The Art of Pivoting in Business

It is fascinating how some of the world’s most recognisable brands began in industries that are almost unrecognisable today.

Pivoting or changing direction for a business is incredibly hard to do. However, when done well, it unlocks a new era of growth and ensures long-term longevity. Let’s start by looking at a few well-known examples:

• Nintendo: Established in 1889 in Kyoto, Japan, as a manufacturer of handmade playing cards. We all know what they do today.
• Longchamp: Still run by the Cassegrain family, it started as a Parisian tobacco shop supplying leather-covered pipes to the wealthy. They transitioned into leather passport covers, opened their first workshop in 1959, and eventually specialised in high-end luggage and luxury handbags.
• Apple: Moved from designing incredible computers to offering full hardware and software integration. By launching iTunes and the iPod, they successfully pivoted directly into the music industry.
• Hermès: Began as a harness workshop serving European noblemen who needed durable, high-quality gear for their horse-drawn carriages.

The point is clear: any business that has survived for decades and scaled to global heights has had to pivot at least once.

What can we learn from these corporate evolutions? Here are the four key pillars of a successful pivot:

1. Build a Strong Core Expertise First

There is an art to pivoting successfully once a business reaches maturity. All of these companies were able to pivot because they had already mastered a very specific domain. For Hermès and Longchamp, it was the craftsmanship of leather. For Apple, it was hardware design. For Nintendo, it was the psychology of play and games. You cannot pivot a business if a foundation isn’t solid.

2. Perfect Timing and Future-Sensing

Having the ability to spot opportunities located in the future is absolutely crucial. Hermès’ transition into fashion was a literal response to the “death of the horse” caused by the rise of the automobile. As people traded carriages for cars, Hermès traded saddles for luggage and handbags, using the exact same sturdy “saddle stitch” they’d perfected for equestrian gear.

Fun fact: This is why the Hermès logo still features a ducal horse and carriage today. It’s a permanent nod to their origins in the stable.

3. Maintain an International Outlook

Most companies that successfully pivot do so because they are intensely curious about world markets, consumer behaviours, and global travel. When founders expose themselves to different cultures and practices, it emulates their curiosity and sparks the imagination required to see what their business could become.

4. Radical Focus and Spotting Anomalies

Pivoting a business towards something different is painful and can feel incredibly risky. You cannot underestimate the importance of focusing entirely on the new direction through relentless innovation and experimentation.

This requires the subtle work of spotting market anomalies.

Steve Jobs was well aware of the anomalies in the music industry when illegal downloading took over. He saw that the only way to save the industry was to create the iTunes Store, a platform so well-designed and easy to use that consumers would gladly pay an attractive price for songs. It single-handedly rescued a music industry that was on its knees at the time.

I was working in the music industry at that time, and I lived through this firsthand. While that specific anomaly was massive and hard to miss, most market anomalies are much subtler and harder to identify.

Conclusion

Pivoting is not about changing who you are as a business; it’s about applying what you do best to where the world is going.