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The Art of the Pivot

The art of the pivot is perhaps one of the keys to project innovation.  Create an MVP ('Minimum Viable Product') and then assess its interest with customers, who should be pioneers or early adopters, and best of all opinion leaders.  The critical suggestion is: 'Would you recommend this product (or service) to a friend or a colleague?"  

 

There will usually be some extra work to do and sometimes a complete 'pivot' in order to tackle the issue (problem, challenge) from a different angle.  This is called the 'pivot'.  In "Lean Start-Up" Eric Ries lists ten types of pivot.  Here they are described using examples from the world of catering.  

 

And further below are also another nine suggested pivot possibilities, inspired by Osterwalder and Prigneur in their famous "Business Model Generation" canvas.   And here's some extra comment on "pivoting" from INC magazine

 

Zoom-In

A single feature becomes the whole product.

There’s no necessity to create the whole product when the main interest is for one feature only. E.g. A restaurant decides to sell just one dish, or type of dish (say, only steaks, or ice-cream, jacket potatoes, hamburgers, sandwiches, pizzas.)

 

Zoom-Out

The whole product becomes a single feature

It transpires that customers are interested in much more than the proposed core activity. E.g. A restaurant decides to includ say, an information service, high-bandwidth wi-fi  a games area, video games and wii, a meeting room, sleep facility, night club, gym.

 

Customer Need

The right customers, but not this problem

Customers that have needs have been correctly targeted, but their most important needs are for something else.  E.g. Business customers who come to the restaurant are looking for a place to work and negotiate with potential clients; or families who have visited the restaurant would like a place to allow their children to play, or singles are looking for a place to socialize after work.

 

Customer Segment

The right problem, but not for these customers

The problem is interesting and potential solutions are available, from the technological, operational and application viewpoint, but for different customers than those targeted.  E.g. A restaurant provides sandwiches for students and then business people visit.  A patisserie and delicatessen is set up for families, but it makes a name for itself and becomes a tourist highlight.  A restaurant set up for truck drivers near the motorway becomes a stop off for people weary of motorway catering.

 

Business Architecture

High margin, low volume or low margin, high volume

High margin and low volume implies targeting a specific niche, and this could just as well be minimalist as embellished, popular or luxury.  For example, sausages have never been perceived as a luxury product, but home cooking, and good ingredients carefully mixed can create high margin for a traditionally ordinary product.  Low cost products can be high margin and pay high salaries through maximum standardization for a carefully targeted market.  Alternatively, low margin and high volume can convert a high end product into a commodity by identifying ways to create economies of scale.

 

Platform

Platform becomes more important than the product

When selling to a fast developing market with high levels of competition, it may be astute to consolidate a platform and facilities that can be made saleable to other actors in the industry, and to treat them as partners rather than competitors.  E.g. A waiter communication from table concept, a standardized preparation base, an automated stock and order system, a prepared food or preservation technology is packaged and licensed.

 

Value Capture

An intrinsic part of the product and not just a feature

An intrinsic part of the product is one that is fundamental to the product identity and is not just an add-on; the wheels as opposed to the sun roof.  However, the satellite navigation function can shift from feature to core of the product if cars are able to drive themselves.  E.g.    A bio-nutritional and health food approach becomes integral to each and every product and not just offered as an option, as in sugar-light or salt-free.   A nutritional food can combine its specific and distinguishing feature of health with tastiness.

 

Engine of Growth

Sticky, viral or paid

Either development is by recommendation and word of mouth; or repeat sales and loyalty, or by investing in sales and advertising.  The restaurant could develop presence on a recognized web site for consumer advice, or create a customer community.

 

Channel

Route to market

The Internet provided alternative routes to market.  Leasing can replace purchase, self-assembly can replace pre-fabricated, download can replace rental, or purchase can replace sharing.  E.g. The most familiar route to market in catering is a restaurant.  However, this could be in many forms such as corporate canteens, meals on wheels, home delivery, night snacks, pub snacks, travel spots such as airports and ships, or something significantly new such as a snack with an inflatable picnic table. 

 

Technology

Shift technologies for competitive edge

Product and service breakthroughs can be either customer-pulled or technology-pushed.   If customer-pulled, the customer has a definite requirment in urgent need of suitable science or technology.   If technology-pushed, the know-how is available and available for application as soon as customers can understand, adapt and apply potential solutions.  E.g. in food supply and catering, microwave ovens, food mixers, toasters, chip making machines, coffee machines, pre-prepared meals, new ways to preserve foods, nutritional foods…

 

Key Partners

Identify partners that can take your offer to another level or a different place

Instead of competing against other players in your field, ally with them, source from them or sell to them.  Once the field gets crowded, it may be that an entire new market has developed.  You could start sell to competitors the kind of services that you know from experience would be useful.  Similarly, competition brings down costs and you could benefit by using the services to extend your offer, to find new customers or to act as a sales umbrella for other companies in the field.  E.g. You have a restaurant that partners with other restaurants to provide services or obtain supplies, or with a hotel, a supermarket, a food supplier, a fitted kitchen supplier, a travel agency, another restaurant chain, a sports club…

 

Key Activities

Identify which activities in your process create and add the most value for customers

It may be any ingredient of the overall product or service that represents the key activity or the highest value added, potentially most important or cherished by customers.  It may be the ability to design, manufacture, deliver, support, buy or sell.  By asking customers you may be able to identify which activities are most important for them.   E.g.  In food and drinks preparation, development and customer cultivation, entertainment, education, relaxation, sourcing and outsourcing.

 

Key Resources

Identify which key competencies, assets, capacity or capabilities are critical to success

The business may have acquired a corner of the market in specific expertise, have access to manufacturing resources, a distribution platform, significant infrastructure, a special location.  All of these may give competitive advantage as well as barriers to entry into the market.  E.g. The restaurant may employ celebrity chefs, talented entertainers as waiters, nutritional scientists, performers and organizers, coaches, masseurs; or the restaurant may be historic or sited in a unique location.

 

Value

Identify where value is created and perceived by the customer

An ordinary customer experience can become memorable and even outstanding with the addition of certain touches; just a flourish or something more fundamental.  E.g. Decorating restaurants with certain themes, making the kitchen visible, or providing products from natural farming.

 

Relationships

Develop relationships with external parties who can provide context, information and support

Consumer guides, local authorities, regulatory bodies, business associations are all examples of relationships that can help a business to develop a network and to spread its wings.  E.g. Restaurant and tourist guides, health and safety officers, local authorities...

 

Channels

Develop original, different and appropriate routes to market

The Internet offers an obvious channel, and in fact more than a single channel, because there are many different sub-channels, such as those involving advertising, social networks, membership, e-commerce and micro-payments.  Other channels could email, exchange purchase for leasing, self-service for personalized service or vice versa.  If car companies offered vehicles for you to assemble on the Internet, or furniture was for rent, the channels would have switched.  E.g. A restaurant that allows people to micro-wave prepared food, or to choose the food that is afterwards cooked in a wok, are changing the channel, as are home delivery services and frozen foods.  

 

Clients

Change your approach to customers and clients

The entire process of service to customers can be analysed and updated at every step, from when the customer first becomes aware of an offer, to when the product is purchased, delivered, used and recycled. E.g. A restaurant could sell people vouchers at a discount or offer some victuals for free at certain times, allow a free meal for a fourth person.  When people can buy as much as they can eat, or that they fit on a plate, the approach has changed.  When the food arrives on a conveyor belt, the service concept has changed.  And when new technologies are introduced in order to improve the connection between appetite and delivery, then the client experience has been reorganized. 

 

Cost Centres

Assess and analyse the cost structure compared to the value model

The cost structure can be improved when the causes of cost are misaligned with customer perceived value.  For example, uncooked meat is costly to preserve and may not appeal to consumer tastes.  Spices may be expensive to supply and not be entirely appreciated by customers who are not accustomed to hot cuisine.  In the other sense, when value that is perceived is not addressed, perhaps an open and visible kitchen, an hors d’oeuvre or a smile on the face of the waiters, are aspects that produce much more value than cost.

 

Revenue Streams

Analyse and assess which customers, outlets and locations will contribute to revenues

In retailing, location and outlet is critical.  The same can be said for a perceived location, whether it is in terms of a web page or a brand image.  The customers contribute to these impressions and are influenced by the decisions that are made.  An analysis of customer behaviours and purchasing choices can raise understanding and facilitate the right business choices.  For example, the surroundings that may suit a pizza outlet, a burger and beer restaurant or a sushi bar may differ considerably.  Even the selection of the words used to describe these places may resonate more or less with the experience that is being promoted. 


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