By: Michael McQueen
As events have unfolded this year, the word ‘pivot’ has emerged as a description of the moves necessary in business, society and individual lives to adapt to uncertain times. It is an appropriate word choice to describe these movements, especially as it depicts a motion that adapts its direction, while remaining rooted in one spot. It is clear that in times of crisis, the fundamental need for businesses is the ability to pivot.
While it may certainly seem like a crisis and a pivot of this scale are unique to this year, businesses have been adapting and moving with uncertain times since their beginning.
Working with the commercial leasing giant CBRE recently, I was fascinated to discover the little-known history of this widely known brand. The “CB” component dates back to a real estate company Coldwell and Banker that rose out of the ashes of post-earthquake San Francisco in 1906. This company then acquired Richard Ellis International Limited, the “RE” part of the name, which traces its roots to 1773 when an undertaker named Richard Ellis in London pivoted his operations into real estate sales. Pivoting is in the blood of this company, which used the crises of its time to innovate, create and forge a new way into its future.
More recently, the watchmaking industry in Switzerland adapted to changing times and a potential crisis for their future in the advent of the smartwatch.
When smartwatches first started becoming mainstream in 2014, Thiebaud, the head of Swiss watch giant Tissot, stated defiantly at a watch fair in Basel, ‘We’re not interested in launching a gadget watch. We like to focus on our core business instead of meandering.’ The heads of rival watchmakers Patek Philippe and La Montre Hermes also went on record to suggest that smartwatches did not represent a threat for their businesses.[1]
Tellingly, these statements were made at the very time Credit Suisse released a forecast estimating the wearable electronics market would reach $US50 billion by 2017.[2]
Fast forward to that very year, and the attitudes of the Swiss had changed drastically. Now, the majority of Swiss manufacturers have embraced wearable technology in a significant way. Everyone, from Alpina and Frederique Constant to Mondaine, TAG Heuer and Montblanc has released app-enabled smartwatches that combine classic Swiss design quality and cutting-edge functionality.
Even Tissot has joined the smartwatch party with the release of their own range of timepieces to rival the Apple iWatch. This is certainly a dramatic about-face for a company that dismissed ‘gadget watches’ as strategic ‘meandering’ just a few years previously.[3]
It is clear that as times become more uncertain and unpredictable than they ever have been, the ability to pivot is also more essential than ever. Understanding how to move without meandering and adapt to circumstances while remaining centred is key.
However, there are 5 mindsets and systems that commonly hold businesses and leaders back from healthy adaptation, because they prolong a pride that paralyses any ability to pivot and move with the times. It is in this lack of humility and teachability that businesses risk forfeiting their adaptability.
In his book What Matters Now, Gary Hamel outlines these five signs[4]:
1. Defensive thinking. When you’re at the peak of an industry, it’s easy to become defensive and the focus becomes on guarding and protecting rather than building — to move from being entrepreneurial to custodial. As a result, bold new ideas are viewed through the lens of how they may threaten or ‘affect the base’.
2. Inflexible business systems. Over time the organisation becomes obsessed with continuous improvement and exploitation of what exists over what could be. Additionally, the more specialised and fixed the key assets or skills become, the less adaptable the organisation becomes. Efficiency and predictability come at the cost of agility.
3. Fossilised mental models. Closed-mindedness is a key hindrance to moving flexibly in response to circumstances. When what was once the ‘best’ way becomes seen as the ‘only’ way, times of crisis become deadly. As Nike’s CEO Mark Parker suggests, ‘Companies fall apart when their model is so successful that it stifles any thinking that challenges it.’[5]
4. Abundant resources. If necessity is the mother of invention, prosperity is the mother of complacency. Having a significant war chest of cash and resources can create a belief that ongoing dominance and success can come by outspending rivals rather than outthinking them. Abundance can also erode any sense of urgency, which can result in critical windows for taking action being missed.
5. Contentment and entitlement. The longer you’re at the top, the harder it is to imagine that you won’t always be — a sense of invincibility can set in and cripple any foresight or response to crisis. Further still, mature organisations often end up being run by people who have never built a business from scratch and therefore they lack the skills and paradigm required to maintain a growth edge.
The reality that this year has proven is that no business is invulnerable to crisis. The need for adaptability across every industry is abundantly clear, as is the need for a humble posture and a willingness to adapt.
It is these 5 states of mind and operation that have the potential to paralyse a business’s capacity to pivot. Moving with times of crisis does not have to mean meandering, not forfeiting the integrity of a business’s identity. The trick is to pivot: to change direction while remaining planted.
[1] Koltrowitz, S. 2014, ‘Smart watches? Not at this time, say wary Swiss’, The Sydney Morning Herald, 31 March.
[2] Ibid.
[3] Gretler, C. 2017, ‘Swatch Takes on Google, Apple With Watch Operating System’, Bloomberg, 17 March.
[4] Hamel, G. 2012, What Matters Now, Jossey-Bass, San Francisco, pp. 107–109.
[5] Linkner, J. 2014, The Road to Reinvention, Jossey-Bass, San Francisco, p. 28.
Article supplied with thanks to Michael McQueen.
About the Author: Michael is a trends forecaster, business strategist and award-winning conference speaker.
Feature image: Photo by Brian Hackworth from Pexels