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As Published in Business
2 Business, November 2008
4 Drivers for Managing Turbulent Times
By Ira S Wolfe
The Perfect Labor Storm and the concurrent financial crisis have collided. As a result your company will be challenged to change in a way for which it has no precedent. Decades of orthodox management decision-making practices, organizational design, and traditional approaches to managing human resources provide no real hope that companies will be able to avoid faltering or suffering painful restructuring.
The real opportunity that businesses have today is to take control of their own destiny and begin to consciously innovate. Yes, that’s right – this isn’t the time to retreat and crawl under the proverbial rock for cover. It’s a time to adjust. A time for innovate.
While executives and business owners of competing companies will typically opt for ad hoc changes, the astute leader will seize this golden opportunity to trump the competition by creating a competitive advantage that beats rivals to the punch with a plan that can’t easily be duplicated. Leadership is not just about adapting to changed realities in the environment but creating new realities.
The world is reorganizing on the fly. The available information is sometimes ambiguous. At other times it is contradictory. Because of this continuous, rapid pace of change and an unprecedented urgency to act, more and more people need to make good decisions quickly. They need to simultaneously gather, decipher, analyze, decide and then act on information with little margin for error. The sheer scale, connectivity and speed of this change is almost beyond comprehension, stretching our old ways of thinking to the breaking point.
That makes the ability to make sense out of things a much sought-after skill. Some might even argue that the world is already too complicated for us. Making good sense of our world has never been harder. Some people are quite resourceful, making great decisions and troubleshooting problems with the information they have on hand. Others act like deer caught it in the headlights. Unfortunately neither tactic provides viable solutions during tumultuous times.
Organizations in the past were designed for the industrial age and strategies were developed accordingly. Today organizations need to mobilize the mind power of the workforce and tap into under-utilized talents, knowledge, relationships and skills. Businesses have unprecedented opportunities to blend the best of the old with the innovation of the new. A golden opportunity exists during this tumultuous business environment to create a durable competitive advantage and generate high returns going forward.
An article published in The McKinsey Quarterly (2007 Number 2) summed it up best: “Strategic-minded executives may not be able to control the “weather,” but they can design a ship and equip it with a crew that can navigate the ocean under all weather conditions.” Executives who select the right people will win the race regardless of the conditions. From this point forward, an organization’s success will only be as good as management’s ability to decode the rising tide of complexity and its workforce’s ability to execute the plan.
Innovative Capacity: A key to durable competitive advantage
It is now painfully obvious that attempting to manage a business in today’s tumultuous environment has undeniable similarities to navigating a river with "permanent whitewater." Management today, and into the unforeseeable future, must be able to complete a lot of important work in a short time under harrowing conditions, on the basis of only a few hunches and a lot of instinct, none of them precise.
Unfortunately, current economic conditions have exposed an organizational vacuum that I have been forecasting for years: the inability of many mangers to keep pace when change is complex and conditions are ambiguous and dynamic. In many organizations, managers are expected to make critical decision in real-time but their bandwidth is still “dial-up.” Many managers lack the depth and breadth of skills to deal with the unintended consequences of past decisions and unprecedented environmental changes. Successful managers and leaders from this point forward will possess the ability to respond effectively to the increased pace of change in an unstable, technologically advanced, globalized economy.
Research has uncovered four key drivers of effective leadership during times of significant change: cognitive abilities, dealing with ambiguity, resiliency, and authenticity.
The first driver is an innate ability that I’ve been harping on for a long time – cognitive abilities. Cognitive abilities shouldn't be confused with "IQ" or education. It’s essentially what many people mean when they describe another person as really “sharp.” Cognitive abilities suggest how quickly and accurately an individual can sift through unfamiliar information, understand what it means, and then apply it effectively. Higher abilities could simply be observed when an individual calculates a percentage change in the cost of goods and its effect on the bottom line in your head (vs. having to pull out a calculator or plug it into a spreadsheet). People with higher abilities also can pick up a complex article or proposal and quickly read, analyze and comprehend what they need to know before others read the cover page. They can listen to a conversation and visualize the final design without ever seeing a blueprint or illustration. Individuals with higher cognitive abilities often have the ability to see the forest without getting lost in the trees. Assessing cognitive skills today provides vital information as critical as personality and experience when hiring candidates and promoting employees.
Unfortunately, improving cognitive skills is not very easy. In a sense it’s similar to the hardwiring of your computer. You can replace the hard drive, add memory, and delete old programs but the processor (the cognitive skills) is what it is. You either have it or you don’t. That doesn’t mean individuals with lower abilities are hopeless because education and training can supplant natural cognitive skills. Some of the most successful CEOs and managers in this country have average and below average cognitive abilities. They succeeded because of their vision, planning, and deliberate execution. They succeeded because they surround themselves with the right people. They are most challenged however when the situation changes unexpectedly and thinking on the fly is required. At that point their natural mental horsepower kicks in … and without naming names, we’re seeing a lot of that deer caught in the headlight look these day in the executive suites around the country.
What follows next is the ability to deal with ambiguity. It is perhaps the one area where corporate America has the most trouble. Being able to operate in unprecedented, complex and fast-changing conditions means you must be able to deal with uncertainty and vagueness. Every decision you make when you don’t have all the information you need entails some sort of risk.
When times were stable and predictable, the need to deal effectively with ambiguity was marginally important. Times have changed abruptly. Ninety percent of the problems that managers now solve are ambiguous – it’s neither clear what the problem is nor what the solution is. The competitive edge will go to those who can comfortably make good decisions with less than all the information, in less time, with few or no precedents on how it was solved before.
A second driver is resiliency, the ability to rebound, adapt and learn even in the face of adversity and stress. Resilient people have the uncanny ability to pick themselves up after being knocked down. From nearly any experience, they’re able to create options – they know there’s always a way out and they will find it. It’s important to avoid confusing resiliency with its polar opposite rigidity. Rigidity is represented by inflexibility, a desire to stick to the plan at all costs even when the evidence is overwhelmingly stacked against success. Rigidity infers a fear of failure and a need to be right. Resilience in the face of adversity requires adaptability and flexibility and is the greatest long-term predictor of success. As Thomas Edison said, ‘there is always a way to do it better…find it.”
Authenticity is a third driver. Authentic means meaning what you say and saying what you mean. Authentic people are straight-shooters; they believe that living by their core beliefs is the most important and highest value. Their actions are congruent with values: they walk the talk and are not afraid to “tell it like it is.” You may not always like what the authentic person says, but you always know where he or she stands on an issue. The opposite of authentic is political. Political people are always navigating or positioning for self-advantage. Authenticity is about being genuine. When navigating the uncertainty of permanent whitewater, politics and self-interest are at the minimum destructive to the change process and at their worst, deadly strategies.
One of the very best tools for helping individuals and teams to work through and improve the ability to deal with ambiguity and increase resilience is DeBono’s Six Thinking Hats. Six Hats offers a technique for thinking differently and unconventionally. It injects an opportunity for creativity into the most risk-averse group and provides a safety net for the emotionally charged team. It is being embraced by organizations world-wide to help “unstuck” conventional thinking.
“Talking” through the six hats is helpful for getting everything out in the open, giving everyone a chance to think and speak without retribution and fear, and focusing on the result, not the process.
The six hats are represented by:
Blue Hat: Setting the focus, ground rules, and agenda. When discussions migrate off course, the blue hat ensures rules are followed.
White Hat: Getting the information – both what you know and what you don’t know. This hat is particularly effective for improving how people deal with ambiguity
Red Hat: Gives permission to express how you feel. It’s the chance to “get-it-off-your-chest” without repercussions.
Yellow Hat: Looks at the value and benefit of every idea. The yellow hat forces people to look through the short- and long-term lens.
Black Hat: Point out what can go wrong. The black hat gives everyone the chance to consider the risks, difficulties, and potential problems.
Green Hat: This is the hat of possibilities and alternatives. Speaking through the green hat challenges the status quo and uncovers opportunity.
This brief discussion of hats does no justice to its effectiveness. I’d highly recommend reading Serious Creativity by Edward DeBono to learn more about the Six Hats. You can also contact The DeBono Consulting Group (http://www.debonogroup.com) for more information.
Navigating a business successfully through turbulent times requires the ability to deal with ambiguity, be resilient in the face of adversity, and being authentic. Consequently, leading through permanent whitewater requires an ability to sense, make sense, decide and act quickly. It requires a sharp mind, humility, and an openness to new experiences.
How prepared are you and your team to meet the future?
For more information about workforce trends and hiring and leadeship selection,, contact Ira S Wolfe at 717.291.4640 or iwolfe@super-solutions.com |
