What are the 3 words that managers find hardest to say?
They are possibly the 3 words that parents find hardest to say to children. They are 3 words that teachers very rarely say to their students.
They are not “You’re the Best”. They are not “I love you”. What might they be?
Confused…
The 3 hardest words for a manager to say are “I don’t know.”
The need to act under the lack of full information does not give the excuse of not needed to do the work. One must do the work to examine the data that is available, to seek advice from wise counsel, to speak to others who have experience; but the analysis once done, must end. A decision must be taken by the leader.
Orchids are not Fragile
I am reading Nassim Taleb’s latest book “AntiFragile” at the moment. I received 2 gifts of this book for Christmas – I do hope it is not because I am generally seen as “fragile” and in need of some increased strength…
I remember a conversation with my friend Xavi, who runs a gardening business. We were talking about Orchids. He explained “there is a widespread idea that Orchids are difficult plants, they are fragile. This is not true. Any plant that has survived the millions of years of evolution to survive in its form today is in no way fragile. It is not suited to certain environments, but it is not fragile.”
Most complex organic systems not only survive uncertainty, chaos, disorder, time… they thrive. They grow stronger though dealing with their environments. There are forests that need fire – certain trees can only grow past a certain point if they face fire. A human muscle will atrophy if not used, it will grow stronger through being worked, through being damaged.
Modern education equates volatility with risk, equates non-standard with failing. Statisticians hate the outliers.
Nassim’s central idea is that we cannot predict risks, but we can predict a system’s capability to cope with risk. We cannot predict an earthquake, but we do know whether the 400 year old cathedral or the poorly built modern apartment block will fall first. We cannot predict a financial crisis, but we can predict which bank will fail first. We cannot predict loss of employment, but we can see which human will come back strong the fastest.
Leading in the Real World
The real world has surprises. Hemmingway said that the “true” parts of his stories were the most un-believable. Fiction is never as crazy as reality.
There are 3 things a good leader must learn to be able to do:
Act under Uncertainty
Take the Painful Decisions
Own the Decision
Acting Under Uncertainty
I teach a class towards the end of the course on the MBA program where my objective is to create uncertainty. As the students give their answers, I give no expression, neither verbal nor non-verbal as to whether I agree with their answer. This creates tension in the class. The students are used to a class where they say their answer and the professor either writes it up on the board or grimaces. If the professor writes it up, I got the answer right. If the professor grimaces, I change my answer until I get a nod and a note on the board.
I believe education from “The All-Knowing Professor” creates a dangerous tendency for future leaders. In the real decisions of life, there is nobody there to nod their head, nor to say “no” or “incorrect”. There are many people making lots of noise, and the leader needs to commit to their course of action without achieving 100% consensus, or 100% of the information that could prove the course of action. Leaders must be able to do enough work to be fairly sure they have a good course of action, and then commit to that course of action; and get others to commit.
If MBAs are learning always to wait for someone else to give then certainty, then they are not learning to lead. We need to ensure that tomorrows leaders are getting practice in the world of uncertainty. They are getting practice at having to move forward without all the information.
Taking the Painful Decisions
Odysseus must choose between definitely losing a few of his men by passing closer to Scylla, or possibly losing all of his men passing nearer to Charybdis, the whirlpool. There was no “good” alternative. MBA cases, video games, TV series tend to allow the hero to find a “good” outcome. They allow the business to survive with nobody losing their job. They allow the main character to finish the journey and get back to a comfortable life. If you have a good option and a bad option, this is not a decision. It is obvious. A leadership decision is always between 2 bad options.
Many of school’s choices are between a good and a bad outcome. Most of life’s choices are between two bad outcomes.
Own the Decision
When I was young, 12 or 13 years old, I was once caddying for my father. We were at a par 3 and we discussed what club to hit. I suggested a 7 iron. He thought it was not enough, but after a pause, took the 7 iron anyway. He had a look at the green, the flag. He took a few practice swings. He stood up to the ball. He swung the club making good contact with the ball. It soared up and was in line with the pin. It hung in the air for 2, 3 seconds… and then dropped… 15 meters short, landing in the sandy bunker.
He made a pained grunt and as he returned the club to me I said “sorry, I gave you the wrong club”. He said, “No, you are the caddy, but I am the golfer. I chose wrong.” At the time I remember feeling bad. I felt that I wasn’t “respected” by him, that he didn’t treat my advice as serious advice. Now I think that he acted then as he has always acted. He owned the decision. I gave advice, but at no point did it become my “fault”. He owns his decisions, whether in golf, in business or in life.
Blainroe golf club 15th hole, where I learnt my golf
Learning to take responsibility for the choice, where it is the leader themselves who must choose, is a challenge. It takes psychological maturity to own a decision that cannot necessarily be justified with the data. It takes psychological strength to deal with the slings and blows of others who have not had to take the decision. Leadership is solitary. Any education of leaders must help the leader find the mental strength necessary to be alone.
Being alone and being lonely are different. Alone is a choice. Lonely is the desire to have someone else to take away the burden.
A good leader has mentors, friends, advisors… but when the decision comes, it is they and they alone who are responsible.
Increasing your Question to Answer ratio
In an uncertain world, the art of “Muddling Through” is of greater importance than the art of long-term strategic planning. Dealing with the chaos requires accepting the chaos, and then taking quick steps to understand the map, the compass. In management life, giving answers shrinks our understanding; asking questions increases our understanding, our capacity to adapt.
How many of your statements are answers and how many are questions?
The person asking the questions is in control of the conversation. It is hard to remain open to other’s ideas. It is hard to stop saying what it is that I want to say, and giving the other what it is that they need to hear.
The Best Questions…
The best Leadership Question: “What is the next right thing to do?”
The best Teaching Question: “What do you think? What other options do you see?”
The best Coaching Question: “You have achieved what you set out to accomplish. Imagine yourself there. What does it feel like?”
The best Friendship Question: “How are you?”
The best Parenting Question: “What was the best moment of your day?”
The best Sales Question: “(I understand that price is important.) What other criteria are important in making this decision?” (The implicit question: “What are you comparing this to?”)
These questions come from my blog series The Origin of Leaders over at ActiveGarage.com.
What do you think?
Let me see how many times I can say “I don’t know. What do you think?” today.
Manel Baucells was the favourite Professor amongst students when I did my MBA at IESE Business School. He taught Decision Analysis. There are certain types of situation under which humans will take poor (rational) decisions. We study this subject so that we can reduce the likelihood that we will take similar poor decisions under similar situations. Examples of situations that cause poor decisions are sunk costs, loss aversion, prediction of low frequency events.
Manel’s new book “Engineering Happiness: A New Approach for Building a Joyful Life“has just arrived to my Kindle. I asked him to answer a few questions about the book, and about how a Microsoft Excel geek could end up at the fluffy end of psychology… writing about happiness 😉
What most surprised you in learning about happiness?
How much happiness depends on our attitudes, rather than on external circumstances.
What led you to write the book?
As professors, our audience are the students that attend our lectures and the colleagues that read our academic papers. There is a moment in our careers that we want to expand our audience, and publish a book for a broad audience. It is critical to choose a time that is not too early in one’s career, and ideas are not yet mature; or too late. Rakesh and I felt that this is a good time in our careers to write a book of this characteristics.
Who will benefit from reading the book?
Any one interested in being happier, or readers of popular science books. I feel that the audience for non-fiction, research based books is expanding. This increase is due, no doubt, to the growing quality and relevance of the research done in the social sciences.
What are the 3 most damaging things people do that reduce happiness?
The fundamental starting point of the book is that happiness equals reality minus expectations. There are three key things one needs to understand:
The first is that expectations shift. The moment one increases his or her living standards, one get adapted quite soon, and going back down is very painful.
The second is that our happiness is greatly influenced by how we compare with our peers, our comparison group.
The third is that happiness can be engineered by using a “less to more” approach. Always start low, and then increase.
What 3 things have you changed in your own life since writing the book?
Managing expectations better, create less to more (crescendo) patterns, and engage in activities that accumulate.
Have you read the book? Did you have Manel as a professor? What are your thoughts about the concept of mathematically measuring and improving “happiness”?
I have prepared a series of short videos for my IESE courses this year. This is a 3 minute video describing the 5 aspects of a powerful speaking voice. A powerful voice will transmit authority to your audience and allow them to engage with you as a credible leader.
The five aspects of a powerful speaking voice
The five aspects of a powerful speaking voice are:
What should we learn? How to make a living or how to live a life? Where should we learn it? Who should be responsible for us learning it? Ourselves or the state?
Make a living or make a life?
In the case of universities – it it really to learn how to do something? Or should it be about how to live? What is the ROI of making a living? Just because it is difficult to calculate doesn’t mean that it is not a big or important number.
Perhaps in the case of vocational and technical colleges it is obvious – the education gives you a skill which allows you to make some money providing this skill to the market. If you study to be an electrician, you don’t necesarily need to learn about philosophy. Maybe you do need to learn about the implications of a career as an electrician and some idea of running your own business later on?
I have written about schools and education several times over the last 18 months:
The verb educate comes from the root “Educare”. Here is a comment my father made on a previous post about learning: “Education has two aspects; the first is related to external and worldly education, which is nothing but acquiring bookish knowledge. In the modern world, we find many well versed and highly qualified in this aspect. The second aspect known as Educare, is related to human values. The word Educare means to bring out that which is within. Human Values are latent in every human being; one cannot acquire them from outside. They have to be elicited from within. Educare means to bring out human values. To ‘bring out’ means to translate them into action.”
What can be cut, what must be kept?
We are at a time when big cuts are being made in “non-essential” services in all developed countries. What counts as “non-essential”? What is cuttable? What is not? How should we decide what should be taught or not? How should we decide which courses should be free or not?
Should engineering, medicine, physics, maths be free and poetry, history, english and humanities cost money to do? Or the reverse; given that you can get paid a good salary as an engineer, doctor but not so much as a poet or historian…
How should schools, colleges, universities adapt to a world of life-long learning? Technical skills are out of date within 18 months… so what I learnt in university 16 years ago about object-oriented programming in C++ and cognitive psychology is about as old as Socrates, Plato & Aristotle. Will the degree of the future be something that goes parallel to life… perhaps returning to college for 2 weeks every year to update my skills and knowledge?
Back to you…
This is not a post with any answer, just some questions running through my head as I reflect on how the world’s governments will allocate the reductions in spending that are forced by the current economic reality. I welcome your thinking, comments, ideas, links to resources. Have a great day.
People ask “when will the economy come back”. The answer is “it will not. not like it was. not like you buy an appartment and sell it in 2 years for 200%”
But there will be a new economy.
A big positive is that 1 billion new people will enter the middle classes in the next decade. This will double the global middle class. This will double the number of consumers in the world.
The Europe and USA Challenge is that this will be happening in India, Asia, Brazil.
Internet has changed sourcing. We all compete globally. If what I do in my job is “follow a recipe”, I will be outsourced to India. If what I do requires thinking and doubt and uncertainty and relationships with people and trust, then I am going to prosper. If what I do can be scaled and is valuable globally, I am going to be rich and I will thrive.
Social media and web video are the catalysts for breaking the domination of the physical contact as the only route to building trusted relationships. Social media, blogs, web video I believe can allow the establishment of deep, trusting relationships without the need to ever physically meet the other person and look them in the eyes. Reputation is moving online.
Keys to Future:
Innovate through really knowing your best customers (what is their pain?) (even if you are not in sales, yes you do have “customers”)
Go global via internet, web 2.0
Take great care of your reputation
There you go… economy of the future 101. Am I right or am I wrong?
Creativity should be fun – brainstorming and coloured post-it notes are preferred to the hard work of challenging existing practices and solving recurrent problems. As a boss, are you prepared to be told that “you have been doing it wrong”?
All ideas are good; all good ideas are self evident – I have heard my bosses at various moments in my career state “all ideas are good ideas”. This is not true. Some ideas are really bad ideas. Some ideas are breathtakingly stupid. Truly original ideas are often not self-evidently “good”. If you have been part of the existing system for long enough, you will be blind to some great ideas that break long-held assumptions about the way the world should work. Music and book publishing companies will not be capable of seeing new ways of delivering music or book content to listeners and readers that challenge their core assumptions of how the world should work.
Innovation is entrepreneurship – many of the most innovative people haven’t got an entrepreneurial bone in their body – they can be quite impervious to the commercial aspects of their new solutions.
The creative imperative – This is the final and overarching myth – that you and your company need to pursue it in the first place. Innovation has a cost. It needs time, money and attention if it is really to become part of the company DNA. If you are not willing to commit the resources then perhaps your best innovation strategy is to not innovate at all.
He starts: “Here is a paradox. In the financial markets, investment information is rapidly and efficiently diffused. New product and service innovations, be they junk bonds, new forms of options, or debt securities that allocate and price risk in an innovative fashion, get rapidly copied by competitors. But, in the “managerial knowledge” marketplace, there is little evidence of much diffusion of ideas or innovative business models and management practices.
Although there is rapid diffusion of language – the language of quality or six sigma, empowerment or putting people first, employee and customer loyalty and so forth – in many cases, not much actually changes in terms of what occurs on a day-to-day basis and in fundamental organisational models.”
photo credit: AComment
He discusses a couple of examples. Southwest airlines has seen profitability for over 20 years in an industry that is losing money. Their organisation has been widely described in articles, cases and books. There were no secrets to what they were doing. It was decades before others began to imitate the Southwest model.
Another well known example is Toyota (excepting events of the last few months). Toyota for a decade was the automotive byword for quality and productivity. Toyota would regularly give plant tours to its competitors – but those managers came home and repeated what they were already doing – perhaps mentioning some six sigma concepts once in a while to give credibility to their positions.
The task for HR? Human Resources must be concerned with the mental models of the people in the company, particularly its leaders. The role of the company’s execution leaders is to ensure that these mental models turn into disciplined action.
Why does management innovation take so long to spread? What role do Business Schools have in accelerating this process?
Mr Matz. He taught biology. I was 14. I was living in Chicago having moved from Dublin and going to New Trier Township High school up in the northern suburbs.
Mr Matz started the first class by holding up the biology textbook and asking how much it was worth? $30. He told us that if we learnt everything in it and could answer all the questions correctly, we each would be worth exactly $30 more. However, if we gained a curiousity for life, a process for analysing systems, a desire to share our ideas, a self belief in our own ability – we would be worth infinitely more. He then set about to make that the real basis of the course.
About three weeks into the course, I received back a homework assignment that had been graded 11 out of 10.
I had never before got 11 out of 10. In my schoolified mind I didn’t believe it was correct. How could Mr Matz make the mistake of giving 11 when there were only 10 points to give. I remember receiving the work and sitting there in surprise. I thought “there must be some mistake”.
I went up and spoke to Mr Matz and asked him about it after class. He told me that I had clearly gone beyond his expectations for the assignment and therefore deserved more than the 10. I remember going through a week trying to understand how he could give 11 when there were only 10 on the test.
Every class ended with 5 minutes of writing in our journals. He didn’t mind what we wrote, all he asked was that our pen remained in contact with the paper for the full 5 minutes and we just wrote about what we felt like writing about.
I kept the habits of intellectual curiousity, of not taking 10 out of 10 for granted as the objective, of writing for a few minutes every day for the rest of my life… I have forgotten osmosis, cellular membranes, species classifications… what he was “supposed” to be teaching. A fair deal. Thanks Mr. Matz.
*UPDATE*
Wonderful news. I wrote this post back in April 2010. About 3 months after publishing it on my blog, Mr Matz’s wife sent me an email. She let me know that Mr Matz is retired from New Trier. I got their address and sent Mr Matz a card and a short letter. Amazing what possibilities a simple blog post can open up!
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