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What types of market disruptions warrant a large-scale response? How do you know when your business is at a strategic inflection point?
Intel CEO Andrew Grove offers guidance on how to know when a change in your business environment requires an overhaul of your company. He recommends that you foster a continual culture of debating and listening.
Read more to learn Grove’s advice on pivoting in business.
When to Pivot in Business
Not every change in your market environment requires an overhaul of your entire company. You wouldn’t want to make a costly pivot for no reason, so it’s important to be sure you’re at a strategic inflection point before responding.
That said, recognizing a strategic inflection point is more easily said than done: The business environment changes constantly because the six forces acting on your company—current competitors, future competitors, government policies, suppliers, consumers, and adjacent businesses—are constantly in flux. Furthermore, major changes often come gradually. When does a change in your business environment mean it’s time to re-examine your entire business model?
Unfortunately, there’s no formula to tell you this. But Grove offers two pieces of advice on pivoting in business. First, debate intensely over a long period of time. Second, listen to a broad range of perspectives: This isn’t only for keeping an eye on potential disruptions—drawing on a breadth of viewpoints also hones your decision-making.
| The Importance of Recognizing When You’re Not at a Strategic Inflection Point Grove’s work focuses primarily on knowing when you’re at a strategic inflection point so that you can make the pivot in time. However, sometimes one of the most important decisions you can make for your company is recognizing when you’re not at one. Reinventing your entire company is costly and risky. You’ll have to expend a lot of time, money, and effort into a major overhaul, and there’s never a guarantee your new strategy will even work. Furthermore, a lot of companies have maintained long-term longevity by sticking to their core business while making smaller, incremental changes. In Built to Last, Jim Collins and Jerry I. Porras critique the myth that successful companies are always pivoting. After all, Ford still makes cars, Boeing still makes planes, and Disney still makes animated films. Even though a dramatic pivot saved Intel from the fate of other American memory chip companies, they’ve now stuck with microprocessors for 40 years. Abandoning a business strategy that still has a future could leave your company without a primary source of revenue. Recognizing you’re not at a strategic inflection point requires the same strategies as recognizing you are: leveraging broad perspectives and debating intensely. But considering the costs of an unnecessary pivot, you’ll want to make sure your debate includes some skeptics. If no one on your team is arguing against the idea of a substantial upheaval, seek out someone who’ll make a case for that point of view. |
Invite Spirited Debate
Grove’s first piece of advice on recognizing strategic inflection points is to debate the issue with your team. He argues that opening your perception of the business environment and your company’s future to criticism and dispute will reveal blind spots in your thinking—key pieces of information you’ve missed or possibilities you’ve overlooked. He encourages you to debate intensely over prolonged periods to leave no stone unturned and consider every angle. For Intel, this process lasted several years.
Welcome a Range of Perspectives
Grove’s second piece of advice on recognizing strategic inflection points is to—again—leverage a wide range of perspectives. This further cuts down on your blind spots by bringing in information and possibilities you might have missed. Grove also suggests that someone from outside your company may be less attached to your company’s way of doing things and make suggestions that wouldn’t have otherwise occurred to you.
He suggests you listen to voices from throughout all levels of the company, including middle management, salespeople, and engineers who may be closer to the six forces that determine changes in your business environment. Grove even includes journalists or critics who might hold a negative view of your company.
Create a Culture Where Employees Speak Up
To bring these voices to the table, you need to create a business culture where employees feel empowered to speak their minds. Grove offers two suggestions.
- Actively solicit feedback. If your employees won’t pipe up when there’s a problem, they may be waiting for an invitation. Make a habit of asking for their thoughts and opinions.
- Reward the messenger. How you respond to your employees’ feedback may determine their willingness to speak up in the future. Managers who show anger or irritation with the bearers of bad news may create a work culture where employees are reluctant to bring up problems for the company.
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Here's what you'll find in our full Only the Paranoid Survive summary:
- How to adapt and survive as a business in a changing industry
- How the CEO of Intel lead the company through a time of crisis
- How to know when your company needs to pivot
