The Tough Decisions That Keep Businesses Alive
Every business reaches a point where it must make tough decisions to survive. Should it stick to the plan or pivot? After years of offering free checked bags—even multiple free checked bags—a big change was coming to Southwest Airlines. For the first time in its 53-year history, the airline was instituting baggage fees. The airline believes this move will yield $1.5 billion a year and strengthen its financial outlook.
This is a hard lesson for business owners. As a business coach, I frequently watch companies wrestle with the difficult but essential changes they need to make. From adjusting pricing to rebuilding a team to rebranding, tough decisions often determine whether a business thrives or struggles.
How Businesses Can Pivot to Stay Profitable
The market is always evolving, and solutions that worked in the past may no longer be effective. Business coaches help companies recognize when it’s time to pivot by focusing on the key drivers of profitability, which may include:
1. Market Changes
Shifting customer behaviors and expectations often require new approaches. Businesses that fail to adapt risk losing relevance.
2. Competitive Pressure
When competitors introduce more profitable strategies, it’s time to reassess and refine your business model.
3. Technological Developments
New technologies can disrupt industries overnight, making adaptation critical for long-term success.
Smart Decision-Making: The Southwest Airlines Pivot
For years, Southwest Airlines was an outlier among major airlines, offering two free checked bags per passenger and maintaining a budget-friendly reputation. But with rising fuel and labor costs, the airline faced a tough decision: stay true to tradition or align with industry standards to protect profitability.
By implementing baggage fees, Southwest mitigated the risk of financial losses while ensuring sustainable revenue. The key takeaway? Sometimes even long-standing policies must evolve for a business to survive.
How a Business Coach Can Guide You Through Change
A successful pivot requires more than just changing direction—it requires moving in the right direction. A business coach helps companies navigate strategic pivots through a structured process:
1. Assess the Problem
A business coach helps evaluate the core challenges, whether it’s declining revenue, rising costs, or changing customer needs.
2. Identify Opportunities
Once the problem is clear, the next step is identifying solutions. Could adjusting pricing, cutting expenses, or expanding services create a more sustainable model?
3. Test Before Committing
Drastic changes carry risks. Smart businesses test strategies before fully committing. Before implementing baggage fees, Southwest likely ran financial models and conducted customer research.
4. Communicate Effectively
Change can be difficult for both customers and employees. A business coach ensures messaging is clear, transparent, and aligned with company values.
5. Track and Adjust
Once a business pivots, it must monitor performance and remain flexible. Long-term success requires ongoing adjustments based on data.
Other Businesses That Successfully Pivoted
Southwest Airlines isn’t the only company that has had to adapt. Some of the biggest brands in the world have made major pivots to stay profitable:
- Netflix: Transformed from a DVD rental service into a global streaming giant.
- Amazon: Started as an online bookstore before expanding into e-commerce, cloud computing, and beyond.
- Slack: Began as a gaming company before pivoting to team communication software, becoming a billion-dollar enterprise.
Should Your Business Pivot?
If you’re facing stagnant revenue, rising costs, or shifting customer demands, it may be time for a pivot. A business coach can help you assess the situation and guide you through the transition.
Southwest Airlines made a tough choice, just like many other successful companies. The key is recognizing when to pivot before it’s too late.
Are You Prepared to Make the Right Business Decisions?
When revenue plateaus, costs rise, or customer needs evolve, businesses must adapt. A business coach can help you determine if it’s time to pivot and provide the guidance needed to navigate change.
Southwest Airlines took action—and so have many other successful businesses. The question is: Are you ready to pivot before it’s too late?
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