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AI may be the latest disruption, but time-tested leadership essentials will still help companies execute bold business model reinvention. Getty Images It’s a familiar challenge. Disruption—whether digital, operational, or customer-related—forces established companies to reinvent themselves. They must incubate and scale new businesses from within while keeping the existing enterprise running smoothly. Today, generative AI is requiring many companies to pivot. It’s not just the catalyst for change. It’s also a tool to do so at scale. But AI is also exposing how many organizations have let their business-building muscles atrophy. Few leaders understand how to carve out new markets and construct bold new business models. In looking at the most successful major corporate pivots, five shared principles emerge as essential for leaders who are building an adaptable operating model and writing the next chapter of their company story. 1. A clear “why” A successful pivot starts with purpose. Leaders should be able to articulate what the future business can achieve that the current one can’t. Without a clearly defined desired outcome, they’ll struggle to identify what they must be willing to change or sacrifice to get there. The best leaders also articulate the future operating conditions that will achieve the desired outcome. And they ensure that existing business lines and functions broadly understand and share that vision. Take, for example, the rise of the cloud and the implications for software providers. For many, shifting from a perpetual licensing model to subscription-based cloud services required a new go-to-market strategy and deep infrastructure investments. But it also promised a path to new growth, with more predictable recurring revenue, access to new customers, and protection against piracy, making the trade-offs clear. At Adobe, executives kept a laser focus on their end-state vision, communicating consistently on financial implications, performance expectations, subscriber metrics, and consumer trust. That clarity helped Adobe navigate the bumps of a full business pivot and grow revenue from $4 billion to $19 billion in a decade. 2. The right leaders—and the willingness to change them Business building takes more than just executing efficiently against a plan. The best business builders can tolerate ambiguity, test their most value-driving assumptions first, learn rapidly, and iterate when their assumptions fail. Other attributes for success include acknowledging what you don’t know, being willing to be wrong, and enjoying a fast-paced, high-trust leadership rhythm with your team. MORE FOR YOU Not every capable executive from the core business will fit this profile. Sometimes, the first leader chosen isn’t the one who can scale it. That’s okay. Organizations that excel in business building are willing to experiment with their leadership, too. The most effective CEOs act as shepherds of the journey, unafraid to recast leadership roles and change team compositions along the way. 3. An escalation lane As Andrej Karpathy, former director of AI at Tesla and cofounder of OpenAI, mused on X, every organization needs someone you can DM for a quick decision. Nothing kills momentum faster than the hurdles of hierarchy. Change inevitably creates friction, especially as the new business model starts to challenge, or even cannibalize, the old one. High-performing organizations blaze escalation paths for decisions around their new businesses. Control functions become accelerators, not blockers. Teams know exactly who to call to resolve certain issues. And those decision makers know to prioritize the new business initiative rather than letting it get buried among other bureaucratic tasks. They also understand that continuous momentum—not perfection—is the goal that should guide their decisions. 4. Flexible resources Annual plans are at odds with business building. Too often, companies pack their annual budgets so tightly that there’s no room to experiment or course correct midyear. Leading companies hold back a portion of their budgets so they can quickly adjust if an experiment takes off. They’re also prepared to pull back when it doesn’t. Likewise, they redeploy skilled talent to emerging initiatives without waiting for the next fiscal or promotional cycle. They follow opportunities, not just the plan. For talent needs that go beyond existing availability or disciplines, flexibility may mean contracting vs. in-house hiring to make it faster and easier to pivot based on new learnings. In-house talent practices may not be fit for purpose for speed, and hiring needs may not fit within existing job types, descriptions, and compensation bands. Creating approaches for flexible access to human capital is just as critical as flexibility in budgeting. 5. Repeatable scaling routines Experimentation, open-mindedness, and flexibility are key to building new businesses. Yet, as counterintuitive as it sounds, so are routine and discipline. Merely launching a pilot isn’t a pivot. The biggest challenge is translating an early success into routines that the broader organization can adopt and scale. Many stumble after their first success because they treat each new venture as a one-off experiment. Change isn’t built in, so it’s too hard to sustain. Instead, leading organizations change their operating models to make scaling easier. They create a playbook for testing and scaling that encompasses process and technology changes on a regular basis. This strengthens that atrophied business-building muscle. Repeatability helped Amazon become a serial business builder. From Amazon Web Services to Amazon Ads, the retailer has spawned several large, new businesses and systematically scaled them. Some, like its advertising business, are now among its most profitable. If history is a guide, most successful pivots take about four years to deliver measurable outcomes. That’s both sobering and encouraging. Reinvention is possible, but only with the patience and persistence required to build the future while still delivering the present. AI may be the current catalyst for change, but the winner won’t be the company that can harness the technology best (after all, tomorrow’s disruption could be different). The real differentiator will be leadership. Those with the adaptability and conviction to simultaneously protect and challenge the core will come out on top. Editorial StandardsReprints & Permissions
