What Are Innovation Pivots & How Are They Beneficial?
Be flexible in your approach
It’s familiar to many of us: you’ve got an amazing idea for a brand new product, service or process, and part way through implementing it you realise you’re not getting the results you’d hoped for. Yes you could blindly continue on, sticking doggedly to the original plan and hoping for the best. But frankly, it’s likely to mean your project fails (or at least it succeeds down to luck rather than judgement). And if it does completely fail it’s likely to be an expensive mistake.
This is where a pivot may come in.
What is an innovation pivot?
A pivot is essentially when a project (or a whole business model) changes direction, usually down to a number of external and internal factors. However they're a fantastic chance to re-evaluate where your project is going, whether it's on track and whether it's actually still viable.
Top tip: Before deciding to pivot, follow the data
The decisions you make need to be based on data analysis from both external and internal channels. Consider reports relating to the daily running of your business, and also research data around the wider market and your competitors. Internal data should be centred around key performance indicators such as profit margins, revenue, sales, web traffic etc, plus of course consumer feedback.
But I researched my project down to the finest detail. Why would anything go wrong so I’d need to pivot?
If there’s one thing the COVID-19 outbreak has taught us this year it’s that life is unpredictable. The pandemic came out of the blue and hit companies across the world hard, bringing the innovation plans of many to an abrupt halt.
The fact is, even the most finely tuned plans can go awry - pandemic or no pandemic. Projects can over-run, unexpected costs can mount up and legislation can change, just for starters.
Making a pivot
By collecting data along every stage of your innovative project, you’ll gain a clearer picture about the direction your efforts need to go in.
Think of it like a road map. The data you harvest should guide you down the path to an innovation that is valuable to both your internal and external customers, and of course generates revenue. It should also prevent decisions being made based on opinion or ‘gut feeling’, instead leading to unbiased assessments where everyone understands the logic.
Forks in the road
During any innovation project you’re more than likely to hit forks in the road. For example, you thought you knew what your customers want, but actually your solution doesn’t fit with what they need it to do. Here you have two options: either you can pivot your solution so that it does do what the customer needs, or you can simply find a customer who it does meet the needs of. But, in most cases there’s only some tweaking required not a whole fresh start. So, if a large proportion of the project ‘works’ a pivot may well be the best option.
Another chance to pivot may come along if you discover a need that is much broader than your innovation project addresses. This might be because the need is not aligned with your brand, or requires an entirely new set of operational capabilities to deliver.
Be wary here. Just because a lucrative business opportunity has come along, it doesn’t mean it’s best suited to your business. This is where an honest assessment of the value of your business comes into play. What are your operational strengths and brand value? Are there any weaknesses? With these in mind you’re able to make a better assessment around whether continuing with the project - even with a pivot - will give a good enough financial return.
The moral of the story?
Don't be afraid to pivot. Avoid blindly carrying on with an innovative new project simply because you’ve become swept away with it. The most successful entrepreneurs keep their minds open and are flexible problem-solvers. So make sure you’re open to opportunities and ideas that may look very different from the ones you set out with.
Has your Ireland-based business undergone an innovative project lately?
Perhaps it has created a brand new product, service or process recently, or upgraded an existing one? If so, was a particular scientific or technological resolved, or partially resolved? Then R&D Tax Credits could well be available.
The Revenue-administered R&D Tax Credits scheme can benefit any Irish company, regardless of profitability, size or industry. And what makes it so attractive is that it doesn’t actually matter if the project was a success or not. Plus, up to €37.50 in every €100 of R&D expenditure can be reclaimed so this isn’t back-of-the-sofa change we’re talking about here.
The benefit is offered either as a cash credit if the company made a loss, or as a reduction in Corporation Tax for those that are profitable. Qualifying costs range from various overheads and materials used up in the R&D process to staff wages, prototypes, employer costs, product testing and much more.
As a leading specialist in R&D tax and grant processing, we’ve seen an exceptional 70% increase in calls and enquiries relating to R&D tax claims compared to this time 12 months ago. This is across both our Dublin and UK bases.
Seeking expert advice on this subject is crucial, particularly in this incredibly tough economic climate. If you wish to discover more about R&D Tax Credits, including how to qualify and apply, please do visit our R&D Tax Credits page. We also strongly recommend using our great value Tax Cloud portal too. Based on your own calculations you can quickly see your eligible claim amount and put together a fully supported application online. There’s nothing to pay upfront either, and the portal is free to sign up.
- Submitting R&D tax claims since 2001
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