also known worldwide for bringing many beloved franchises to life, including Super Mario and the Legend of Zelda.
Play-Doh was dreamed up to solve a once-trying problem: Cleaning sooty wallpaper. However, as coal-heating homes became less common, the company realized the demand for its original product had dropped dramatically. To revitalize the brand, it took a quick pivot from wallpaper cleaner to a children’s modeling compound. Since it’s nontoxic and sparks imaginative play, Play-Doh has become a household name.
Fujifilm was a film photography giant, but when digital film became popular, the company had a choice: Adapt and innovate or risk becoming obsolete. In a surprising move, the company did one better. It chose to not only go digital but also use its background in chemical and material science to enter new sectors like healthcare and cosmetics.
Adobe entered the market in 1982 when software still came on floppy disks. As technology evolved, the company kept up by transitioning to each new type of physical media, including CDs. However, it was with the advent of cloud computing that Adobe’s resilience really shone. The company made the bold move to shift its software delivery model to the cloud, securing its success in the digital age.
Slack didn’t initially have its sights set on the business world. Instead, it was developed as an internal communication tool for a gaming company. Once the founders realized its broader potential, they decided to pivot, creating one of the leading team collaboration platforms. Today, it has over 12 million active users, collectively completing more than 5 billion actions per week.
Achieve lasting success with business pivot mastery
While navigating the ever-changing business landscape, what works today might not work tomorrow. Your willingness to adapt and evolve can make all the difference in how you weather the changes. Missing the chance to adjust your strategy could result in being left behind. However, a successful pivot may not only ensure the survival of your company but also its growth. So, keep a close watch for changes coming your way and always be ready to pivot to stay in the game.