The Key to Thriving in Turbulent Times: Finding Your Pivot Points
Business leaders are increasingly concerned about learning how to navigate the ever-changing global marketplace. Many expected the post-COVID season to be the “roaring 2020s” (Karlgaard, 2021). However, business leaders are now concerned about the roar of war due to conflict in the Ukraine. Although the challenges related to COVID-19 are lessening in some areas, these challenges have been replaced with new ones.
In this fast-paced and ever-changing marketplace, what skills do your clients need to adapt and embrace agility? When necessary materials are no longer available for production lines, what is your client's Plan B? Continue reading for insight into the value of agility in surviving and thriving in turbulent times.
The pivot point
As business leaders learn the importance of adapting or pivoting to changes, it is important to recognize that the root-word “pivot” implies a “shaft or pin” on which to change (or pivot) has already been established (Merriam Webster, n.d.). The ability to pivot or change in the face of adversity requires preparation and an understanding of your pivot points. Consider the woodworkers' use of a “pivot hinge.” Pivot hinges “pivot on a single point” (KitchenCabinetKings, n.d.). A woodworker's entire functionality and operation depend on one single point, a single pin within a pivot hinge. If that pin fails, the hinge fails, ultimately leading to a faulty product.
The pivot point is the point at which an entire project or business relies on. For woodworkers, it can be the screw holding the pivot henge together. For business leaders, it can be a valuable resource such as Lithium used to create the batteries that make their products work.
Finding your pivot point
Just like the woodworker whose project depends on the pivot point of a hinge, business leaders have pivot points in their business. While woodworkers can replace pivot hinges with ease, the readjustment required for business leaders can be more complex. Because of this, it is vital that business leaders find the pivot points in their business or what materials, tools, industries, knowledge, and skills are essential to the success and functioning of their business. They must understand what resources their business cannot function without. Consider the following questions to help business leaders find their pivot point:
What is a pivotal resource to your production line?
What is pivotal to the success of your business?
What could your business not function without?
If you were to lose all access to [fill in the blank], how would your business function?
These questions can reveal areas of your client’s business that are pivot points as well as areas that are sensitive to marketplace changes. If a business no longer has access to its pivot point, how can it adjust its manufacturing or business plan to survive in a changing marketplace? Walking your coaching clients through “what if” scenarios regarding these areas of sensitivity can encourage them to build more resilient businesses that are able to adapt to failed pivot points in a fast-paced and changing marketplace.
Understanding the substitution imperative
Once business leaders find their pivot points, they can work towards finding ways to adjust or change their business models in the case of a failed pivot point. One of the ways businesses can improve their ability to adapt to failed pivot points is by understanding the substitution imperative.
The substitution imperative is a strategy that business leaders can create that states “if we cannot use [pivot point], we will substitute it with [fill in the blank].” The substitution imperative encourages business leaders to have planned and prepared substitutes for the pivot points of their business.
For example, consider the current challenge faced by car manufacturers: the microchip shortage. When interviewed by Shira Feder of Popular Science in 2021, Patrick Penfield, a professor of supply chain practice at Syracuse University stated that they were in a “global supply chain crisis” and that “we’ve just never ever seen anything of this magnitude impact us before” (Feder, 2021). Clearly, the microchip shortage took many manufacturers by surprise, as seen by the reduced production of cars from Nissan, GM, and Ford among others (Feder, 2021). In this scenario, as factories closed due to the COVID-19 pandemic, the supplies needed to manufacture microchips became unavailable, and the availability of microchips required to manufacture cars declined. Furthermore, as more individuals worked from home, there was an increase in demand for “consumer electronics” that further challenged the already sparse supply chain. This ultimately created a domino effect that negatively impacted many companies.
How could this challenge have been avoided? By acknowledging that microchips are a pivot point to the manufacturing processes and planning a response or substitution to that failed pivot point.
After identifying the pivot points of a business and creating a strategy that responds to potential pivot point failures, business leaders must also understand the importance of agility and innovation. Having a strategy is vital, but implementing it requires agility. According to McKinsey & Co, “agile organizations can quickly redirect their people and priorities toward value-creating opportunities” (Aghina et al., 2020). This quick redirection or pivot towards better opportunities is key to successfully responding to the changing marketplace. Research points out that agile businesses can experience improvements in employee engagement, customer satisfaction, operational performance, and financial performance (Aghina et al., 2020). In order to be an agile organization, McKinsey & Co recommends focusing agility on the following 5 areas of business:
Businesses leaders that invest in the agility of their business “process” can create “rapid decisions and learning cycles” for their business processes. This is essential to responding to the rapidly changing workplace and marketplace of 2022. By increasing the agility of a business, “organizations can increase the speed of decisions and product development.” Agility “allows them to stop trailing their competitors and to move to the forefront of product development” (Aghina et al., 2020).
Agile businesses can be more “responsive to change” than those without agility (ProductPlan, n.d.). According to Gallup, “one of the most powerful advantages of agile companies is their ability to give employees a sense of optimism about the organization’s capacity to survive—and thrive—amid disruptive marketplace conditions” (Brecheisen et al., 2018). This skill can greatly benefit business leaders who are navigating a fast-paced marketplace.
Applying agility to the workplace
The agility of a business is an indicator of its ability to adjust its pivot points. But how do businesses leaders increase the agility of their businesses?
Creating an agile culture
Gallup outlines 8 cultural factors that influence agility:
They explain that these factors must work and grow together to impact levels of agility within a business (Nink, 2019).
Speeding decision processes
Another recommendation for building an agile business is simplifying decision-making processes. Further research from Gallup states that “the more decisions that have to be made, the longer it takes to fulfill a customer's need” (Nink, 2019). A key way to reduce the time it takes to respond to marketplace changes is planning for them ahead of time, ultimately reducing the number of decisions that need to be made during crucial periods of time in the marketplace. This can be done by implementing the substitution imperative discussed above.
Preparation and planning
According to American Express, “When firms have a strategy mapped out, they can better pre-empt changes before they take place instead of constantly reacting.” Geoff Begg, Senior Vice President, Global Commercial Payments JAPA, American Express states, “With an external environment that changes quickly and is difficult to predict, striking a balance between preparedness and adaptability is essential. Being agile and flexible enables business leaders to adapt their course early either to address challenges or tap on opportunities” (American Express, 2016). Workday Adaptive Planning summarizes this well by stating that “business agility is really about having the right controls to properly manage and measure change. And most of that comes down to how you plan.” They recommend 3 key strategies to develop agile planning:
Widen participation to include voices from every key functional area across every region in the business.
Deepen the score and fidelity of their planning to understand the true business-wide impact of every action taken.
Run the whole planning sequence much more frequently and ideally continuously (WorkdayAdaptivePlanning, n.d.)
These three strategies can be applied to the importance of understanding the pivot points of a business. For example, business leaders can “include voices from every key functional area across every region” of their business by asking executives and employees questions about what resources are most vital to their role in the business to identify pivot points. In response, business leaders can “deepen the score and fidelity of their planning” by understanding the “business-wide impact” of these pivot points and the substitution imperatives created for them. Lastly, business leaders can review these pivot points “more frequently” and even “continuously” to make their business more resilient to marketplace changes.
10 characteristics of highly agile corporations
Business leaders can invest in the development of the following 10 characteristics of high agile corporations.
A unified vision across the organization.
Customer-focused and performance-oriented cultures.
Diverse talent that excels in a fast-changing environment.
Leaders and managers who are developed to coach and empower.
Dynamic teams structured and networked to focus on key priorities.
Leaders who make timely, quality decisions.
Targeted, sensible and just-in-time communication.
Stable, highly adaptable core operating processes.
The mindset to pursue simplicity and thrive in complexity.
Technology that purposefully enhances customer and employee experiences. (Nink & Robinson, 2021)
The main takeaway
As business leaders adapt to the fast-paced and changing business environment, it is vital that they understand the pivot points of their business. These pivot points are the resources, knowledge, and/or skills that a business cannot function without.
As executive coaches, it is important that we lead business leaders towards the development of more resilient and agile businesses through powerful questions regarding these pivot points. By asking business leaders how they plan to respond to unprecedented changes in areas most vital to their businesses, executive coaches can inspire business leaders to create more resilient and agile businesses. Using the information and resources discussed above, consider the following series of questions for your next peer group meeting or executive coaching session:
What are the pivot points of my business?
How will my business respond to unavailable or failed pivot points? What is my Plan B?
Is my business agile enough to respond to challenges and changes?
How can I increase my business’ agility and response to failed pivot points?
Merriam-Webster. (n.d.). Pivot. In Merriam-Webster.com dictionary. Retrieved March 9, 2022, from https://www.merriam-webster.com/dictionary/pivot
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