As the saying goes, the only thing constant is change. One of the biggest challenges businesses face is whether to make tactical adjustments, or go for fundamental changes in strategy. Nearly all businesses—whether startups or established companies—will change a fundamental aspect of their business model at some point. Some will identify the need to change early and treat it as an opportunity, while others will await the next survival crisis. But given the extent of disruption brought by technology and cultural shifts, particularly over the last five years, CEOs talk more often of “pivoting” than of “staying the course”.
As Eric Ries, author and creator of the Lean Startup methodology explained, “a pivot implies keeping one foot firmly in place as you shift the other in a new direction.” The image works best for me as an analogy to football–a player pivots to find a better path to the goal line. In business, it is essential to understand if you’re changing your route, or the goal itself
Business pivots are often in response to or anticipation of moves by competitors, changes in the economy, emergence of new technologies and/or shifts in consumer behavior. All of these factors spurred us to create ViewLift, an end-to-end technology and services platform enabling the highest quality content to reach the greatest number of consumers across all of the devices they favor. As new technologies made it easier for consumers to view internet-streaming content, many households began to change the way they view television, films and similar video. Thanks to our visionary Board, we made the bet more than three years ago that this shift wasn’t a one-hit wonder; in fact, consumer demand for the content they wanted, when and where they wanted to consume it, was fundamentally changing everything.
From that experience, we have distilled four ways to prepare for your next pivot, no matter your industry:
1. Know when it’s time. I love Game of Thrones, but if the Starks have always said “Winter is coming”, the family motto sure isn’t a weather report. In business, it can be difficult to distinguish between a hot, but temporary, trend and a new way of life. As CEO, you get the big bucks to be right about timing. You know the shortcomings of the business you’ve been in; try to learn as much about the direction you’re heading. “Data-driven” implies decision-making guided by the quantifiable, amplified by real customer feedback and relentless testing. Caution does not mean being blinded by your initial vision. Founding CEOs have a particular problem letting go of the initial concept that led to the business’ creation – I know I did. But the leader’s job is to hear what the market is saying, and bring your shareholders and colleagues into the process of responding to that market reality.
2. Change uniquely. You may be headed somewhere new for you, but is it clearly different from what your competitors offer? A new business approach built on your strengths and acquired knowledge still needs market differentiation. When we launched ViewLift, we knew we were entering the B2B market from an unusual vantage point – having operated 5 different channels of our own across as many as 21 different devices – but that operator’s perspective wasn’t going to be enough, alone, to distinguish us. Most new market entrants offer uniqueness in features and often, price and terms. What will make yours stand out with customers?
3. Be customer obsessed. In today’s digitally-connected world, companies have to rethink fundamentally how they connect with the marketplace. My oldest son, an engineer and software product designer, has contrasted innovations that come purely from engineers building something they think is cool, and companies that harness that creativity in service of clear customer needs. What problem are you solving – and can you grow to solve even more for that customer at every stage of the lifecycle? I’d also recommend spending extra time with your top customers. Learning the highs and lows of their experience with you will help you refine how you’ll deliver more value others.
4. Remember your employees are key. Business is a team sport, and pivots are a team maneuver. Change is difficult enough, but don’t make it worse by keeping your employees in the dark. Share the light. The less they know, the more fearful of their job security they will be. Ensure they hear company news from the company rather than outside sources. By being transparent and equipping them with key messaging and insight, your employees can be your most influential change agents. The key is to lay out why the new or additional direction will make their jobs more rewarding.
A number of companies have been through this process and strategically pivoted to capitalize on market opportunities. Take Starbucks for example. While Starbucks’ business was built on coffee, they initially didn’t actually brew any beans. Starbucks began in 1971 simply selling espresso makers and coffee beans. When Howard Schultz decided to pivot the business to resemble European-style coffeehouses, he stayed true to the company’s initial goal of helping people enjoy coffee.
And there are countless others. Apple started with a focus on computer hardware, and pivoted into today’s e-commerce service and mobile consumer products giant. And Steve Jobs’ other company, Pixar, had begun selling really expensive computer hardware, going through a series of near-death experiences before it moved into producing animated films with Toy Story.
So the next time you see the need to change your business’ direction, know you’re in good company. As Winston Churchill said, “to improve is to change; to be perfect is to change often.”
Rick Allen has run successful companies in nearly every form of media, and helped to develop or extend some of the country’s most prestigious brands. Rick is the founding CEO of SnagFilms, which he helped to create with Ted Leonsis. The company is a leading distributor of independent films, with thousands of titles offered online and across all mobile and TV-connected devices.
SnagFilms also offers a tightly-refereed selection of films on all major pay platforms. The company owns and operates Indiewire, the independent film industry’s leading news service and blog network, twice named top entertainment site by the Webby Awards. SnagFilms’ newest unit, ViewLift, is a unique platform helping media companies extend their audiences in the OTT, mobile and web world, via proprietary technology, leading industry relationships, and complementary additional content. Named in 2013 by Red Herring as a Top 100 company in North America and a 2014 Webby nominee, SnagFilms includes among its investors Mr. Leonsis, as well as Steve and Jean Case, New Enterprise Associates, Comcast Ventures, the Knight Foundation, Clark Enterprises and Terry Semel.
Allen joined Leonsis to produce Kicking It, which screened at Sundance, Tribeca and other film festivals and was aired globally by ESPN; for the film and their work on homelessness, Leonsis, Allen and colleagues received the 2009 Stewart B. McKinney Award from the National Law Center on Homelessness & Poverty. The two thereafter produced A Fighting Chance for ESPN, and a 2014 documentary, Lost for Life, televised in nearly 60 countries, including on Lifetime and the BBC.
Previously, as President and CEO of Sporting News, the country’s oldest sports media company, Allen led a revitalization that saw it named twice to Adweek’s annual “Hot List” as a top-10 media property. Earlier, he served as President and CEO of the for-profit arm of the National Geographic Society, responsible for television and film; interactive products, websites and e-commerce; maps; travel; retail; catalog; and consumer products. Under his leadership, the National Geographic Channel was launched and became one of the fastest growing cable channels in history. Before coming to National Geographic, Rick was a senior executive at Discovery Communications, parent of the Discovery Channel, where he extended the company’s brand into filmed entertainment, education, technology and retail.
He also served in the White House as a Deputy Assistant to President Clinton, helping to establish AmeriCorps (the domestic Peace Corps). Before his White House service, Allen was CEO of a privately-held group of 35 companies based in Los Angeles. He has written and lectured widely, and been active in civic affairs particularly dealing with education. He has received a number of industry honors. Rick and his wife have 3 sons.