Periodically, I’ll post on some of the implicit but common executive challenges I observe while carrying out my practice. This is one of those posts…
The context of this post is simple: I have the opportunity to work across numerous executive teams and within institutions of various sizes. In nearly every case, individual leaders consume themselves with how different their organizations or their problems are. I figured I’d take a moment to reflect on some of the common themes that I see leaders dealing with. Perhaps it will strike you in a way that’s helpful.
So, here are six challenges that executives I’ve worked with face–whether they know it or not–and an accompanying quick note on ideas to overcome each of them.
The Six Challenges
1. Ego Depletion
The Challenge: We have only a limited capacity to make considered, controlled decisions. But, many of us (you and me) have an unlimited number of decisions we could make in a given day. Executives have a relentless access to decisions. The pace of information flow these days enables it. If you are like me, you probably get up and check email sometime in the morning, starting the flow of decisions you must make. You also (possibly) check email at the end of the day, and fire off a few more decisions or opinions. In between, you’ve probably had to make decisions all day. Such is life, but if you think about your ability to make decisions in a given day as finite, you’ll understand the concept of Ego Depletion. You may laugh and say you know people whose egos never deplete, but still.
Ways to Overcome it: This one is easy and hard at the same time. Delegate choices. Be deliberate about the scope of decisions you’ll take. Keep your focus on the major things in your professional (and personal) life. Know what matters to you (and, hopefully, it’s not everything). Also, and most critically, realize that your capacity to ponder and decide on minutiae may be exceptional, but that you–as executive–can deplete the capacities of the people around you. Yes, you can exhaust your subordinate’s ability to make good decisions simply by placing too much focus on things that may not matter much.
2. Separating Signal and Noise
The Challenge: We face a tremendous amount of information flow that amounts to noise in our daily professional lives. By noise I mean, literally, junk that has no meaning or implication for work or play. Examples that executives face include internal rumors, short term changes in customer behavior, and macro-level news that people will view as significant, but whose impact is negligible on daily business. The challenge arises when executives feel the need to justify a response or reaction to the noise. One of my favorite momentary pastimes is to flick the “Stocks” app on my iPhone a few times a day and get a look at the headlines for the S&P 500. Without fail, the headlines attempt to explain a 0.50% change in the market index. It’s linked to jobs, or Greece, or some other secular trend. It would be amusing if you didn’t actually think about the people spending their lives conjuring such headlines. Folks, sometimes it’s just noise. Know the difference.
Ways to Overcome it: I’m a fan of the old Army saying “Once is happenstance, twice is coincidence, and three times is enemy action.” It’s okay to level yourself out and wait out the first bit of information as potential noise. Practically speaking, when presented with challenging but not-yet-significant information, be willing to ask “what would make this information more than just noise?” Know when enough is enough.
3. Making Talent Mobility an Advantage
The Challenge: In the immortal words of Billy Joel: We Didn’t Start the Fire. Talent mobility is not really new anymore; but the amount of information that talented people have at their fingertips has changed drastically. What this means is that the most driven, talented individuals–usually the ones who actually know their value in the marketplace–are much more likely to vote with their feet. This challenge is common, but it’s increasing as talented people have more and more access to inside information on both their own company and companies they might consider joining. The implication of this challenge is that some employers will suffer mightily from adverse selection as their best employees decide to ply their trades elsewhere. The current generation of 50 something’s may cling to the notion of loyalty as something an employer gets value from, but younger workers are starting to know better. Your cost of talent is high if you can’t engage people and propagate vision. It is infinite if you are dishonest and people catch on.
Ways to Overcome it: In reality, talent mobility is only a challenge to companies and leaders who place limited focus on engaging and exciting people. Companies who have great places to work will get richer because they will have a lower cost of talent. Companies who can no longer hide their really bad workplaces will get poorer and engage in more mercenary practices to attract talented people. Propagate a vision, engage people, know what they think. Most of all, seek understanding. Listen.
4. Avoiding A False Sense of Disruption
The Challenge: Make no mistake some sectors are being disrupted mightily, and the challenge for executives is how to move faster. Still, there is an unhealthy proportion of executives out there who, like Don Quixote, are out tilting at windmills when it comes to disruption. They are looking for a disruptive fight at the expense of handling daily business. So much ink is drained on the topic of disruption, innovation, and creativity that the average executive sees it as a panacea; when in reality–and in the average business–there is far more value in having a healthy business with solid people, processes, performance, and prospects. True disruptive innovation takes a long time in MOST sectors.
Ways to Overcome it: First of all, you need to know what disruption really is. Are you truly changing the basis of competition, or are you simply selling that notion. When it comes to disruption, be careful not to assume your sector is different in terms of the pace of change without testing the notion. Know that investments in disruptive business models and technologies are important, and needed; but be sure to pursue them as a piece (often a small but focused piece) of a healthy business portfolio. Saying that you are going to make a business healthy by creating the next better mousetrap ignores the history of disruption. Avoid the false security it provides.
5. Avoiding Tyrannical Short-Termism
The Challenge: Short-termism is the opposite challenge from the “False Sense of Disruption” outlined above. Because I see many different companies in operation, I see both of these faces show themselves. Sometimes they show themselves within the same company. The challenge here is that executives, faced with near term earnings targets and expectations; actually underinvest in capital assets and innovative improvements to process, product, or people engagement. They lack an emphasis on longer term, disruptive, or even incremental business model or product improvements because they can’t afford them. In reality, they can’t afford not to have them in the portfolio.
Ways to Overcome it: A balanced portfolio is the key here. The average executive gets this notion; but the average executive also needs someone to keep him or her honest when it comes to rationalization of investment levels in new or interesting businesses. Typically, this challenge rears its head at the margin. It’s in questions like “Do we really need to have that many sales people pushing our new product?” or “Does that expensive training program really need to be held this year?” Keep people close who can argue for the balanced portfolio. Oh, and listen to them.
6. Making Strategy Flexible
The Challenge: I am approached monthly by companies that desire a way to think about strategy differently. They want a strategy. The biggest challenge of strategy formulation, however, is breaking through the mindset that a “strategy” is a set thing. Set piece battles are getting increasingly rare in business (they will exist as long as privileged assets exist, but that’s a different post). The proverbial strategy in a booklet gathering dust on the shelf is proverbial because it has happened far too often. Usually, this occurs when a strategy is built to placate senior management or a board vs. to truly inform the approach to business. This is a continuing challenge for executives. Strategy is not deterministic. It is subject to random changes. It is subject to competitive moves. It has to be adaptive. Executives face the challenge of making it so.
Ways to Overcome it: Strategy is a living thing. The first way to overcome this challenge is to embrace the adage that “no plan survives contact with the enemy.” In business it’s perhaps more polite to say “no plan survives implementation intact.” Strategic plans are no different, so start with that in mind. Understand the boundaries within which a given strategy remains intact, and the triggers that would make a refreshed or different approach appropriate. This is a big challenge, and one I have spent a lot of time on in the past several years.
There you have it. Six challenges that I see as pivotal for current executives. If I’d had more time and a better text editor, I might have made this shorter, but I hope you get the gist.
I’d love to have your thoughts.