Tuesday, November 15, 2011

Agility requires “pivoting”

I recently watched a Youtube video of Eric Ries at O’Reilley’s Web 2.0 Expo, 2010. Ries, the creater of the Lean Startup methodology, makes an argument that most startups are inefficient because they follow long development cycles and don’t pay attention to the needs of their end users. In the process of conducting business as usual, Ries states that these startups develop products that customers do not want and unwanted and are a “waste people’s time.” In order to remedy this situation, Ries puts forth his Lean Startup Model. Two key points here:

1) Startups need to pivot, or adjust strategies, when encountering difficulties. By pivoting, or changing directions but staying grounded in lessons learned, startups have a higher chance of success.

2) Not only do startups need to pivot, but they need to reduce the time between pivots—basically, iterating a process over and over, as quickly as possible, to reach the goal (whether that be a product, a service, or a combination of the two).

While Ries speaks from a tech-centric background, drawing heavily from agile product development, his ‘pivot principle’ dovetails nicely with the concepts outlined in Sull’s “Competing through Organizational Agility” article.

Pivoting embodies Sull’s notion of agility, regardless of the type of agility considered. If a business—or a startup—or a nonprofit—discovers a new niche that would provide game-changing opportunities, pivoting towards that opportunity would be a demonstration of strategic agility. Similarly, organizations should pivot one’s resources towards more attractive business areas…and, by doing so, demonstrate portfolio agility. The last form of agility that Sull discusses—operational agility—links agility to opportunities that conform to a clear business model. I assert that in order to exhibit operational agility, a business needs to focus on customers in order to gain key insights into their needs in the market.

The timing issue—iterate as quickly as possible—is a bit counterintuitive. While there is value in refining a business’ strategy and direction, I believe that iterating too rapidly could cause general confusion in the company as to the true strategic direction that company is taking. Agility, rapid pivoting, iteration…all are buzz words for being responsive to the market, customers, and environmental changes. A danger exists, however, in being overly-responsive to shifts in markets, as such agility can cause a company to lose its core identity and purpose.

What do you think? Is there such a thing as too much agility? How much is too much—and how can one tell?


References:

Sull, D. (2010). Competing through organizational agility. McKinsey Quarterly, number 1, 2010.

Ries, E. "The Lean Startup: Innovation Through Experimentation." Web 2.0 Expo SF 2010.

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