Is A Powerful Pivot The Strategic Move Your Business Needs?

Is A Powerful Pivot The Strategic Move Your Business Needs?

Leadership | Posted by - April 30, 2019 at 12:30 am

In the life of every business, change is the only guarantee. In order to stay profitable, relevant, or retain customers, experts agree that at some point every company will have to make a pivot in one way or another, and it shouldn’t be seen as a sign of failure.


A pivot is a move a company makes “because something is either economically not working or you’re pivoting to seize an opportunity,” says Brandon Seigel, president of Wellness Works Management Partners, based in Los Angeles, Calif.

Seigel believes the only way to stay ahead of a pivot is to be sure to institute metrics that a company can review on a daily, weekly, monthly and quarterly basis.

“I’m a big believer that metrics tell the story. Determining when to pivot is usually based on the trends and objectives that you lay out in your metrics,” he says.

A common mistake, he says, is when people are afraid to read the signs and they wait too long or, they don’t pivot because of ego, thinking they will overcome what the metrics are revealing.

The most important metric of them all to watch, he says, is cash flow. More specifically, fixed versus variable expenses. Things like rent and administrative fees are fixed. But things like marketing, and income related to customer acquisition is more variable.

He says smaller companies are often less likely to pay attention to their metrics, and as a result, they fail.

The quarterly metrics are the ones that will reveal the trends that will tell you when to pivot, he says, but even shorter-term metrics will reveal important information.

The number two metric that entrepreneurs should pay attention to, he says, is customer acquisition cost. 

“If you create a business plan on the fact that you’re going to have customers, let’s say they have to purchase a subscription monthly, and you’re not measuring the retention of that, you’ll have to pivot that business model because otherwise you’re going to fail.”


A pivot is not always a major overhaul of a company, Siegel says. He explains that there are multiple kinds of pivots:

•    Adding or changing employees/team pivots
•    Shifting overhead pivots
•    Changing the business model pivots
•    Downsizing pivots
•    Mergers and acquisitions are a form of pivot

He argues, “There’s no business that doesn’t pivot in its lifetime.”


The question is whether you want to pivot for “either a survival condition or in order to thrive,” Seigel says.

Seigel says the people that pivot and thrive are typically experienced entrepreneurs who are proactive in paying attention to their metrics and changing with the times.

“The people that pivot for survival are usually making a last chance effort,” he says.

Akiva Goldstein, founder and senior network engineer for Onsitein60, an IT company based in Manhattan, N.Y., knows what it’s like to make a last-chance pivot for survival. His company spent thousands of dollars on customer relationship management (CRM) software and continually hit roadblocks. Not only did the software not do what they wanted, they were losing leads and sales. 

“We had to make a radical change,” Goldstein says. After what he calls a “war room meeting” in which they got very clear about their “wants and needs” they decided to invest in paying a developer to customize the software they needed exactly to their specifications.

“It literally transformed our company,” Goldstein says. The software took four months to develop but it allowed them the ability to customize it as needed. “We’re able to do small pivots all the time really cheap because we’re not locked into a software,” Goldstein says.

Whenever and however a company opts to pivot, Seigel reassures companies not to view pivoting to mean they did something wrong or miscalculated. “I believe pivoting is a sign of staying agile,” Seigel says.

Tags: business, business advice, business success, entrepreneur, leadership, marketing, metrics, money, success

Jordan Rosenfeld

Jordan is a freelance writer and author of eight books--six writing guides and two novels--most recently: How to Write a Page Turner (Writer's Digest Books). Her articles and essays have appeared in such publications as The Atlantic, Daily Worth, The New York Times, Quartz, Scientific American, The Washington Post and many more. Follow her: @JordanRosenfeld on twitter, or visit:

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