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Don't Be a 'Pividiot.' Follow These Tips. Constantly changing directions can harm your business. So how do you know when it's a good time to pivot?

By Matthew Toren

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Something commonly referred to as a "pivot" -- essentially, changing your company's direction -- can be an invaluable tool for entrepreneurs. But like so many good things, pivoting can turn bad fast. The key is to know when to pivot and when to stay the course.

I know an entrepreneur -- let's call her Sally -- who is actually pretty brilliant. But for all her brilliance and several years of work, she has not come very far with her company. Sally is an amazing idea person. She thinks of strategies, angles, and business concepts that most other business people would miss.

However, Sally's business struggles year after year. She is seen by her peers and friends as someone who just hasn't hit on "that one thing" yet. It probably baffles many who know her. How could such a smart, hard working, creative entrepreneur not be successful?

Sally's problem is that she is (with all due respect) a "pividiot." She regularly throws all her genius and hard work out the window in favor of a new "great idea." And let me be clear, these often are really great ideas. The problem is that they rarely have time to take hold before they're scrapped for something she believes will take her company in a better direction,

While she has maintained the same overall business concept (loosely), her website, offerings and company mission have changed significantly a number of times over the past few years. She's changed her revenue model many times, and don't even get me started on her logo, which may very possibly have set a record for most number of "final" versions for one company's logo.

Related: 6 Signs It's Time to Turn Your Startup in a New Direction

I'm picking on Sally, but I know she's not the only "pividiot" out there, and I want to keep others from going down the path of "pividiocy" (too much?). So, how can you know if it makes sense for your company to pivot or not? What if you have an amazing idea that could up your game and transform your organization into a global empire? How do you know if you're caught up in the excitement of a fresh, new idea or if this change will really be good for your company?

Here are three steps to make sure you're making a smart pivot:

Pretend you know nothing. Forget what you've learned through running your business up to this point -- just for a moment. Look at this new idea or direction as its own standalone concept. If you were starting a company from scratch today, is this the direction you would take? Would it bring unique value to the marketplace that would equal success for you and your company?

Remember what you do know. Now think about all you've learned while building your business. If you had started out in this different direction, what would your company look like today? What challenges would you have avoided? What additional challenges might have come up? Most importantly, why would this fresh concept have been so much more successful than what you've done up until now? If you could run two companies -- one as you are now, and the other using this new idea -- where would each company be five years from now and why?

Dig deep -- like, soul-searching-deep. The first two steps are about proof of concept. You need to figure out if this really is a viable pivot that can bring a significant improvement to your company. But even if you determine it's a sound idea, this third step is critical. You need to be completely honest with yourself about why you are thinking of changing your business.

In Sally's case, it is fear that keeps her shifting from one direction to another. She is afraid to commit 100 percent to giving one model everything she's got. It's the classic fear that touches most entrepreneurs at one time or another: "What if I give it my all and fail anyway. Then I'm really a failure."

Could that be why you're looking at a new direction for your company? Or maybe if you're really honest with yourself, you'd admit that you're looking for a fast path to success -- maybe one with less work and quicker rewards. There's nothing wrong with that at face value. It's a good gig if you can get it. But you better be sure you're not abandoning something that just needed a little more focus to break through in favor of a pie in the sky "what if." Because that, my friend, would make you a "pividiot."

Related: The Art of the Pivot

Matthew Toren

Serial Entrepreneur, Mentor and co-founder of YoungEntrepreneur.com

Matthew Toren is a serial entrepreneur, mentor, investor and co-founder of YoungEntrepreneur.com. He is co-author, with his brother Adam, of Kidpreneurs and Small Business, BIG Vision: Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right (Wiley). He's based in Vancouver, B.C.

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