Step Down, Back, or Sideways to Grow
You have learnt something. That always feels at first as if you have lost something.
—George Bernard Shaw
Sometimes the only way up is down. Think of the diver who crouches down before springing off the board, or the rower who strokes back to glide ahead. It’s Newton’s third law, which states that for every action there is an equal and opposite reaction.
Disruption by definition involves moving sideways, back, or down, with all the negative connotations that conjures, in order to move forward. As a business owner, you part with profits to acquire the equipment you need to scale. As a manager, you sacrifice some of your own productivity to teach your employees new skills, making the whole team more effective down the road. As a professional, you may even accept a cut in pay or status to take the job of a lifetime.
In this chapter, we’ll explore how companies and individuals can take a step back in order to grow, and how a sideways, backward, or downward move can become a slingshot up your personal learning curve.
The Benefits of a Step Back
When organizations get too big, they often stop exploring smaller, riskier—but possibly more lucrative—markets because the resulting revenues won’t have enough impact on their bottom line. There are many examples of this. Yahoo is one: in the nascent days of the web, Yahoo flipped the revenue model on its head when it introduced banner ads and shifted to tracking ad response rather than impressions.1 In pursuing the ever higher margins and greater profits of banner ads, Yahoo dismissed opportunities like content marketing and mobile. These opportunities, once thought too small, or too much of a hassle to pursue, are now making a direct hit to the engine of Yahoo’s business. It is terribly difficult to step back when you are getting better and faster at what you are currently doing.
But the benefits are sizable. When you choose to step back, you can consider what you hope to learn or discover—a sort of business plan for your backward move. And, if you are jumping to a new curve, you can prepare in advance so as to enjoy a softer landing, financially, and quite possibly emotionally.
One interesting example of stepping back in order to grow is BRE Bank in Poland. According to Chris Skinner, banking expert and author of Digital Bank, after BRE Bank launched in 1988, it grew rapidly, becoming Poland’s third-largest bank. Then, in 2000, with the rise of the Internet, BRE Bank launched mBank, a pure-play online bank.
The real opportunity for disruption came in 2011 when BRE Bank was under siege from new entrant Alior. Says Skinner, “Fearing its core market would be seriously contested, BRE Bank invested $35 million over 15 months to reinvent the bank for the mobile, social, digital age and offer services like money transfers via text. It even tossed the BRE name, rebranding the entire group to mBank.”2 In addition to winning 11 global industry awards for innovation, mBank is not only trouncing competitor Alior in innovation, it is again #1 in customer acquisition in Poland, far outpacing industry growth.
At the level of personnel, when you allow employees to rotate into new roles, revenue growth and margin expansion will likely decline temporarily. An impaired ability to hit revenue and growth targets could put your personal standing at risk. But in the long term, it’s the smart call for you and your firm. According to an in-depth study conducted by Accenture, high-performing companies, those that surpass their peers on financial metrics across business cycles and leadership eras, are those that develop capabilities before they need them.3 The average and low-performing companies don’t.
It is almost always better to step back than to be pushed back, but for nearly every company and individual, pushback at some point seems inescapable. A company may run up against a competitor it cannot beat and have to completely rethink its product or service, or you might be fired from a job despite your best efforts. In either instance, what feels like being pushed off a cliff can launch you to a new learning curve with greater opportunities for growth, profit, and success.
Consider Tractor Supply, a chain of stores for home improvement, agriculture, lawn, and garden care. Tractor Supply was founded in 1938 to sell tractor parts to the six million farms in the United States. Growing steadily, the company went public in the 1950s. But by the late 1960s, tractors were more reliable and didn’t need as many parts. At the same time, the number of farms had declined to three million. Over the next twelve years, Tractor Supply was acquired twice, and had five different presidents in one decade. After seeing a significant number of store closings and a revenue decline to $100 million, down significantly from the peak, several key executives participated in a leveraged buyout in the early ’80s.
The new owners plowed into the data and discovered that, while the number of commercial farmers was decreasing, hobby farming was on the rise. This suggested a strategic pivot away from supplying tractor parts, and toward general farm and ranch supplies. Says former CEO Joe Scarlett, “One of our key goals was to become the pet supply store for people who own horses.” Today, Tractor Supply has grown to 1,400 stores, three times more than its next five competitors combined, with revenue north of $5 billion.4
Stepping back can be traumatic personally. Elin Cherry, an attorney and compliance officer who has held positions at Bank of America and Societe Generale, was shoved off her curve when she was fired. Her son immediately asked the question, “What did you do wrong?” She’d asked herself the same question over and over again for about a year, and finally came to the conclusion that neither the question nor the answer mattered. “Being fired was painful,” she says, “The time has not been a cakewalk; for the better part of the year, I felt down and was in the throes of a midlife crisis. I doubted my abilities, my past successes, and my ability to reenter the workforce in a meaningful way. But with ample time and no other choice, I plowed forward.”5
As Cherry put one foot in front of the other, she competed in her first triathlon and three 5K runs, and embraced a healthier lifestyle. She joined a compliance consulting firm that she loves. Cherry discovered that life goes on. She discovered that her career is important, but she no longer places work ahead of family and sleep. She’s also learned that people are wonderful. Many have been willing to tell their stories and to listen to hers. Knowing that you aren’t alone in the experience of being pushed off the curve helps ease some of the psychological trauma of that unexpected loss. We need to know that we’re not alone, life will go on, and we will be successful again.
Just as a company’s survival depends on revenue growth, an individual’s well-being depends on learning and advancement. For far too many, growth comes to a standstill at the top of the curve. Once we achieve a certain level, it seems there’s nowhere else to go—so we keep on doing the same thing. Those who want to grow have to jump to a new role, industry, or type of organization.
This doesn’t necessarily mean you need to change employers. Dave Blakely earned a master’s degree in mechanical engineering from UC Berkeley and started as a staff engineer at design consultancy IDEO two decades ago. Many people in his position would have deepened their core expertise and eventually managed technical staff. Instead, Blakely became a program manager, a job that many of his colleagues considered to be a step down, a place for someone who couldn’t handle the rigor and detail of engineering. But the new role allowed him to broaden his skills: he learned how to delegate and build team morale, for example. Those new skills propelled him into the management ranks, and eventually he became the head of technology strategy at IDEO. Blakely didn’t foresee he’d have that role when he started his career, but moving sideways let him climb a more rewarding ladder over the course of his twenty-five-year tenure at IDEO.
Then again, your step back may involve changing your employer. In 2002, Carine Clark was senior director of network products at Novell, responsible for building a global campaign for an $800 million business. At the height of her success there, Clark left to run marketing (at a third of her former salary) for the unknown start-up Altiris, a SaaS-based platform for managing IT assets. This step back became the launch pad for her personal rocket ship. In 2007, Altiris was acquired by Symantec, a security and storage software company with revenue of more than $6 billion; Clark eventually became the chief marketing officer.
But in 2012, after a sabbatical to deal with stage-three ovarian cancer, Clark took what some would consider a step down to become the CEO of Allegiance, a $20 million software company that analyzes customer data in real time. In early 2015, MaritzCX acquired Allegiance. Despite Allegiance being one-tenth the size of MaritzCX in terms of revenue, Clark was immediately tapped by Maritz’s chairman to be the president and CEO. Clark’s ability to take calculated backward moves has been critical to her career success. Or as she likes to say, “lose something now to win something that is bigger and better.” Let’s not forget Clay Christensen. Only after being fired from a CEO role did he decide to pursue a doctorate degree—with five young children and at nearly forty years of age.6 This backward move positioned him to develop a theory that has changed the way we think about business, and Christensen has become one of the world’s leading management thinkers.
Is Stepping Back the Right Move?
Just because there can be benefits to a strategic step back doesn’t mean it is always the right call. If you’re working toward an ambitious and potentially achievable goal, such as managing a division at your company or winning a C-suite job in your industry, there’s no need to. But if as an individual you’ve reached the top rung of the ladder you’re climbing, it’s time to find a new ladder—for the same reasons companies must seek out new markets.
First, you need to head off the competition. As you continue to improve along the dimensions of performance that the employment market has historically valued, you risk overshooting demands. What you do reliably, if not brilliantly well, can be done just as effectively by many peers—and perhaps more swiftly and affordably by up-and-comers.
Second, consider the greater rewards that disruption might bring. It’s true that disruptive innovation in business tends to start out as a low-cost alternative, and of course you don’t want to embrace a career strategy that reduces your own price point. But when you disrupt yourself, you vector to a new set of performance metrics. And with personal disruption, compensation is not just financial—psychological and social factors also matter.
Also consider the phase of your career. Early in your career, you are at the low end of the curve. You can take the jobs that no one else wants. There’s little to lose in taking a step back. Senior employees are at the upper end of the organizational curve. If things get really bad, they likely have a golden parachute, and there’s enough headroom to slingshot forward. The risk/reward math works. It’s much more complicated if you are a middle manager. Trying something new could result in a steep slide back down the curve, with internal fiefdoms giving a none-too-collegial shove.
An HR program manager (we’ll call him Ben) inside a storied Silicon Valley company leveraged his distinctive strength of coding to write a program that remediated a departmental pain point. The last thing anyone expected from his role was a full-application ecosystem and operational dashboard complete and in production in less than a month at zero additional cost to the team. His colleagues in IT now had to decide if they would “bless” his initiative and solution, or reject it because he had inadvertently done their job quickly and affordably. They opted for the latter: instead of cheering, they booed.
If you are a middle manager, you likely have had a similar experience of being stuck in the middle. In innovation circles, it’s been referred to as the “frozen middle,” because this is where good ideas get put on ice. If middle managers could freely skate up and down the curve to where they believe the puck will go, there would no doubt be a thaw. As you consider moves sideways, up, or down, simply be aware of this dilemma—and, importantly, consider it when the people who work for you want to make a move.
Finally, remember to analyze how well your skills map to others’ unmet needs. Just because you crouch before jumping doesn’t mean you’ll dive into a lake. It could be a shallow pond. One of my coaching clients is off-the-charts good at sales; he’s raised money for presidential campaigns and sold enterprise software. He would like to move into private equity.
Given his experience to date, this move will be more of a long jump than a hop and a skip, but it’s doable. He lives in Boston, where there are a plethora of private equity firms, and he’s plugged into the right networks. If he were still in Idaho where he grew up, this would be an ill-advised long walk off a short pier. No doubt he will need to work harder in finance than in sales, so the slope of his improvement is steeper, but he’s in the right ecosystem. He can logically make the leap from here to there. To avoid a dangerous fall, make sure the curve you want to jump to involves the right risks for you and leverages your distinctiveness.
The whole point of disruption is to move up the y-axis of success, however you define success, over the x-axis of time. When you disrupt yourself, you are making a conscious decision to move down the y-axis, leaving a comfortable perch, possibly with pay and status taking a hit, on the premise that the slope of your next curve will be even steeper, leading to another period of rapid growth up the success curve. Just make sure you’re not jumping onto the wrong grid.
There are instances where we abandon ship, whether in a business or a relationship, out of fear. The going gets tough, and we get gone. In my experience, the far more common challenge is mustering the courage to jump when you are comfortable. When the status quo doesn’t seem all that bad, jumping often seems needlessly risky. So, pack a parachute to make your jump a safer one.
Charles Scott had a plum job at Intel Capital’s Venture Capital Fund, and had developed Intel’s clean technology investment strategy. He also wanted to spend more time with his young children. He didn’t quit his job straightaway. He took a two-month sabbatical to test-drive his dream: in the summer of 2009, he and his eight-year-old son cycled the length of mainland Japan, 2,500 miles in sixty-seven days.
Scott is also a good example of embracing constraints. Because he was taking his sabbatical in the midst of the financial crisis, he wanted to insure himself against a job loss. So, he not only persuaded Intel to sponsor his trip, during which he would blog about his adventure using Intel equipment, but the United Nations named him and his son “Climate Heroes” as they raised money for a tree-planting campaign and promoted the UN’s efforts to combat climate change.
Once he finished this endurance adventure in Japan, Scott had enough data to be certain he wanted to change careers, even though this would mean riding away from a high-status, financially lucrative gig. So he saved and planned for two years before finally leaving Intel in 2011 to launch Family Adventure Guy, a business in which he takes his children on endurance challenges linked to charitable causes, and then writes and speaks about their experiences and earns sponsorship dollars.
One of the most difficult aspects of jumping to a new curve is setting aside your ego. In her essay, “Shedding My Skin,” Rebecca Jackson writes, “Have you ever let go of something that simultaneously protects and strangles you; something that both defines you, but also suffocates your evolution? Just like a snake shedding its skin, you have to lose something critical to grow, leaving you vulnerable and exposed in the process.”7
When we take a step down to gain momentum for an upward surge, for a time we will know less than those around us. This can deal a blow to the ego. In achievement-oriented cultures, it is very difficult to look dumb even temporarily, asking questions like, “Am I doing this correctly?” especially to lower-status team members. MIT professor emeritus Edgar Schein describes a willingness to acknowledge that “in the here-and-now my status is inferior to yours because you know something or can do something that I need in order to accomplish a task or goal” as the art of humble inquiry. For many, this can feel very painful. In fact, in some cultures, says Schein, “task failure is preferable to humiliation and loss of face.”8
“A disruptive innovation must measure different attributes of performance than those in your current value networks,” writes Christensen. In layman’s terms, when you are disrupting you need to find the right metrics to measure you, and quite possibly these will be new metrics.
Think about Billy Beane, the former general manager of the Oakland Athletics. Despite being financially poor, the A’s became one of the most successful franchises in Major League Baseball when Beane took the helm. As Michael Lewis chronicles in his bestselling book Moneyball, the cash-strapped Beane reframed the game by recasting the way he measured performance.
When the A’s acquired relief pitcher Chad Bradford from the White Sox, Bradford’s standard pitching metrics were respectable, but his fastball came in at eight-one to eighty-five miles per hour, and he looked funny when he threw—the scouts made fun of him. But because the A’s thought about measurement more comprehensively than the other teams, Beane knew Bradford was a steal.
According to Lewis, “Chad Bradford gave up his share of hits per balls in play, but, more than any pitcher in baseball, they were ground ball hits. His minor league ground ball to fly ball ratio was 5:1. The big league average was more like 1.1:1.”9 Ground balls don’t get hit over the wall. They make singles, occasionally doubles. Bradford eventually signed a three-year $10.5 million deal with the Baltimore Orioles.
To get you thinking about how you might more intelligently measure your performance on a personal level, ask yourself: How am I defining success? When you were young, success metrics were handed to you by parents and teachers. They likely included what grades you got, which college you got into, what job you got, or how little trouble you got into. Once you’ve hit these marks, and you accelerate into a sweet spot of competence and contribution, you begin to play by your own metrics.
Consider some forward-thinking metrics in the workplace. According to Dr. Stacey Petrey, vice president in charge of global compensation and benefits at Mylan Pharmaceuticals, “there are additional categories/metrics by which to measure performance. Here are just three: (1) Talent Developer—tally the number of team members for whom a manager has brokered a move into other areas of the organization; (2) Innovator—did they create an environment that fosters innovation as evidenced by the number of ideas generated by their team; (3) Value Integrator (a manager who analyzes and synthesizes information and turns it into a competitive asset)—count, for example, how many cash management strategies came from their division?”10 These are all contributions that can be measured. When you are willing to do the hard work of asking what should be measured, you can measure almost anything. Recalibrate personal metrics, too. Disrupting your work life has implications for your personal life. A reader commented on one of my Harvard Business Review pieces, “I quit my senior position at a research institution five months ago. I had plans to build a freelance career but then my disruption was disrupted as my wife’s disruption started taking hold and her consulting career picked up. I put my plans on idle to take care of our six-year-old twins during summer. Spending so much time with the kids forced me to look at things from a perspective of work–life integration rather than work–life balance. Today I took the children to visit my dad in the small village he lives in. I read under the shade of a walnut tree, with two puppies sleeping by my feet as the kids played with their grandfather. A slow day for sure, but I got enough out of it. To your post about different performance metrics, my five-per-month migraines are completely gone.”
As this father illustrates, our personal life also has metrics. It’s important to consider the metrics by which you measure your life as a whole, not just the career component.11
Is simply showing up perhaps the most important metric of all? A look at some of the research has convinced me that Woody Allen was right, and 80 percent of success really is just showing up. According to Keith Simonton, professor of psychology at UC Davis, the odds of a scientist writing a groundbreaking paper, with success defined by the number of citations in other works, is directly correlated to the number of papers that the scientist has written, not to the IQ of the scientist.12
Similarly, Rob Wiltbank, professor of strategic management at Willamette University, tracked the returns of the Angel Oregon Fund and found no material difference in the returns of the winners and the finalists in various pitch competitions over a ten-year period.13 The runners-up had an equally good chance that their companies would ultimately succeed. It’s called the equal odds rule. If you want to write a frequently cited paper, publish a lot. If you want a successful business, get to work. If you want to sharpen your skills as a disruptor, disrupt. A simple metric: show up and keep showing up.
Most people hit a point in their lives where they examine their trajectory and consider a pivot. We typically label this the midlife crisis. In disruptive innovation terminology, it’s a rethinking of which performance attributes matter. Famed developmental psychologist Erik Erikson describes this as a period of generativity, during which we have a wealth of knowledge and experience, and are supremely motivated to do not just for ourselves but also for others, as we ask the question What can I do to make my life really count? The metrics that we use to define success shift as a consequence. Perhaps earlier in your career the metric was money or fame. Now you want more autonomy, flexibility, and connection. These require different metrics of success. Only you can play moneyball for you. As social media and business strategist Liz Strauss said, “It’s not possible for the world to hold a meeting to decide your value. That decision is all yours.”
Every time you hop down to a new curve, you have the opportunity to recalibrate the metrics by which you gauge yourself. Just as a business moves from the messiness of start-up life to codifying process in order to scale, as you start to identify the metrics that measure what matters to you deeply, you’ll be able to lock and load, then barrel up the y-axis of success. I don’t know how you’ll define success. Mine is best described by paraphrasing Samuel Johnson: the ultimate result of all ambition is to be happy at home.
As you look to tip the odds of success in your favor, beware the undertow of the status quo—current stakeholders in your life and career, including family members, may encourage you to just keep doing what you are doing. The metrics you’ve always used to measure yourself are comfortable, and so are your established habits; performing well on your current path is practically automatic. You can almost convince yourself that staying put is the right thing. But there really is no such thing as “standing still.”14 The “use it or lose it” principle applies to our brain cells just as it does to the muscles in our bodies. Neuroplasticity has a reverse function. Connections recede through lack of activation, while continual stimulation of neural pathways keeps them healthy and active, including—and especially—when you step back, down, or sideways.