Monday, March 31, 2008

Analogy #168: Blind Confidence

Let’s assume, for a moment, that Simon has a cancerous tumor that needs to be removed from inside his body.

As he is walking down the hallway at work, Simon runs into someone he knows named Bob. Simon strikes up a conversation with Bob which goes something like this:

“Hey Bob, I’ve got this cancerous tumor in my body and I’d like you to take it out.”

Bob answers, “But Simon, I’m not a doctor. I know nothing about surgery. I’ve never done anything like this before.”

“That’s okay,” Simon replies. “You can do it, Bob. I have complete confidence in you.”

“But I don’t have any training, or any proper tools,” protests Bob.

“Let’s not get bogged down in details,” says Simon. “You know the goal. Now just go and get it done. Look! Here’s an empty office. I’ll just lie on the desk right now and you take out the tumor.”

Confidence can be a good thing. Without confidence, difficult tasks would never be undertaken. Inspired confidence from leaders provides the motivation for a firm to tackle a new strategy.

However, there is a difference between realistic confidence and blind confidence. Realistic confidence is rooted in knowledge about the task at hand and the capabilities necessary to accomplish it. There is a reason to feel confident, because you know what needs to be done and are assured that you have what is needed to do it.

Blind confidence, by contrast, is not rooted in anything. You really do not have a clue as to what needs to get done or whether you have what it takes to get it done. Just through blind faith, you hope that it can be done.

In the story above, there is no rational reason why Simon should have any confidence that Bob could take out that tumor. Bob has no training or skills in medicine. He has no tools or assistants to help him in the task. Yet, Simon says he has complete confidence in Bob’s ability to take out that tumor. This is blind confidence.

I suspect that if Bob went into that empty office and started to take out that tumor with whatever he could find in that office, Simon would end up dying from the attempt. This was not well-placed confidence.

Sound silly? Well, I’ve been around businesses who have acted almost as silly. The leaders of these companies come out of their strategy meetings with extremely aggressive goals, but not a clue as to what it will take to accomplish them. Then, they go and tell everyone in the organization how confident they are in the people’s ability to make the aggressive goal a reality.

The leaders do not provide any direction, tools, or training to get the job done. All they supply is the goal and the rhetoric: “I know you can do it. I have great confidence in you!”

The company tries to hit the goal, but without the necessary skills, training, direction or tools, they fail. The company (like the patient) dies from the attempt.

The principle here is that blind confidence can be dangerous. Our confidence needs to be rooted in something more. The following four points need to be kept in mind to prevent the perils of blind confidence.

1) Goals cannot be made so aggressive that they do not stand a chance of being accomplished.
Aggressive stretch goals can be very useful in moving a company forward. Jim Collins and Jerry Porras, in their book “Built to Last,” praise the benefits of Big, Hairy Audacious Goals (BHAGs). However, there is a difference between an aggressive goal and a completely unattainable goal.

When goals are left as mere numbers, they can give the appearance of attainability. Saying things like “20% annual profit growth,” “Sales of $10 Billion,” or “40% market share” can sound very impressive. But is it realistic? The only way to tell is to boil down what it would take to achieve these numbers to see if this is realistic.

For example, McDonalds one time tested a McShrimp Cocktail. Customers in the test loved it. An ambitious goal of how many McShrimp Cocktails could be sold was created. But was it realistic?

Upon further analysis, it was determined that even if McDonald’s captured every shrimp on the planet, it would not be enough to satisfy the goal. And even if they could capture nearly all of the shrimp on the planet, the implications on costs would be such that they could no longer get the shrimp at a price at which they could make a profit. And then there would not be any shrimp left for future years. As a result of this analysis, they rejected the goal and did not proceed with the project.

It did not matter how confident McDonald’s management would have been. They could have shouted all day that “I have confidence in your ability to meet these goals,” but they still would not have been met. It was unrealistic.

2) Goals need to be anchored in actions.
It’s one thing to set a numerical target. It is quite another to know how to achieve it. As in the story, Simon had a goal to remove a tumor, but gave the task to someone with no knowledge of how to do it. If you want to achieve a goal, first develop a realistic action plan to get it done.

Remember, if a goal is ambitious, then it cannot be accomplished by doing the same things you did in the past (otherwise the goal would have already been achieved). New results require new actions. If you do not plan the new actions, how can you reasonably expect new results?

Strategic planning should be more than just setting goals. It must provide the key activities necessary to make the goals a reality. This does not mean that you have to understand every detail in advance before starting. But you should at least understand the key milestones necessary to get the job done.

If a goal is not anchored in actions:

a) You could end up trying to achieve an unrealistic goal.
b) You could end up hitting the goal by doing the wrong actions (like achieving a sales goal by destroying profitability).
c) You could end up with chaos, as the company moves in random directions since there is no consensus on what the proper action should be.

Don’t just measure numbers…measure activity.

3) Even a skilled doctor cannot succeed without the proper tools.
Actions require resources, such as people, equipment, training, and so on. Even if Bob in the story had been a skilled surgeon, it would have been nearly impossible to successfully remove a tumor in an unsterile office, without any surgical tools/equipment, anesthesiologist, nurse, or other necessity.

Similarly, if your strategic goal requires certain resources, then the strategy needs to include a path for obtaining those resources. Perhaps you will need to acquire new talent. Perhaps a skillset can only come through acquisition. Perhaps money needs to be invested in R&D or new distribution capabilities.

Offering blind confidence is not enough. You have to offer the proper resources as well. And if you cannot find or afford the proper resources, then your goal is probably unrealistic.

4) What you may think is inspirational leadership may actually come across as clueless leadership.
Finally, if you ignore the first three points and still go on stage to give your speech of confidence, keep in mind that your audience may not interpret the speech as you wish. They may realize that the goal is unrealistic, that you have no clue about which actions to take, and that you have not provided the proper resources to get the job done.

While you’re saying “I know you can do it…I have confidence in you,” the audience may be thinking:

“This is an impossible task. Our leaders are clueless idiots. My future is doomed. I need to start getting my resume out there.”

Hence, instead of providing inspiration and confidence, you have done just the opposite.

Confidence and inspiration are necessary to tackle new strategies. However, unless that confidence is rooted in realism, associated with specific actions, and supported with the proper resources, that confidence is worthless. The only thing it will inspire is employee defection.

There was a Dilbert cartoon where the pointy-haired boss gives a speech to the employees. He says, “Sales are dropping like a rock. Our plan is to invent some sort of doohickey that everyone wants to buy.”

After the speech is over, he goes over to Dilbert’s cube and says, “The visionary leadership work is done. How long will your part take?”


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