improve communication, and speed up decisions. They avoid becoming stuck in the product-lifecycle loop, and make sure that experimentation and the surfacing of new ideas is always on the agenda. Most important, they focus those innovations, changes, and investments on a keen and curious understanding of the changing customer.
QUANTUM LAWS OF BUSINESS
According to quantum mechanics’ Heisenberg Uncertainty Principle—something I still struggle to get my head around—atoms can be in two places at once.19 Sometimes, when I talk to leaders at new-era companies, I sense that they believe they need to be two companies at once.
To which I say, Yes, you do.
If we could formulate a new Uncertainty Principle for business, it would help us understand why winning today is so challenging. At one point companies could do one thing exceptionally well—build a computer like Dell, master execution through Six Sigma like GE, dominate a market like McDonald’s, deliver a catalogue like Sears—and that capability would create a channel for growth and prosperity. At one point markets were similarly static and manageable. Today, organizations must be capable of meeting challenges on multiple fronts in order to deal with splintered and dispersed markets, and even—gulp—multiple realities.
By learning how to position to pivot, they gain the adroitness, agility, awareness, and decisiveness needed to be more than one company at any one time.
Accordingly, they can stay lean by constantly making improvements to existing processes or solutions; seizing new technologies that might help them solve problems better or meet needs in better ways; changing existing products to meet new needs in the same markets, repositioning products for new markets, or entering new markets with new products.
And, at the same time, they can be vigilant about innovation because it leads to disruptive growth and helps reshape markets in ways that give them advantage.
They are able to make these shifts successfully because their how—the culture, mindsets, and philosophy of the organization—is more important than their what. By keeping one foot firmly stable in the “How” they can pivot toward any “What” and shoot for any measure of success.
In most organizations, as Gary Hamel notes, change is regarded as an episodic interruption of the status quo; something initiated and managed from the top. The power to initiate strategic change is concentrated there, and every change program must be endorsed, scripted, and piloted before launch. Transformational change, when it does happen, is typically too late and convulsive—and often begins only after a “regime change.”
What’s needed is a real-time, socially constructed approach to change in which the leader’s job isn’t to design a change program but to build a change platform—one that allows anyone to initiate change, recruit confederates, suggest solutions, and launch experiments. A pivot, in other words, doesn’t have to be an earth-shattering move, nor does it need to be a complete reinvention of the organization. Instead, companies that are nimble pivot by making thousands of changes every day—from strategic decisions to small tweaks—rather than by relying on a few big, multi-year initiatives. They are, in Nilofer Merchant’s words, not 800-pound gorillas but a cohesive group of 800 gazelles that can move quickly and lightly across the landscape, changing direction at a moment’s notice and in unison.20
Make no mistake, these companies also have big and bold initiatives. But they don’t rely on them as their sole driver of change and growth. They constantly experiment, and they constantly make small bets—believing that some will eventually lead to business opportunities even bigger than their current one. They’re attuned to their markets. They use social media to interact with and listen to customers—not to broadcast or promote. They rely on data, but they don’t obsess about risk parameters or consequences, nor do they navel-gaze and gerrymander decisions to meet the needs of the organization over the needs of customers or markets. They empower their people to make adjustments. They leverage their intuition as a guide and apply agile development processes to bring concepts into action. They don’t view change management as a set of processes for moving from point A to point B, but as a workplace philosophy that encompasses real-time collaboration, participation, alignment, and awareness.
How can you position your organization to pivot?
Too often, I run into organizations that try to become more innovative or customer-focused by adopting the processes and models of more successful organizations without making deeper changes. I’ve seen the leaders of retail organizations come back from the Disney Institute and say, “Let’s start calling all of our store sales people ‘cast members!’” As if that label will turn a slightly wary and perhaps cynical twenty-something into a more engaged, customer-focused, crowd-pleaser in the store. How many organizations successfully Zappos their customer service, or GE their way to flawless execution?
It’s not about processes and operating models. Those can be adopted, but they won’t stick or make a meaningful impact unless they are embedded in your culture. The way you structure and position your company must be a conduit for the beliefs and mindsets you have in place.
So, when contemplating the attributes I’ve described above for companies like Cisco Systems, GE, or Toyota, recognize that whatever approach you take must be right for your culture. At the same time, the approach you take—if you push it hard enough—is going to change and develop your culture, so be sure that this is where you want to go and what you want to become. GE is the master at this—using initiatives that drive innovation and growth to deliberately change culture and give the company the how it needs to tackle the what it wants to pursue.
QUESTIONS FOR YOU TO CONSIDER:
HCL TECHNOLOGIES is a US $6 billion business and information-services technology company headquartered near New Delhi, India, with operations in more than thirty countries. The company had been growing rapidly since the mid-1980s until that trajectory began to stall in 2000, even relative to HCL’s competitors. By 2005, Vineet Nayar, who had worked for HCL his entire career, was asked to take over as CEO. His only condition to the board was that he be allowed to take an unconventional approach to managing the business.
Nayar knew that the company had become bogged down by its own processes and bureaucracy, and he believed that it was heading toward an inevitable decline unless something radical was done. This conviction was reinforced shortly after he assumed his role as CEO when he visited a key customer who had canceled a long-standing HCL contract. When Nayar asked what HCL could have done better, the client said, “Your employees did nothing wrong as individuals. But your organization did not support them.”1
To Nayar, this criticism defined the crux of the problem. Customers gain most of their value from a company through their interactions with
