Momentum Podcast: 614

How Hard Should You Pivot?

by Alex Charfen

Episode Description

One of the questions I'm getting most often today is “how do I know how much I should pivot?” This comes as no surprise because 100% of businesses are going to pivot in some way due to this crisis.

The key to surviving this crisis and thriving as a business is knowing how much you should pivot and why. There is a clear way to understand what your business needs to do and why do you need to make a minor, major, or absolute pivot.

I've helped hundreds of entrepreneurs and grow businesses through a crisis, knowing exactly how to set your company up for success is crucial.

Full Audio Transcript

This is the Momentum Podcast.

Given the crisis in the world today, it should come as no surprise that 100% of businesses are going to have to make a pivot in some way. The key to surviving this crisis and thriving as a business is knowing how much you should pivot and why. In this episode of the Momentum Podcast, Alex is going to take you through the framework that we teach businesses on how to understand whether they should make a minor, major or absolute pivot. I hope you enjoy.

I'm Alex Charfen and this is the Momentum Podcast. Made for empire builders, game changers, trailblazers, shot takers, record breakers, world makers and creators of all kinds. Those among us who can't turn it off and don't know why anyone would want to. We challenge complacency, destroy apathy and we are obsessed with creating momentum so we can roll over bureaucracy and make our greatest contribution. Sure, we pay attention to their rules, but only so that we can bend them, break them, then rewrite them around our own will. We don't accept our destiny, we define it. We don't understand defeat because you only lose if you stop and we don't know how. While the rest of the world strives for average and clings desperately to the status quo, we are the minority, the few who are willing to hallucinate there could be a better future and instead of just daydreaming of what could be we endure the vulnerability and exposure it takes to make it real. We are the evolutionary hunters, clearly the most important people in the world because entrepreneurs are the only source of consistent, positive human evolution and we always will be.

I wanted to check in this afternoon on a subject that I've been thinking about a ton. It's how hard do companies pivot. And here's why I've been thinking about it a ton. When the Coronavirus crisis hit, our company was coaching about 119 companies. Today we are coaching close to 170 companies. So, we've experienced some significant growth in numbers, not necessarily in dollar volume. We're now selling a lower price product which I'll talk about in a second. Is about how hard to pivot. But because I'm talking to and we are supporting so many entrepreneurs, we have been thinking a ton about how do you create an effective pivot and how do you understand how much your company should pivot. How do you evaluate? Because for so many of the companies we work with, they've been hit by a bus, because this virus has changed so much about how they have to work.

Some of the people we work with are completely shut down. Others their businesses have barely been affected and then others have been affected significantly, but here's what is clear with everybody we work with, 100% of our companies have had to adjust in some way due to this crisis. There's really... The way I see it, three types pivots. You have a minor pivot, where you're changing messaging and usually shifting and improving delivery, usually in a minor pivot. Then there's a major pivot, where your avatar has significantly changed. And then there's an absolute pivot, where you're going to do something else as a company. I'll talk about why you do that. And here's how I do everything in a business. So, before I make any type of a decision like that, I want to be able to analyze in the right way, how should I make this decision? And we have a tool that we teach companies. I actually have a longer podcast on it called Client Centric Mission. And the Client Centric Mission is how we guide activity in a company.

So, unlike some programs out there where you create a mission statement or a vision statement, then you set it aside and then you work on other stuff, the way that we train, is everything is holistic and everything is used. It's all part of the system. And the Client Centric Mission is simply the answer to four questions. Who are you going to help? How are you going to help them? What's the change you want to make? And how will you know you're successful? For us, the Client Centric Mission prior to the crisis was, we help visionary entrepreneurs who can't turn it off and we help them by showing them the systems, tools and frameworks they need to build a company and build a team that supports them. The change we want to make is that visionaries get the help they need and step into leadership rather than trying to manage. And we will know we're successful when we are seen as the place that any visionary entrepreneurs can grow an empire.

And that Client Centric Mission, who are you going to help? How are you going to help them? What's the change you're going to make and how will you know you're successful? Is exactly how you know how much you need to pivot, whether you need to do minor, major or absolute pivot. And then another framework we teach the five core functions, lead gen, nurture, conversion, delivery, retention resell and upsell, is how you know what you need to adjust in a pivot. Let me explain. So, when you look at your Client Centric Mission, who are you going to help and how are you going to help them? That's the place to focus on who are you going to help prior to the crisis? How much has who you're going to help shifted? How much has their world shifted? How much has what they need shifted? And is how are you going to help them still valid? If you have a very similar avatar and how you're going to help them is still valid, you're probably looking at a minor pivot. Let me give you an example of a couple of them.

So one, Emily Hershey's agency, Emily's a good friend of mine, she works with influencers. She's actually becoming our ad agency right now. And Emily's business, influencers are still coming to her, they still want the same Facebook advertising and they still want the same exposure. They do have different questions now, but there's... Her demand has actually gone up for her. So, who she's helping? Still influencers. How she's going to help them? Still the same stuff. They just have different questions. So, she's had to adjust messaging like, "Yes, we are attracting... This is what's going on now, this is what's relevant for this time period. This is how much less expensive advertising is in a crisis. This is how you can use it to your advantage." So, she's selling the exact same service with a shift in messaging and then a slight shift in delivery, where they are making sure that they are really staying in touch with all of their clients and understanding what's going on and just put a little bit higher touch in place. And then sharing, making sure everyone understands their numbers. So, really just reinforcing what they're already doing.

They were an extraordinary agency before, now they're still an extraordinary agency, tons of demands. So that's a minor pivot. You look at somebody like another one of our clients, Darien Kozz Robby, we call him Kosmo. Darien runs a barbecue sauce injection and rub and spice company and it's called Kosmos Q. His demand for his product's gone up. So, barely any shift in messaging, but now stuck at home doing a barbecue. So, same product, shift in messaging and then just making sure that on the delivery, they're getting all the deliveries done. They've had a huge increase in demand, so they're pivoting and they have to actually increase how much they're fulfilling, increase how much they're buying. So, every company has to adjust in a crisis. So, minor is usually going to be messaging and delivery.

Now, in a major pivot, it's when who you're going to help and how you're going to help them is no longer valid. It's shifted significantly. So, a great example is my company. For us, about two weeks into the crisis, here's what happened. Prior to the crisis, 90% of the people we were talking to were exactly who I talked about before. Visionary entrepreneur, needs help building a team, doesn't really think they can build a team and is frustrated with building a team and wants to really build an empire and we are going to help them cross that chasm. That was everybody we were talking to and they were already up and running, already growing, feeling the pain of needing to do those things. Two weeks into the crisis, 90% of the calls we were taking, 90% of the interactions we were in had shifted.

One out of 10 was growing just like Emily and just like Kosmo, but the vast majority, were telling us that they had just been hit by a bus, they needed to know how to pivot, they needed to know what to do next, they needed to get organized, to get clear, they had no certainty, they didn't know their plan. And so we knew we could help those people with certainty. I've done tons of crisis training, crisis intervention. I actually am more comfortable in a crisis than not. And I know that sounds crazy, but it's just true. I do much better in a crisis. It narrows focus, it makes things much easier for me. And I've led huge movements through crisis over and over again. And part of the reason is identifying the opportunity in what's happening. And one of the opportunities for us was, nine out of 10 people coming towards us now, who we're going to help has completely shifted.

And how we're going to help them, really was no longer valid because they had different sets of questions, different needs, because we were normally helping people that had an up and running business and now needed to go forward from there. We needed to help people understand how to pivot. And so as an organization for us, we had to make what I would say is a major pivot because it affected our avatar, who we're going to help, how are we going to help them and part of the change we're going to make. Because now what we've done is, we're no longer just helping the visionary entrepreneurs that are already growing a team, we're helping people who maybe have lost a business, are trying to figure out a business, are getting into business, have a successful company and need to understand how to navigate the pivot, aren't clear on what to do next. For us, those questions we all address very similarly with the same structure, the same format, the systems we've created are really crisis built systems.

So, what we've been teaching for years, while we're already accustomed to coaching, is the crisis management system and now we've created another layer of program for that client, for somebody who needs to come in at a $297 a month price point, way lower than we've ever offered anything. And who needs help with that pivot, who needs help moving in the right direction? So, for us that was a significant departure because we were consistently only working with people who were doing really well and so to start working, not really well, working with people who are feeling the pressure of doing well and that's why they came to us, here's what we realized. Is we needed to make a major pivot because in our business if we didn't adjust who we were going to help and how we were going to help them, we're going to see major fall off in our business that was going to be pretty catastrophic. We would only be able to talk to and engage in one out of 10 people, and the other thing was really challenging for us is most people showing up we wouldn't have a solution for.

So, that's why we made what we call a major pivot and it's who we're going to help is going to change, because now it's the entrepreneur, it's visionary entrepreneurs who need to get clear in the middle of a crisis and who also are building a company and growing a team. And the change we want to make, is helping people understand how to pivot, how to consistently pivot, how to continue making the right plans in a crisis. We are now really very clear on how to react in a market like this. And so it's changed to how and the change we want to make because now we want to make sure entrepreneurs don't get lost and they remember that we are the most consistent source of positive human evolution and that we always will be and a crisis is a period of accelerated change. We need to check in here. So that's a massive shift for us. That's why we made a major pivot.

Another one of our clients had to make a major pivot is Matan Gavish. He has an extraordinary company called Fit Hit. They teach Krav Maga and kick boxing up in New York, all in-person. They had to go from 100% in-person, to 100% virtual because how, like we teach kick boxing and they teach kick boxing to women to help them feel empowered and it's really an extraordinary company, an extraordinary story, but how they help them is in-person. Training had to shift completely to virtual. So, that is a major pivot. That is, you're shifting how you deliver, you're shifting the entire backend, you have to shift the front end message to match the backend delivery that now has shifted very significantly. They've successfully navigated it in a lot of ways, they're doing well, they're maintaining their members, they're having people show up, but that is a major pivot.

So, if your who you're going to help and how you're going to help them and the change you want to make is going to really shift, then you have to look at, you're making a major pivot. Going from in-person to virtual, is a major pivot. Going from brick and mortar to online is a major pivot that is going to take a lot of resources. And then the last type of pivot is the absolute. I've done this, I had a business in my thirties, where I didn't want to be in it anymore and I just decided to make an absolute pivot. That's how a lot of people do it. And I want to acknowledge something and validate something for everyone who's listening, especially in this crisis.

If you've had a business that you've been running that you're not in love with, if you feel this responsibility to keep doing it and you're not really wanting to, if you've been wanting to make a change and you've known it for a while, if this break from your business or this break from the activity or if you've had a break and it feels like a relief, then consider making an absolute pivot and doing something else and selling your business or getting out of it because you should love what you do. You should be excited about it. The clients that I have that are not being able to be in business right now, feel like they're being held in at the gates. It does not feel like relief. So, I've been there. I've been in a place where the feeling of getting out of my business felt like relief, so I made an absolute pivot. That's where you create a crisis. I created and said, "I'm out."

Now, in a crisis like this where it's been created, you can go back to the Client Centric Mission and ask yourself some questions. So one of our clients that made an absolute pivot is Molly Geyser. Molly is... I absolutely love her, she's one of the smartest entrepreneurs I've ever worked with and she has just this really unique artistic, creative, very giving, very sharing type of personality that I love to get her perspective. And Molly was running a business up until the beginning of the crisis called Booty Shorts, where she was selling a certification for boudoir photographers and then the crisis hit. And who are you're going to help and how you're going to help them? "I'm going to help photographers learn how to shoot boudoir, so that I can help them make a living and help them gain confidence." Well, here's the challenges. In a crisis like this, Molly made the calculation that that had shifted tectonically, it was not going to be the same market, it wasn't going to feel the same for a long time.

And when you look at the things people are going to fill in after a crisis like this and start doing, boudoir photography might be down towards the bottom. And so she also decided like I did, she wanted to make an absolute pivot. And now, she is teaching entrepreneurs how to build their own online courses. And I love watching her right now, because it's like watching an entrepreneur operate in pure joy. She's just excited every time I see her and just looks like she's loving what she's doing every time I see her. And so follow Molly, you'll see. She's also brilliant. And so the absolute pivot is where you change what you're doing completely. And the reason that I share this, and I think maybe overnight, here's what you should think about. Is where are you? Are you in a place where it's a minor, major or absolute pivoting? Here's what you can do.

Sit down and write out who are you going to help? How are you going to help them? What's the change you're going to make? And how were you knowing you're successful prior to the crisis? And then write out what that shift would be post prices and see how much different it is. For Molly, for Kosmo, almost identical, shift in messaging, a little increase in delivery, making sure you have the right stuff in place and that's minor. If there's a big shift like for us or for Matan, where the person you're helping and how you're going to help them, for us really the change you want to make has also shifted, then that's a major pivot.

And if you're like Molly or like I was when I was younger and who you're going to help, how you're going to help them, change you want to make and maybe even how you will know you're successful as a person has shifted and you've decided you no longer want to do what you're doing or your business may not be valid post-crisis or may not be valid now, and the avatar has shifted so much you can't access them anymore, then it's time to look at an absolute pivot where you are starting over and understanding what to do. And here's just a word for those of you who might find yourself in that place. I've actually now, because of who we know and how many entrepreneurs we know, I've heard of a ton of businesses that are going under and the next week or two are not going to be able to maintain or don't know what they're going to do. And I think there's going to be a lot of broken businesses and a lot of entrepreneurs who are affected by this.

And I've been there. Cadey and I in 2007 lost everything, we were bankrupt, it was one of the hardest periods of my life. And here's what I know helped us move forward if you're in this place. And the reason I'm focusing here is because I think this is the toughest place to be out of the three that I've talked about. And if you're in this place where you're making an absolute pivot, where it does feel like starting over, just remember you're not really starting over, you're just starting a business over, the experience you have, the knowledge you have, the perspective you have, the abilities you have now that you didn't have before are all there. And they are going to act as a massive shortcut for you and an accelerator for you if you do have to start over. And so understand that sometimes that is the universe's way of telling us that we need to take our skills and apply them in a different way. I'm 47 years old and I've had to go through... Not had to, I've chosen to and then had to go through more than one pivot.

My wife and I have grown businesses through every crisis we've been at. And I think part of the reason is that I realized early that every time stuff was going on that wasn't comfortable anymore, wasn't right anymore or when things were taken away that I had an opportunity to go in an absolutely different direction and pursue another outcome and another solution and another way of getting things done. And just understand that for us as entrepreneurs when we're starting over and we have to recognize what we've lost, the greater the loss you have, the greater the perspective, the ability and the skill set you bring into the current situation. And so for some of my clients that have multimillion dollar businesses that are going to be permanently affected, we've had that conversation because I have the perspective now to understand as we went through this crisis. And Cadey and I, we had some losses, we had a lot of clients drop out of our programs. When we made our major pivot, we replaced a lot of those clients and the revenue. But we went through those feelings of loss as well.

And the faster that you get over what you've lost, the faster that you set that behind you, the faster that you accept it and get real with it and measure it and quantify it. And say, "Okay, this is how much it is. This is reality." The faster you can look forward, orient towards the future and commit to growth. And that's what we do as entrepreneurs. So, remember we were made for this. We actually live a career and a life that creates crisis and making a pivot is just another part of it. And so this is a big one for a lot of us, it's a minor one for a few of us and it's absolute for a few of us. And so this is part of what we do. And if you'd like more information on this crisis, on understanding it, on adapting to it, overcoming it, that is now my mission. Is to help as many entrepreneurs as possible know for a fact that every crisis carries with it the seed of an equal and greater opportunity.

That's in Napoleon Hill Quote, but I believe it so deeply because that's what showed up in my life. Join me on our webinar, I do a full crisis raving with what you need to know to understand what's going on and how to predict what will happen next. And then adapt to the market that's emerging and know exactly what we're going to be dealing with in a lot of ways and overcome the crisis and make a massive contribution and be part of the solution., I'd love to see you there and share this for me. I appreciate you. Thanks everybody.

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