The Pivot is a concept well beloved in the Lean Startup community. Always be looking for the way in which your product or service can be changed to adapt to new markets, new customers and/or new applications. To hear the Lean Startupers go on about it, sometimes you’d think they’d invented the concept.
But the idea of a business pivoting is nothing new. Look at Nokia – masters at the art going from rubber products to (rubber-encased) cabling to electronics to mobile phones to whatever they do next.
My colleague and co-presenter at tomorrow’s 2015 CIO Summit Tony Phillips drew my attention to another great example from history – Wrigley’s.
Wrigley’s started out manufacturing soap. As an incentive to retailers, they used to give baking powder away for free to help encourage the soap sales. Until Wrigley’s realised that the baking powder was a more valuable proposition than the soap, and their product became the raising agent. A new sweetener to deal making was found in the form of chewing gum and… well, you can see today that that second pivot was the important one.
The key to pivoting, though, isn’t just about discovering what’s the new direction of business travel; it’s also about giving up the old stuff. Wrigley’s no longer manufacture soap or baking powder. Nokia no longer make rubber, cables or mobile phones (as an aside, if Nokia survive then the sale of their mobile phone business to Microsoft will probably be regarded as a case study in off-loading perishable goods).
A lot of the CIOs I talk to are in the business of pivoting. From cost centre to profit centre, from internal to external, from IT to Digital. But a common refrain I hear is that alongside the new they also feel that they need to keep providing the old.
Whilst those who have bought into commoditisation and cloud services have acknowledged the liability of the data centre, very few are willing to give up the governance and security parts of the IT portfolio. Those are vital services to the business, apparently.
But if you need to be regarded as a centre of innovation, can you also be a centre of governance? Can you be both poacher and gamekeeper? My gut instinct tells me that that will both inhibit the ability for technology teams to be regarded as innovative, but also is generally a pretty bad idea. Self regulation rarely turns out well.
So alongside the pivot, you need to think about the pass; who in the organisation (or outside) can be given the responsibilities for doing the things that you no longer need (or want) to do? Can they be stopped entirely, and if so, how? Do they sit better in another area of business (a shared Corporate Governance or Internal Audit group, for example)? Without passing on those legacy services, the chances of Brand IT being seen as the people who innovate are fairly slim.
You can find the presentation that Tony & I will be giving at tomorrow’s CIO Summit at http://stamplondon.co.uk/CIOSummit
There are still a few places left to attend in person – register at http://www.cio.co.uk/cio-summit/attend/