The Failure to Understand – Cost & Consequence

In Our View …

The economic turmoil of the past several years has resulted in serious social disruption, rising financial uncertainty and an enormous destruction in value throughout the global economy. It would be hard to find a sector, country, household or organization that has not been touched, in some negative way, by the thorny tentacles of this economic meltdown. The loss of value in the stock market, the housing market, the employment market and in generally reduced industrial performance and productivity are the issues that make the headlines.

We find it curious no one wants to talk about the other way in which value has been eroded, even though its financial impact is arguably just as great. In our view, the loss of value through bad leadership and the failure of leaders to master the skills necessary to manage tension and discord in their business is an enormously important issue and an inconvenient truth.

It somehow seems easier to point the finger of blame at the external factors we cannot control, including economic greed, than to look in the mirror and accept responsibility for the things we can control. Our premise is very simple – discord, disagreement, conflict and tension are all part of the human condition and, therefore, a natural part of organizational life. Failure to master the skills necessary to mitigate the negative impact of this social condition and reality (let alone understand it) leads to an unacceptable loss of value on several different levels.

It’s time to make a different choice.

The Value of Discord …

Someone once said something to the effect, if you are not moving ahead you are falling behind. In today’s turbocharged, hypercompetitive, increasingly flat and virtually connected world that sentiment is undoubtedly true – in the extreme. The implications of this simple phrase are enormous and the failure to heed the advice perilous, to say the very least.

The challenge for leaders is how to keep their organization sharp and hungry.

One way is to harness the energy embedded in conflict and tension and use it to advantage. This is particularly important when we raise the stakes, yet again, by asking high performance teams and business units to work together collaboratively and then, in so doing, charge them with finding new and innovative solutions.

If that is our approach, we have to answer at least three questions.

  • Can we actually harness the energy and direct it in a positive manner?
  • Do we really understand what collaboration means?
  • What is the essence of the innovation process?

In our experience, there is a huge disconnect between what many leaders say they want and the steps, processes, mindsets and culture they create in order to help achieve it. Simply put, there are far too many leaders who would not be able to adequately answer these important questions.

No wonder avoidance is the tonic of choice!

Harnessing Energy …

In our view, there is no question a leader can intentionally create and then positively harness healthy energy by mastering the skills and developing the competency to direct discord – in all of its various forms. It comes down to a willingness to create a set of “Guiding Values” and then live them every day, in every way.

We are not talking about the kind of Values written on engraved plaques and placed at points around the office. We are talking about the philosophical values that guide value creation.

What are they?

  • A belief in vigorous dialogue and healthy debate.
  • A belief in allowing opposing ideas to compete out in the open.
  • A belief in always seeking the optimal answer, solution or outcome.
  • A belief in personal accountability and shared responsibility to the common cause.

At the end of the day, the leader who truly understands wealth creation and wishes to maximize the sustainable value of the enterprise for customers, shareholders and employees also understands that he or she is responsible for crafting the culture and creating the conditions which allow the very best people, to do their very best.

It is the credibility and character of the leader and the commitment they show to these Values that allow the discord to be directed for good – rather than evil.

Understanding Collaboration …

In far too many organizations, the word collaborate means “play nice”. When that is the case, it is almost a given that neither the leader nor the people below actually understand what the word means, let alone what it looks like inside the social reality of the modern organization.

  • Collaboration is the act of exploration.
  • Collaboration is the pursuit of better answers.
  • Collaboration is the result of a process of competition.

When you make an effort to genuinely understand the collaborative process, you come to the conclusion it is all about “dynamic tension”. It is the belief in and commitment to bringing diverse opinions and experiences together and then allowing them to collide violently in an open marketplace for ideas where only the best ideas survive.

This is the opposite of what most organizations do. Instead, they involve mostly like minded people, with a very limited range of experiences to come together in a controlled environment where the final answer is typically just a shade above the lowest common denominator.

How can this latter approach possibly create better value than the former?

It will not and cannot produce a competitively advantageous outcome from which significant new economic value can be created. It suggests incremental mediocrity is what the market wants when the market really values novelty.
Promoting Innovation …

In recent years, we have seen a flood of innovative applications, new ideas, breakthrough products and game changing actions taken by a wide range of players in every industry, from financial services to health sciences to media and technology. We have no idea whether the number of inventions has gone up over time or even if there are more inventions today than 100 years ago.

What we do know, is that the speed of acceptance of new ideas has increased and the time between invention and commercialization has decreased. This alone tells us the rate of economic value creation is greater than ever before, but only if you can master the game. It would seem that if creating value for shareholders is what allows you to stay in the game, leaders should be paying more than lip service to innovation.

Maybe we are wrong, but it seems to us that, like collaboration, innovation has become such an overused buzz word that it has lost its intrinsic value and, therefore, has become depreciated as a fundamental business concept. Let’s get over it!

People like Roger Martin, Tim Brown, Steve Johnson and Matt Ridely probably have it right when they talk about “The Opposable Mind” or the same concept by different words.

The fact of the matter is, innovation occurs:

  • In the midst of chaos, confusion and uncertainty.
  • In the zone of productive disequilibrium.
  • In the heat of disagreement.

Innovation is bred from tension and conflict directed at novel solutions that today may seem to sit at the fringe of acceptance, but which will very likely define the mainstream of tomorrow.

Redefining Conflict …

The art of business leadership is thousands of years old, but in a strange way, it is as though we have not discovered how to master it. As a result, we believe there is a huge loss of value that occurs each and every day. While we have all tried to improve the ultimate efficiency of our organizations through the rational lens of process laden solutions like Six Sigma and endless organizational restructurings, we have not devoted the same time, attention and dollars to the most insidious, irrational problem of all – loss due to dysfunction!

  • Is it possible we simply do not know what the nature of conflict really is?
  • Is it possible we suffer from some sort of perception bias?
  • Is it possible we frame conflict incorrectly?

Let’s stop kidding ourselves. Truth be told, we have failed to develop the necessary sophistication in our understanding of the human condition and remain locked in a set of time warped paradigms that no longer apply.

Conflict, discord and tension are not the bad things we think they are.

They are the essential elements of creativity and value creation we seek and need.

The failure is our unwillingness to master the leadership competencies necessary to turn the heat of debate and the energy of disagreement into genuine, unique value. We would rather avoid the hard work, bury our heads in the sand and call “dynamic tension” the enemy, than do what we need to do to recognize the benefits of diversity of thought, experience and ideas.

Mastering Diversity …
In the old days – all the way back as far as the 1960’s – the desire for most western oriented business people was a homogenous society and a homogenous workplace. Even better if we could then design, manufacture and deliver products and services for a homogenous consumer in homogenous markets, in homogeneous countries.

It’s a new world today – and it has been for longer than we want to admit.

While the blue jeans and iPods and the other cosmetic symbols of culture may be the same in Arizona, Alberta and Angola, the “experiences” of people are more diverse today than ever before. It is that rich diversity that offers so much potential, but it come at the cost of an increase in the number of inevitable clashes. It is one more reason we have to make a different choice, we need to choose to master the ability to harness those natural tensions and have them work for us rather than against us.

The heart of most conflict lies in our perceptions, biases and beliefs. It is the misperceptions based on our misunderstandings that create the tension we seem to fear. When we allow fear to become the dominant emotion we close down, rather than open up the dialogue. That, in turn, sets a chain of events in motion that spirals downward and eventually becomes distrust, dishonesty and dysfunction.

Dysfunctions of a Leader …

The world if full of bad leaders.

Luckily, for the rest of us, they are pretty easy to spot and tend to have limited impact because they generally do not have much influence or staying power. The real concern should be with the leaders who are not bad – they are just not very good. These are the leaders who are in positions of power and influence but who have not chosen to master the mandate and yet still carry on with the role of leader – at great cost, often a hidden cost!

In the field of modern Organizational Psychology we can pretty much assess and label these characters with a high degree of accuracy, but it has been the measuring of their negative impact that has eluded us. There is some excellent literature out there on these psychological profiles and dysfunctional behaviours, but that is not the issue we are trying to address here. The very specific issue here is the way in which conflict, tension and discord are managed, and whether or not the leader is able to create the environment in which it can be harnessed.

At the risk of too much generalization, we can say there are at least four things to watch for when it comes to ensuring your leaders have the requisite know-how.

  • Are they open to someone else’s perspective?
  • Have they come to terms with authority?
  • How do they use their power?
  • Are they are able to look in the mirror?

If the answer is NO to any of these – you have a problem and a co-conspirator in the intentional and wilful loss of economic value.

Steps to Take : : Actions to Consider

In putting forth the case in favour of tension, conflict and discord, the objective is to suggest that value creation is better served by mastering and embracing the necessary stimuli for creativity and originality, rather than trying to dampen them down with pseudo harmony and a lowest common denominator approach. The justifiable question is how then can we possibly embrace such a radical thesis without destroying the very thing we are trying to improve?

Good question.

Here are some answers.

See Beyond your World
Most of us are victims of our own experiences, many of which are too narrow. The secret is to embrace the experience repertoire which others bring and use it to help broaden the tapestry of possibilities.

Draw Better Boundaries
Big, beige and beautiful is not likely to be very exciting – it is more likely to be a crushing bore. As a result, we need to be willing to push out the boundaries of our imagination and play more comfortably with the ambiguity around the fringe.

Become Very Awake
Today, if you are not hyper alert you are probably in some serious trouble, but blissfully ignorant of that fact. When you wake up, you might be shocked to see the trouble you are in. A better tuned radar system will push you to attention and open your eyes.

Practice Appreciative Enquiry
All the great leaders we know have the ability to ask terrific questions. Gut wrenching, penetrating and deeply disturbing questions. These are the kind of questions that, if you can answer them, will create remarkable value.

Conduct Conscious Conversations
The art of good conversation is lost. We are either too distracted at one end of the spectrum or too concerned with winning at the other. In either case, we have lost the ability to raise the calibre of the conversation to meet the challenge of the moment.

Bridge the Divides
Making peace means building bridges. Bridges of understanding and mutuality that can only be built on common ground and common interest. If we enter the debate with a commitment to building these bridges, chances are we will find opportunity.

Catalyze Innovation
If the answers to tough questions and hard problems were easy, we would already have them. The fact is, our traditional menu of choices is often too narrow and the answers we really want are the ones we have not already thought about and that lie just outside our conscience.