When To Pivot

What It Covers

Rita McGrath explains how businesses miss critical inflection points—changes that shift competitive rules by 10x or more—using cases like Gillette losing market share to Dollar Shave Club's subscription model and Kodak's failed printer bet.

Key Questions Answered

• •Early Warning Systems: Create charts tracking conditions that must be true before an inflection point materializes, then monitor quarterly. A pharmaceutical company used this to anticipate telemedicine by tracking Medicare payment models, legislative changes, and physician practice consolidation patterns.
• •Disengagement Strategy: Allocate quarterly simplification days to eliminate outdated processes before launching new initiatives. Successful pivots require respectfully exiting legacy businesses—like Verizon selling landline assets and phone books—to free resources for fiber optic infrastructure investments that enabled cable TV competition.
• •Employee Behavior Signals: When your own employees stop using your products, it reveals unmet customer needs. Nokia's product developers never visited phone stores, missing that retail shelf space for their products was shrinking—a clear market share warning they ignored until too late.
• •Problem Over Solution: Procter & Gamble's water purification chemical failed commercially in developing countries until they reframed it as disaster relief charity, attracting NGO partnerships. Focusing on the problem space—safe water access—rather than one solution opened viable business models and government relationships.