What I Read

Sometimes the product won’t be right and sometimes the market won’t be ready, but the bottom line is that there is an early time to pivot: before the signs become clear outside the company, explore new opportunities, foster internal innovation, research potential acquisitions–anything instead of trying to pursue the original vision, which is not working. The concept of rapid experimentation driven by pivot-or-persevere decisions based on impact metrics is the key to success at the corporate level as well as for early startups.

What Happened When I Tried Implementing in Big Corporations

A large educational company I worked for recognized the need to pivot later than most major market players, and the leadership made a decision to pursue market opportunities as fast as they could. Switching from a traditional face-to-face tutoring schema, they create online courses, apps, and mentoring sessions post-2010–way too late to catch up with the growing digital education market. It was clear that the company needed to pivot but not clear how, given its 75-year legacy and vast experience in traditional tutoring and small-class test prep education.

To sustain its business, the company initially relied on internal product and engineering resources and created many powerful mobile apps that were well received by the market. This was accomplished through internal innovation and customer-centric thinking. However, in doing so, it was were still catching up with the market and new competitors who were well ahead of them, acquiring their customer base on a growing scale.

What was the next step in pivoting this business? As you learned from Chapter 2, the company had to start with a customer in mind. What was the market segment that had significant problems the company could solve? What was the optimal way to address the problems?

Having these questions in mind, the company’s leadership decided to tap into the unlimited potential of the startup world and partnered with the Techstars accelerator to host educational startups. It also acquired a social and adaptive learning platform that provided question banks for educational testing. Finally, it formed several startup ventures on its own, including one that covered an obvious gap while pivoting away from its traditional market of college applicants: the core of this business was helping its students, recent college graduates experiencing challenges in finding jobs, to get education in a high-demand field and to support their further job search.

The strategy of diversifying its experiments proved successful, although the company was not able to get the social learning platform off the ground despite significant investment. It is hard to say why this pivot, which seemed to be a perfect market fit, failed miserably within the first year of acquisition (much longer than necessary, since early signs of a failure were present). Most likely it was a combination of corporate leaders who lacked customer-focused mentality, lack of motivation, and poor acquisition strategy. That said, the job-seeking pivot worked very well and gave many people an opportunity to find a job and learn a new profession, and it allowed the parent company to sustain the disruption. An interesting addition to this story is that the professional career development business started as a programming/engineering course and rapidly pivoted to data sciences/machine learning specialization, which allowed it to avoid competition with cheaper offshore talent and address an empty niche in the job market.

What I Learned As I Adapted the Concepts in Corporations

These 12 steps provide a practical sequence to lean startup’s pivot-or-persevere model. The most important key to success is not the process; as usually, it’s people-related. This value is called courage. The courage to move forward at triple speed at early signs of success and persevere in achieving the goal if success criteria are met. The courage to pivot from a once-exciting idea to a different one based on validated learning, now smarter and equipped with newly acquired learning. In either case, time is of an essence, and courage is the fuel.

When I presented the ideas of a pivot, it resonated well within the organization. However, implementing a pivot is a challenge. A large Fortune 100 client of mine has a robust culture program. They teach it, implement it and celebrate it. When one of the IT programs they managed hit a dead end we facilitated a retrospective and reviewed the five values that were the corner stone of the cultural program. Courage wasn’t one of them. Upon further inspection I argued that the values could lead to a culture of complacency and mediocracy since they promoted behaviours of accpetance and consensus rather than risk taking and speaking up. A senior manager at the company shared with me that you could recieve a bonus as long as you: ‘played the cultural game’ so to speak. Pivoting as a behaviour was not something that the cultural program espoused. Without courage as a value the cultural program was missing a valuable driver for pivoting.

A pivot is a change; and in bigger organizations, a pivot impacts more people than it does in startups.

We had to identify methods to present a pivot in a positive way, embracing the validated learning and following through with the change. We found that Kotter’s eight steps to change were limiting us had we been required to implement them for every pivot. Additionally, the bigger the team involved, the more we got mired in communicating the pivot.

While small startups can pivot themselves on a daily basis, in bigger businesses we learned we had to integrate the concept of the pivot into the operating model. We had to explain to the organization the accepted amount of pivots in a certain timeframe; in other words, how many pivots were allowed in a given timeframe. We found that the concepts of a pivot were not necessarily foreign to the portfolio management team and the program managemenet office. Traditional product development frameworks introduce phase gates to support a GO/NO GO decision at various intervals of the development process. In practice though these become mere administrative hurdles to overcome as the project or program progresses towards completion and the product is released to the market. Often the phase gates involve only a review of documentation rather than evidence based feedback to a working model of the product. This is where pivoting provides a different framework than the traditional phase gate approach. The decision to pivot must be based on empirical validation evidence (relevant lead-impact metrics). This evidence is collected from real consumers (representing the selected persona) who interact with a partial solution - an MVP. The MVP integrates important and uncertain assumptions that we identified enabling us to meaure true alignment with our vision. These pivot decisions are in line with our vision and mission to deliver the right products and features that would delight our customers. The framework brings together concepts from various schools of thought - thus it is crucial to Synthesize an Integrative Operating Model. Otherwise pivoting, which is at the heart of a successful lean enterprise implementation will not be truly accepted as an option and will be viewed as a failure rather than as validated learning.

As I shared in the beginning of this book, my goal is to equip you, the reader, with everything you need to implement a holistic approach to enterprise-level lean agile transformation. The first section described what I learned, often the hard way, when adapting lean agile concepts at organizations bigger than 500 employees. I reviewed the fundamentals of the lean startup framework, as well as agile, lean, design thinking, and Lean UX frameworks to analyze the five key fundamentals of success for any enterprise transformation. I also analyzed examples from my experience that exhibit patterns and anti-patterns related to implementing the framework. In the following section, I review how to apply these examples to the reality of an enterprise transformation.