The ability to adapt and change course can be the difference between thriving and merely surviving in today’s fast-evolving economy.
In turn, ‘pivot’ has become an increasingly common term in the corporate lexicon, especially over recent years, as companies face unprecedented challenges and opportunities.
What is a pivot?
A pivot is a strategic shift in a company’s direction, involving fundamental changes to its business model, product offering or target market.
Organisations pivot for many reasons, driven by the need to respond to market shifts, technological advancesand evolving customer expectations. It is a recognition that the current path may not lead to the desired destination and a significant change is necessary to open new growth avenues.
Famous examples include Slack’s move from gaming to collaboration software and Nokia’s journey from a paper mill to telecommunications powerhouse, illustrating that pivots can come from the most surprising of places and lead to extraordinary success.
Indeed, even Play-Doh started life as a wallpaper cleaning product.
The increasing prominence of pivots
The business landscape is developing faster than ever – and with it, the desire and necessity to pivot has increased. Digital transformation, the rise of hybrid work models and an increasing focus on ESG (Environmental, Social and Governance) principles are all forcing companies to radically rethink what they do, why and who for.
Companies are finding that to stay relevant and competitive, they must be agile, embracing change not just to grow, but to survive. The shift towards subscription-based models, the integration of technology in traditional sectors and the need to embed sustainability are just a few factors prompting businesses to reconsider their trajectories.
Thriving through a pivot
We know all about the pivot at fulfilmentcrowd. We have lived the process, transforming from a niche ERP software developer to a market-leading third-party fulfilment services provider in the aftermath of the global financial crisis.
Our transition to tech-led logistics emerged from a combination of customer demand and the need for growth beyond existing capabilities. Sparked by an enquiry from an ecommerce client, we saw an opportunity to expand our value proposition beyond just software solutions, which were profitable but had reached a plateau in terms of future potential.
We initially provided services from our own warehouse but expanded capacity by applying sharing economy principles and adapting the fulfilmentcrowd software platform, securing agreements with partners in the UK before spreading our wings into the USA, Germany and Netherlands before the pandemic in 2019.
Today, we operate a unique model that is protected from imitation due to the technological complexities that have been overcome; the business has its software development origins to thank for that. It is also sustainable by design – rather than building our own fulfilment centres we utilise the millions of square feet of existing underused warehousing globally.
Our pivot therefore was not about adding services; it was a strategic realignment that has propelled us to international growth and leadership in fulfilment solutions. Today, we operate a global footprint of 1.57 million square feet across 15 fulfilment centres which is powering profitable growth, evidenced by a 17% increase in year-on-year revenue and 83% EBITDA rise in H1 of FY24.
Recognising when to pivot
We have learnt a lot about pivoting along the way. First and foremost, it is a decision that should not be taken lightly. It requires a deep understanding of your market, a clear vision for the future and the agility to change course when necessary.
Key indicators that a pivot might be needed could include persistent challenges in catching up with the market, excessive competition, hitting a growth plateau or finding that only part of your business is thriving. For us, it was all about pushing through the barriers to growth and creating a model that could generate revenue as we slept.
Top tips for a successful pivot
If I was asked what the most important things are in order to successfully pivot, I would recommend focusing on the following:
- Assess your current position: As a first step, take a hard, honest look at where your business stands and its current potential. Back in the noughties, we knew that there was little growth potential in our market and competition was driving out margin. Thinking long-term, the need for change was existential.
- Listen to your customers: Often, the market will signal the need for a change. For us, customer feedback was crucial in kickstarting our evolution.
- Embrace agility: Pivoting requires flexibility and a ‘test and learn’ mentality. We quickly adapted how we used our warehouses and evolved relationships with partners to successfully move into a new market.
- Focus on your strengths: Identify what you do best and consider how these strengths can be applied in a new direction. For us, we had strong expertise in developing ERP-class software and we utilised that to provide an unrivalled 3PL service offering.
- Communicate clearly: Ensure your team is on board and understands the vision behind the pivot. This was key for us and I am proud of how many of the team have stuck with us through the journey.
The central point
Pivots are increasingly becoming a part of the strategic toolkit for businesses aiming to stay relevant and meet new opportunities in today’s market landscape.
It is not a cure-all solution, but a well-executed pivot can redefine a company’s future, opening new pathways for growth and innovation. At fulfilmentcrowd, our transformation journey is a testament to the power of strategic pivoting, driven by customer needs, market insights and the relentless pursuit of doing things better.