The Art Of The Pivot: How To Find New Directions In Uncertain Times
Latest since Covid-19 has impacted industries worldwide, the need to pivot in order to stay successful has never been greater. Here is a 4-step framework to make the pivoting process easy for you.
by MING Labs
Covid-19 has greatly impacted all industries and the end is nowhere in sight. A lot of business models that have been proven to be successful now have to be reconsidered because circumstances have changed and uncertainty is increasing. During the Innov8rs Connect Unconference, Sebastian Mueller from MING Labs explained why pivoting is especially important now, and guided participants through the challenges of a pivoting journey towards finding a solution based on a 4-step framework.
Watch the full session including all of Sebastian’s tips here:
WHY? Current Triggers
The biggest trigger today is undoubtedly the current pandemic. Predictions show that we are headed towards a fractured world scenario. This means the severity of the virus is high enough that countries want to close themselves off, with certain corridors in the world becoming disconnected. Some of the lasting changes that we can already see include a rise in flexi-work, adoption of low-/no-touch services, nearshoring and local sourcing, as well as sustainability and circularity as the next transformation. All of these are things to keep in mind when talking about pivoting, as we already see their lasting impact.
WHAT? The Pivot
But how does pivoting actually mean? The first step is to look at your current strategy and reach an inflection point that makes you reflect on your business. You can then either refine your current strategy or pivot. This includes a fundamental change in many aspects of how your business runs and operates. It is a fundamental decision to radically deviate from your current strategy.
Strategic inflection points where you should consider pivoting include a significant shift in market need or behavior, an extensive shift in the competitive landscape, or megatrends that lead to disruption. The key is to spot trends early based on significant data so you can formulate a new strategy in an informed way.
HOW? Execution
The 4-step process for finding your pivot:
01 Trigger — What has changed and why?
Every pivot starts at an inflection point. Circumstances have changed, and our old strategy does not work anymore. The reasons for that can be myriad, yet it is critical that we think through them in a structured manner.
Therefore, to kick-off, the Pivot Workshop starts with an exercise around identifying the fundamental changes that the company needs to be aware of. They are structured into changes in the Value Chain, Value Creation, Value Delivery, and Value Capture.
To start, everyone in the team has a few minutes to note the changes they have observed in the various segments. After comparing notes and sharing observations, everyone gets another few minutes to note the observed changes’ root causes. This will help address the correct level.
To close this exercise, the group conducts a voting activity to prioritize the top three root causes of change.
02 Anchor — What are your core assets?
Every pivot happens around an anchor point. A pivot changes certain parts of a business, yet keeps on leveraging others. Those are the anchors that will form critical assets in the new strategy.
Similarly to the first exercise, we will think about our operation’s critical assets within the Value Chain, Value Creation, Value Delivery, and Value Capture segments. These assets can be tangible or intangible — from real estate, machines or equipment, to IP, knowledge, or brand.
Everyone in the group takes a few minutes to note down all the organization’s key assets that come to mind. After that, everyone shares their notes and discusses them. To close this exercise, the group conducts a voting activity to prioritize the organization’s most important assets.
03 Options — What pivots could you make?
Before moving into creating new strategies, we first want to get the creative juices of the group flowing. We will need people to think very differently from the way that they are thinking at the moment. Therefore we need a warm-up and transition exercise to prepare the mind.
Trying on some pivot options, without more profound analysis, is a great way to do just that. On the canvas, we have eight different pivot options prepared with a list of example actions. Every one of those is a potential new strategic direction that can be explored.
We recommend going a few rounds with this exercise. One member of the group selects a pivot direction they want to explore, and then the group discusses what that would mean for their organization and takes notes. Explore what would change, what would stay, and what that would mean.
Encourage out-of-the-box thinking — this exercise is purely to stretch the creative muscle, get a bit more familiar with pivoting, and try on a few options. Be as left-brained as possible, and have fun with it.
04 New Angle — Work out your options and test
In the final exercise, we bring it all together. The goal here is to develop three concrete directions that could potentially be the new strategy and find ways to experiment with them.
To start, drag each of your three top challenges into the three boxes. Now go one-by-one through the challenges, starting from the top, and discuss where the largest impact of that challenge lies and what kind of pivot might be appropriate. Following that, discuss which assets would be the most valuable in that particular pivot scenario.
Once you have picked your pivot and critical assets, discuss what that would mean for your organization. What changes? What remains? What is the impact? How difficult would that be to pull off? Finally, after you have a good grasp of that new direction, discuss the easiest and cheapest ways to prototype and test that direction.
Ideally, you run through that exercise for your three top challenges, have a few options in terms of your new direction, and run multiple experiments. From there, follow the typical Lean Startup cycle and iterate your way to a new direction that shows traction.
PRACTICE: 4-Step Framework
To put these four steps into practice, you can access the MING Labs Miro framework below and find out what pivot options work best for you. Try it out and let us know your results in the comments!
Summary
With today’s changes that come with the new normal and with scenarios that present lasting impact, pivoting isn’t only a ‘nice-to-have’ anymore — it has become a ‘must-do’ for organizations. But as the most suitable pivoting option depends highly on one’s individual business needs, there is no one-size-fits-all formula.
This 4-step pivot framework is designed to ease the process of rethinking an outdated business model to ensure ongoing success, by adjusting it to new circumstances, and help organizations struggling with change find their new solution.
MING Labs is a leading digital business builder located in Berlin, Munich, New York City, Shanghai, Suzhou, and Singapore. We guide clients in designing their businesses for the future, ensuring they are leaders in the field of innovation. For more information, visit us at minglabs.com
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