Pivot to the Future: Discovering Value and Creating Growth in a Disrupted World
Omar Abbosh, Paul Nunes, and Larry Downes
PublicAffairs (April 2019)
How to “find your brick and then keep enhancing it”
According to Omar Abbosh, Paul Nunes, and Larry Downes (AN&D), they wrote this book to share what they learned from their research whose purpose was to reveal “which industries are vulnerable to disruption; how successful companies find their value opportunities; and how leading organizations pivot in response to disruptive change.”
During my interviews of him, John Kotter told me that the toughest change to achieve is getting executives to change how they think about change and David Kelley and Tom Kelley stressed the difficulty of getting executives to think innovatively about innovation. I was again reminded of these observations when encountering this passage in AN&D’s Introduction, “Reinventing Reinvention.” A business opportunity was there, and right in a company’s wheelhouse, but its managers failed to respond. “What was needed was not just a new strategy, but a new approach to strategy: One that enabled the company to make the most of new technologies, turning them from disruptive threats to profitable opportunities.”
In essence, strategies are “hammers” that drive tactics (“nails”) and, as Richard Rumelt correctly notes, there are good strategies and bad strategies. A good strategy focuses efforts on a target, and that focus can only be achieved by not diffusing energy in other directions—that is the meaning of Porter’s dictum of “choosing what not to do.” At the same time, a good strategy chooses the right target to focus on, not wasting the focus of energy on a target that cannot be affected or that is unimportant—that is the meaning of Drucker’s distinction between efficiency and effectiveness.
As for bad strategies, Rumelt suggests, it doesn’t even try to address an important challenge. Instead, it speaks of aspirations, visions of the future, lays out performance goals, or simply lists a bunch of unconnected actions. For example, at one time Nokia was the leader in mobile phones. A new administration placed a focus on financial performance measures and the consequences have been the company’s obvious loss of position and leadership. Hewlett Packard seems to specialize in grandiose goals that are not backed up by the capabilities or patience to see them through.
All of this helps to establish the context, the frame of reference, within which Abbosh, Nunes, and Downes (AN&D) share their thoughts about how almost any organization (whatever its size and nature may be) can discover value and create growth in a global marketplace that has become more volatile, more uncertain, more complex, and more ambiguous than at any prior time that I can recall.
They recommend what they characterize as a “wise pivot” — using a combination of new strategies — that can help make that happen. Wise pivots demand “a strategic approach that doesn’t fight the tide as much as it surfs waves of disruption.”Basically, “The wise pivot crosses businesses and time frames, releasing value already there but currently trapped. Through interconnected, rolling strategies that operate within and between the lifecycle stages — the old, the now, and the new — leaders continually reallocate assets and investments to balance all three. This assures continued revenue from core assets that nay be nearing the end of their life and generates profits needed to invest in the future as the business and its people move quickly through the now and arrive sustainably at the new.”
Business leaders face two separate but interdependent challenges: Establish an appropriate balance between what is Old (today’s core offerings and and the revenues they generate), what is Now (the most successful products and services that will accelerate profitable growth), and what is New (accepting necessary failures to establish new scalable profit sources). There are several significant — and formidable — obstacles to releasing trapped value. Companies that release theirs consistently find innovative ways to target and unleash whatever is accumulating at one or more of four of trapped value levels:
Societal: Failure to engage in profitable partnerships to solve societal issues
Consumer: Retaining unused or underused private assets
Industry: Lack or cooperation/collaboration and investment in shared segments of infrastructure
Enterprise: Limited or wasteful use of digital technologies
AN&D provide three three examples of organizations that have released substantial value (Tencent, illumina, and Starbucks) at all four levels in Figure 1.7, Page 36. Also check out the detailed discussions of the nine levers of the Wise Privot in Chapters 6-8, focusing on Innovation, Finance, and People. (See Figure 6.1 on Page 156.)
Some of the most valuable material is provided in Chapter 3. AN&D focus on seven winning strategies that almost any organization can use to pivot to the future. Here they are, explained on Pages 65-89:
1. Technology Propelled
3. Data Driven
4. Asset Smart
6. Talent Rich
7. Network Powered
In the remaining chapters, AN&D explain how to search for trapped value, overcome the wrong turns, and master the winning strategies.Before concluding their brilliant book, Omar Abbosh, Paul Nunes, and Larry Downes point out that the LEGO Group (founded in 1932) was on the brink of bankruptcy about fifteen years ago until a new management team led by CEO Niels Christiansen pivoted to the future and thereby ensured that the company would have a future. How?
According to Christiansen, “the brick is at the heart of what we do, but we are, to an increasing amount, using digital to enhance it.” That is the essence of the wise pivot. “Find your brick, then keep enhancing it.”
I agree with Marshall Golsmith that “what got you here won’t get you there.” Perhaps he agrees with me that “what got you here” won’t even be good enough to let you stay here…much less get there.
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I urge those who share my high regard for this book to check out two others: The Technology Fallacy: How People Are the Real Key to Digital Transformation co-authored by Gerald C. Kane, Anh Nguyen Phillips, Jonathan R. Copulsky, and Garth R. Andrus, and, Nine Lies About Work: A Freethinking Leader’s Guide to the Real World, co-authored by Marcus Buckingham and Ashley Goodall.