To Pivot or Grit is the question...

In the dynamic landscape of business and innovation, deciding to persist with an initial idea or pivot in response to environmental cues and audience feedback is a determining crossroads. This dilemma resonates across diverse entities, from emerging start-ups to well-established corporations and even individuals carving their professional paths.

Embarking on a journey of entrepreneurship or initiating a new project brings the inevitable question: How long should we hold on to an idea? When is the right time to make a move? When is it wise to challenge conventional approaches and embrace change? The dichotomy of decision-making, represented by persistence and conversion, manifests in familiar and unfamiliar environments.

When problems are known, grit can be tailored based on contextual factors. However, when facing new challenges, the pivoting system can position a venture advantageously in an unexplored landscape. So that to pivot or not is the question.

Coined in 2009, "pivot" denotes a structured course correction designed to test a new fundamental hypothesis. Entrepreneurs commonly use it, viewing it as a method to validate propositions related to business models and a necessary step in finding the correct strategy. Although it shouldn't the commonality, negative customer feedback or a flawed business model often triggers a pivot, particularly prevalent in industries like software and hospitality.

Skyless Game Studios is an excellent example of software strategic pivoting; it chose to transform from being an app company to a video game company in its early stages. In their article "Agile for Social Good," they shared some of the learnings that influenced that decision; "Having frequent, honest, and collaborative retrospectives have really allowed us to improve continuously throughout the journey. In addition to the incremental process /product improvements, our decision to pivot our entire business idea early on from an app company to a video game company was intimidating but extremely consequential. If we had not applied the retrospective process or had decided to mindlessly pursue our original idea without evaluating online feedback and market circumstances, we would have most likely failed as a company with no sustainable path to revenues or investment. We learned that timing is everything and pivoting at the right time can be very positive and powerful even if it might initially seem like simply cutting your losses." 1 (Malhotra & Hashmi, n.d.)

In contrast, the concept of 'holding on' or perseverance is seen in larger organizations of a more conservative nature. While data analysis reveals a tendency for start-ups to pivot multiple times in a short period, large organizations such as manufacturers or finance often adhere to set missions and archaic processes for extended periods, like betting on a dead horse, sometimes to their detriment.

An example is Kodak, a camera company that suffered business and sales losses amid the digital camera and photo revolution due to a failure to invest in new technology. It resulted in the camera market advancing without them, as customers sought newer models from competitors. They had the best platform to lead the photo industry, but their strategy needed improvement. Had they allocated funds to technological experimentations and advancements, they would have remained the pioneers of the photo and film industries. What could have been the root cause: poor business strategy or lack of vision from leadership and stakeholders? Persevering on a flawed strategy can impede organizational output and slow business performance in an ever-changing environment, demonstrating faulty vision or poor decision-making.

Strategic planning failure occurs when businesses need help to address challenges posed by disruptive systems or emerging markets, hindering the achievement of corporate goals. For instance, we all remember how cool the Blackberry was; it was strongly accepted by companies and individuals alike. However, Motorola faced strategic planning failure when it attempted to market luxurious cell phones in 2009. This investment in a niche technology and market led to significant financial losses. A few years later, in 2014, Lenovo, a computer company, acquired Motorola and has owned it ever since. This failure can manifest on various levels, from large-scale instances like unsuccessful mergers to more specific issues within teams where mutual appreciation and support are lacking. Successful avoidance of this failure requires corporate leaders and team members to identify necessary changes to achieve optimal success.

Regarding model experimentation, Amazon Styles is a prime example of it; earlier this year, they announced the reimagined in-store shopping. Using the Amazon Shopping app, customers could send items to a fitting room, access a touchscreen to browse more options, rate items, and request more sizes or styles coming to their fitting-room within minutes. The concept was great, and given Amzon's popularity among consumers, it made sense to combine that with an innovative platform to create an unparalleled CX concept. However, as I hypothesize, the current environment and societal trends did not render the proper opportunity to profit from it. Thus, in October this year, Amazon announced its exit from that business venture. The pivot, of course, came with a price; numerous orgs were established to make this venture come to life, all of which meant a great deal of resources and financial planning. While a multi-billion dollar company can afford that type of investment, start-ups, and newer ventures wouldn't be able to survive that kind of swing.

Let it be known that despite the allure of pivoting, maintaining a steadfast posture in fulfilling a vision comes with its merits. The pros include building resilience, fostering consistency, and achieving long-term goals; this, of course, while maintaining awareness of the environment.

Moreover, research findings on these topics have shed light on the intricacies of this decision-making dilemma. Key takeaways include the importance of business model experimentation, which can be critical in deciding what to continue to invest in and what to put to rest.

Nokia is a known example of both pivoting and persevering; while they are not the top mobile device company, they found their way to lasting brand value. In the 20th century, Nokia diversified its production, spanning rubber goods, electronics, and telecommunications devices. In 1992, the company ventured into mobile phones, marking a pivotal moment. Opting for a strategic shift, Nokia decided to concentrate exclusively on mobile devices, divesting all other divisions by the end of the same year. From 1998 to the late 2000s, Nokia dominated the global mobile phone and smartphone market. However, due to poor management decisions, its market share plummeted. Microsoft acquired Nokia's mobile phone business in 2014, renaming it Microsoft Mobile. Post-sale, Nokia shifted focus to telecommunications infrastructure, IoT technologies, and ventures into virtual reality and digital health. In 2016, the Nokia brand re-entered the mobile market through a licensing arrangement with HMD Global while continuing to be a significant patent licensor in the mobile phone industry.

Deciding to pivot or persevere is not one-size-fits-all; it's a nuanced choice influenced by each venture's specific market and audience. As we navigate these crossroads, entrepreneurs, organizations, and individuals must leverage the available insights from historical trends, case studies, and research findings. The success lies in striking a balance between adaptability and resilience, ensuring that the chosen path aligns with the ultimate goals of the venture in a sustainable fashion.

1. Malhotra, A., & Hashmi, A. (n.d.). Agile for Social Good: How I built a Forbes Under 30 Video Game Startup.