“There’s no better way to encourage innovation in your company than to lead by example. Innovation starts at the top – leaders should be role models for workplace passion, positive outlook, clear direction and vision, and of course, embracing change,” (entrepreneur.com).
There are many reasons businesses experience a pivot. Businesses can pivot in a reactive or proactive manner. The reactive pivot involves quick and adaptive thinking during an unforeseen change, or a calculated response to decreased revenue or other issue. A company may shift in time of a national or economic crisis. They may use a pivot as a public-relations tactic to change negative perceptions or reputation. Revenues may have plateaued, or the competition may be consistently outperforming. Startups often encounter fundamental pivots in their business strategy after a review of customer preferences, buyer personas or any factors that contribute to their bottom line, (hubspot.com).
The proactive pivot determines ways to innovate ahead of the curve and plans to make shifts before major marketplace changes might occur. It can ensue from technology or marketplace changes or exploration of new target audiences or new revenue sources. Companies might complete a research campaign and choose to test the results gathered.
Mastering the pivot – whether reactive or proactive – can make all the difference in whether a business will find success. There are four key components to conquering the pivot:
1. Adapt Your Thinking – the system has changed or will change, see the system differently.
“When a crisis hits, we are forced to confront the truth about how our systems work (or don’t). The places where things could be done better or more efficiently become glaringly obvious. All of a sudden, opportunities for innovation are staring us in the face,” (harvardbusiness.org).
Putting a spotlight on the vulnerabilities of a company may make for difficult decisions. However, with this introspective look at what portions of an organization work versus those that do not, determinations can be made for a better future.
“Pivoting can be a humbling experience,” says Jay Fuchs of hubspot.com. Whether it is a drastic or minor course of action, leadership must agree on a new way of thinking and communicate that to internal and external stakeholders.
2. Communicate More – be transparent with all stakeholders internal and external; talk more, not less.
“Remember that a successful pivot requires buy-in. While the decision typically comes from the top, the change of course can only succeed if everyone follows the plan — from the biggest investor to the lowest-level employee,” (inc.com).
Honesty and transparency can make or break a business pivot. Commit to the decisions that were made and discuss those changes in detail. Use all communication methods to let internal and external audiences understand the changes or new business direction. Email, social media, press releases, company newsletters, blog articles, video channels, or podcasts are just some of the ways to inform key groups.
The more up-front the messaging, the more likely investors and team members will trust the pivot. With everyone on board, the new way of thinking and changes to the business model will translate well to clients and customers.
3. Re-Think the Customer Experience – be authentic, but also empathetic and a champion for your customers’ needs.
“All companies should be thinking critically about which of their customers’ newly adopted habits might stick in the long run. Using the information you have about your customers’ priorities and needs, a little creativity and a lot of flexibility will go a long way toward making innovation happen,” (forbes.com).
Researching customer needs and changes to buyer personas offers valuable insights to business pivots. Ask questions like:
What trends are resonating with target audiences?
What do customers really want in today’s marketplace?
What makes customers happy, excited, and positive?
What are the driving factors behind customer purchases?
What can be done to improve brand loyalty?
How are competitors finding success?
For example, Netflix began as a DVD-rental and mail-order company. After demand grew for new and original content, they pivoted and now compete with HBO, Disney and others for awards and viewership, (forbes.com). By adjusting the business model to meet customers’ needs, Netflix continues to see strong revenue growth and increased brand loyalty.
4. Pivot to Innovate – make a shift to deliver improved strategies, products and services to target audiences.
“Crises present us with unique conditions that allow innovators to think and move more freely to create rapid, impactful change. For learning leaders, these conditions provide us with the opportunity to do our best to help, and for our teams to do their most innovative work in the service of our organizations,” (harvardbusiness.org).
Look to the workforce for their expertise and suggestions throughout a pivot. Larry Clark of Harvard Business says there can be a massive energy spike in workforce because of a crisis or major change. Leaders who can appropriately focus this energy on a critical purpose will likely find an influx of new ideas. Individuals in the workforce may feel compelled to share insights they normally would keep to themselves, Clark explains.
In both reactive and proactive pivots leaders should research to make calculated changes. Asking questions from the workforce and other key stakeholders can provide valuable insights needed for innovation. For example:
What would you change about our products?
What is something you really look for in a brand?
What trends have you noticed in the marketplace that we haven’t explored?
What is something that competitors offer that we could produce here?
How would you improve our service offerings?
While the amount of time and money spent on research or gathering insights will vary depending on the type of pivot (i.e. a crisis or rebrand), the ability to innovate in an impactful way remains the same. Read more about rebranding strategy here.
Although no decision to pivot should be made lightly, with these four strategies, companies can perfect the pivot and innovate for positive change.
The Pandemic Pivot
COVID-19 affected businesses around the world in a way that no one imagined. Companies have worked tirelessly to respond to the challenges on several fronts – their people, their products, and their profits. The ones who found success took quick action – a “pandemic pivot” – to manage their business in innovative ways to both protect and serve customers and their own organizations.
Across the country virtually every organization, from businesses to schools, hospitals and factories pressed a massive pause button. Reactive and proactive mitigation plans were put in place to protect the safety of workers and customers. Businesses and schools went remote, essential workers were provided sanitizing stations and new social distancing procedures.
Restaurants, retailers, and auto dealerships are all offering “no contact” options for customers. To help with heightened financial concerns, Bank of America moved 3,000 employees from across the bank into positions to field the increased calls from concerned consumers. Sysco, the largest wholesale food distributor, shipped cleaning supplies and used their knowledge of take-out needs to help customers make the shift from sit-down to take-out, (finance.yahoo.com).
As companies face new challenges during the pandemic, their customers are facing their own. Meeting those needs gives new opportunities to strengthen ties. With many families working and schooling remotely, internet providers such as AT&T, Xfinity and Spectrum provided free and reduced-rate internet, (usatoday.com). LinkedIn offered 16 learning courses free to help people stay sharp or learn new skills, (socialmediatoday.com). U-Haul offered 30 days of free self-storage to college students affected by schedule changes at their universities, (cnn.com). Actions like these form new relationships and could lead to continued patronage.
Altering product lines because of smaller demands or pandemic needs is a change some companies have made. Ford, GM and Tesla produced ventilators to shore up a low national supply. Virtually every apparel company (like Brooks Brothers, New Balance and GAP) are producing face masks, (wwd.com). While still bottling spirits, distillers like Sazerac, Diageo and Brown Forman are diverting production of alcohol to making hand sanitizer, most of which they are donating, (distilledspirits.org).
Vivid Impact has also experienced a pivot during the many challenges of 2020. What began as a mission to make the workplace healthier and safer evolved into innovations to help customers do the same. Through a company-wide idea-generation form, Vivid designed, programmed and developed a Stay Healthy Storefront offering ready-to-print essential safety signage. The form also led Vivid to develop face shields that meet CDC-guidelines. Within two months, Vivid produced and shipped over 37,000 face shields. Vivid also pivoted to act as a third-party logistics partner distributing more than 3.9 million pieces of PPE to frontline workers for customer partners.
Looking for new ways to innovate? Contact Vivid Impact today to start strategizing!