There are many reasons why executives decide to pivot their companies, but the biggest one is by listening to customers and responding to their needs (faster than the competitor).
In 2007, our customers expressed the need to better govern information across controlled and uncontrolled environments. This wasn’t an area we had previously specialized in, so when we heard this recurring theme from multiple customers, we knew it was time for a change and focus on a new market with a new product. As a trusted partner of our customers, one of our top priorities is making sure we deliver value to them.
There are three main pillars to making a pivot work — Vision, Product, Commercial. Each must have a strong leader who knows how to transform an organization and balance customers, competitors and analysts.
- Vision: Someone needs to be tasked with owning the vision. Many times, this is the CTO or CSO. This person is talking to the market (customers, analysts, etc.) and asking the right questions and then documenting the results.
- Product: Once the vision has been defined, a strong product team is required to implement and execute on the vision. This includes writing detailed product specifications, writing and testing code and delivering the product to market.
- Commercial; The vision is defined and the product is developed, what’s next? A motivated team to market, sell and service the offering. The team needs to understand the business value and market potential measured on the financial success of the initiative.
The change wasn’t easy and it took time, but eight years later we know we made the right decision. Whether you’re in the throes of a pivot or still determining if it’s right for you, consider these dos and don’ts:
- Do your research. We look for validation in the market by customers, prospects, strategic partners and analysts. Customers are great for funding business-critical projects while prospects confirm they are willing to do business with a new provider. Industry analysts validate the approach with their research and the customer inquiries they receive.
- Don’t forget your existing customers. Deciding to enter a new market is always tough. You have a very strong commitment to your existing customer-base and it’s important to continue to foster good, long and trusting relationships with your current customers, while building new ones.
- Do properly allocate your resources. When it comes to resource allocation, it’s important to understand the effort is a new investment; meaning, don’t take 100% of the funds from your foundation product and allocate it to the new product. This is just a poor business decision.
- Don’t underestimate the investment. Companies should never underestimate the effort to transform a company. Going through a pivot requires 100% commitment from everyone — from the board of directors to the executive team to the receptionist. Internal and external communication is critical.
- Do have the right people. Everyone from your board to the C-suite, to additional senior executives, to operations and IT, to the marketing team, getting commitment from the entire company is critical. Ensuring you have the right people in place, doing the right jobs is a very important factor in executing a pivot.
- Don’t assume the change will happen overnight. Rome wasn’t built in a day. For RSD, the timeline was two and a half years to deliver a product to market. We disrupted a 40-year-old discipline and built a brand new product from the ground up.
Unfortunately, there is no undo button so make sure you spend some time thinking this through. Understand why you want to pivot. Research the market. Discuss the goals and objectives. Be extremely transparent to your employees, customers and analysts about the vision and status of the mission. If people become negative about the new strategy, they need to be consulted to understand the benefits of this new vision. Communication should be clear, concise and consistent.
Pierre Van Beneden is the CEO of RSD, a leading provider of information governance solutions for the enterprise. He co-authored the book “Meta Organizations” and has spoken at the World Economic Forum on the role of information technology on education. He has more than 25 years of experience driving growth at software companies through leadership and a results-focused approach. Prior to RSD, he was the vice president, EMEA, for Adobe Systems. Van Beneden holds a Ph.D. in business management from Paris University and a master’s degree in the same subject from Paris Dauphine.
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