Put a Pivot in Your Step
In times of uncertainty big opportunities are often missed, resulting in silent and unseen costs. Big payoff almost always means big investment, either of organization focus or money—or both. In uncertain times, the probability of payoff is harder to figure, and even well-managed companies experience this impact:
1. The highest-return window is missed. Instead, either there is no action, or the action that is taken is watered down. That skimpy action will likely have even less payoff than expected, but it nevertheless diverts precious company focus away from the business’s current income and cash foundation.
2. The most profitable option is skipped. This only makes sense when filtered through the fear of failure. Options that are both likely and very profitable are scarce as hens’ teeth, as my mother used to say (pure Oklahoma). Delaying one is often more risky than the risky action that prompted it.
3. The most powerful customer move is delayed.A clear stroke for customer value is tough to find, and if it’s avoided, it leaves room for your competitor to figure it out and provide it to your customers. A lost customer is the most expensive customer there is-just think of the value of all future sales to that customer, their referrals, their purchase of related products, their feedback on where your firm can improve, and so forth.
SPEED BUMP: Delay opens the door to competition or lost customers.
What to do instead? Try the Pivot. Like the move in basketball, it means pinning one foot (the Pivot Foot) to the floor, and rotating on it to place the other foot (the Power Foot) in a new spot. It has started more hooks and layups than even Kevin Durant can count. Let’s break it down:
The Pivot Foot:
This is the group of current offerings that your customer values the most, which also provide the foundation of your business. Here’s what to do:
1. Name it: Spell out the pivot concept, rename it the foundation concept, and define which parts of the business are included.
2. Boost it: Measure it, talk about it in every meeting, reward people for it.
3. Improve customer connection with it: Ask for a customer story every week from each department of your company about it. Share the stories with your team and your customers.
The Power Foot:
This is the growth part of the business. It’s the place where risks can lift you up. Here’s what to do:
1. Pick one project: Focus on it until it stands on its own feet or shrivels.
2. Name a growth team: Charge these folks with both plan and execution.
3. Measure it: Growth, profit, and customer response are the basics.
4. Report it: Except where security truly blocks it, tell the progress news to everyone in your company, and to the customers involved. The more people are “in on it,” the better.
SPEED BUMP: Protect the Power Foot Team like a fragile plant.
At one of the companies where I worked, new product development endangered growth because it took so long. We split off engineering and “test” functions from plant operations. Development engineers could make quick tests of new concepts and parts without tangling with ongoing operations. Time to market and revenue improved by one-third.
ACCELERANT: What’s your Pivot Foot? (Note to diligent reader: Only when you’re clear about your Pivot Foot will you give your Power Foot the full commitment that it needs to be successful.)
Identify your path to CFO success by taking our CFO Readiness Assessmentᵀᴹ.
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