Most Businesses Should Neither ‘Pivot’ nor ‘Double Down’

Company leaders are encouraged to believe that they face a stark choice when it comes to change: either double down on their existing strategy or pivot to pursue some form of radical transformation. Our research reveals that this advice is appropriate for only one-third of companies. For the other two-thirds, the better response to a changing environment is to innovate the activities used to deliver value to customers and other stakeholders. In recent articles for MIT Sloan Management Review, “Changing How We Think About Change” and “The Essence of Strategy Is Now How to Change,” we described how change can take three forms — magnitude, activity, or direction — and how companies can identify which form of change is appropriate for their business by evaluating their performance on two dimensions: fit to purpose (the quality of their fit with the expectations of customers and other stakeholders) and relative advantage (the vulnerability of the company’s capabilities to substitution).