The senior management team and I were sitting around a table discussing a variety of new strategies for coping with the impact of the Affordable Care Act, when I commented that I did not think the organization was well positioned for long term success. In particular, it had to stop focusing on only trying to fix all of the immediate problems and instead began defining and then solving the more pressing adaptive problems. The COO’s head popped up from his folder full of charts and graphs, and said, “Our major problem is that our leaders are mostly focused on counting things. They have a ‘just tell me what to do and then I will do it’ mentality. We need to change this first before we can move forward.”
So many organizations today are suffering from the hubris born of success, to refer to a phrase from Jim Collin’s writing. As Arie de Geus, the former head of Shell Oil Company’s strategic planning group, wrote: “The signals of threat are always abundant and recognized by many. Yet somehow they fail to penetrate the corporate immune system response to reject the unfamiliar.”
Jim Collins in his book, How The Mighty Fall and Why Some Companies Never Give In, HarperCollins, 2009, wrote, “Great enterprises can become insulated by success; accumulated momentum can carry an enterprise forward, for a while, even if leaders make poor decisions or lose discipline. Stage 1 [of organizational decline] kicks in when people become arrogant, regarding success virtually as an entitlement, and they loose sight of the true underlying factors that created success in the first place.” He points out that when an organization neglects it’s primary flywheel, i.e. when the “what” replaces the “why”, then the rhetoric of success replaces understanding why. This results in a decline of the learning orientation within the organization. As Collins explains, “leaders lose the inquisitiveness and learning orientation that mark those truly great individuals who, no matter how successful they become, maintain a learning curve as steep as when they first began their careers.”
Therefore, we as leaders must have the capacity to work with complexity and uncertainty. It will all come down to improving the decision-making process throughout the organization. Noel M. Tichy and Warren Bennis in their excellent article called “Making Judgment Calls: The Ultimate Act of Leadership” in the October 2007 issue of the Harvard Business Review, note that there are three stages to effective decision making. In Stage #1, the Preparation Phase, effective leaders sense what is happening in the internal and external environment and identify the problems. Next, they frame up the issue that will demand a judgment call, and then align their team members so that everyone understands why the call is important. From my vantage point, this is the stage in which most leaders are doing a very poor job. Rarely do they frame up the issue and then mobilize and align people well before the call.
In Stage #2, the Call Phase, the moment of decision has arrived. While many think of this as a single moment of rational analysis based on knowable and quantifiable variables, in reality it is a “dynamic process influenced by multiple variables which are often outside of a leader’s direct circle of control or influence.” However, “the best leaders make decisions that influence now but also set up a framework for others to make successful decisions.” I wish more people grasped the depth of the authors’ insights and realized that setting up a framework for making a decision is as important, if not more important than making the actual decision.
In Stage #3, the Execution Phase, once a decision has been made, a leader needs to mobilize resources, people, information, and technology to support the decision. Furthermore, they need to make it happen while learning and adjusting along the way.
I believe there is a critical Stage #4, the Evaluation Phase. Here we routinely evaluating our strategic choices and decisions as a large group and during 1/1 coaching sessions. This strengthens the level of understanding and improves the overall framework for strategic and operational decision-making.
For us here today, I end this morning’s thoughts with a wonderful question written by Jon R. Katzenbach, Ilona Steffen and Caroline Kronley in their great article called “Cultural Change That Sticks” in the July-August 2012 issue of the Harvard Business Review: “If we had the kind of culture we aspire to, in pursuit of the strategy we have chosen, what kinds of new behaviors would be common? And what ingrained behaviors would be gone?” It is time we answer this question so we will have greater collaboration and less heroics.