8 leadership behaviours to prepare for a strategic pivot

Modern business leaders are navigating a world of relentless change. The need to create organisational cultures that can adapt and evolve is a new leadership essential.

How can leaders across an organisation successfully create the conditions for a successful pivot?

Article by:

Sharon McBroom

It’s probably fair to say that most businesses don’t see themselves as dinosaurs.

And it’s also probably safe to assume that the actual dinosaurs didn’t see themselves as dinosaurs either. On the contrary, they were successful and thriving; part of a vibrant expanding ecosystem, completely dominant astride our young world.

But then everything about their context changed – in the form of a 15 kilometre wide asteroid.

Fast forward sixty-six million years…

In 1891, William Wrigley Jr realised that his customers were less impressed by the soap he was selling than by the chewing gum he was giving away. Just two years later, he had redefined an otherwise niche product into a mass-market phenomenon.

Forty-five years later and half a world away, Lee Byung-Chull was selling noodles through his small trading company, Samsung Sanghoe. By 1969 it was transforming itself into the mighty Samsung Electronics.

In 2009, Tiny Spec was a struggling gaming company until its founder, Stewart Butterfield, realised the hidden value in the internal chat function they had created for their developers. In just four years, Tiny Spec became Slack, one of the most popular workplace communication tools in the world, worth $16 billion.

The common thread between all three entrepreneurs is a not-entirely-pain-free story of leadership, resilience and agility, pivoting towards the intrinsic value of their companies.

For modern business leaders, the accelerating pace, the unimagined technology, rapidly changing customer expectations, the overwhelming competition, politics, society, demographics, climate are very real and not going away.

A relentless shower of contextual asteroids.

Think about this for a moment: a full 88% of the businesses making up the Fortune 500 in 1955 are gone. They have failed, merged or sunk without trace. We dismiss them as dinosaurs; lumbering giants unable to adapt.

Maybe, in our new world, leaders have an advantage over both types of dinosaur: our ability to imagine; to anticipate, create and reinvent – if we have the courage to do it.

“When you’re finished changing, you’re finished.”

Benjamin Franklin (1706 – 1790)

The Leader Pivot

In our BANI world, (the steroid successor to VUCA), the life expectancy of a business is shorter than ever and it is startling clear to us that an emerging leadership competency is the ability to lead through a strategic pivot.

A business needs to pivot (change direction) when the current plan is not delivering. It is a strategic and wholehearted overhaul of: what the business does and how it sees itself, what it retains as the essence of its value and what it has to jettison.

The pivot warning signs are there for all to see but easy to dismiss:

  • “competition is tough”
  • “we are playing innovation catch up”
  • “our pipeline seems to be in a plateau”
  • “there is market boredom around our service”
  • “we are losing client traction”

Leaders succumb to the temptation to ignore the facts; to just push themselves and others even harder; to allow optimism bias to silence them.

And the painful truth is that most businesses seek to pivot far too late.

It is ironic that in most of our organisations we strive to establish the very thing that can bring about our demise: predictability. We build systems and processes that reward consistency, we shape strategic plans that promise clarity, we reinforce them in daily routines and weekly meetings – the pursuit of predictability is Valium for the organisational brain.

In a sense, this should be no surprise – we are complicit in creating it. A need to feel secure is in our psyche and we inevitably project our personal needs into the cultures of our organisations. And this is fine until our attachment constrains us: when remaining in the irrelevant or damaging present seems safer than moving to a future unknown. 

At the heart of this pivot problem is a deeply human bias: the Sunk Cost Fallacy.

The Sunk Cost Fallacy occurs when a person or group of people is reluctant to abandon a strategy or course of action because they have invested heavily in it, even when it is clear that abandonment would be more beneficial.

On a micro-scale, think about that dull cinema movie that you sat through. You really thought it was going the be great. You continued to sit there, frustrated and bored, hoping it would get better. You did that rather than leaving and finding something more interesting to do because you have a sunk cost – the price of the ticket. The fallacy lies in the belief that because you have invested time and money in it, you should see it through.

Now imagine a multi-billion dollar business that has history, money and egos invested in a failing strategy. For many, “throwing good money after bad” is a more acceptable option than the perceived failure of acknowledging a need to pivot.

You only need to ask Kodak, Toys R Us, General Motors and Blockbuster about that.

The pace of change, the expansion of competition and the ravenous expectations of our customers is only going in one direction, whilst too many leaders in too many organisations employ patterns of thinking and behaviour that are prehistoric in comparison to what is needed. 

This might seem like unreasonable criticism, but it is not intended to be; it is just the harsh reality of what happens when the Leadership Loopholes become embedded and we are faced with the brittle combination of ego and the unfamiliar. In order to assuage our dilemmas of the present, we fall back on reassuring routines of denial and dispersal – rather than face into the painful uncertainty of the future.

You can’t build an adaptable organisation without adaptable people – and individuals change only when they have to, or when they want to.”

Gary Hamel (writer, business thinker)

So what does it take from a leadership perspective?

Businesses succeed and thrive when they build a sustained leadership culture that emphasises curiosity and openness, and minimises compulsion and compliance. When individuals change only when they have to, it is already too late. 

If they are excited by the prospect of fresh perspectives, if they are engaged in the conversation, if they see distributed leadership all around them, they are probably ready to pivot before you even ask them.

The organisational aspects of a successful pivot make up a whole different article but from a leadership perspective, these are our eight behavioural priorities:

Pivot before you need to

A successful business pivot happens when you want to do it, not when you have to. Get in early, drive the agenda, force the conversation, challenge the complacency, agitate for change from a position of anticipation. 

Build the culture first

A convincing pivot is much more than just a new product or client conversation; it is a new way of seeing the world from the business perspective. Focus your first conversations on preparing the essential culture of the future: how will we behave? how will we make decisions? how does our future culture need to differ from what we have now?

Be brutally honest

Be brutally honest about the business reality and the wider operating context. Encourage the tough conversations and listen to what you don’t want to hear. Stand by the unpopular, unwelcome truth, even when it hurts.

Build a compelling leadership vision

Create a fresh vision that respects the intrinsic value of the organisation, clearly explains the case for the pivot and sets out what will be needed on the road ahead.

Control the narrative

This is the moment for confident, charismatic and influential leadership; be crystal clear, provide honest assessments, describe consistent priorities, confirm that others understand your intention, align your “collaborative armada” of distributed leaders to the vision.

Acknowledge the value of the past

A pivot alters aspects of your core offer to better meet customer demand or build a fresh audience. It anticipates emerging realities, building on the strong foundations of previous endeavour. Don’t be tempted to undermine the good work of the past to justify the future.

Your pivot is strategic – not cosmetic

It is a bold and fundamental shift for some (or many) aspects of your business in order to ensure future relevance, viability and profitability. It is not a rebrand, relaunch or a restructure – it is core to how you see yourselves and how you relate to your existing or new customers.

Own the pain

Change isn’t easy; it requires effort, discomfort and a letting go, often of long held traditions and beliefs. It is important that leaders demonstrate empathy and acknowledge the pain. Allow for appropriate grieving whilst maintaining a steely focus and pace to the pivot. 

Engage everybody in the transition

A successful pivot happens when everybody understands the why, the how and what (in that order). Engagement is conversation not broadcast; there is a time for storytelling and a time for listening. Encourage local responsibility, share best practice, encourage formal and informal leaders to shape solutions that adhere clearly and sustainably to the pivot. 

Successful leaders create a fresh context to equip those around them for a bold future: balancing competition with collaboration, being ever more agile, moving before being certain, adjusting on the go and understanding that competitive advantage is transient.

This requires a very conscious application of new leadership behaviours; flattening hierarchies, emboldening teams, focussing on intrinsic value to the end user and, perhaps most difficult of all, being prepared to radically re-imagine what they need to do in order to survive and thrive.

In their own ways, I think William Wrigley, Lee Byung-Chull and Stewart Butterfield would understand.

When you want to find out more about the work we are doing all over the world, building outstanding leadership cultures and high performance teams, please do get in touch.

We are ready when you are.

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