Steve is the Managing Director of Nabity Skyline Point Capitalis a real estate investment company focused on multifamily acquisitions.
When running a business, you’re always looking for the best possible edge. You look through articles by experts on the future of the economy, the landscape of your industry, new trends and potential challenges, looking for the information you need to make the “right” choice. But the reality is that those experts are not perfect astrologers or fortune tellers. For example, I hardly need to tell you that many of the predictions about the 2022 economy were flat out wrong.
Yes, it’s important to stay informed and listen to expertise and advice, but it can be even more important To develop your ability to see when the “experts” might be wrong and then adapt quickly.
Let me explain how I learned this important lesson in leadership.
venturing into the unknown
When I was CEO of a paper die-cutting company, we had an unsettling opportunity in front of us. Our machine was a smash hit at the 2006 International Quilt Show in Texas. It looked like there might actually be a market for machine-cut fabric among quilters.
We returned from the show to our Nebraska plant and hired a Dallas brand consulting firm to conduct focus groups in Dallas and Chicago. Using that information, I planned to split the company into two: one branch for paper die-cutting customers and the other with customized products for fabric and quilters. Shockingly, the report showed no market interest in the new die-cutting product for quilting.
The advisors suggested that we drop the idea. This was the moment of truth. Should we believe the data or go with our gut? In the end, we went with our guts because of the passion we saw at the quilt show.
Our sentiment was supported by the facts: Quilters hate cutting, and our machine solved their problem. No one else was doing it in quilting – which meant the market was wide open. Furthermore, this was taking place during the financial crisis of 2007/2008. Many companies were leaving the market instead of launching new products, which increased the scope of our openings.
The team together decide to fly in the face of negatives (and experts) and “head west” anyway. Like Lewis and Clark, we were excited by the idea of finding out what was over the next hill. We didn’t have all the answers, but we believed we were smart enough to figure them out along the way.
So, we formed a spinoff company focused on quilting machines and headed west to see what we could do.
Finding a Team That Can Pivot
Surrounding yourself with the right people is key to changing direction and adapting – including anytime you want to go against expert advice. So one of the first things we did for the new company was build a blue-ribbon team. I spent a lot of time building team members, and especially an adaptable team. Our people turn out to be our best asset.
When you’re heading into the unknown, you don’t want “yes men” who smile and nod when you ask them to circle your ship. You want people confident in their abilities to challenge you and the experts, so you don’t start out believing your own BS or anyone else’s BS.
Being ready and willing to switch to a new strategy
At the trade show where we sold so many die-cutting machines, we received an important warning that helped us change directions at a crucial time. A lady at the booth stepped over to me and asked a technical quilting question. Two sentences into my reply, he pointed a finger at me. “I can tell you don’t know Anything About the quilt,” she said. “We’re not scrapbookers. We’re quilters. She was absolutely right. I didn’t know the first thing about quilting. I took her warning seriously and got my team on a serious note.
We geared up and researched our market. We hired quilters to teach us and learned everything we could to solve their problems. We talked to hundreds of people, tested products, attended more shows, made several quilts ourselves, and cross-referenced similar products.
In other words, we acknowledged our mistake and worked to rectify it.
In the end, the company was very successful. We enlisted experts and built a top brand in fabric cutting. But our success was not due to determination and adaptability alone. Right from the start, we recognized that the direction we were going in was wrong, and we were able to quickly change to a more effective strategy.
Through this experience I learned some of the most important lessons in my career as a leader:
- Listen to your conscience, but don’t believe their BS.
- Build an adaptable, expert team.
- Set up a system that allows for smooth pivoting no matter the next hill.
- Don’t be afraid to defy the experts.
So, yes, read those articles as you usually do. Listen to those who know. Understand your industry.
But build a customizable team, and learn to listen to your gut. When you think you’ve got reason enough to defy the experts, head west and make your mark.
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