“ON BEING A PIVOT-WISE BUSINESS LEADER”
Today’s blog is a supplemental to my published book on business pivots. The book is entitled “On Being a Pivot-Wise Business Leader: The Secrets of Strategic Leadership for Successful Business Pivots” and if you are interested in the topic can be obtained via Amazon at:
THE BUSINESS PIVOT TANGO
When the CEO of Lands’ End joined the company, she was facing great expectations that she would make some kind of heralded business pivots to the firm. Lands’ End, a well-known purveyor of outdoors casual clothes, had been facing tough times and there was a palatable hunger by most stakeholders that a shake-up pivot was needed. Over a period of 19 months, she pivoted the business, and according to the Wall Street Journal, added slimmer outfits, a new line of active wear, overhauled the catalog, brought in celebrity photographers, did photo shoots in exotic and expensive locations, and took other actions. Turns out that after those hectic and pivoting-heavy 19-months, she was canned.
It might seem odd that after she had so quickly made some seemingly significant pivots to their product line and other business aspects, she should be dismissed. What is even equally startling is that she was left go in the fall (late September), just prior to the crucial holiday season when it has to be all-hands-on-deck for a consumer goods company that relies upon its bread-and-butter during the winter holidays. Her being let go must have been more important to the Board than was the notion of keeping her at least through the holidays to presumably make sure that the ship wouldn’t hit any icebergs.
What led to her downfall?
We might not ever know the full inner circle of details, though maybe she’ll eventually do a tell-all book like other business figures that have had such circumstances, but we can reasonably speculate about what happened. It has been reported that the employees found her to be standoffish and removed, so that’s one key stakeholder base that she failed to adequately bring along on the pivot. It is reported that she had not made a compelling case to the Board about the nature and pace of the pivots, leaving many Board members unsure and concerned, which is another key stakeholder that she failed to adequately bring along on the pivot. And, likely most damming, the pivots did not seem to resonate with customers and sales had dropped by over 7% in comparison to the prior year’s sales in the same time period. The customers were then another stakeholder that she had failed to bring along on the pivot.
Let’s take a look at the importance of bringing along your key stakeholders when doing a business pivot. As a business leader, you need to be mindful of each stakeholder base, and have an explicit plan and approach about how you will get them aligned on the business pivots. If you just let it occur by happenstance, maybe you’ll get miraculously lucky to have them go along, but your better bet is to aim to make it happen.
I call this the Pivot Tango. Just like the famous dance technique, a Pivot-Wise business leader will see their efforts of doing business pivots as a kind of Tango. There is a need to make sure each of the dance partners, whether the Board of Directors, the employees, the customers, and others, will be in-tune with you, the business leader, and step as you step.
UNDERSTANDING HOW TO PIVOT TANGO
There are numerous and varied stakeholders that are ultimately going to be a part of the business pivot. These stakeholders include your fellow business leaders, the employees of the firm, suppliers, business partners, the Board of Directors, funders, shareholders, and the like. Some of these stakeholders might be more or less engaged by you as a business leader than others, depending upon your circumstances and the business pivots you have in mind. Some might be more or less important than others, again dependent upon your circumstances. All of them need to be considered.
That’s right; all of the stakeholders need to be considered. Do not leave out a dance partner. If you do, the stranded dance partner will be eyeing you while they are standing on the sidelines, and the result could be catastrophic. They are bound to feel left out, it hurts their feelings, and perhaps motivates them to want to seek a form of “revenge” simply due to the lack of proper and civil attention that should have been granted to them by you, the business leader.
OPEN VERSUS CLOSE PIVOT-EMBRACE
In Tango, there are two types of embraces, the open embrace and the close embrace.
Let’s go ahead and characterize the Pivot Tango as having either an Open Pivot-Embrace or a Close Pivot-Embrace with each of your respective stakeholders. This means that you will want to identify which of your stakeholders you need to be very close to, nearly chest-to-chest, if you will, while others that you can stand apart but still be holding hands. You should be holding hands with each dance partner (stakeholder), regardless of whether standing close or a bit nudged apart.
This will also vary over time. During a Pre-Pivot, you might be doing a Close Pivot-Embrace with some stakeholders, such as the Board and your fellow executives, and be at a more Open Pivot-Embrace with the other stakeholders. When getting into the second stage of a pivot, which I call the Pivot Point (it is an admittedly confusing moniker since it seems like it refers to an instant of time, but a Pivot Point can last for days, weeks, or months), the nature of the embrace might change. Maybe in the Pivot Point you are still in Close Pivot-Embrace with the key executives, but shift into a more Open Pivot-Embrace with the Board, and then now embark upon an Open Pivot-Embrace with the rest of the employees and other stakeholders. There is a third stage, the Post Pivot, whereby once again you would want to make sure you are embracing the stakeholders, and doing so in either an Open or Close manner as befits the situation.
TAKING TANGO STEPS WITH RHYTHMIC FOOTWORK
In Tango, you can take small steps, or sometimes longer and more elegant steps. Whichever kind of step you use, you need to have syncopated rhythmic footwork that corresponds with the steps. If you ever watch one of the TV shows about dancing with the stars, make sure to look at the practice portions before they come onto stage for their big performance. During the practices, you can see how carefully they figure out the footwork. On stage, it seems effortless, while we know that secretly they worked hard, usually very hard, and laboriously got their footwork figured out.
The same is true for the business pivot. The business leader needs to work behind-the-scenes with each of the stakeholders and get the footwork down with them. In this manner, when on-stage, so to speak, the business leader and the stakeholder will appear fully functional and coordinated. If you aren’t conferring with Board members, outside the Board meetings (whenever you can get their attention), then when you go into the boardroom and want to dance, you are likely to find many of your now surprised dance partners don’t know how to follow your lead. Some of them might even want to follow your lead, but because you were not apparent about it, they find themselves in a lurch, and so the dance will come across quite awkward. Of course, you also have the Board members that maybe want you to trip and fall, which you have made it much easier to have happen by neglecting to get the syncopated rhythmic footwork in place.
Business pivots also include some high lifts, kicks, and drops. If you are radically pivoting the core business model or keep products of the firm, these are not just your run-of-the-mill Tango moves. For each of the lift, kick, or drop, you had better make sure that your respective stakeholders know that it is coming. Imagine a dance partner that is smoothly dancing with you, and all of sudden you do a kick. You might think, well of course the kick was needed. As the business leader, it perhaps was obvious to you. But the other dancer, let’s suppose the Board, they might not understand why you opted to kick. What is the business purpose? Why now? Why not later? How will the kick make a difference?
As we saw with Lands’ End, the CEO did not seem to align and get the footwork established with several of her key stakeholders, including the Board, employees, and customers. Not only were these stakeholders misaligned, but it seems that the number of kicks, lifts, and drops was more than the Board expected or thought was necessary. Maybe the slimmer fits was enough for a pivot starter for the Board, or maybe the new line of active wear was the most they could stomach at once.
It can be a tough balancing act in firms when the Board says they want pivots, but when the talk becomes the walk, it can be difficult for them to accept it. The presiding business leader or CEO can whine later on that the Board wanted one thing but only was willing to accept something else, but that’s a bit of puffery since presumably the business leader should be finding a means to get them aligned. The fact that customers also weren’t stepping up to increase sales was a likely added nail in the coffin. A business leader that boosts sales can get more runway from the Board than one that is either flat on sales or in this case had a drop in sales.
I want to next shift a little bit away from the Tango analogy or metaphor, but it will still be kept in our minds as I do so. In Tango, the body center tends to move first, and then the feet shift to support where the body is going. The leader of the dance duo, signals to their partner by the shifting of their body center, the pressure on the coupled hands, and then the feet of the duo move accordingly. It does not always happen that specific way and there are variations in the physical aspects of the dance, but it is probably fair to say that’s how it often goes.
This takes us to the next topic, the Pivot Chorus-Line Effect.
THE PIVOT CHORUS-LINE EFFECT
I am going to bring up birds next. Have you ever seen a large collection of birds flying through the air? When you watch a flock of birds, you will usually see something that looks magical. They will seem to pivot in union. They do this mid-air. They do this in split seconds. They do this marvelous pivoting without bumping into each other. They do this pivoting without the use of cell phones and wireless transmitters to communicator with each other. How does this happen?
The leading theory is that birds use a chorus-line approach to their coordinated movement. The assertion is that birds don’t just follow a particular bird that is the somehow a single designated leader. Nor do they seem to look at just their nearest neighbor and do as the neighbor does, which was another prevailing theory. Instead, the chorus-line approach says that the birds anticipate the pivots of the other birds and then it spreads in a wave-like fashion throughout the flock.
A propagation of this manoeuvre wave begins at a relatively slower speed as each bird detects other birds that are reacting and then speeds up phenomenally once the birds see more and more of the other birds making the pivot and when the time to pivot reaches them. The basis for calling this a chorus-line is that you are to imagine that you are standing on a chorus-line, and you see up-the-line that your other dancers are starting to do a high kick. You then begin to anticipate it, and are starting to get ready to make the same kick, once the right timing happens of it becoming your turn.
This is related to business pivots and business leaders. Some business leaders think that they need to be the one bird out ahead of the flock and get all the others to pivot, and then the others will pivot. This is not the right image. The business leader needs to certainly be a leader, but they also need to get some of the stakeholders to also believe in and undertake the pivot. This then sparks the other stakeholders to also go with the pivot, since they see that the other stakeholders are already in motion. The “belated” stakeholders anticipate what they need to do when the pivot time reaches to them.
For example, one way to guide the employees would be too stand-up in front of them and announce that you, the business leader, are going to pivot in the direction X. You then expect that they will follow you as you make that pivot. You are at the head of the flock. You envision that everyone “behind you” will be following your lead. What would be more powerful would be if you had gotten some others of the flock to initially also join the pivot, which will spark the others of the flock to follow suit.
With your Board, you might get one or two of the more powerful Board members to go along with the pivot, and then the other Board members might anticipate that soon they are also to shift with the pivot. Then, seeing that the Board is starting to join the pivot, other stakeholders such as the employees will join with the flock and also make the pivot. When you share with them the pivot, they are already anticipating it.
This needs to be done carefully. If you let out that the pivot is coming and it is still being cooked, so to speak, you can inspire the flock to all make a pivot that maybe is not what you ultimately decided to do. You then need to correct the direction of the pivot that others have taken in anticipation of your desired pivot. If the pivot is really coming, but if the inspiring of the pivot is too soon, the rest of the flock maybe goes in the direction you wanted but messes it up by doing so sooner. If you watch a flock of birds closely, you will see that even as good as they are with the chorus-line, you will nonetheless see some birds that suddenly pop out of the flock or seem to be awry within the flock.
PIVOT SOUL SATISFACTION
One other aspect about the business leader and the stakeholders is that the business leader needs to think not only about the purely dollars-and-cents aspects of the pivots, but also the Pivot Soul Satisfaction. By this I mean that the stakeholders will likely feel a sense of emotional satisfaction when a pivot is done well.
This satisfaction of the heart and mind can increase pride in the business and generate an almost spiritual meaningfulness. Wow, the employees say, look at what we accomplished as a team. The Board says, wow, look at what this business leader was able to achieve with this company.
We marvel all the time about business pivots that went well. The media loves to talk-up those business pivots. Rarely do you hear about the business pivots that went sour. The case of Lands’ End is unusual more due to its being covered in the media, rather than because it is somehow a unique or one-time ever occurrence. Business pivots are constantly going awry. It is the way of business. It is also why there is the trend toward “fast failure” as a means of going ahead with a pivot to see if it can stick.
The type of business pivots that did not work at Lands’ End generated Pivot Soul Dissatisfaction. This is a combination of the aspect that the pivots did not work well, and that they were apparently perceived as either too many pivots or the wrong set of pivots. Now, don’t get into a zen-like zone and think that gaining Pivot Satisfaction would be sufficient alone to get a grandiose pat on the back for the pivots. If the dollars-and-cents don’t also follow suit, the amount of soul satisfaction is going to only last so long. For many of the tech firms, they are lucky that since many of them are outright losing money, and so yes, a soul satisfaction might be enough to support a pivot. Those firms are betting on the long-term on the money side of things, so they can then leverage the soul side in the shorter-term and get away with it.
RECAP OF PIVOT TANGO
Remember to consider your stakeholders as your dance partners. You need to hold hands, and figure out the dance steps that you will be taking on the pivots. Each stakeholder will need either an Open or Close Pivot-Embrace and the nature of it will vary over time, varying during the Pre-Pivot, the Pivot Point, and the Post-Pivot. Preparation is crucial to ensuring that there is syncopated rhythmic footwork. For each stakeholder, figure out what the business pivot means to them, and when and how they will need to pivot with it. By using the chorus-line effect, aim to get some of the stakeholders to act early, so that others of the flock anticipate the upcoming business pivot. You, as the business leader, need to do more than act as an autocratic follow-me and somehow assume that everyone will just fall in-line. Many of the flock will not do so, and the end result can be disastrous for the flock (the firm) and for many of the birds, including you, the business leader.