A popular term in the entrepreneur world is ‘pivot’. It has become a cliché term for justifying almost any business decision. Financial Times defines ‘pivot’ (when referring to a shift in strategy) as a “tortured path that most start-ups go through to find the right customer, value proposition, and positioning.” (http://lexicon.ft.com/Term?term=pivot)
A shift in strategy implies that an organization is moving from one stable position to another stable position. Volatility occurs during the shift. Depending upon the degree of change, an organization may find themselves with a minor change that is hard to tell from the original position or it may be a major change that demonstrates ‘Blue Ocean’ thinking.
What if the pivot is not moving from one stable position to another? Everything is in a state of change all the time. In reality, the starting point for a pivot is commonly undefined, poorly understood and in motion. Is the pivot like walking across the room or like falling off a cliff?
What if a business person makes a second pivot before completing the first pivot? Some pivots make be instantaneous, but most take time to implement. No matter how well planned, change may force a new pivot before the first one is done.
What if stability is never achieved? What if instead of a pivot being a deviation from an established strategy, the strategy becomes to implement a series of pivots?
With a change in presidential administration, with new majorly disruptive technologies entering the market every month (artificial intelligence, blockchain, autonomous cars, etc.), with a change in power being handed off from the Boomers to the Millennials, with the threat of ‘climate change’, and with the overpricing of stocks on Wall Street, when would it be appropriate to expect a stable marketplace where a product or service may mature and generate profits great enough to justify the investment?
I believe we have entered an era of continuous change. This era requires continuous pivots – a ‘pinwheel’. A business must adopt a flexible strategy that can adapt rapidly to whichever way the wind blows: whether it be a gentle breeze or a hurricane.
Most management teams that find themselves reacting to continuous change will always feel out of step. Better management teams will be able to forecast changes and position themselves to take advantage of opportunities as they occur. The best management teams will be able to influence the changes to gain an advantage.
The greater challenge will be for an organization to maintain focus on its mission and goals. Milestones, schedules, budgets and resources may change, but making and selling quality products and services to satisfy customers must stay on track.
There are a number of books on the topic of continuous change. Most of the authors start from the position that the organization is in control of its own destiny and working proactively to implement change as a culture. However, a more realistic approach is to assume that most changes will result from external forces and the organization must try to align with the change or continuous change will become chaos.
Dakin Capital Guild LLC