Q014
Is there a way
to plan for a pivot?
our take .
Planning for a pivot means planning for a pivot. Every step you take down the road of choosing this successor over that successor or hiring this person instead of that person means that there’s less open-endedness in what should or even can come next. That applies to what you’ve done with a company or an organization before, too. We’ve called this idea or state Day 2 – to distinguish it from Bezos’s (frankly impossible) directive to always keep it Day 1 at Amazon. In other words, decisions you make today change the range of options available to you in the future.
What does this have to do with using a succession for a pivot? Succession events happen in context. Yes, you can bring in a maverick CEO to “shake things up” and realign towards new goals, new material circumstances, new environments, or new trends, the range of options that are going to “work” – that are open and available – are suggested and curtailed by all of the decisions, conditions, and outcomes that leaders have made before.
If you’re heading in the same direction (i.e., not using succession as a pivot), you’re building on previous choices made to take a step (or steps) forward. So while the scope of opportunity narrows as you head down the same path, ideally, the magnitude of significance of what’s being done is growing.
But if you’re planning for a pivot, then succession can’t be a single point around which things are going to turn around. You need a runway. Or a little tacking and sailing, if you want some nautical terms. Developing the selection criteria for a new CEO is one place you can start to adjust your heading, considering not just what replacing a leader would look like, but what you want leadership – and the company – to look like five or more years down the road. It’s a longer process than a hard pivot (which is sometimes necessary, but never gentle), but it helps give you the right range of options for your next leaders and their Day 1 – and Day 2.
on paper.
character to consider: Steve Ballmer
Recognition and Response
In 2014, Steve Ballmer was the outgoing CEO of Microsoft, having led the company through a period of robust growth in the PC software market. By the time he left, however, Microsoft faced pointed criticism for missing key technological trends – mobile computing and cloud services – and for being perceived as overly dependent on revenue streams from Windows and Office. There was a concerted effort to use the succession event as a pivot point for the company. The board settled on Satya Nadella, who had been with Microsoft for over 20 years and was then leading the Cloud and Enterprise division (see insider outsiders as a choice for making consistent, sustainable change in an org). The choice was a recognition of the stagnation that had set in in the face of industry shifts and a response to investors and board members who were growing increasingly vocal about the need for strategic transformation.
Pushing the Reset Button
While Microsoft’s succession planning for who came after Ballmer arguably came too late (Microsoft had already missed the bus on many of the concerning technologies), once the process got in gear, it did plan for the pivot, articulating what characteristics would define a successful successor in a newly envisioned future. With Ballmer’s support and guidance, the board geared their search for someone who had a deep understanding of emerging technologies, the ability to build and scale innovative products and new revenue streams, and a different and more collaborative leadership style that still understood Microsoft’s internal dynamics. Most importantly, Nadella was known to be a more willing risk taker than Ballmer, a key mindset shift that, while uncomfortable for the organization in the short run, was a necessary change.
Slow Pivots?
There was about a 6-month overlap in 2014 when Nadella took over as CEO and Ballmer remained on the board – not really the swift break you think of when you think “pivot.” There were some benefits from the slow burn: knowledge transfer had a chance to cook and the messaging remained reassuring to investors and other stakeholders. But the reality is that these overlaps generally cause more tension than they relieve. Ballmer’s decision to acquire part of Nokia before stepping away became an ongoing source of tension, investors started to worry that the outgoing CEO might be putting undue influence on decision-making, and Nadella started to feel squeezed.
Works Consulted
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