It was the 10-year anniversary of ABC, Inc and Tally was frustrated. She was a prisoner in her own company. ABC was not performing to her expectations and it was draining the life out of her. Whatever fix she tried felt like throwing money into a black hole. Nothing was working.
Many companies are stuck on their way to success. Over time, when a series of innocent decisions cause a cascade of problems, it’s time to pivot. Pivot means to slow down, stop moving one direction, redefine the plan, align, and move forward in the new direction. Pivoting, for most CEO’s, seems counter-intuitive. They want growth and progress, not look stalled or hesitant.
CEOs will agonize over the pivot. How will employees respond? How will customers respond? Keeping the status quo is more comfortable than change. Problems seem better when you know them.
What CEO’s should ask themselves is “what happens if I do nothing?” Your opportunity cost is the biggest expense. It affects your growth, your profitability, and the valuation of the company. You are probably missing opportunities.
A place to start is to ask, what are we doing now that, if we could do over, we wouldn’t do again?
Your answer exposes what you need to see about your current situation. Sacred cows needing to be slaughtered appear. Poor decisions come to light. Sometimes good people are in the wrong chair or good people need more development or even good people that just need to find new jobs outside the company. There are investments or technologies purchased or agreements made that did not work out or are no longer appropriate. Elimanating or abandoning the underperforming frees up resources and capacity for the new.
Tally chose to take the risk and pivot. It was hard, focused work. It required commitment to the new emerging plan. Not all employees were completely comfortable with the changes, and several left. Some customers no longer liked the new direction. After they eliminated some complexity, abandoned some products, and changed some tools, the business took off. Cash flow improved; they created momentum.
Now Tally has created a business that is engaging again to her. She focuses her energy on what she is passionate about and delegates more to her competent employees. Her company is now excelling at a previously unimaginable level, the value of the company has more than doubled.
In business you are always moving towards or away from success. It takes courage for a CEO to risk the pivot when you realize the direction you are going is not bringing the success you and your company deserve.
Do you need to pivot? What do you need to eliminate? Is the opportunity cost enough to make you take the risk? What happens if you do nothing?