Steve Nabity is the Managing Director of Skyline Point Capital, a real estate investment company focused on multifamily acquisitions.
When running a business, you’re always looking for the best possible edge. You pore over 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 those experts are not perfect fortunetellers or soothsayers. I hardly need to tell you, for example, that many predictions about the 2022 economy were dead wrong.
Yes, it’s important to stay informed and listen to expertise and advice, but it can be even more important to cultivate your own ability to see when “the experts” may be wrong and then quickly adapt.
Let me explain how I learned this important leadership lesson.
Venturing Into The Unknown
When I was CEO of a paper die-cutting company, we were presented with an uncertain opportunity. Our machine had been a smash hit at the 2006 International Quilt Show in Texas. It seemed as though there indeed could be a market for machine-cutting 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 in two: one branch for paper die-cutting customers and another with customized products for fabric and quilters. Shockingly, the report showed no market interest in a new die-cutting product for quilting.
The consultants suggested we give up the idea. It was a moment of truth. Should we believe the data–or go with our gut? In the end, we went with our gut because of the passion we saw at the quilt show.
Our feeling was supported by facts: Quilters hate cutting, and our machine solved their problem. No one else was doing this in quilting–which meant a clear market opening. In addition, this was happening during the 2007/2008 financial crisis. Many companies were leaving the market rather than launching new products, which widened our opening.
The team decided together to fly in the face of the negatives (and the experts) and “head west” anyway. Like Lewis and Clark, we were energized by the idea of discovering what was over the next hill. We didn’t have all the answers, but we believed we were smart enough to figure them out on the way.
So, we created 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 critical 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 create a blue-ribbon team. I spent a great deal of time vetting team members and specifically building an adaptable team. Our people turned out to be our best assets.
When you’re heading into the unknown, you don’t want “yes men” who smile and nod when you tell them to run your ship aground. You want people confident in their abilities who will challenge you and the experts, so you don’t start believing your own BS or anyone else’s.
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 switch directions at a critical time. A woman at the booth stepped toward me and asked a technical quilting question. Two sentences into my answer, she jabbed a finger at me. “I can tell you don’t know anything about quilting,” she said. “We are not scrapbookers. We are quilters.” She was right, of course. I didn’t know the first thing about quilting. I took her warning to heart and led our team to a serious pivot.
We buckled down and researched our market. We hired quilters to teach us and learned everything we could to solve their pain points. We talked with hundreds of people, tested products, attended more shows, made many quilts ourselves and cross-referenced similar products.
In other words, we admitted our mistake and worked to correct it.
In the end, the company was very successful. We bucked the experts and created a top brand in fabric cutting. But our success wasn’t just due to bullheaded determination and adaptability. From the beginning, we recognized the direction we had been going 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 of my career as a leader:
Listen to your gut, but don’t believe your own BS.
Build an adaptable, expert team.
Put a system in place that allows smooth pivoting no matter what’s over the next hill.
Don’t be afraid to defy the experts.
So, yes, read the articles you usually do. Listen to those in the know. Understand your industry.
But build an adaptable team, and learn to listen to your gut. When you believe you have good enough reasons, defy the experts, head west and make your mark.
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