To Innovate, Pivot Like a Ballerina
A leader understands her organization’s core
Recently, we woke up to unremarkable news. Jeff Immelt who had been GE’s CEO for 16 years will retire in a few months. His successor, a 12-year GE veteran, has been under review for 2 years. Corporate leaders come and go, but in an age where the tenure for a big company CEO is 7.4 years, GE reminds us that it takes a long training period to prepare for the top job. And that top job is about innovation.
Law firms, of course, are different. Training for the top job is… Okay, I tried to find the right metaphor, but the reality is that our law firm leaders do not train for the top job. Some of them were department heads, office heads, practice group heads, and served on whatever committee manages the firm. But we need to be honest. Those roles do not prepare you to run a several hundred million to a couple billion dollar entity. They don’t prepare you to innovate. They prepare you to be the least offensive candidate when it comes time to vote for a managing partner.
Back to GE. Immelt had a challenging tenure as CEO. That statement is true for any CEO today. When social media can turn your company on a dime, world events can change over night, and even countries like the United Kingdom can flip-flop politically, planning for the future is more like leaving the afternoon free for the unexpected.
At the beginning of Immelt’s run in the top job, GE was a financial services behemoth, with manufacturing tucked in behind it. For those of us who grew up with GE as the household appliance name, the switch to financial services was a bit surprising as an innovation. For GE, however, it was evolutionary.
GE had — we thought — mastered the art of long-range strategic planning. It moved its massive portfolio of businesses along, adding a bit here and taking off a bit there, with the flotilla constantly moving in the right direction. When making money from money replaced making money from things, the flotilla had to change direction. It had to pivot.
As we reach the end of Immelt’s run, we can look back and see just how massive the innovation. It trimmed the financial services parts and bulked up on the making money from things parts. GE has become a solution provider for the new age, coupling all-things computer with its manufacturing prowess.
Even GE has its doubters. The people who still make money from money — activist investors — want GE to change even more. In this respect, they resemble clients. They focus on the short term not the long term. They want immediate gratification (clients want this in one-time low fees), not long-term success or competitive advantage. They live like there is no tomorrow. An activist’s relationship to its investment is like the relationship many clients have with their law firms, transactional not relational.
GE has made it through leadership changes and survived challenges from investors. It has an ability that no law firm has seen fit to master. It has the ability to pivot. Like the graceful ballerina gliding from one movement to the next, GE pivots from one business model to the next. It takes a bit more time than it takes the ballerina, but then GE has a bit more bulk to move.
Law firms may argue that they, too, can pivot. They bring in lateral hires in hot areas to beef up those practices, while slimming down in other areas. This isn’t strategic pivoting and it barely passes note as a change. Lateral hires do nothing to solidify a firm’s identity in an area or to give firms a point of differentiation. They do not come with attendant investments in infrastructure, such as technology, nor do they help with innovation. They serve merely as a way to add more hands when demands shifts, and will quickly be replaced by other hands when demand shifts again.
To pivot means, first, having some core around which to pivot. The ballerina pivots en pointe. GE pivots on its core groups. Even startups pivot on their core skillset. As we look at law firms, they have nothing around which to pivot. They have no core thing. They are distributed, amoeba-like creatures. This, in part, is why most law firms have difficulty defining their reason for existing.
Another requirement of the pivot is a deep understanding of what you do, what you don’t do, and how to navigate the path from where you are to where you and your clients want you to be. Law firms know where their clients want them to be, but they don’t want to be there. To bastardize Wayne Gretzky’s famous line, clients want law firms to skate to where the puck is going, but the law firms want to stay where the puck has been.
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About: Ken is a speaker and author on innovation, leadership, and on the future of people, process, and technology. On Medium, he is a “Top 50” author on innovation, leadership, and artificial intelligence. You can follow him on Twitter, connect with him on LinkedIn, and follow him on Facebook.