When To Pivot: Lessons Learned On A Tumultuous Boat Ride
Updated: Sep 18
On my catamaran trip on the Napali Coast, I learned one important thing from the captain: know when to retreat and regroup. We headed against 8-15 foot waves with 20-knot winds. The customers were getting seasick, everyone was cold and wet from the waves splashing over the bow, and the adventure was quickly becoming a burden. So, he turned around. And the reward for this decision was finding something entirely new – a whale repeatedly breaching to showcase his prowess to a female whale. We were treated to the show of our lives. (Full Video)
This experience perfectly illustrates a crucial lesson for leaders and entrepreneurs: sometimes the path you are taking has too many potholes, and you need to slow, stop your momentum, or pivot.
Knowing When to Change Course
How do you know when to slow, stop, or turn? Let’s take a look at some famous pivots to learn from them:
Slack: Started as a game company called Tiny Speck, but the internal communication tool they built became more popular than the game itself.
Instagram: Began as a location-based check-in app called Burbn, but the photo-sharing aspect resonated more with users.
Nintendo: Initially a playing card company, they pivoted to video games and became a global entertainment giant.
Avon: A door-to-door book sales company that started offering perfume as a free gift, which became their main product.
What these examples have in common is that they all recognized an opportunity in a different direction. They were willing to abandon their original plan when they saw a more promising path.
What are some signs that a pivot is in order?
It's not always easy to tell when your business needs a change of direction. Here are some key signs that it might be time to consider a pivot:
Market and Customer Signals:
Decreasing sales or leads: This is a major red flag. If your numbers are consistently declining, it's a clear sign that something isn't working.
Lack of product-market fit: Are you struggling to find customers who truly value your offering? Are your customers bailing shortly after signing on? That means there may be a mismatch between your product/service and market demand.
Changing customer needs or preferences: The market is constantly evolving. If your customers' needs have shifted and your business isn't keeping up, you risk becoming irrelevant.
Increased competition: If new competitors are entering the market and taking your market share, you might need to differentiate yourself or target a different niche.
Negative customer feedback: Are you receiving consistent complaints or negative reviews? This feedback can provide valuable insights into what's not working and where you need to improve or change.
Internal Business Signals:
Stagnant growth or plateauing: If your business has hit a plateau and you're not seeing the growth you expected, it might be time to explore new avenues.
Low employee morale or high turnover: If your team is disengaged or constantly leaving, it could be a sign that something is fundamentally wrong with the business direction.
Loss of passion or motivation: If you, as the business owner, are no longer excited about your work, it can be difficult to drive the business forward.
Limited profitability: If your business isn't generating enough profit to be sustainable, you need to make changes to your business model or strategy.
New opportunities or insights: Sometimes, a pivot can be driven by the discovery of a new market opportunity or a valuable insight that could lead to greater success.
External Factors:
Changes in the industry or economy: External factors like technological advancements, economic downturns, or changes in regulations can significantly impact your business.
Unexpected events: Events like the COVID-19 pandemic can force businesses to adapt and pivot to survive.
Important Considerations:
Don't confuse a temporary setback with a need to pivot: Every business faces challenges. Make sure you're not reacting to a short-term dip in performance.
Gather data and feedback: Don't make decisions based on gut feelings alone. Collect data, analyze market trends, and listen to your customers.
Be willing to experiment: Pivoting often involves trying new things. Be open to experimentation and learning from your mistakes.
Don't be afraid to let go of your original vision: Sometimes, the best way to succeed is to let go of your initial idea and embrace a new direction.
Recognizing these signs and being willing to pivot can be the difference between a struggling business and a thriving one.
And by devising a newer, safer, less bumpy path, you may find the gold at the end of the rainbow, just like our captain found the breaching whale.
The Leader's Role: Unbiased Observation and Avoiding the Sunk Cost Fallacy
As a leader, it is your responsibility to be an unbiased observer of the choices you and your team have made and determine the right path forward. This requires objectivity and the ability to detach from the initial vision.
One significant obstacle to pivoting is the sunk cost fallacy.
Imagine that you bought a concert ticket a few weeks ago for $200. Beyond the cost, you are super excited. All of your friends will be in attendance, and the band playing is one of your favorites. However, on the day of the concert, you feel sick, and it’s raining outside. You know that traffic will be worse because of the rain and that you risk getting sicker by going to the concert. Although it seems that the current drawbacks outweigh the benefits, why are you still likely to choose to go to the concert?
This is known as the sunk cost fallacy. We are likely to continue an endeavor if we have already invested in it. That often means we go against evidence that shows it is no longer the best decision, such as sickness or weather affecting the event.
Had the captain fallen victim to this fallacy, more people would have gotten sick, and reviews of their service would have been negatively impacted. He could have stubbornly continued on the original course, prioritizing the initial plan over the well-being of his passengers and the potential for a better experience. Instead, he recognized the changing circumstances and made a courageous decision to change course.
The Takeaway: Embracing the Pivot
A good leader is responsible for understanding when the originally chosen path is a perilous one and puts more in danger than the reward it promises. And taking an alternative path can lead to tremendous growth and potential. Sometimes, turning the boat around is the best way to discover unexpected treasures. Just like our whale encounter, pivoting can lead to opportunities far greater than we could have initially imagined.
If your business is showing signs of the need to pivot, but you are struggling with the idea of making it happen, coaching may be for you. Schedule a free coaching discovery call to explore how coaching can help you take the best next step regardless of the sunken costs.
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