Pivoting in business is a difficult decision for leaders. Pivoting at the wrong time or in the wrong way can be, in a word, disastrous. On the other hand, pivoting at the right time in the right way can inject tremendous energy into a business, propelling the company upward with terrific thrust.
One of our clients demonstrated “best of the best” leadership courage and skills when they made the momentous decision to execute a dual pivot: to effect a change in leadership roles while simultaneously implementing a change in strategic direction.
Their success was the result of four key components:
- and transition
First, timing. The two founders of the company recognized that they and the business were at inflection points. On the one hand, as individuals, they wanted to retain ownership of the business and be involved in major decisions. However, they desired to remove themselves from the day-to-day management of the business in order to pursue other interests. On the other hand, their industry was evolving rapidly. To continue its positive trajectory, the business would need to expand its focus and modify its strategy.
To delay the decision to pivot on either the personal or the corporate fronts would have had serious ramifications in the long term. For example, failing to adapt to industry trends could have caused the business to lose significant market share. The leaders were willing to assess the realities of the situation objectively and make the courageous decision to pivot in a timely manner.
Change, of course, is never easy. But the co-owners were on firm footing because they had intentionally built a culture of trust over the years. Because there was such good health among the members of the leadership team, it was a straightforward matter for the owners to say to the team, in essence, “We need to take a fresh look at our strategy. We also want to take a fresh look at the roles we’re going to play in the future. And that means ultimately we will bring in a new CEO.”
For leadership teams that lack trust, such an announcement would likely have been met with resistance (either overt or covert), anger, or other dysfunctional behavior that would inhibit the ability of the team to think clearly about either the strategic direction of the firm or the qualities they would need in a new CEO. In this case, however, working out of a culture of trust, the leadership team responded in a supportive manner and fully engaged with the owners to achieve the dual pivot.
Standing on the foundation of trust, the co-owners practiced transparency. The initial announcement of the coming changes was made to the entire leadership team, avoiding the common trap of “whisper down the lane.” This ensured that everybody heard the same information at the same time in the same way. The team was given the full opportunity to process the news, react to it, ask questions, and engage in dialogue. Subsequently, the owners informed the rest of the employees, extending transparency all the way down through the organizational hierarchy and strengthening trust throughout the company.
As matters progressed, the leadership team was kept involved at every step, such as collaborating to develop the new strategy. The result was a cohesive group in full support of the new direction and the new roles for the founders.
Finally, the owners ensured a healthy period of transition to the new reality. With regard to bringing in a new CEO, they planned for as much as a year of overlap where they and the new person would work side-by-side. This approach guaranteed time and opportunity to achieve a complete transfer of institutional knowledge and establish solid internal and external relationships. They wanted to be certain that everyone – the new CEO, the leadership team, and the company as a whole – was set up for continued success.
Pivoting well in business takes a combination of leadership courage and leadership skill. With proper timing, a culture of trust, transparency in communication, and a plan for transition, you can ensure excellent outcomes for yourself and your business.