How to Keep Your Company from “Missing the Pivot”
For many, 2020 was the year of “Evolve or go extinct.”
2020 was a year of disruption.
Shifting realities resulted in shifting consumer expectations.
These shifting expectations caused many brands to face an existential crisis: “Evolve or face extinction.”
At INTO, we call this “making the pivot” or “missing the pivot.”
In this case, “pivoting” is broadly defined as “shifting to a new strategy or approach.” Shifting consumer needs, expectations, and realities are often a catalyst for making a “pivot” — a.k.a. making a change.
What it means to “Miss the Pivot”
Imagine that you are running on a treadmill at the local gym.
When you start running, you observe that there are only two or three other runners — and, you’re the fastest in the bunch. Feeling a slight sense of self-satisfaction, you put your head down and keep going at the same pace.
Thirty minutes later, you look up and look around once more. The gym has become slightly more populated. There are now twice as many runners, and those on the treadmills next to you are running slightly faster than you are. Now that you have competition, you feel the pressure to speed up a bit yourself. You bump it up a couple of notches and settle into your new pace.
After an hour, all the treadmills are packed with people that look like they’re training for an Olympic sprint. You’re no longer the fastest runner, and you’re sweating and panting as you try to keep up.
This analogy likely sounds familiar to C-Suite executives sweating it out to stay competitive in a crowded market.
“Missing the pivot” is the common term for competitors who look up too late only to realize that they’re running behind the competition.
Here are some common examples:
BLOCKBUSTER:
Survived the transition from VHS to DVD, but failed to adapt when competitors started leveraging more convenient channels to deliver content to consumers.
KODAK:
Led the commercialization of the camera until the advent of digital photography. While running to catch up, the company tried to diversify into pharmaceuticals, memory chips, healthcare imaging, document management, and other fields — but the stock price is still 96% below its 1997 peak (Source: U.S. News).
MOTOROLA:
Everyone remembers the company’s iconic Razr phone of the early 2000s, but Motorola failed to shift its focus to smartphones and rapidly lost marketshare to companies like Apple, LG and Samsung.
TOYS “R” US:
The specialty megastore that dominated the ’80s and ’90s, but failed to address the competition that started to infringe from all sides — including discounters like WalMart and online sites like Amazon.
There are lessons that can be learned from each of these has-been industry giants — one of the most significant being the threat of hubris as a blinder to encroaching competition. According to McKinsey & Co., this is a “cognitive bias” or a “systematic error in the way executives process information” that can dampen a company’s future outlook or hinder its successful expansion into new markets.
The Year of “Make It” or “Miss It”
2020 has been a “make it” or “miss it” year for many companies.
Companies have had to be on the pulse of consumer needs and shifting trends and more responsive than ever in adapting accordingly. Companies who have a “systemic error” in the collecting or processing of consumer data have been exposed.
Accenture Interactive uses neighborhood restaurants versus bigger chains as an example:
The pre-COVID business model was pretty straightforward: “We serve good food, get great reviews on Yelp, and people come in.”
Then suddenly, these small businesses were forced to evolve. They had to add curbside pickup (their version of adjusting the supply chain). They had to physically build outdoor seating with plastic dividers, heaters and more. Then they had to relate the new experience to digital; customers have to snap a pic of a QR code to show the menu. They had to ensure the food stayed warm and train the entire staff to reorient around this new experience. Maybe, while they were building this feature, they added personalized digital coupons as well.
Essentially, facing an existential threat, the proprietors took a step back, figured out what they needed to do to survive and did it throughout the “organization” — physical, digital and with employee buy-in.
Now consider a nationwide restaurant chain I won’t name. When eating at their restaurant recently, their QR code took me not to the menu but to the corporate homepage. I called over the waitress, and she said, “Oh yeah, people keep pointing that out. They need to fix it.”
This bigger chain was unwilling to — or unable to — reorient their experience and feedback application process to accommodate customer needs. When the smoke clears, customers will notice — and this company will look up to realize that they are the ones lagging behind the competition.
Macro-Misses and Micro-Misses
“Making the pivot” or “missing the pivot” can happen in both big and small ways, at macro- and micro-levels.
For the companies mentioned above — like Blockbuster and Toys-R-Us — a monumental pivot was required in the way that they went to market. They missed it, and their decline from glory was quick and complete.
However, as the Accenture illustration shows, companies can also “miss the pivot” at a micro-level. The QR code didn’t redirect to what customers needed to access — and the company as a whole didn’t make (or couldn’t make) changing it a priority.
“Making the pivot” at a micro-level is an indicator of a strong connection between company and customer. It indicates a useful and applied feedback loop. For a company that repeatedly “misses the pivot” at micro-levels, warning signs should appear that its customer listening practices and perhaps overall priorities are not where they should be. Over time, micro-level misses could contribute to a macro-level fall.
Pivoting Presents Growth Opportunities
An organization that can pivot is an organization that can grow.
An organization that can’t pivot will, one day, be dead in the water.
Here are three ways that your company can start gaining insight to pivot today:
1. Customer Listening
Deciding whether or not to pivot — and how to pivot — starts with opening the door to customer dialogue. Feedback is often the quickest way to identify and address where a pivot is required. In some cases, customers can even offer suggestions about how improvements should be made in ways that infuse value to their lives.
2. Trend Watching
Companies should be on the pulse of what’s next, and able to anticipate what’s coming. Observing and assessing trends is a key way to do so. Trend-watching is directional — allowing companies to understand the overall directions in which things are developing and changing. Trends can provide excellent fodder for brainstorming and a foundation for innovation. Companies who correctly anticipate customer needs are often leading their industry.
3. Personal Experiences
Everyone is someone’s customer. Your team members buy from other brands on a daily basis — groceries, apparel, hobbies, travel, and more. Encourage team members to share points of delight or dissatisfaction with their other brand experiences. Learning from the successes or mistakes of other brands — even if they’re out-of-category — can lead to insights or ideas that will improve your own.
About What’s Next Labs: What’s Next Labs is a publication of INTO, an agency that empowers businesses to transform their aspirational goals into actual growth. Learn more about INTO at into.agency.
