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The Prepared Mind of a Leader
By Bill Walter
John Wiley & SonsISBN: 0-7879-7680-6
Chapter OneThe Only Foundation We Have
People and organizations have been prepared and unprepared throughout history, yet businesses continue to run, decisions and problems continue to be dealt with, and innovations continue to break through. So why is the need to have a Prepared Mind more critical than ever before?
To answer that question, we need to start with what we know. Contrary to the "clean sheet of paper" recommendations from the heyday of the reengineering movement, we humans do not start with a "clean sheet of paper" when we are constructing new knowledge and understanding in our minds. We build new knowledge and skills by appending new information to existing knowledge and skills and by recombining the old with the new in new ways.
We thus start with some of the important things we already know as business practitioners. These, combined with new information we gain from reading, listening, and experiencing business for ourselves with the application of the Prepared Mind skills, will set the stage for a new way of thinking. We have no choice but to build on today. It's the only foundation we have.
We offer the following as what we know about the context for building a Prepared Mind. These are the givens, the context in which we operate:
We know we operate in a system; we are not alone.
We know that we are in the midst of multiple life cycle curves.
We know that life cycle clock speed is accelerating.
We know that progress requires us to actively sense and respond to the changes around us.
We know that leadership is important during times of change.
We know that every organization has a cascade of strategies, whether they know it or not.
As you think about these givens individually and then consider the connections among and between them, you will see a picture, a mosaic, of an evolving future that requires us to be more prepared than ever before.
There are more givens unique to you and your organization. What would you say they are? Are you listening to others in your organization who see connections you may not? Are you painting the picture and bringing others along the path of seeing the connections?
We Know We Operate in a System
When we investigate organizational successes and failures, the question of responsibility is often focused on the person in command. However, the system in which that leader is operating is just as powerful a determinant. Consider the realities of business life.
Collectively, companies are part of a system called "business." For much of the twentieth century, we followed the mechanistic thinking of the industrial revolution and considered ourselves to be part of a massive industrial machine (a "cog," with a specific role in a specific part of the machine, so to speak). By the end of the century, we changed the metaphor to that of ecology, which is more complex because the chains of cause and effect are co-evolving, they are much longer, and they are more interrelated. Your business is part of a business ecosystem. As with nature, if the ecosystem dies, all of the inhabitants die. Think of the airline industry as an ecosystem. Just how healthy is that entire ecology?
Like any other system, the system called business is a network of components, among them the human components or stakeholders: managers, executives, employees, competitors, suppliers, customers, and others who have relationships with one another. Both the components and relationships can change over time, and the strength of the relationships will wax and wane over time. In addition, any category of stakeholders can have multiple relationships. For example, competitors can buy from companies, sell to them, and also compete against them: same company-different relationships.
Changing any component or relationship can cause a string of other changes, which are not necessarily tightly linked in time or space. For example, when a competitor makes an improvement in quality control, a company's relationship with its own customers will change. What was good enough may no longer be so.
Now here is the tough part. In a complex system like business, we often do not know all the components. What people or organizations might affect or be affected by your decisions?
Furthermore, we often do not know the type or strength of the relationships between and among those people and organizations. Which relationships are becoming more or less relevant in your own ecology of business? For example, do your employees recognize themselves as having a contractual relationship or a loyalty relationship with the company? Will that loyalty relationship still hold after the latest round of layoffs?
The bottom line is that being prepared for the future is more complex than ever before. The leaders and companies that will succeed in this climate are those that appreciate the requirements of its many relationships, are able to change as they change, and can do so more quickly and more intelligently than their competition. Prepared Mind leaders are those who know how to work within the system while getting the system to realign or evolve in the direction they have imagined.
To get any system to change in a business ecology, we must first start with the people or stakeholders of the system: the decision makers behind other system components such as budgets, policies and governance, technological choices, and customer preferences. The Prepared Minds of successful leaders strive to understand what is on the minds (and in the hearts) of the stakeholders of their business ecology, and they design strategy and change from that understanding.
Prepared Mind Question
How do we make progress in a dynamic system with unknown components, unknown relationships, and unknown strength of relationships?
We Know We Are in the Midst of Multiple Life Cycle Curves
Most of us are familiar with the standard product life cycle terminology of introduction and growth and maturity and decline (Figure 1.1). These are the stages that all products traverse from creation to elimination.
We also know that the same-shaped curve can be used to describe the life cycle of a business or an industry. And for those of us with enough years under our belt, we can see the same happening for most, if not all, management tools, techniques, and fads that have passed through our lives. Do you remember when Total Quality Management was hot (and then rapidly cooled off)? Do you remember the meteoric rise and fall of Quality Circles? How about the concept of employee empowerment? Is it mature, or on the decline, or already dead in your organization?
We live in the midst of simultaneous industry changes, company changes, product changes, technique changes, and fads-and all are at a different point in their own life cycle. There is so much evidence of the life cycle curve in our environment that we no longer take notice and consider it. We are like fish that don't see the water.
The hard part of all of this is that there is a big difference between knowing the cycle exists and knowing how to deal with it in a proactive manner. The curve is crystal clear when we look back on what has happened but almost impossible to anticipate as we look forward. We know the shape of the eventual curve that will play out, but we don't know how long the current phase will last and therefore when the curve will change direction. We also don't know how abrupt the change will be or to what degree the curve will change. And this is critically important when we think about the curve in the light of developing strategy.
Prepared Minds work within the current curve while thinking ahead of it. They also start seeing and helping others prepare for the new curve so the shift is truly evolutionary rather than a jolt to the system. Through skills such as imagining, learning, reflecting, teaching, and deciding, they determine when and how to ride the current curve and when and how to act beyond it.
Consider this. Would Motorola have lost the lead in cell phone technology if it had been prepared for the shift from analog to digital technology? We can look back and see that analog technology was in a decline long before Motorola did anything about it. It may have noticed the shift but clearly acted on it too late. What if Motorola leaders had noticed the curve in time to "jump the curve" to the digital life cycle? We can be sure that someone was jumping up and down and worried about the analog life cycle, but we have to ask why didn't they do anything in time to avoid the sudden maturing of the analog cycle.
The Prepared Mind senses changes in the direction of the life cycle curve before it's in full force and prepares the business for the new fundamentals while continuing to operate in the old fundamentals. Andy Grove, the cofounder and chairman of Intel, referred to these changes in direction of the life cycle curve as strategic inflection points, describing them as "a time in the life of business when its fundamentals are about to change." This often means seeing the connection of something new in the greater environment, beyond our own industry. We have to learn to think through or imagine the possibilities of these out-of-industry changes on our own business's market, our organization's competencies, or other key factors in strategic decision making. For instance, have we truly thought through and begun to jump to the next curve that the flood of baby boom retirements will bring to bear on almost all industries and social systems?
Prepared Mind Question We know we are in the midst of many life cycles. We know that shifts in their curves will herald new fundamentals for products, services, and businesses. But even in the fast-paced world of high technology, nothing happens overnight. There is always some sign of the changes about to hit, or even creep into, a company or an industry. Talk to some of the people who work with suppliers or customers. What new trends or technologies are they seeing? Are you paying any attention to them?
We Know That Clock Speed Is Accelerating
In the early 1990s, we were besieged with articles, speeches, and books addressing the topic of managing change. It was not a question of whether organizations could change, but whether they could change fast enough (or thoroughly enough) to get the benefits they needed. Most important, did leaders and workers change their mind-sets so they were more prepared and more agile to meet future changes, or did they simply survive one change after another?
Whether you embraced or fought the change movement, the reality is that thinking well and doing more, more quickly and more frequently than before, is an important variable in making progress. Move too fast, and your organization may expend resources as it moves down blind alleys: markets that will never materialize, problems that will self-resolve, and so on. Move too slowly, and problems may become too big to handle or opportunities may fall into the laps of competitors. Look at Sears Roebuck and Company or Howard Johnson restaurants and ask yourself, "Is it what they did that got them in trouble-or is it what they didn't do?"
Prepared Minds know how to engage in thoughtful, real-time observation, analysis, and decision making in the midst of time-sensitive, resource-constrained, high-risk situations, and they know how to keep themselves and those around them focused on their core purpose and ultimate goals as they are making sense and deciding what to change and what to keep. They know how to walk the thin line between thinking and doing, between responding and reacting, between planning and experimenting. Also, they know how to engage others in continuous strategic iterations, understood as part of their normal course of doing business, and becoming smarter in the process. They don't hesitate to use tools such as scorecards and forecasts, but they don't just react or jump on the next new fad. They learn and change as they go.
Prepared Mind Question
What do the people in your organization believe about your ability to "lead faster"? What values do you and they have in common?
We Know That Progress Requires Us to Actively Sense and Respond to the Changes Around Us
Survival and progress have always depended on the ability of the person or the organization to sense changes in the environment and then to respond in a timely and appropriate manner. Consider the early leader in electronic calculator industry, the Bomar Company (a manufacturer of LED displays), and its calculator, the Bomar Brain. Bomar had the lead and then lost it. What didn't the company adapt to?
Individually, we have all experienced the fight-or-flight syndrome. Something sudden happens, and we respond; in days gone by, this often was the difference between living and dying. Today, problems arise; we roll up our sleeves and attack the problem and feel tired, but satisfied, at the end of the day. We also know, but don't usually admit, that while we are often adept at handling "something big" that happens to us, we are lousy at dealing with small, slow changes. So we slowly let our relationships dissolve, or we slowly get out of shape.
And the same conditions happen in our business organizations. While some changes are fast (such as technological capacity), the impact on our day-to-day lives may feel slow or ambiguous unless we are, by nature, early adopters or unless we are prepared to see the change and its implications for our business. We go from being a hard-charging competitor to a company with bloated overhead expenses. We go from knowing our best customers to having a profile of a typical customer (which does not actually fit any particular customer). Margins slowly shrink, and we blame the dynamics of "the industry" instead of making the changes we should make in our organizations. One of the dangers of being strictly results driven is that we can spend so much energy "doing" and keeping up that we don't take the time to think ahead, until the inevitable is at our door and we feel compelled to react.
It seems so simple, yet we manage to mess it up time and time again. What step or steps in the process were missed or delayed and caused Polaroid to miss the shift to digital photography? Our guess is that its leaders sensed it and made sense of it, but could not "pull the trigger" and decide to change the emphasis of the company. What food companies or restaurants missed the huge impact of the low-carb craze in 2004? Did Apple Computer possibly cause a shift in consumer electronics with its iPod music storage device? Time will tell.
Prepared Minds watch for anomalies-warning signs, surprises, new developments on the horizon-and ask if they fit their view of the world. If they do, then all is well. If they don't, then action must be taken. The danger in this simple scenario is the temptation to force-fit the anomalies into an existing view of the world and set of assumptions. To avoid this danger, they must continuously question the assumptions they and their organizations are making and ask for input from those closest to the action.
Prepared Mind Question
What can be done in your organization to help it slow down and take the time to make sense of new data and information? Is there a tie back to the organization's core purpose and ultimate goals and getting decision makers to think through the new situation in the light of those?
We Know That Leadership Is Important During Times of Change
The business scandals of the past few years have raised the need for better leadership of our businesses. Changes in global business conditions raise the need for global leaders. Changes in the technologies underlying our products and business operations raise the need for leaders who can transform our organizations. And yet, at the same time, we see the need to drive leadership lower in the organization to reduce response time, improve service, and deliver better value to customers.
Excerpted from The Prepared Mind of a Leader by Bill Walter Excerpted by permission.
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