THE STORY
You may remember Hugh O’Brian as the star of the TV show “Life and Legend of Wyatt Earp.” This was a top rated show during its run on ABC from 1955 to 1961. Hugh O’Brian is also known for something else, called HOBY, which stands for Hugh O’Brian Youth Leadership. O’Brian started the organization back in 1958, after being inspired by an encounter with Albert Schweitzer. HOBY is still active today.
The goal of HOBY is to help prepare High School youth to become effective future leaders in society. Every year, HOBY brings together some of the best and brightest high schoolers in the US to central locations for seminars and interactions with some of the leaders in the world. It is a great organization.
Back in the 1990s, I was invited one year to be a leader at HOBY representing the food distribution system. I thought it would be fun to interact with the youth and “impart my wisdom.” Little did I know that I would soon be ambushed.
I got to the location where the meeting was being held and was immediately bombarded with questions from the youth about food distribution in the US. At least they were worded like questions. In reality, they were manifestos, presented in the form of a question. They had already decided that we needed a radical overhaul of food distribution, had concluded what that revolutionary change should be, and were berating me for why the industry had not already made all these changes.
After the initial shock of being ambushed, I pulled myself together and tried to explain a few things. I tried to explain to them that the world is not purely black and white. The current system was not 100% evil and their proposals were not 100% good. There are implications from every decision that ripple out and affect many areas. There can be lots of negative unintended consequences which fall out of what originally appears to be good, and vice versa. You have to look at all the trade-offs of good and bad in your decisions and find the best blend.
For example, many of their proposals were very expensive to implement. I told them that these proposals in total would radically increase the cost of food, putting it out of the reach of poorer people. As a result, instead of giving people better food, their proposals could have the unintended consequence of increasing starvation and malnutrition. Did they really want that?
I told them that some of their ideas about food purity could lead to increased spoilage, food wastage, and increased disease and sickness. Did they really want those unintended consequences?
As a result, I told them that one needs to take a balanced and nuanced approach, trying to create the most good while minimizing the unintended negative consequences.
I could see that I was getting nowhere with this line of reasoning. Their minds were already made up. It was more important for them to act now than to act right. Nuance is not a part of the average High School thought process.
THE ANALOGY
These HOBY leaders-to-be aren’t all that different from some of the leaders of today. They have notions of what look like good ideas, but haven’t thought through all of the long-term consequences.
Leaders today have lots of pressures on them. Every day is full of crises and fires which need to be put out right away. There are pressures to act quickly and decisively. There doesn’t appear to be any room for nuance or for thinking out all of the long-term consequences of a decision (good and bad).
Unfortunately, if this type of thinking is ignored, leaders eventually may come to regret their decisions. For example, Enron came up with what at first looked to be a great incentive system for encouraging near-term profits. It was praised by many management gurus. However, it also had the unfortunate negative consequence of encouraging falsification, deception, and corruption. The unintended negative consequences of this incentive system caused the implosion of Enron.
How can this be avoided? This is where strategic planners can provide one of their most valuable services. Because strategists tend to be a little more removed from the tyranny of the immediate crisis of the day, they have the luxury of being able to focus more on thinking through all the consequences of a decision. They can then present that thinking to top leaders, so that they can make more informed decisions.
Just as I was trying to help the HOBY youth see the bigger picture and all of the consequences and ramifications of a decision, strategists need to the same for their companies.
THE PRINCIPLE
The principle here is that although it is desirable for leaders to look for the unintended consequences and the subtle nuances/ramifications in their decisions, it is essential for strategic planners to do so. No one else is in a better position for this task. (Note: I talked in greater detail on the importance of considering unintended consequences in an earlier blog.)
As mentioned above, leaders are often pulled in many directions and have difficulty sitting back to ponder all the ramifications. This makes it difficult for them to be the key practitioners of this task.
Many of their other top confidants have large empires of power. This can bias their ability to think objectively through all the ramifications, since it could impact their power base, or the power bases of their rivals. Even if they can be objective, that power base can make it hard for them to appear objective to others. Their questionings can appear to be personal attacks. So they are not the best candidates, either.
Outside consultants are useful, but this is typically not an area where they excel. They are often not intimately knowledgeable about your industry in a way that helps them understand the nuances of a particular decision. Also, they are not planning to stick around long enough for the unpleasant ripple effects to appear. Finally, their specialty is usually to bring in hoards of young people to gather data, not to have someone sit back and ponder implications.
No, it would seem that the strategists are in the best position for this important task. They have the most freedom from the daily fires that detract from long-term thinking. Strategists also tend to have fewer ties and biases to the status quo power bases, giving them more freedom to look to look at things objectively. Finally, because they are insiders with a stake in the long-term prospects of the business, strategists can see the nuances and are motivated to make them known.
In medieval times, the court jester was the only one who could openly criticize the king without fear of getting his head chopped off. They could get away with it because it was part of their role, and because it was packaged inside humor.
In many ways, strategists are like the court jester. Strategists are uniquely suited to get away with critical assessment about unintended long-term ramifications, because long-term concerns are a key part of their role, and they can package it inside of strategic assessment rather than personal attack. A friend of mine succeeded well as a strategist because he mastered the role of the court jester, which allowed him the ability to point out these negative ramifications in a way that no one else could.
Most job descriptions for strategists do not include the specific task of being the key point person for pointing out negative unintentional consequences and showing the difficult trade-offs hidden behind many decisions. Even so, it is probably one of the most important things they can do for their organization. Take the time to develop this skill. Then use the skill. Your company’s future depends on it.
SUMMARY
Many decisions which look great upon first glance can actually be terrible strategic decisions after pondering all the hidden long-term ramifications. To make sure a company reaches the right decision, someone in the organization needs to be pro-actively searching for the unintended ramifications before the final decision is made. This involves taking the time to ponder the nuances and interconnectivities of the business and how the decision will impact them. And guess what…usually the person best suited for this role is the strategist.
FINAL THOUGHTS
Earlier, I said I was ambushed at the HOBY convention. Actually, I was ambushed twice. Hugh O’Brian cornered me and wanted as much insight as possible into how he could get a huge donation for his organization from the company I worked for. I pointed him in the right direction.
Dear Gerald,
ReplyDeleteAgain, you provoke me with your originality. As much as I liked this article, still it left me perplexed. The “choice between opposites” such as to move or not to move is missing a third foggy and straining choice, which is NOT making a choice. This is analogous to the state that lies between order and disorder in the complexity science. Systems need to strain themselves so as to adapt with the changing business environment. I believe the problem was not only, as you rightly stated hurriedness to move. More it was of not receiving timely signals to adapt with the new business environment. Removal of business strain will only help in accepting the prevailing conditions with disregard to the pressing need for adaptation. I would go further and assume that the company profited from its move because business prospered and the old headquarters appreciated. Does this mean the company took the right decision? I doubt it because businesses should learn and adapt. This is not one shot in the arm, but rather a continuous process.
Gerald, I do not know if you would agree!
Ali;
ReplyDeleteYes, many decisions can be made in small doses and have lots of adapting. However, some strategic decisions are large and require a major committment. This would include buying or selling divisions, introducing a new product line, and so on.
For these larger decisions, a full commitment is needed--either for or against. You cannot half-heartedly jump over the Grand Canyon in two steps. It has to be one step. Any more, and you fall into the center of the canyon and die.
Later, you can adapt (you must adapt). But if the major decision was the wrong one, it can be difficult to go back. So make those types of decisions carefully. And as you point out, avoiding a decision is an option, but in the end, isn't that the same as saying no?
Gerald,
ReplyDeleteI appreciate your reply. I agree with what you said as it conforms with the saying that nobody should attempt to change horses in the middle of a river. My institution challenges this advice. In your example, the company had the option reduce the building size during construction,, to give one example. More importantly is that during hibernation companies may recruit as this is the best time to attract talent and give new employees enough time to “condition” with the working conditions. This option was not considered by the company you gave as an example.
In essence, I agree mostly with what you said about major decisions; however, this does not negate the need for making some adaptations.