Category Archives: White Papers

Curiosity—The Cure for Strategic Ignorance

download as pdf

In Our View …
We are asked all the time, by senior executives across all industries and sectors, about the broad megatrends we see, and how other organizations are responding to the increasingly complex challenges of business leadership today.

Our answer is always the same, and we tell them three things.

 We are not going back to a simpler, less chaotic, more orderly and more predictable time,

 All great breakthroughs are in the “How” we do things, not in the “What” we do, and

 Leadership, going forward, requires fresh mindsets, attitudes and competencies.

We know one of the essential ingredients for success is curiosity matched by ambition, and so we have chosen that theme as the focus for this edition of our quarterly Newsletter “Navigate the FutureTM”. In so doing, we have drawn upon two sources:

 Some of the most popular of our previous editions of Navigate which have looked at this issue through a number of different lenses, and

 The thinking and writings of Ian Leslie, a London, England based author commentator and a brand strategist for major UK and global brands.

I hope you enjoy this fresh perspective.

Yours truly,
R. Douglas Williamson
President & CEO

Curiosity Killed the Cat, or Did It?

We have all been taught that three basic drives propel human existence – food, sex and shelter. Increasingly, academics, economists and other thinkers are suggesting that humans possess something else – a fourth drive. They tell us that pure curiosity is unique to human beings and, while animals may snuffle around in the bushes, they are only looking for ways to satisfy the basic three drives. It’s only people, as far as we know, who look up at the stars and wonder what they are. The ancient philosopher Erasmus suggested that curiosity was greed by a different name and, for most of Western history, curiosity has been regarded as, at best, a distraction, and at worst, a poison, corrosive to the soul, to society and certainly to business.

Ian Leslie, in his book “Curious – The Desire to Know and Why your Future Depends on It”, suggests there is a reason for this. He submits that curiosity is unruly, it doesn’t like rules, or at least, it assumes all rules are provisional, subject to the laceration of a smart question nobody has yet thought to ask. As such, curiosity disdains the approved pathways, preferring diversions, unplanned excursions and impulsive left turns.

In short, Leslie suggests curiosity is deviant! Even worse, he reminds us that pursuing it is liable to bring us into conflict with established thinking and authority, as everyone from Galileo to Charles Darwin to Steve Jobs would attest.

But, perhaps, we need to evolve our thinking.

A society or an organization that values order above all else will seek to suppress curiosity. But, a society or organization that believes in progress, innovation and creativity will cultivate it, recognizing that the enquiring minds of its people constitute its most valuable asset if only they can be leveraged.

Ending the Great Stagnation …

Tyler Cowen, a professor of economics at George Mason University, has termed the current period “the great stagnation”. Edmund Phelps, the Nobel Prize-winning economist, believes the grassroots spirit of enterprise which fueled the Industrial Revolution is being suffocated by the dead weight of state and corporate bureaucracies.

Are they right?

If the great challenges of the future require new answers, and new thinking, we need to find ways to create organizational cultures that are more collaborative, more creative and more competitive. To do so, we need our people to be active, enquiring and imaginative. In short, we need them to be full of ideas and curiosity. The truly curious amongst us will be increasingly in demand. Employers will be looking for people who can do more than follow procedures competently or respond to requests. The people we need, and the cultures we must foster to grow and reward them, must have a strong intrinsic desire to learn, solve problems and ask penetrating “wicked” questions.

These individuals may be difficult to manage at times, they will take unpredictable paths, and they won’t respond well to being told what to think. These curious learners go deep, and they go wide. They are the people best equipped for the kind of knowledge rich, cognitively challenging work required today. They are also the ones most likely to make creative connections between different fields, and the ones best suited to working in multi-disciplinary teams. To put it another way, there will be a rising premium on people with a high need for understanding, a Need for Cognition (or NFC), which is the scientific measure of intellectual curiosity.

Blind Spots & Bravado – A Toxic Combination
Originally Published – Fall 2011

Over the past several years, the global economic swamp has drained and, as a result, the hidden rocks of inefficiency should now be visible to anyone who can see. What better time to declare war on those things getting in the way of improved organizational effectiveness? However, we still find organizations hunkered down for survival, not rising appropriately to the challenge at hand. It is as though the greater the uncertainty and instability in the market, the less willing leaders actually are to stare down the “devils” within their own organizations. The less willing they are to deal with the things holding them back and getting in the way. The less candour they have to tackle the issues that make a real difference.

Strategy is ultimately about developing a radically new point of view, a new way of looking at the world and defining success. Opportunity arises as these viewpoints shift, affording you the chance to destabilize and disorient the competition.

Here is a list of pointers to help get you started.

Dig Deeper – Much Deeper

If your resolve is to get straight answers to the “wicked problems” hidden just beneath the surface, the success of your search will depend on how willing you are to do the heavy lifting necessary to find them. Begin by making sure you have selected the right people to help you think, probe and discover, and provide them with the necessary air cover they need and deserve.

Ask Tougher Questions

Mining for the hidden issues, dilemmas and incongruities lurking in your organization will require you to ask more penetrating questions than you have ever asked before. The questions need to be questions of exploration, focused on the unknown territories – and you have to be prepared to follow the line of thought, no matter where it takes you.

Check the Numbers

In this new world of “Hypercompetition”, you will need to change how you analyze the conditions. This means examining the data you have at hand in new and more interesting ways. Then, just to add another level of tension, you will need to seek out new information from new places and in new combinations.

Call it Out

Organizations tend, over time, to take on the characteristics of their leader. If there is a meaningful shift to be made in the way strategy is conceived, then the leader will have to model new behaviours. This very likely means an overt, visible commitment to calling out the superficial arguments that do not hold water, and putting an end to the timid, evasive responses to the tougher questions. Raise the bar. Increase the standards. Demand better.

Banish All Defenses

It is human nature to become easily annoyed and defensive when someone challenges your opinion or point of view and, yet, we actually need more dissent and disagreement than ever before if we want to surface the “real” issues impacting organizational performance. These defensive reactions are multiplied several times the more people we ask to speak up and, soon, we have a complex maze of conflicting, opinions, priorities and messages. The trick is to eliminate the excuses people use to divert their energy and attention. The leaders at the top need to ensure there is no recrimination for speaking the truth, and that those who do so are sheltered from those who would build walls to keep the truth hidden.

Go Big or Go Home

Business is about balancing risk with market need and opportunity. As we have been forced back onto our heels by recent economic events and circumstances, many have tried to lessen the risk by reducing their field of vision. They have justified a hunker down strategy by promoting it as the safest thing to do. Strategy is an offensive weapon. Get out of the bunker and get back in the game.

The Devastating Cost of Bias in Leadership
Originally Published – Winter 2013

The biases that undermine strategic decision making often operate in full force during those most heated of meetings we have where opinions collide and the conversation is intense. The suggestions below, which were developed by Dan Lovallo of The University of Sydney and Olivier Sibony of McKinsey, are designed to help ensure you and your team are not held hostage to the biases which others may bring to the table.

Make sure the “right people” are involved.

To get to the best decisions, you need to ensure a rich diversity of backgrounds, roles, risk aversion profiles, and interests are represented. Cultivate critics within the top team. Invite contributions based on expertise, not rank. Don’t hesitate to invite expert contributors to come and present a point of view, without attending the entire meeting.

For the portion of the meeting where a decision is actually going to be made, keep attendance to a minimum, preferably with a team that has experience making decisions together. This loads the dice in favour of depersonalized debate.

Assign Homework

Make sure pre-decision due diligence is based on accurate, sufficient, and independent facts, and on appropriate analytical techniques. Request alternatives and “out of the box” plans. Consider setting up competing fact-gathering teams charged with investigating opposing hypotheses.

Create the Right Atmosphere

As the final decision maker, ask others to speak up (starting with the most junior person), show you can change your mind based on their input, and strive to create a “peer-like” atmosphere. Encourage expressions of doubt, and create a climate that recognizes reasonable people may disagree when discussing difficult decisions.

Manage the Debate

Before you get going, make sure everyone knows the meeting’s purpose and the criteria you will be using to make decisions. For recurring decisions, make it clear to everyone that those criteria include “forcing devices” (such as comparing projects against one another).

Take the pulse of the room – ask participants to write down their initial positions, use voting devices, or ask participants for their “balance sheets” of pros and cons.
Use pre-mortem techniques to expand the debate. Promote counter anchoring by postponing the introduction of numbers, if possible. As well, “reframe” alternative courses of action as they emerge by making explicit “what you have to believe” to support each of the alternatives.

Follow up

Commit yourself to the decision. Debate should stop when the decision is made. Connect individually with initial dissenters and make sure implementation plans address their concerns, to whatever extent possible. Monitor pre–agreed upon criteria and milestones to correct your course, or move on to backup plans.

Conduct a post-mortem on the decision once its outcome is known. Periodically, step back and review decision making processes to improve meeting preparation and mechanics, using an outside observer to diagnose possible sources of bias.

The Powerful Influence of Perspective
Originally Published – Spring 2012

In the modern business era, there has probably been no other period of time during which so many moving parts were circulating, at such high speed, with no obvious or discernible pattern to their movement, as right now. In times like this, it can be hard to make sense of things, and even harder to connect the dots and shape them into a clear picture you can share with others in a confident and convincing manner.

As a result, the cognitive and interpretive skills of the leader are being put to the test like never before. The old approach, the tried and tested, may not be the best approach to solve new challenges where there is no precedent to call upon.

Here are some things to consider instead.

Reduce Anxiety Levels

In an environment that is full of uncertainty and anxiety, the role of the leader, at any level, is to reduce the anxiety that gets in the way of performance. Healthy anxiety is one thing, but endless, spiraling down anxiety, that creates sludge and becomes an excuse for inaction, is simply not acceptable.

Go on a Road Trip
Sitting at your desk will not help. The best way to gain a different and clearer perspective is to get away from the task at hand and elevate your vantage point. Get out into the world of your customers, and your customers’ customers, and see what they are feeling and experiencing.

Face Down the Demons

In every organization, there are obstacles, barriers and excuses that get in the way. They seem to be known by everybody except the leader, or the responsible unit manager or executive. The current climate, with the swamp having been drained, provides the perfect opportunity to slay the demons and deal with the things that are now even more obvious.

Tap into the Creative Class

It is highly unlikely that your traditional, buttoned down executives will have the capacity, or the willingness, to find the “next right answer”. Chances are, they are just too invested in the status quo to become the active champions of the transformation you actually require. You will need to weigh the risks of non-action against the risks of opening up the dialogue to the next generation of leaders from the creative class.

Shift by 45 degrees

In case radical transformation is just too big a leap to take, the least you can do is force your organization to look at things from an angle off the current centre. The enforced discipline of altering perspective can serve a very useful purpose in terms of identifying things that are just no longer right, when seen from a less comfortable and traditional point of view.

Amplify Your Curiosity

If all else fails, the least you can do is take steps to upgrade the level of curiosity displayed by your key people. You need to ask them to hone their skills when it comes to posing the questions that lead to new and fresh insight. It will require you to disrupt convention by accepting the inherent tension that comes from useful debate and improved dialogue.

Deny, Defend, Disrupt – It’s Your Choice!
Originally Published – Summer 2013

We are not hostages to the random forces of the free market.
We are not prisoners of the change monster who chases us every day.
We are not powerless in the midst of forces that may, at times, overwhelm us.

We have free choice, and we deserve to be allowed to exercise that choice without being judged by those who may disagree. Today, we need better choices, and we need to make sure those people who see things differently than we do are allowed to “call it out”, rather than submit. In our view, no one has done a better job of describing this formula for success based on candour than Phillip Kotler and John Caslione in their book “Chaotics: The Business of Managing and Marketing in the Age of Turbulence.”

They have done a brilliant job of summarizing the characteristics of companies that have lived a long and healthy life, and we have shared them below as a recipe for leaders who wish to seize the opportunity this moment presents, the opportunity embedded in the disruption we find all around us.

Sensitivity to the World Around Them

The best leaders in the world have an acute and finely tuned radar for sensing and identifying shifts in the business and social context. They appreciate the need to be vigilant in continuously scanning the environment and interpreting the signals.

Awareness of their Identity

The best organizations in the world know who they are and what they stand for. They are confident in their own skin and not easily tempted to jump on fads that pass in the night. They place the importance of culture alongside that of strategy.

Tolerance to New Ideas

The best thinkers in the world are broad minded, curious and open to the new and the different. They embrace new ideas and concepts. They resist the confining cocoon of complacency. The pioneers of the continuing future will be those who seek out new knowledge and understanding in an effort to make sense of the world.

Valuing People Not Assets

The best run companies in the world place people first, even before customers. They know and understand it is people who create value through their insight, ingenuity and passion. They appreciate that machines and buildings and systems are only there to enable human capability to be leveraged.

Loosening Steering and Control

The best leadership teams in the world are not obsessed with maintaining order and enforcing control. They are more inclined to actually be the chief agitators for freedom, experimentation and more breathing room. They know that no leader, or group of leaders, can get the best out of the opportunities which present themselves by tightening the vice of control and centering it around the executive table. They open up the discussion to include others who think differently.

Organizing for Learning

The organizations that thrive and excel in times like these are organizations that see learning opportunity in everything they do, and turn themselves into lean, mean learning machines, producing new learning at ever expanding rates of return.

The Power of Unreasonable People
Originally Published – Summer 2011

The world we see evolving is an exciting and challenging one. It is a world in which the array of possibilities is endless, and the need for novelty, imagination and originality has never been higher. The world of business has an important role to play in shaping the communities in which we live and building the international bridges that will bring us even closer together.

This brave new globalized world, with its rich and diverse tapestry, is also a world that is demanding new answers to haunting questions about sustainability, justice, tolerance and equality. Business leaders have a powerful platform from which to help transform the world, but their success will depend on the mindsets of those in positions of influence. Equally, the ongoing business value proposition will require the same, or very similar, new mindsets.

In order to begin the process, we have provided a short list of possible actions.

Identify the Deviants

The current and future competitive climates will require new ideas, and those are more likely to come from people who view the world just a little differently. Organizations will need to do a much better job of identifying them and bringing them into the circle of influence. Wise leaders will not only listen to them, but will give them a voice and the opportunity to shape the future. Think about reshaping your Talent Evaluation process.

Unleash their Conviction

These deviants thrive on freedom of expression and passion, so let them loose. Tap into their core purpose and allow them to identify new areas of opportunity for your organization. Think about creating a Tomorrow Forum as a vehicle for these thinkers to cast their minds into the emerging trends of the future.

Provide Broad Scope

We know from the work of behavioural economists such as Daniel Kahneman and Amos Taversky that the key to effective problem solving and decision making is in the proper framing of the challenge. Accordingly, we need to be open to a healthy divergent phase of investigation, and learn to examine multiple scenarios in tandem. Rushing to a premature conclusion within a narrow frame or context is exactly the wrong formula. Think about building a component into your Learning and Development process to addresses this.

Weave the Story

It is part of the human condition to relate to stories and to use them as metaphors for our own challenges and dilemmas. In this era of Blogs, Facebook and other social media, there are many ways to create virtual storytelling communities that get people involved and engaged in crucial conversations about tomorrow. Think about your Communication Strategy and whether it is creating the right conversations.

Ensure Ample Air Cover

The people you need to help carve the path to the future will be people who stand out and make others uncomfortable. You need to ensure they are not marginalized by those who do not understand the value and purpose of creating a new mindset. Do not allow the efforts of new thinkers to be drowned out by the disciples of the status quo. Think about ways you can benefit from Design Thinking.

The Predictable Passages of Transformation
Originally Published – Winter 2015

The decision to embark on a transformational journey should not be taken lightly. The leaders must commit to seeing it through, and must understand there are predictable passages they need to navigate along the way. Promises should be few, and guarantees abolished. No transformational leader can allow ego and bravado to take control of them, their actions or their words. The promises should only be about the hard work that lies ahead and the reward at the end of the tunnel. Realism and truth must be the order of the day, and the touchstone for the behaviour of leaders at all levels.

The leaders can and should lay out the broad strokes, but must avoid the temptation to offer the fine detail to those who cannot exist inside the cloud of uncertainty and ambi-guity. They should set the compass heading, but avoid handing out the detailed road maps that many people will be demanding.

The leader must appeal to heart over head.

Here are some things to think about, as you begin to consider what’s next.

Build the Guiding Coalition

Your first task is picking the team. There is a huge difference between the operating team you may need to keep the business running, and a transformation team whose job it will be to reimagine the future. The skills and aptitudes are different but, most significantly, it is the mindsets and attitudes that are different. The leader must draft wisely, and from all levels of the organization, when putting together a truly whole-brained, cross functional and cross disciplinary group of advisors and agents.

Bring the Coalition Inside the Tent

Your first act of courage will be to trust the coalition with an open, honest assessment of where the organization currently stands and the obstacles and imminent risks it faces. The leader must be willing to pull back the veil and call things as they really are. There can be no room for obfuscation or gilding the lily – it’s the straight goods, raw and ugly, that must be put on the table.

Embark on a Dialogue of Discovery

Members of the guiding coalition must be given a clear choice – join the battle or step aside. This must truly be a coalition of the willing, and the willingness must be to break the old model apart and start with a blank sheet of paper. There can be no room for biases, sacred cows or antique paradigms. The task must be undertaken as it was in the movie Apollo 13, where the entire mission was about getting the ship back to earth.

Focus Your Energy and Resources

Decide what really matters and what will have the biggest impact. Do the hard work first and forget about the pseudo benefits of “low hanging fruit”. The journey will not be determined by early wins, but rather by new choices about the stuff that really counts. Strip away the excuses and face the demons.

Emulate Churchill

Take control of the narrative. Lead from the front and talk to the organization in real terms, appealing to emotions and setting expectations realistically. Accept any help that anyone can offer and recruit volunteers to the cause. Remember that your words will carry extra meaning, and that words matter. Pick those words that will resonate in their simplicity and common sense. Present the facts in all their dirty glory and, most importantly, offer hope while promising hard work.

Six “Wicked Questions” Every Leader Must Ask

download as pdf

Competence, Character & Leadership …
We are not the first to suggest leadership needs to be defined in a more robust and all-encompassing manner. In fact, we believe the definition of what constitutes great leadership is not static, but rather needs to evolve with the times and the particular challenges posed by a specific moment or era. In this sense, leadership is something that can only be judged by the relevance of the person (or persons) to the particular stage on which they perform and the unique context within which they have been asked to lead.

All leadership is, so it has been said, situational!

In my book “Straight Talk on Leadership” (Wiley and Sons, 2013), I introduced the eight transformational leadership competencies I believe are required for the times in which we live. The good folks at Western University in London (Crossan, Gandz and Seijts) offered up their ten “Dimensions of Leadership Character” and the two together give us a very good model with which to evaluate the nature of leadership today.

This powerful combination of character traits and leadership competencies offers a roadmap to those who wish to examine not only their own fitness, but the fitness of the leaders below them. No worthy leader should shy away from holding themself, and others to the very highest of standards and asking the tough, “Wicked Questions” needed to accurately assess how competent they are.

Power of Wicked Questions …
We have always been fascinated by the magical art of asking “Wicked Questions”, those questions that do not have an obvious answer. In fact, we would go so far as to suggest great leaders know how to craft wicked questions, and it is their ability to do so that marks them as truly unique individuals.
At their very essence, wicked questions are questions of exploration or discovery.
Wicked questions are used to expose the assumptions which shape our actions and choices. They are questions that articulate the embedded, and often contradictory assumptions, we hold about an issue, a problem or a context. Unlike everyday questions, wicked questions do not have an obvious answer, and their value lies in their capacity to open up options, expand the scope of inquiry and surface the fundamental issues that need to be addressed, rather than the symptoms which often mask or distort the truth.
On the following pages we offer up the questions we believe leaders must ask themselves, and then act upon, no matter what the ugly truth reveals. To play on the famous quote by British Prime Minister Winston Churchill (a situational leader if ever there was one), the ability to answer these questions is “Not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

Are We Really Clear Headed? …
We can all be blinded by distraction and deafened by noise, but the true test of a leader is their ability to rise above all of that and, in the words of Rudyard Kipling, “Keep your head when all about you are losing theirs and blaming it on you”. When a leader allows their cognitive abilities to become impaired, for whatever reason, they lose the crucial ability to accurately orient themselves, and their organization, in both time and space. As a result, their judgment can be seriously flawed and, even worse, they may not even realize it until it is too late.
Leaders must possess the strength of character, and depth of competency, to avoid this trap. They must force themselves into asking the wicked questions to seek the truth and ensure the validity of their thinking. They cannot rest until they have punctured every half-truth or bias that may have crept into their thinking over time.

Leaders must be wide awake and hyper alert. They must possess a combination of:

THE LEADERSHIP COMPETENCIES:
Contextual Intelligence (CQ) – sensing subtle shifts and predicting their implication
Ambiguity Intelligence (AQ) – living comfortably with uncertainty and not knowing

THE CHARACTER TRAITS:
Transcendence – appreciative, inspired, purposeful and future oriented
Humility – modest, reflective, continuous learner, respectful and grateful

Are We Using The Right Lens? …
Our perspective on an issue, or on a challenge, or on people is what ultimately shapes the conclusions we reach and, therefore, the actions we take (or don’t take). If we get the initial frame wrong, then we will very likely make the wrong assumptions, and they will fog up the lens through which we look at the situation. We will end up drawing the wrong conclusions based on a faulty premise – or an outright distortion of reality.
Our mental models are powerful, often invisible, prisons that can trap us into a belief system that is both inaccurate and dangerous. When leaders allow themselves, or their organizations, to twist and distort the reality of any given situation, they become complicit in a chain of events that will almost always lead to failure. Leaders must be at their best when things are foggy or vague, and they must have the balance just right between what is fair and just, and what is required to alter old, tired mindsets in order to unlock the potential found in a new way of thinking.

Leaders must be vigilant, calm and rational. They must possess a combination of:

THE LEADERSHIP COMPETENCY:
Strategic Intelligence (SQ) – deep insight , clear foresight and peripheral vision

THE CHARACTER TRAITS:
Justice – fair, equitable, proportionate, even handed and socially responsible
Temperance – patient, calm , composed, self-controlled and prudent

Have We Been Totally Honest? …
It’s very easy to tell little white lies, we all do it from time to time. Some are simply innocent lies, with no malice or ill intent, and some are lies of convenience, designed to get us out of an uncomfortable or tight spot. No matter how we cut it, honesty is a practice rooted deeply in our character, and it is either a covenant we keep with ourselves, or something we allow to roam at will, depending on the situation.
We consider candour to be the ultimate lubricant for a high performing organization because it assumes the shortest distance between any two points is a straight line, and beating around the bush is nothing more than waste and inefficiency. The trouble is, most people have a limit to their candour. In critical situations, they allow themselves to hold back from telling the truth for fear of recrimination or some form of backlash.

In our view – the worst truth is still better than the best lie!

Leaders must be humble and authentic. They must possess a combination of:

THE LEADERSHIP COMPETENCY:
Emotional Intelligence (EQ) – ability to know yourself and connect with others

THE CHARACTER TRAITS:
Integrity – authentic, candid, transparent, principled and consistent
Learning – open, aware, informed studious and inquisitive

Has Our Culture Evolved With The Times? …
Some people believe an organization’s culture should remain static, preserved in a pickle jar and never allowed to change over time. They believe their culture is somehow a guarantee of continued success, or an anchor in a storm, or some other colourful metaphor that suggests the past is a harbinger of the future. While there may have been a time when this was more true than false, the fact of the matter is – times have changed.
Cultures need to evolve with the times, and the continued relevance of your organization may very well be determined by whether or not your culture has allowed new oxygen to creep into the lifeblood of what it believes and how it acts. At its core, culture is the way things get done, it’s what people believe and how they choose to work together. It is not determined by the organizational chart, or hierarchies of control and authority, but rather by what people think and do on their own, when no one is watching.

Leaders must have an eye for talent. They must possess the combination of:

THE LEADERSHIP COMPETENCIES:
Talent Intelligence (TQ) – capacity to spot, develop and release latent talent
Collaborative Intelligence (COQ) – connect with and work comfortably with others

THE CHARACTER TRAITS:
Humanity – considerate, empathetic, compassionate, magnanimous and forgiving
Accountability – takes ownership, accepts consequences, conscientious, responsible

Have We Banished Complacency? …
The well-known author and business guru Jim Collins once said “The enemy of great, is good”. He was right – but he may not have gone far enough because complacency still remains the silent killer of organizational effectiveness. Perhaps it is sheer laziness, or maybe it is fatigue, but leaders everywhere are guilty (at some level) of allowing their organizations to drift into a repetitive pattern of subdued mediocrity.

Harsh words, perhaps, but with more than a little truth!

As complex social structures, organizations cannot be managed solely, or even effectively, through a dense set of policies and procedures. The human element will always come into play and, like water, it will find its own natural level, regardless of how it may be contained by a set of structures. Leaders must be the energy source that fights back against the dark forces of complacency, and they must do so by continually agitating, stretching, challenging and provoking.

Leaders must disrupt and disturb. They must possess a combination of:

THE LEADERSHIP COMPETENCY:
Decision Making Intelligence (DMQ) – ability to frame problems and resolve issues

THE CHARACTER TRAITS:
Courage – brave, determined, tenacious, resilient and confident
Resourcefulness – able, imaginative, adroit, able to deal well with difficult situations

Are We Breaking New Ground? …
Yesterday is the land of nostalgia, while tomorrow is the land of opportunity. Since we will be living in the future, whether we like it or not, a leader who is not thinking fast forward is leading their organization backwards in time. While breaking new ground is hard work, full of risk and peril and with no guarantee of success, it remains the only way to move ahead and, in the process, remain relevant.
Over the broad sweep of economic and social history, progress has been marked by the brave pioneers who were driven to the future by the allure of its promise, not the comfort of its certainty. Progress is a necessary part of evolution, and adapting to new conditions is what ultimately allows us to prosper and grow, both personally and organizationally. Leaders, above all others, must be the ones to challenge convention and stir the pot of discovery to ensure their organizations move forward. They must discard the shackles of convention and embark on a journey into the unknown.

Leaders must be brave and curious. They must possess a combination of:

THE LEADERSHIP COMPETENCY:
Innovative Intelligence (INQ) – ability to inspire, imagine and invent new solutions

THE CHARACTER TRAITS:
Driven – passionate, vigorous, results oriented, takes initiative, strives for excellence
Determined – resolute, purposeful, unwavering, undaunted and tenacious

Steps to Take :: Actions to Consider
It is our strong conviction that the times in which we live change the very nature of the leadership we need. In a world as fast-paced, demanding and ever changing as the one we find ourselves in today, we believe leaders need to be more open than ever before to new mindsets and new possibilities. To quote the author Marshall Goldsmith “What got us here, won’t get us there”.
As such, leaders have to master the stubborn paradox that has always been part of leadership, the ability to embrace new ways of thinking while being guided by a set of character traits and virtues that provide balance in the midst of chaos and confusion.
Here are some things to help get you started.

Abandon Perfection as the Goal
In a world that is fundamentally imperfect, populated by less than perfect people, the very pursuit of perfection may be a cruel form of flawed logic. In fact, one can argue that arriving at a state of perfection is what actually inhibits you from getting better, doing more, or inventing something different. Give imperfection its rightful place.

Focus on Asking Better Questions
We all like answers, but the thing that actually moves us forward is questions, questions that challenge what we believe and what we have come to accept. The ability to ask “Wicked Questions”, the kind that disrupt, and stretch us beyond our own boundaries, are the gold dust of success.

Keep Things in Constant Flux
The role of the most senior leaders of any organization is not to keep things in check and under control, it is exactly the opposite. Great leaders thrive in the midst of chaos, and even create it as a means to push their organizations forward. They realize that keeping things in motion, and allowing ideas to collide (sometimes violently), is the best way to remain agile and opportunistic.

Tinker and Experiment Continually
Curiosity may have killed the cat, but it is what all great leaders, in today’s environment, must have in spades if they wish to guide their organizations forward toward sustainable success. Complacency, in all its forms, must not be allowed to put its evil hands around the neck of the organization and choke the ability of people to innovate on a daily basis. Innovation is a free spirit and a restless soul, it cannot become institutionalized.

Honour Your Rebels
In times like this, your best friend may very well be the crazy person you always feared in the past. The person who seemed just slightly off kilter, the creative deviant, the slightly twisted thinker who might have always been the one to challenge you. Today, you might want to keep that person close to you, and give them the immunity of the court jester to say what they think and to think outside of the box.

Innovative Intelligence – Unlocking the Value Within

download as pdf

download as pdf

In Our View …
It has been said that if you put your ear to a giant conch shell on the beach, you can hear the sound of the distant ocean. In much the same way, if you put your ear to the door of most executive suites today, you will hear the sound of heated conversations on the ever illusive subject of innovation in the modern organization. Almost without exception, these are “how to” conversations, as though there is some sort of mystery behind innovation locked in a jar, protected within a reinforced steel vault.
It seems business leaders are constantly looking for the holy grail of innovation and the magic benefits of how it adds value. The trouble is, there is much more talk than action. More hand wringing than results. More misconception than understanding. More aspiration than success.
All the while, the innovation gap beneath our feet continues to widen and, as it does, the illusive benefits seem to move even further off into the foggy distance. In our view, it’s time for business leaders to do a “reset”. It’s time to pull back the veil of mystery and look the challenge of innovation squarely in the eye.
In this edition of Navigate, we will try our best to decode the myths and misconceptions that blind us to breakthrough thinking and meaningful results. We provide a framework to re-examine how your organization can significantly reposition itself on the arc towards sustainable innovation by creating a culture of innovation from top to bottom.

Yours truly,
R. Douglas Williamson
President & CEO

The Liberation of Free Thought …
Over the long sweep of history, whether in business, politics or any other realm, every fresh, original idea was trapped in the head of the innovator before it was released to be shared with the rest of us mere mortals. Every new idea for a product, every breakthrough process in manufacturing, every new offering for customers, was first an idea before it was a financial opportunity. Our minds are wonderful, powerful tools for meeting the challenges of the modern world, but in far too many organizations, the collective brainpower of the organization is wrapped within a rigid box of conformity and fear.
The truth is, most great ideas die of starvation!
Far too many organizations imprison free thought within the strict confines of their rigid organizational bureaucracy. To make matters worse, we all do so while telling ourselves, our employees, our shareholders and our customers that “Innovation” is a key priority and we need more of it to create new value.
The gap between rhetoric and reality is quite shocking. If we want to hold our leaders accountable, we have to find a way to make the liberation of thought less daunting for those who worry about the risks of innovation, rather than the opportunities. Innovative thinking is not the hobgoblin it is made out to be, and the answer lies in recasting the innovation conversation in ways which reveal it for what it is – the engine of economic prosperity and the soul of the relevant organization.

The Art of the Near Win …
In an effort to get beyond the barriers that trap innovative thinking inside the heads of employees, managers and leaders, we need to understand the psychology which conspires to build the case for the anti-innovation “conservatives”. In short, the “conservatives” are trapped in a tomb of fear. They believe control and predictability is more important than freedom and innovation. As a result, they wrap their anti-innovation arguments in the cloak of risk management as the sanitized way to somehow justify their thinking.
It has been said that if you know someone’s fears you can understand their need, so we need to dig a little deeper into the psyche of the “conservative” and better understand those fears in order to address them and move forward.

It seems to us the likely list of fears would include:

Fear of being wrong, and – getting caught
Fear of not knowing, and – looking stupid in the process
Fear of ambiguity and uncertainty, and – the emotions it creates
Fear of ambition and striving, and – that they come with accountability

At the end of the day, leaders who seek to build more innovative organizations need to shift from fear of failure, and the avoidance of mistakes, to the celebration of the near win. Celebration of the fact that solid effort and good intentions are the jet fuel for an organization who wishes to uncap the potential for new ideas trapped in the minds of those who strive for something better, bigger and more innovative.

Value Creation in the “Apple World” …
We have all come to embrace the allure of Apple with our admiration for their breakthrough, revolutionary products, the company itself, their culture and the fact they have become the poster child for innovative leadership. This larger than life reputation, however, has been used as an excuse by many senior leaders to remind their staff that they can’t be an Apple, they can’t do what Apple did and they can’t learn that much from them because “they are different”.

How wrong they are!

The lessons from Apple (and others) are in fact repeatable and extendable to other domains, because the real lessons are the lessons on how to “think” differently in order to produce and invent differently.
The lessons we can all benefit from are those which suggest we need to:

Be well ahead of the customer and invent the future
they want before they even know they want it.
Design things with elegant simplicity and a set of features that is beyond user friendly and into the realm of cool.
Wrap everything you do in positive, pleasant and deep emotions, through the experience you create.

The secret to serial innovative thinking is a willingness to be bold and to redefine the future by abandoning the past and moving beyond those things that don’t work well, are not particularly pretty and don’t leave us feeling “special”. We live in the “Experience Economy” and, in that world, innovative thinking is the only capital that matters.

Widening the Perspective …
We all know the problems faced by leaders today have become increasingly. complex. They cannot be solved with past experience and/or “pure” knowledge lone. What is required now, more than ever, is Innovative Intelligence (InQ). InQ involves solving complex problems by discovering, combining and then arranging, fresh insights, ideas and methods in new ways. It is a process of synthesis, not analysis.
Let’s look at the five InQ Competencies which together form a storyboard, or framework, for understanding the innovative thinking process.

The first is Perspective.

This is the Contextual Understanding stage of the innovation process.
In this stage you are constantly scanning the environment in search of “faint signals from the periphery”.
You are putting your knowledge and experiences to work, in order to make sense of things and help others understand.
It involves the powers of:

Observation – listening, feeling, sensing
Connectedness – association, salience, importance, relatedness, empathy
Insight – causal relationships, critical thinking
Abstraction – comfort with paradox, ambiguity, complexity

To test your own use of Perspective, ask yourself the following questions:

Am I in touch, in tune, and keenly aware of the changing external context?
Do I see patterns that link unrelated subjects, creating more powerful
insights?

Building Ideas through Collaboration …
The second InQ Competency in our framework is Collaboration.
This is the Framing & Definition stage of the innovation process.
In this stage you are intentionally examining the situation at
hand through a wide range of alternate lenses.
You are putting ideas, possibilities and options together in a variety of new and different ways.
It involves the powers of:

Diversity of thought – networking, assimilation, probing
Integrating – melding, combining, assembling
Conflict resolution – suspending judgment, finding common ground
Simplifying and synthesizing – weaving elements, eliminating distraction

To test your Collaborative competency, ask yourself the following questions:

Do I take the time to solicit and listen to the opinions and ideas of others?
Do I debate with passion, but resolve conflicts creatively and positively?

The Power of Discovery …
The third InQ Competency in our framework is Discovery.
This is the Ideation stage of the innovation process.
In this stage you are following the multiple leads which your intuition is providing
you, and ensuring you satisfy your need to explore options and alternatives.
You believe there will always be more than one right answer to any question and you pursue them all.
It involves the powers of:

Curiosity – inquisitiveness, exploration, discovery
Imagination – playfulness, intrigue, free thought
Questioning – visiting the premise, assumptions, conclusions
Generation of ideas – reframing, scenario thinking

To test your own powers of Discovery, ask yourself the following questions:

Can I “zoom up” to see the big picture and “zoom down” to see the details?
Do I accurately frame problems in order to assess multiple viable options?

The Freedom to Experiment …
The fourth InQ Competency in our framework is Experimentation.
This is the Prototyping stage of the innovation process.
In this stage you are turning your assumptions into concrete knowledge through the process of confident trial and error.
You are testing your logic and learning as you go, never pre-judging the possible outcome.
It involves the powers of:

Persistence – tenacity, resolve
Boldness – risk, confidence, experimentation
Optimism – belief, tranquility, balance
Adaptability – improvisation, ingenuity

To test your Experimentation quotient, ask yourself the following questions:

Am I comfortable with contrarian thinking and viewing things through a new lens?
Do I push through my comfort zone to increase my overall thinking
capabilities?

The Willingness to Learn …
The fifth and final InQ Competency in our framework is Learning.
This is the Re-evaluation stage of the innovation process.
In this stage you are reverse engineering, learning from what didn’t work in order to discover what does.
You are examining the outcome(s) in a totally objective and genuinely dispassionate manner.
It involves the powers of:

Humility – to accept failure and not knowing
Objectivity – to embrace the truth
Accepting failure – to extend the range of possibilities
Resilience – bouncing back and learning from mistakes

To test your willingness to Learn, ask yourself the following questions:

Do I demonstrate discipline in reviewing outcomes to learn from experience?
Am I open to the possibility of new and different interpretations and insights?

Steps to Take :: Actions to Consider
It is no longer good enough to think of innovation in the traditional, but far too narrow, sense of process improvement and product development. Today, innovation must ooze from every pore of the organizational tissue. Innovation is a state of mind at the individual level, and a state of culture at the organizational level. It is the soul, passion, intuition and experimentation that fuel the healthy innovative body. Culture matters when it comes to value creation through innovation. In today’s world, the role of the senior leader is to create a culture which overcomes the institutional barriers to discovery, experimentation and collaboration. Here are some ideas to consider as you try to shift your organization into high gear.

DEFINE THE SIZE OF THE PRIZE
Innovative people need to be lifted by a bold sense of majesty, passion and purpose. To achieve this heightened state of innovative nirvana, the senior leaders must:

Be clear on the true nature of the problem to be solved
Avoid shooting for the soft middle and, instead, aim for the lofty heights
Create a vivid inflection point separating today from tomorrow

FIND THE RIGHT INVESTORS
Many entrepreneurs cite a shortage of funding as the number one source of their
frustration. However, the much more important source of capital is the renewable energy that comes from emotional investment. To tap into this wealth, the senior leaders must:

Start a crusade that draws people into the cause
Find the emotional growth zone which triggers inner commitment
Understand that faith and courage trump logic and reason

BUILD NEW CAPACITY
In the folklore of an earlier time, an alchemist was someone who could create value from nothing. In today’s world, senior leaders must find a way to replicate the alchemist’s supernatural magic by creating innovative capacity from thin air. The senior leaders must:

Turn on the light bulb and grant permission to think big thoughts
Use a compass to help people orient themselves in uncharted water
Develop an organizational appetite for tackling the really hard stuff

FREE THE PEOPLE
There was a time when organizations operated on the faulty assumption that wisdom flowed down from the top of the organization in a cascading waterfall of intellectual superiority. Senior leaders must reverse that premise and must:

Knit a quilt of vibrant diversity and dynamic tension
Transmit one message, but accept many paths to success
Create a safe harbour for bold ideas to be nurtured and allowed to germinate

LEAD FROM THE FRONT
It has been said the only thing all great leaders have in common is “willing followers”. It’s not about charisma, or even experience. It’s all about credibility and the powerful magnetic force it brings. To build their leadership currency, senior leaders must:

Avoid being a ghost and be seen everywhere
Promote clarity as the best message an executive can send
Spend more time in the engine room and less time in the board room

The Predictable Passages of Organizational Transformation

download as pdf

download as pdf

In Our View …
In an orderly, predictable, safe and sane world, the very thought of a leader embarking on a journey of fundamental organizational transformation would be considered radical, if not irresponsible. On the other hand, given the environment we have experienced in recent years, and will likely continue to experience for the foreseeable future, ignoring the need to transform could be equally considered an act of serious neglect by any responsible leader.
The challenge, as always in times of great uncertainty, lies in how the leader weighs the risks and opportunities while, at the same time, determining the right moment.

. If things are going well – you may not wish to tinker, let alone transform
. If things are going poorly – you may have already lost your chance for success

Bottom line, survival has always been dependent upon the ability to adapt to circumstance. In this way, the business world is no different from the animal world, except you might assume the more intelligent species would be better at transformation and adaptation than they really are. Transformation, which is several degrees of complexity up the food chain from traditional “Change Management”, is something very few do well.
In our view, this is in large measure due to the fact most leaders have a less than complete understanding of the transformational journey and the various passages they must navigate in order to be successful. In this edition of Navigate the Future™, we will attempt to describe the process and share our insights on the predictable hurdles .

Reflections in the Mirror …
Our experience with large scale transformational change suggests there are three distinct phases to the transformational journey, and nine very distinct and predicable “passages” which must be navigated.
The first phase is what we call the “Getting Ready Phase” .

PASSAGE # 1 – CONCERN
In this stage, the body of the organization is already well aware of the challenges it faces, and some people have already begun to sense that something is wrong. In fact, those at the more junior levels often spot the signs first. They are typically much closer to the customer, and much more aware of the obstacles and barriers that are getting in the way of delivering on the value proposition. They see the gaps in vivid techno colour, but they feel powerless to effect change, or even catch the attention of those further up the organizational pyramid. They begin to hunker down for bad news and bad times.

PASSAGE # 2 – CONFRONTATION
Eventually, the leaders above begin to sense the issues for themselves, although they almost always lag in their awareness. Slowly, they begin to examine the evidence which suggests things are not going according to plan. The first reaction is almost always to reject the need for large scale change and, instead, try to put a short-term fix in place to buy themselves time. They debate amongst themselves the reasons for the difficulties, but they are typically more interested in attributing blame than they are in addressing the roots causes which lie deeper below the surface.

Igniting the Engine …
Assuming the organization, and its leaders, come to appreciate the messages being telegraphed by the “faint signals from the periphery” suggesting transformation may be required, they move on to the very difficult stage of agreeing on the diagnosis.

PASSAGE # 3 – CALIBRATION
Almost every business leader we have ever met talks about the insidious nature of organizational silos and the challenges of achieving alignment. These are the two evil step sisters which, over and over again, cause organizations to languish in mediocrity or die in painful agony. Despite how damaging these issues can be, it always surprises us how difficult it is for otherwise capable and decent leaders to come to terms with abolishing these well-known self-imposed barriers to sustainable high performance and serial success.
Coming to terms with reality, no matter how painful that reality may be, is something leaders must find the strength to do. Getting the organization to rally around a call to action and calibrate on the need to transform takes time, energy, determination and strong character. Giving people, at all levels, the truth, and trusting they will respond in kind, is an act of leadership courage and it provides the fuel to carry on with fierce resolve and unwavering determination. It is at this point the organization will experience the first of two big “dips” in the transformational journey. To quote the author Seth Godin, these “dips” are the necessary rite of passage we must go through on the journey to excellence and high performance. They must be embraced as part of the journey, which is not a straight line, but rather a choppy, uneven and turbulent progression.

Developing Deep Resolve …
Phase 2 is the “Beginning to Perform Phase” of the transformational journey, and it also has three distinct passages. Leaders often make the mistake of believing they can muscle their way through this phase and, by way of sheer will and determination, force the organization to speed up and get to high performance in a much shorter period of time than it really takes.
This is a fundamental flaw in judgment which has caused many a good leader to fail, and many a good organization to crash and burn. It is like the parable of Icarus who ignores his father’s advice and, out of abundant hubris and misguided ego, flies too close to the sun only to fall from the sky to his predicable death.

PASSAGE # 4 – PREPARATION
Every successful journey begins with good planning and preparation. In the case of organizational transformation, this is about planning and preparing for the surprises, setbacks and struggles you will experience along the way.
Preparation, in this sense, is not about eliminating or even mitigating all the risks and trying to chart a certain path.

It is the exact opposite!

It is about developing mindsets, attitudes, beliefs and behaviours that will allow you to cope with the “curve balls” which you will face. Too many leaders believe they must control the process in great detail when, in fact, the focus should be on preparing people to be tenacious, resilient and adaptive to ongoing change.

Delayed Gratification …
This is the half way point in the transformational journey. The people have committed, the leadership team has calibrated, and the organization has been primed and prepared for the journey – including the inventible dips it will encounter along the way. Culture and values have been cemented deep into the organizational tissue, and the vitally important and influential middle management group has been galvanized.

Now the real work begins!

PASSAGE # 5 – EARLY SUCCESS
Human nature is a truly strange and unpredictable beast. Amongst our many quirks is a tendency to want to get past the bad as soon as we can in order to get back to the good. In organizational transformation, this human trait needs to be tempered if you want the breakthroughs that are possible in true transformation.
Simply put, you have to avoid the desire to declare victory too soon!
True transformation takes time and, while you certainly want early success, you need to be careful to not overplay those successes, and think they are guarantees that you are safely on the road. The fact of the matter is, those early successes are probably just bringing you back to a baseline you should have been at in the first place.
The truly great transformational leaders know the hard work needed is much more than simply gathering the low hanging fruit. They tap into the positive energy flow, but use it to push ahead more boldly, resisting the tyranny of complacency at every turn.

Dealing with the Funk …
It has often been accepted as gospel that people hate change. The trouble is, that is just not true, but instead an unsophisticated form of popular folklore. The truth of the matter is, people hate the emotions triggered by uncertainty and fear. As a result, there is a base human response to the passage through the Early Success stage that creates a tendency to plateau. People want to coast. To put it another way, they want a rest from the fearless pressure of the uncertainty monster and they pause for a time-out that can last for quite a while if you are not careful.

PASSAGE # 6 – THE PLATEAU
At this point, leaders of the organization on a transformational journey need to pay very special attention to the organizational pulse. They have to sense the early signs of an emerging plateau and get ahead of it. The narrative within the organization needs to change and, truth be told, some changes in key people will very likely have to be made.
Senior leaders must take careful and objective stock of their people and their capacity to shift into yet another higher gear. The skills and aptitudes needed from this point on will change, and wise leaders play it differently. Rather than slowing down when a corner approaches, they shift gears and accelerate into the turn. This decision is what allows the organization to catapult ahead, and avoid a prolonged drift sideways.

Preparing for Battle …
We have now entered Phase 3, “The Determination Phase” . This is the portion of the journey that will either allow the organization to realize its true potential, and reap a dividend on its transformational agenda, or enter a period of decline and probably death.
Organizations that have been successful in navigating this part of the journey have all tended to go on and achieve a level of sustainably superior performance that most others can only envy from a distance. This is rarified territory, and it can only be claimed by those who have:
. Taken the long view and avoided short-term temptations
. Operated according to a clear set of values and guiding principles
. Honed their Talent IQ and really learned how to get the most out of people
. Banished complacency from every single pore of the organization
. Transformed who they are, what they have to offer, and how they go to market
. Evolved ahead of the curve rather than having the future catch them by surprise

PASSAGE # 7 – THE CRISIS
Organizations that embark on a transformational journey are taking a risk. They know the path to success is not a straight line and there will be setbacks along the way. In a world filled with turbulence and uncertainty, it is safe to assume that, at some point, the resolve of a transforming organization will be tested by an event not of their own choosing, and most likely occurring at a time of great inconvenience.
This crisis, whether internally or externally generated, is a true moment of reality for the organization, and will determine whether the heavy lifting done up to that point has helped the organization develop the new muscles necessary to break through.

Taking the Hill …
As the organization survives the crisis, it emerges stronger, more confident and more capable of tackling the last leg of the transformational journey. This is the same type of boost a spacecraft gets as it rounds the moon and catapults back toward earth. The energy created is used to help the organization propel itself forward.

PASSAGE # 8 – TRACTION
You know that wonderful feeling of relief when the wheels of your car grip the road in the midst of a snow storm, and allow you to avoid getting stuck. The traction phase of organizational transformation creates the same feeling. The leaders gain a stronger sense of imminent success and the body of the organization responds in kind, putting its shoulder to the wheel.
Traction allows everything to just seem easier and to come more naturally. The barriers, burdens and hurdles seem to melt away, and the organization picks up speed as it feeds off its newly cemented confidence. This is the moment you have worked for and, while not without its own perils and hard work, it takes place within a new climate of focused commitment and fierce resolve.
Savour this moment as the reward for all the hard work done along the way but, rather than coast, put your foot to the floor and accelerate.

Finding the Groove …
The organization deserves a reward for all its efforts, trials, tribulations and hard work. The leaders have taken their people through a difficult and tumultuous journey. The prize at the end is an organization that is firing on all cylinders, with good balance, sound perspective and growing capability. The fundamentals have been tackled to the ground and the people, policies and processes are all delivering as hoped for. The organization has become a smooth running engine, and now the task changes once again as it enters the final passage.

PASSAGE # 9 – SUSTAINABILITY

Sustaining success is hard work!

While it may be the end of the transformational journey, it’s not the end of the hard work. The work may be different, but it is equally challenging and by no means is sustainable success guaranteed. It must be earned and re-earned everyday, in every way, by every person. Keeping the organization on its forward trajectory requires constant care, attention and fortitude.
The leaders must be vigilant like never before. They must remain alert to the tell-tale signs of moving backwards. They must continue to make big changes on many fronts, but the energy required should be less and the ease of execution should be greater. Staying in a good place means staying alert to the slow re-emergence of bad habits.

Steps to Take :: Actions to Consider
The decision to embark on a truly transformational journey should not be taken lightly. The leaders must commit to seeing it through and must understand there are predictable passages they need to navigate along the way. Promises should be few, and guarantees abolished. No transformational leader can allow ego and bravado to take control of them, their actions or their words. The promises should only be about the hard work that lies ahead and the reward at the end of the tunnel. Realism and truth must become the order of the day and the touchstone for the behaviour of leaders – at all levels.
The leaders can and should lay out the broad strokes, but avoid the temptation to offer the fine detail to those who cannot exist inside the cloud of uncertainty and ambiguity. They should set the compass heading, but avoid handing out the detailed road maps that many people will be demanding.
The leader must appeal to heart over head.
Here are some things to think about, as you begin to consider what’s next.

BUILD THE GUIDING COALITION
Your first task is picking the team. There is a huge difference between the operating team you may need to keep the business running, and a transformation team whose job it will be to reimagine the future. The skills and aptitudes are different but, most significantly, it is the mindsets and attitudes that are different. The leader must draft wisely, and from all levels of the organization, when putting together a truly whole brained, cross functional and cross disciplinary group of advisors and agents.

BRING THE COALITION INSIDE THE TENT
Your first act of courage will be to trust the coalition with an open, honest assessment of where the organization currently stands and the obstacles and imminent risks it faces. The leader must be willing to pull back the veil and call things as they really are. There can be no room for obfuscation or gilding the lily – it’s the straight goods, raw and ugly, that must be put on the table.

EMBARK ON A DIALOGUE OF DISCOVERY
Members of the guiding coalition must be given a clear choice – join the battle or step aside. This must truly be a coalition of the willing, and the willingness must be to break the old model apart and start with a blank sheet of paper. There can be no room for biases, sacred cows or antique paradigms. The task must be undertaken as it was in the movie Apollo 13, where the entire mission was about getting the ship back to earth.

FOCUS YOUR ENERGY AND RESOURCES
Decide what really matters and what will have the biggest impact. Do the hard work first and forget about the pseudo benefits of “low hanging fruit”. The journey will not be determined by early wins, but rather by new choices about the stuff that really counts. Strip away the excuses and face the demons.

EMULATE CHURCHILL
Take control of the narrative. Lead from the front and talk to the organization in real terms, appealing to emotions and setting expectations realistically. Accept any help that anyone can offer and recruit volunteers to the cause. Remember that your words will carry extra meaning, and that words matter. Pick those words that will resonant in their simplicity and common sense. Present the facts in all their dirty glory and, most importantly, offer hope while promising hard work.

Solving Canada’s Business Crisis – The Brutal Facts

Download as PDF

Download as PDF

In Our View …
It has become increasingly obvious, to those who watch the global economic scene, that Canada is at serious risk of becoming a marginal player on the world business stage. There are many complex and historical reasons for this, but chief amongst them is the fact our long standing “deficit of ambition” has finally caught up with us. Our luck and good fortune have evaporated, and complacency has conspired to put us at a disadvantage in a world where drive, innovation and urgency have become the touchstones for business and economic success.
In my new book “Straight Talk on Leadership -Solving Canada’s Business Crisis”, I provide both a diagnosis as well as a prescription for this predicament. In this edition of Navigate, I draw upon data and research which not only reinforces my concern, but sharpens the perspective and adds weight to my arguments – for those who might otherwise reject the core premise.

Amongst those who have arrived at virtually the same conclusion are:

Deloitte – The Future of Productivity Report I OECD – Economic Survey I World Economic Forum Conference Board of Canada – How Canada Performs I Martin Prosperity Institute The Institute for Competitiveness and Prosperity

Canada desperately needs its business leaders to wake up from their self-induced slumber, and join together in a dialogue of national economic renewal in order to chart a national economic plan for the future. The issue, as I attempt to scope it here, is not so much a criticism of how well we are doing, or have done, but how well we are living up to our potential to perform even better. It is by that measure that virtually all experts agree we are in decline.
It is our competitiveness gap. It is our prosperity gap. It is our national dilemma.

The Productivity Challenge …

When it comes to their own businesses, leaders generally understand the minute details and special dynamics of organizational productivity. They intuitively appreciate how the various interrelated inputs lead to the eventual outputs. They understand how paying careful attention to each part of the value chain can impact the bottom line. Somehow, when it comes to the national economy, the pursuit of our collective long-term interests, and improving the overall performance of the consolidated Balance Sheet and P & L, we fall victim to a severe case of “best practice amnesia”. Productivity improvement suddenly becomes an unspoken, complex mystery we choose to ignore rather than address.
There is no shortage of reputable business leaders and organizations sounding the alarm bell about the decline in relative productivity we have allowed the country to fall victim to.

Here are just a few quotes from Deloitte’s “The Future of Productivity Report”.

“A finite window of opportunity is presented by today’s promising economic conditions. To capitalize on this window of opportunity, business leaders must fundamentally re-examine their attitudes towards intelligent risk to ensure their future competitiveness.”

“A significant portion of Canadian firms mistakenly believe they are making competitive levels of investment when they are not -causing them to slip behind their peers.”

Canadian business leaders must wake up to the crisis we have created and work hard to overcome our national “deficit of ambition” which is causing us to cruise on auto pilot when we should be surging forward with fierce resolve and boundless energy.

Declining Advantage …
There will be many Canadians (and no doubt many business leaders) who will read this and deny the existence of any problem whatsoever. They will charge hyperbole, exaggeration and overstatement. They will point to how well Canada came through the recent global economic crisis, the strength of our banking system, and the fact our national budget deficit would be the envy of many. In fact, they may not take kindly to any suggestion at all that Canada is falling in global presence and relevance.
Canada’s Comparative Productivity vs. the U.S.A.
Mid – 1980’s 91%
Today 80%
Average Workers Contribution to GDP per hour
USA $60.77
Canada $47.66
Source: Deloitte – The Future of Productivity Report

Unless we take aggressive steps, right now, to reverse this trend, we will not only become even less competitive on the expanding global scene, but we will no longer even be able to compete within the slowly shrinking confines of North America. At that point, our proximity to the vast US market will have gone from being an advantage to becoming our biggest curse.
We need the courage to lead ourselves out of the wilderness of rapidly diminishing relevance, and it must be business leaders, not governments, who show this leadership.

The New Creative Destruction

It was back in the 1930’s the expression “creative destruction” was coined to describe the natural process of economic renewal and regeneration which underpins the passage from one economic era to another. Joseph Schumpeter’s principle showed how organizations (and also countries) move along a continuum on which, as they mature. They eventually come to a point where they have a choice to make – adapt, transform, reinvent or die!

In the case of Canada, the evidence would seem to indicate that forces have conspired against us. It’s time for business leaders to heed the call of the mounting evidence, and shift from chronic mediocrity to hypercompetitiveness.

The Yanks and Us and Others …
Sleeping next to a giant has both its benefits and its disadvantages. It has been Canada’s good fortune, during a period of American economic dominance, that we could easily trade with our cousins to the south without any of the cultural, linguistic or other barriers the rest of the world might put in our way. We rode the American jet stream for all it was worth, and for Canadian businesses, it provided a comfortable, reliable source of growth.
Growth is not so easy to achieve in the new world order, and it will certainly not just come to us, we will have to go out and get it – the hard way! While it can be tiresome to constantly benchmark ourselves against the USA, it does offer a sharp contrast to sober our reality, especially when it comes to labour productivity growth.
This measure of relative competitiveness has been in decline for many years. In the early 1980’s, the US and Canada were in an almost dead heat when it came to productivity. However, for 30 years now, the rate of growth in GDP generated per hour in Canada has been slower than in the US, and the gap has consistently widened.
Today, our productivity per worker is only 78.3% of the USA.

GDP per hour (2012)
Norway – $74.88 I USA – $63.22 I Australia – $54.86 I Canada – $50.25

Countries with Labour Productivity Growth greater than Canada
Korea I Russia I Czech Republic I Hungary I USA I Sweden I Japan I Austria
Finland I Israel I UK I Australia I Spain I Portugal
France I Belgium I Germany

The Widening Investment Gap …
Canadian companies appear to be afraid of growth or, at a minimum, simply don’t know how to chase it or maintain it as a necessary part of sustainable business success. According to The World Bank, it is easier to start a business in Canada than almost anywhere else in the world (except New Zealand and Australia). However, the evidence suggests we have a huge challenge when it comes to growing our businesses into significant size and scale.
Deloitte’s “The Future of Productivity Report” puts it very well (if all too painfully) when they suggest our problem is the fact we seem to excel at “turning our gazelles into water buffaloes”. According to Statistics Canada (June 2011), this inability to grow from a small to a medium sized business in Canada is most starkly revealed in the underperformance of our medium sized companies. While our large and small businesses do their share to contribute to GDP, it is the nascent medium sized businesses that are letting us down.

Contribution to GDP by firm size
Large Business – 45.7% I Small Business – 41.9% I Medium Business – 12.4%

A study of companies who have crossed the five year threshold of existence shows that, amongst the OECD countries, only 2.66% of all our Services firms and 3.16% of our Manufacturing firms would be considered high growth by world standards.
This dismal result places us squarely in the bottom quartile of all OECD countries.

Services firms – Considered high growth
Canada 2.666%
Netherlands 3.66%
Sweden 4.91%

Manufacturing firms – Considered high growth
Canada 3.16%
Israel 4.50%
USA 5.71%

The Importance of SME’s …
Canadians are not as well informed as they should be about the composition of our national business foundation. This leads to misconceptions and misunderstandings about what actually makes business tick in our country. We are too easily influenced, and perhaps enamored, by the big companies which make the headlines (BlackBerry, most recently) or by the huge profits of the big banks (every Quarter). The fact of the matter is, Canada is actually more a nation of shopkeepers and small business operators than of corporate giants of global repute.
The difference is important in terms of understanding how employment is created, how export trade is done and how policy is set to encourage growth and investment.
Here are some key statistics from StatsCan and Industry Canada as at July 2012:
• Number of employer businesses – 1,122,000
• Number of small businesses (fewer than 100 employees) – 1,100,000
• Percentage of Canadian businesses with fewer than 100 employees – 98%
• Percentage of all businesses considered Good Producing – 22.7%
• Percentage of all businesses considered Service Producing – 77.3%
• Small business contribution to GDP – 30%
• Percentage of total Labour Force in small business – 48%
• Survival rate of small businesses after 5 years – 51%
• Percentage of small businesses owned by women – 17%

At the top end of the market, even our largest companies are virtual minnows when it comes to the number of employees they have compared to the USA.

Top 50 Firms by Employees (Average Number)
Canada – 43,000 I USA – 249,000

Entrepreneurship in Canada …
It has long been felt Canadians are more risk averse than our American cousins and, when it comes to business, the evidence is compelling. Two bits of data support this.

Deloitte’s Executive Risk Behaviour Index
(Measuring the relative risk appetite of business leaders)
Canada 47.4%
USA 57.7%

In short, we abhor risk and hate uncertainty, and wonder why our success is tempered!

StatsCan / Industry Canada Survey of Business – 2011
(Noting the most frequently cited obstacles to innovation)
Risk and Uncertainty – 47%
Lack of Skills – 28%
External Financing – 25%
Regulatory issues – 18%

Interestingly, the most popularly reported barriers to business success (lack of access to financing and the burden of regulatory compliance), when combined, still comprise less of a burden than does plain, simple, old fashioned fear of risk and uncertainty. In a world where risk and uncertainty are on the rise, it is hard to imagine how Canadian business can survive, let alone thrive, unless we stiffen our spine and begin to develop a tolerance for ambiguity.
Canada’s fear of global trade, which can be measured by the comparatively few Trade Agreements we have entered into, is another factor holding us back.

Number of Free Trade Agreements in Place
European Union Countries – 70 I Chile – 52 I Mexico – 44 Singapore – 24 I USA – 17 Canada – 10

Death by Starvation ….
It seems, from the OECD Report on Research and Development, that Canadian business invests less in business R & D than the OECD average. In fact, our fear of the unknown and love of certainty, result in us investing less than 1% of GDP, when the OECD average is 1.6%.

This means we rank behind the following countries:

Israel 3.4% I Korea 2.8% I Finland 2.7% I Denmark 2.1%
USA 1.9% I Belgium 1.3% I Australia 1.3%

It also means we are in the bottom quartile, along with countries such as:
Italy .7% I Hungary .7% I Portugal .7% I Estonia .8%

Another revealing fact, from the same OECD Report, shows the rate of R & D investment (when compared to the 27 OECD countries) actually gets worse by size of company. In other words, our ranking falls the bigger the company size.
• Small firms (fewer than 50 employees) – Canada ranks 8th out of 27
• Medium sized firms (50 – 250 employees) – Canada ranks 15th out of 27

• Large firms (more than 250 employees) – Canada ranks 16th out of 27
This tells us the bigger we get, the more we starve ourselves to death!

Steps to Take :: Actions to Consider
We have much to be grateful for in Canada. No one can take that away from us. We remain a sought after destination for many less fortunate in their homelands, who choose to come to our shores in search of opportunity, tolerance and justice. Unfortunately, the lustre is off the promise and, in relative terms, we are slipping backwards. In the words of Deloitte’s “The Future of Productivity Report”, “Canadian companies accept the traditional progression as inevitable, blaming their eventual decline on circumstances beyond their control”. It need not be that way!

Wake-up Canada
We need to banish our overconfidence and complacency. According to Deloitte’s report, a stunning 36% of Canadian companies actually believe they are doing better than they really are, while another 17% know they are underperforming and don’t care. Somewhere along the line, we need to enter into an adult conversation with ourselves, bereft of clouded judgment, over confidence, delusion and naiveté.

Think Fast Forward
The past is no guarantee of success, especially in a world shaken by new forces, both economic and social. While the rose coloured glasses of nostalgia may provide some comfort on a cold night, they will not help us envision a path forward. We are going to live in the future whether we like it or not, so better we design the future than become captives to someone else’s design.

The World is our Oyster
The Canadian brand resonates everywhere in the world, but if we don’t leverage our brand, the inherent value will be lost. It’s time for Canadian business to be bold and venture off the safe confines of North America. We will find friends and customers elsewhere, waiting to accept us as partners in shared success and growth.

Build Global Leaders
The world of business is a global business, and Canada needs to develop young leaders who are both willing and capable of innovating and being as comfortable in Dubai as Detroit, Mumbai as Miami, and Hong Kong as Hollywood. We have not done a good job of preparing for the global economy when it comes to our leadership bench strength and, while it is overdue, it’s not too late.

Plan the Attack
Canada needs a Strategic Plan. We have outsourced our national economic future to elected officials and bureaucrats who may be well intentioned, but are even less qualified than our business leaders. The country has good minds and original thinkers and it’s time to harness them, for the sake of our country, and ask them to put the future of their nation ahead of their self interest. It will not be easy, but then nothing worthwhile ever is!

Place Smart Bets
While Canada is large in terms of geography, we are small in terms of population. We have to conserve our resources, and apply logic and common sense to the choices we make. Like every Canadian family, we can’t always have everything we want and we have to make choices. No one has a crystal ball, and some choices will require risk, but we are better to place a select number of wise portfolio bets, rather than ride the risk free route to average results in a world that demands more and rewards the brave.

Execute with Brutal Determination
Throughout history, Canadians have risen to the challenges facing them time and time again. We will have to do it once more. It is part of the Canadian DNA to dig in and fight when the chips are down. There can be no corner of Canada left behind. We need all Canadians to put their shoulder to the wheel. All that remains is for someone to give us a solid business case and a good cause.

The Clock Is Ticking on Leadership

 

download as pdf

download as pdf

The Clock is Ticking on Leadership

In Our View …

Leadership may very well be the second oldest profession in the world, but we still seem to have a dire shortage of good leaders at the very time we need them most. One reason for this is the fact the value of leadership has become seriously diluted by a continuing decline in the level of trust we all have in our organizations. This is true for both private and public organizations, and in their leaders whether elected or appointed.

We can cite two sources of evidence for this contention.

  • Edelman’s Trust Barometer, which shows than only one in five respondents in their 2013 survey believes a business or governmental leader will actually tell the truth when confronted with a difficult issue. Edelman is the world’s largest Public Relations firm.
  • Gallup’s “Confidence in Institutions Study”, which shows a terrifying decline in trust from the 1970’s, revealing double digit declines in sectors as diverse as the medical system, big business, public schools, newspapers and organized religion. Gallup is a global leader in research and analytics.
  • This cannot continue, and those of us who believe leadership is both a sacred trust and a privilege must take steps to turn the tide of declining trust. To do so, we must not shy away from holding our leaders to the highest standards of competency, character and capability that we can. In this edition of Navigate the Future we suggest one possible model.

    Yours truly,

    R. Douglas Williamson
    President & CEO

    Setting the Stage for Leadership …

    Our work provides privileged access to organizations of all types, and their leaders – at all levels. We get to see them “up close and personal” as they navigate through periods of transformation and change and, as a result, we see first-hand what they face. While each organization is different, the issues and challenges they encounter are stunningly similar.

    The list looks something like this:

  • Lack of a full understanding of the organizational objectives
  • Lack of clarity around how decisions get made and why they are made
  • Gaps in cascading of information from the top to the bottom
  • Gaps in accountability for performance at all levels

    We firmly believe that while the tone is set from the top, the real impetus for change comes from a powerful combination of customers on the outside and middle management from within. These two “constituencies” are the barometer by which we evaluate whether a senior leadership team has the currency of trust it needs to steward the organization through the choppy waters of change.
    Without the full and enthusiastic support of these two groups, leaders simply will not have permission to lead in the way they must to make the changes that ensure continued relevance. 

    It is an Issue of Credibility …

    We may be wrong, but it seems to us the essential building block for trust lies in the credibility of those who are asked to be our leaders. It may be simplistic, but without credibility, senior leaders will not have the currency they need to finance the changes. In other words, without a large pool of goodwill in the form of credibility, there will be no support, or at least not enough support, to allow the leader to spend on driving deep organizational transformation.
    Simply put – the power to lead is granted by the people in direct proportion to the permission they give the leaders, based on the credibility they have earned.
    This definition of leadership turns the thinking of many people on its head, and yet it is exactly the type of change in perspective we need in order to rebuild the lost levels of trust which we are witnessing in far too many places.
    It begs the question of how, then, do you build credibility?

    The answer is through:

  • Transparency – the worst truth is still better than the best lie
  • Diversity – of input in order to examine contradictory points of view
  • Empathy – listening without judgment and connecting on a human level
  • Decision Making – focusing on the “how” and not just the “what”

    Define the Meaningful Opportunity …

    The fact is, people prefer to follow causes, rather than leaders. Yet, somehow, in a world infatuated with charisma and the cult of powerful personalities, we have forgotten this very basic rule of how followership is created. It is more than semantics, and it is the foundation on which leadership trust and credibility is formed.

    Leaders everywhere would be well advised to return to basics and consider how they can create a cause worth fighting for as a means to engage their people, drive change and elicit the discretionary investment that lies untapped within the souls of their employees.

    Inevitably, this means making deliberate choices about:

  • What really matters and will make a difference
  • What wicked market problems they are trying to solve
  • What barriers are getting in the way which need to be demolished
  • What the end result will look like and how to make it compelling for everyone

    To put it simply – leaders must lead from the outside in, and take an honest, objective, external view of the markets they serve and the customers they covet. They must then shape their ambition as a cause around which people can engage with passion and purpose.

    Hone Your Perceptual Acuity …

    Leaders are not meant to be the smartest people in the organization, but they are meant to be able to assemble a whole brained team which collectively is brilliant in both how they think and how they execute. All too often, leaders fall short on both accounts.

  • They fail to demand the highest levels of strategic thinking acumen.
  • They fail to demand full, clear accountability for excellence in execution.

    The end result is mediocrity.

    The tonic for breaking out of this vicious cycle of doom and decay is for senior leaders to do a much better job of honing their ability to anticipate the future, or what we like to refer to as the ability to pick up the “faint signals from the periphery”.

    This focus on perceptual acuity demands several cognitive aptitudes:

  • Spotting the anomalies and/or gaps in the market
  • Cutting through complexity to see the core issues with crystal clarity
  • Combining multiple variables into a coherent picture of the possible future
  • Building scenarios which allow the opportunities to be examined in detail

    The basic premise behind improving perceptual acuity is that victory will go not to whoever is the smartest or the richest, but rather to those who can spot opportunities ahead of everyone else and shape the market as a result.

    Decide What Business You Are Really In …

    It may seem like a silly question for a leader to pose, but do you really know what business your organization is in? Perhaps your organizational cataracts are blurring your vison and things are not quite as clear as they were even a few years ago. In case you have not noticed, things have changed, and looking through a new set of lenses may be the smartest thing you can do to ensure continued relevance.
    In today’s world, the customer is King, Queen and Emperor all in one. They determine what they need and what they want, and they have a rapidly declining tolerance for anyone or anything that does not meet their standards. It may very well be that what they want from you has changed, in ways you do not fully understand or appreciate.

    Leaders need to be able to see through the thick walls of complacency, convention and custom, and ask some really tough, probing questions aimed at reframing the very nature of their core business proposition. Questions like the following:

  • Where are we truly differentiated from our competitors?
  • What unmet needs do our clients not know they actually have?
  • How can we sharpen our focus on a fewer number of real distinctions?
  • Which parts of our business can we walk away from to free up capacity?

    In today’s world, a leader needs to be able to see through to the very essence of what they are offering, they have to focus on what’s inside and not get confused by the wrapper.

    Improve Your Judgment & Decisions …

    We all like to think we are better than we really are, it is a natural part of the human condition. In business, however, it can be especially fatal. An organization’s value rises or falls on the sum total of all the decisions (big and small) made by all of its people over time. Consequently, it would seem logical that senior leaders pay far more attention to the judgment behind the decisions they and their people make.

    But they don’t!

    In fact, one of the most common symptoms of organizational under performance both we and others see, lies in the realm of the decision making process and the organization’s inability to make brilliant decisions quickly, rather than mediocre decisions slowly. This is a disease with a known cure, and all it takes is a leader willing to call it out and do something about it.
    Here are just some of the things you can do to get better at making crucial judgments:

  • Build a more diverse set of perspectives through which to frame decisions.
  • Focus on the assumptions which go into the premise behind your view.
  • Carefully think through the consequences, both intended and otherwise.
  • Always search for more than one “right” answer.

    Remember – you are only as good as your last great decision.

    Get the Balance Right …

    It is tough to be a great leader, and it’s going to get even tougher, whether we like it or not. The interconnected world of global commerce is changing in so many dramatic ways, even the very best leaders cannot forecast what the future will look like.

    So what can we do?

  • Should we put more resources into better forecasting?
  • Should we collect more data to help prove we are right?
  • Should we hold more focus groups to make sure we are on track?

    We don’t think so!

    In our view, the ability to remain relevant does not come from the deep, dark well of more facts and additional empirical evidence, it comes from touch and feel and intuition. This means that leaders need to re-examine how they spend their time and where they choose to focus their attention.
    Inevitably, this means:

  • Deciding on the “right” short term vs. long term priorities.
  • Determining the “right” vital few key levers to generate momentum.
  • Making smart investments in the future potential of the “right” people.

    Focus on the Culture & Values …

    Identity matters.
    Brand matters.
    Behaviours matter.

    Leaders would be well advised to be more determined and resolute in acknowledging the role they must play, and the responsibility they have, in shaping the environment in which their leaders and people are being asked to operate. In a word – the culture!

    Too many leaders are allowed to pay lip service to the culture file, and few have the courage, will and character to exercise their authority in an area which should be a principal domain of the most senior leader. You simply cannot outsource the culture file to other executives if you want to fulfill your mandate as the CEO.

    Culture is just as much a part of the governance and organizational effectiveness structure as finance, legal, technology, etc., but seldom does it receive the same deep focus and sharp attention the others get.

    We know the reasons why!

  • It is elusive to codify
  • It is hard to quantify and measure
  • It is messy and full of people problems

    Beware the devil you do not understand, it may eat you alive!

    Steps to Take :: Actions to Consider

    Ignorance is not an excuse at the best of times, and in today’s world of readily accessible information, it is simply not acceptable for any leader to remain uninformed, ill-informed or misinformed about the environment in which they operate.

    The secrets of great leadership and high performance are not locked in a vault, accessible only to those with a secret key. In fact, there are no mysteries yet to be unveiled when it comes to excellence in leadership and the nature of superior performance.

    The challenge lies not in the availability of answers, but rather in the:

  • Deficits of candour, courage and ambition
  • Lack of willingness to ask the tough, insightful questions
  • Fear of doing the hard work necessary to make things better
  • Resistance to change, bred out of comfort with the status quo

    Here are some things to consider …

    Get Outside

    Leaders need to get out of their comfort zone and, for most of them, that means getting to the “coal face” where the real people and the real customers live. Fly by visits are not the answer, the leader of the future has to be willing to dig in and find creative ways to really interact with the people who have the insights they need to drive the changes they want.

    Shake it Up

    Boredom is a habit that is acquired by those who expect others to do things for them. There is no shortage of work to be done, challenges to face, problems to solve and ideas to be explored. The great leaders we know of are restless by nature and dissatisfied by temperament. There is no time like the present for the senior leader to take on the role of the Chief Agitator, or the Chief Rabble Rouser or the Chief Chaos Creator.

    Don’t Be Afraid of the Truth

    Leaders can hide for a short time, but they cannot hide forever. The truth is liberating, if you have confidence in your ability to stare it in the face. Too many leaders allow themselves to live with the knowledge there is a gap between what they hear and what they feel. The great leaders are never afraid of knowing where they stand, because they know that moving forward is inevitable, no matter how inconvenient.

    Connect in Real Time

    We live in a fast paced digital world, and yet too many leaders still rely on their analog channels to connect them to the real world. Leaders need to get with the times and adopt practices that shorten the time period between messages sent and messages received. Throw out you transistor radio and get with the times!

    Make a Difference

    The value of leaders comes not from what they manage, but how they lead. Every leader needs to be guided and fueled by a deep inner passion about something (anything). Vanilla leadership is not what today’s more challenging environment demands, so get out there and find something meaningful to do.

  • Lessons in Team Leadership from Sochi

    download as PDF

    download as PDF

    **Drafting a Winning Team …**
    Seldom is success a solitary effort. Even in those sports which appear to be individual in nature, there is a background team of trainers, nutritionists and psychologists – all of whom contribute. In business, the same can be said, but seldom is the same degree of care put into developing the “right” business leadership team.
    It’s all too common to hear complaints (sometimes verging on adult whining) about lack of alignment and inadequate collaboration as the source for under performance. Why do so many leaders seem mystified by the mechanics of team work, and fail to understand they control their choices and, therefore, the outcomes?
    Let’s look at some facts:
    • Teams are built through hard work over time
    • Teams require clear roles and responsibilities to succeed
    • Teams need to understand the “decision rights” within the team
    • Teams are based on a mix of individual and collective accountabilities
    We have largely failed to make the science of building a winning team a critical
    leadership competency. Instead, we continue to rely upon broken systems and
    practices that lead to teams that are set up for underperformance from the get go.

    Meticulous Preparation …
    Success comes from a combination of different sources, typically a cocktail that
    includes equal parts hard work, effort, timing and luck. The first two ingredients set the groundwork for the moment when opportunity presents itself and the organization and its leaders swing into action. In sports and business “getting ready to win” is as important to ultimate victory as playing the game itself. Despite this, leadership teams rarely prepare in the way they should.
    Just ask yourself the following questions:
    • How much practice time does your team allocate?
    • How well organized and planned are the practices you do hold?
    • How much do you work on perfecting your “special teams” and “plays”?
    • How fit is the team, and what are you doing to improve the level of fitness?
    It might seem like a throwback to the values and beliefs of an earlier age to suggest that hard work matters, but the truth is – it does!
    Successful teams prepare to be successful and, while there is nothing glamorous about the preparation phase of the journey to victory, the gold medal winners know there are no shortcuts. The gruelling, boring preparation is all part of putting yourself in a position to excel when it really matters.

    The Role of Culture …
    A study of serially successful winning teams will quickly and convincingly reveal the importance culture and chemistry play in ensuring victory. These are not mysterious secrets locked deep in an underground vault. Simply put, they are the basic, common sense rules of success.
    Culture matters, despite how often it is ignored or dismissed by leaders who look down their nose at the “soft skills”, and prefer instead to puff up their egos with macho locker room banter about the value of the “hard stuff”. It is disturbing to witness the naïve talk of leaders who refuse to accept that success occurs within a context, and is the direct result of time spent creating the “winning conditions”. Success is the outcome – culture,
    chemistry and the other “soft skills” are all part of the inputs. Garbage in – garbage out!
    The external market conditions, the pace of technological change and the nature of societal and demographic change all conspire to make organizational culture an even bigger and more important priority than ever before. Leaders need to revisit their understanding of what culture means and the role it plays. Some common myths need to be punctured.
    • The myth that culture is something HR looks after – wrong
    • The myth that culture is about employee engagement – wrong
    • The myth that culture is linked to compensation and benefits – wrong
    • The myth that culture is elusive and cannot be proactively shaped – wrong
    It’s time to grow up and place the elephant of culture on the leadership table.

    Heart as Human Jet Fuel …
    We seem to have come to the mistaken belief emotion has no place in the workplace and must be banished. This absolves too many leaders of the need to hone their skills of managing emotions, both their own and those of their teams. It provides a convenient excuse behind which some leaders hide. In the process, it deprives their organizations of a source of positive energy that can be put to very good use.
    Emotions matter – in both business and sport!
    In fact, emotions, including passion, drive, competitive spirit and determination, are all necessary ingredients for success for any endeavour in which there are obstacles to overcome and challenges to meet. If you disagree, then ask yourself why both the American men’s and women’s hockey teams wilted under the pressure of important games in the recent Sochi Olympics.
    • Were they less talented? Not likely.
    • Were they less prepared? No, they were not.
    • Were they less well coached? Very, very unlikely.
    They wilted because their heart was not as big and their emotions were not as well channeled – especially when they met some adversity along the way.
    Heart matters – especially when you are tested.

    The Power of Determination …
    There are several important behaviors which leaders can leverage to get things done,to drive change and to overcome obstacles. However, the subject of determination, as an essential leadership trait, has not been studied in the way it deserves. The most important insights in this regard come from the work of Dr. Angela Duckworth at The University of Pennsylvania and her research into what she calls “grit” (and others might simply call determination). Professor Duckworth has identified an important breakthrough in our understanding
    of performance and what distinguishes one person over another. She reminds us that “smarts” on their own are not enough to drive success. The “grit” she talks about is something that is hard to define, but you know it when you see it!
    Associated with “grit” are the twin concepts of self-control and conscientiousness.
    Dr. Duckworth describes “grit” as the tendency of a person to sustain interest in, and effort toward, very long-term goals. Self-control is described as the voluntary regulation of behavioral, emotional, and attentional impulses in the presence of momentarily gratifying temptations or diversions.
    This powerful combination of personal attributes is what allows some people to push harder, strive higher and remain committed in the face of adversity. In today’s world of short-term thinking and endless distractions, these traits are perhaps the answer to managing some of the stresses we feel. They speak to the character of the leader and, while hard to measure empirically, they represent the intangibles that separate good from great, and success from mediocrity.

    Never Underestimate Lady Luck …
    All of the great leaders and leadership teams I have known, over thirty plus years, have benefitted from their share of good luck. In fact, if anyone ever tells you that there have not been times when they got a break, they are probably lying to you or are deluding themselves. Luck in business is about seizing opportunity when it presents itself.
    The great leadership teams we know and have studied over time have worked hard,
    every day, to make sure they are ready to grab opportunity from the table when it presents itself.
    • They have done the small things.
    • They have stuck to some core beliefs.
    • They have ground it out in the trenches, over and over again.
    Having done so, and having paid careful attention to the chemistry, culture and
    character of their leaders, they have been able to pounce quickly when opportunity presents itself. In the case of our women’s Olympic hockey team, a puck that luckily hits a goal post to keep the game against our American cousins close, ends up being the turning point that shifted the momentum and led to a win for the team that was behind going into the third period.
    As always, luck comes to those who are well prepared.

    Lessons from Adversity …
    Setbacks are a part of business life – some would argue a necessary part, if you
    believe we learn more from our failures than our success. Setbacks come in all sizes, shapes and forms, and they tend to present themselves at the most inopportune and inconvenient of times. Leaders can’t prevent surprises and setbacks, no matter how hard they try or how many processes, policies and procedures they put in place. Leaders are much better advised to build organizations that can bounce back from adversity quickly, rather than pretend they can erect walls to prevent setbacks.
    Resilience is a positive organizational trait, and you can build resilience into your organization in several different ways. The most important of these is instilling confidence in people that they will not be punished for their errors of either commission or omission. We can go even further and suggest that since mistakes and setbacks are inevitable, you should make them sooner rather than later in order to provide valuable learning and insights that can be built into the organizational architecture.
    To face adversity is to face the world as it is – imperfect, random and oftentimes paradoxical. Leaders who hesitate or, even worse, freeze in the face of adversity, are not likely to succeed in the long-term, because they create organizations which lack the resilience necessary to carry on. The author Seth Godin refers to these moments as “dips”, which represent the necessary tests along the road to success and serve to separate the worthy from the pretenders.

    Coaching from the Bench …
    Standing behind the bench of any great team is a great coach. Notice, they are found behind the bench (in support of their players), not in front, where the players deserve to be! If you had carefully watched both Mike Babcock and Kevin Dineen (the coaches of our two gold medal winning Team Canada hockey squads) as they skillfully guided their teams through the Olympic experience, you will have seen two leaders who never got too high and never got too low. In fact, their emotional tone and demeanor could have even been described as coldly neutral, but without doubt, they both feel something inside. It’s a matter of emotional control and perspective, two things that business leaders could learn to embrace.
    In addition, both of these coaches had confidence in their teams and a quiet confidence in the preparation leading up to important games. They understand that preparation
    matters, and that doing the hard work of “getting ready” is vitally important. Seldom do our business leaders commit to the same intensity of the preparation phase of work in the way they should.
    To make matters worse, they don’t always know how to manage the bench during the
    game. They are not attuned to the subtle signals which their players emit, and seldom do they trust their intuition on who to put into the game at just the right moment.
    Business leaders should act more like hockey coaches than commanding officers.

    Steps to Take :: Actions to Consider
    Canadians all across the country once again felt the pride of Vancouver 2010 as
    they watched Sochi unfold on their TV screens and web browsers. They marvelled at the success of athletes from all of the various winter sports (captured in the Twitter hashtag #we are winter), whether they were Canadian or otherwise. But, as always, we reserve our biggest boasts for hockey.
    We can honour all athletes by taking away lessons which can be applied in business just as well as they can on the snow or the ice. Lessons born not from academic textbooks, but rather lessons drawn from the well of common sense.
    The following are just some of those lessons.

    Build Teams of Leaders
    We have become infatuated with the cult of the superstar leader, the hero,
    the mythical men and women of unbounded charisma. The best organizations,
    however, focus on building a pipeline of leaders who know how to play on teams
    and who respect the name on the front of the jersey, not the name on the back.

    Get the Chemistry Right
    Too little attention is paid to the importance of chemistry when building teams.
    The collective result is what matters, and a team of A players does not always win over a team of B players who play with heart, pride and passion.

    Practice Hard – Practice Often
    Greatness does not just happen, it is built and earned through hard work and the
    constant search for mastery, which come from deep within. The great players
    always take practice seriously and, yet, in business, it is always the solitary
    superstars who refuse to practice with the team and see it as a waste of their time.

    Focus on Potential
    There are not very many superstars who are born – the majority are made! They
    evolve over time, based on a certain innate capability, but it has always been
    baked into them by parents, teachers, coaches and life experiences. Business
    leaders need to stop looking for the Sidney Crosby types and, instead, look
    for those who have the potential, but who need someone to help release it.

    Hire for Heart, Grit and Determination
    IQ is overrated as a determinant of success! At best, it is no more than one
    third of the total success equation, sitting alongside EQ and Character. Those
    leaders who perform best under pressure, and within the fog of ambiguity,
    tend to be those with more grit and determination than those with a fist full of
    degrees from Western, McGill or Harvard.

    Commit to Learning from Setbacks
    You can tell when a leader lies or misleads. One of the most heinous lies is
    about how mistakes are treated in the typical organization. The gap between
    rhetoric and reality in this domain can be huge and, while the spoken word
    says “stick your neck out and take a risk”, the daily code is the exact opposite
    and only the CEO is blind to the reality.

    The Devastating Cost of Bias in Leadership

    download as pdf

    download as pdf

    In Our View …
    The job of the business leader has never been an easy one and, with each cascading wave of change in the economic, technological and social environments, it gets even harder. The natural evolution of business requires the leadership “model” to change
    with the times and, so, the supporting competencies must change along with it.
    Unfortunately, leaders are failing to keep pace with these rapidly accelerating and
    unfamiliar changes, and find themselves ill-equipped for the challenges they face.

    The failure to reinvent has been the downfall of many a leader!

    Today, the complexity of markets and the rising demands on business can easily tempt
    even the best leader to become intoxicated with stockpiles of information, and overwhelmed if they do not keep a clear head. Leaders need to rise above the noise and distraction that surrounds them, and maintain their perspective and objectivity in the midst of unrelenting pressures.

    The question might very well be “What must the leader watch for?”. The answer would be “bias”. Bias in how they view the world, how they frame the challenges, how they
    arrive at decisions, and bias in their judgment, including their judgment of people.
    This issue of Navigate the Future™ is an attempt to help focus the minds of leaders on the toxic impact of bias, and explain the things which can be done to purge it.

    The Form and Nature of Bias …
    As shocking as it may be to admit, we all begin our professional lives imperfect in many different ways. Some of us work on our imperfections and become better over time. Some of us do not! The difference can depend on those we surround ourselves with and learn from, or it can be in how introspective and aware we are about our own faults and shortcomings. We have all seen leaders who are otherwise quite brilliant, but who succumb to the mysterious dark forces of delusion and denial. It is not only sad, but it is also very avoidable!

    Almost always, the failure to banish our imperfections causes us to fall short of our potential or, even worse, destroy the potential of others around us.
    • Bias is a leadership disease – it can cripple and kill.
    • It comes in various forms – often times well hidden from view.
    • Leaders who suffer from bias must take the first step – acknowledgement.
    Bias must be a significant problem in society because, if you Google “overcoming
    bias”, you get almost six million hits. You can go to www.overcomingbias.com, or
    any of the other bias related sites, but we wanted to share some thinking on what
    we consider to be the “Big Five” biases related to business leadership.

    Action-oriented Bias I Interest Bias I Pattern-recognition Bias
    Stability Bias I Social Bias

    There are many others, but for the bias novice – this is a good starting point!

    Action-oriented Bias …
    We have all seen instances when someone rushes into action and, in a “blink” (to quote Malcolm Gladwell), jumps to a conclusion because they feel compelled to act, as if driven by some crazy, internal force that defies logic to the more thoughtful.
    The often revered “Type A” leader is particularly vulnerable to this temptation.
    While there is certainly much to be admired in the bold and the brave, it would be a lot more comforting if we knew, for sure, they were not unwitting victims of a blinding bias that increased the odds of mistake and failure. The answer, however, is not to slow down and become more conservative or cautious, but rather to ensure they are not ignoring important sources of decision making bias, such as:

    • Excessive Optimism
    – wrapped in the thick fog of naïveté
    • Overconfidence
    – fueled by ego, bravado and machismo
    • Reckless Neglect
    – warped by the miscalculation of repercussions

    In the frenetic world in which we live, action is seen by some as the necessary antidote to the sins of procrastination and indecisiveness. Hats off to the speedy, the bold and the decisive, but if it is fuelled by hidden bias, the odds are a train wreck is on the horizon and the cost could can be catastrophic.
    Interest Bias …
    We all have personal interests and, sometimes, these interests can even contradict each other, as well as collide with the interests of others. The human condition is fraught with complexity based on either the misalignment or misunderstanding of interests. In business, the added layers of complexity can sometimes make it difficult to understand
    clashes of interest, let alone resolve them.

    Outstanding leaders have a knack for knowing how to navigate this hornets’ nest of twisted and conflicting interests. They are adept at seeking the common ground on which to build, no matter how small that ground might be. They, as great diplomats in business and politics, have always known how bridges of understanding can be built.

    The principle biases buried in the interest realm include:
    • Misaligned incentives
    – causing improper responses to stimuli
    • Inappropriate attachments
    – to things, emotions and old mental models
    • Misaligned perceptions of goals and outcomes
    – resulting in confusion and poor prioritization

    The art of building strong bonds of mutual interest is based on a belief that differences are healthy, positive and necessary when you are in pursuit of an optimal outcome. It is the energy inherent in the rub between conflicting forces that sparks the imagination, and fuels breakthrough thinking.

    Pattern-recognition Bias …
    Diversity of thought is the precious foundation on which to build innovative, game changing solutions to the wicked problems that perplex others who get caught in the tug of war between progress and nostalgia. The more people think in independent ways, the more likely they are to see something different in the same situation. It is this unique tapestry of perspectives that allows new insights to arise. Once presented, they
    can often be the answer to the crippling paradox that may have paralyzed conventional wisdom up to that point.

    Unfortunately, the fact people can see different patterns in the same picture (or business case) can be a double-edged sword. The wishful thinking of pattern recognition bias means people can be prone to seeing what they want to see.

    Pattern recognition biases come in many forms and disguises.
    • Confirmation bias
    – choosing only the facts which support a favoured belief
    • False analogies
    – drawing comparisons when none exist
    • Misleading experiences
    – revising history to draw different conclusions
    • Champion bias
    – falling into the hero worship trap

    Leaders need to draw out the biases by putting ideas and perceptions into open competition with one another. This flies in the face of the friendly collaboration mostleaders seek, which often turns out to be a thin veneer of civility wrapped around a core of mediocrity.

    Stability Bias …
    How sweet and peaceful life would be if there were no bumps in the road, no
    turbulence in flight, and no unexpected obstacles placed in our way. However, anyone who has been in business for more than a nanosecond knows that is a pipe dream!
    Yet – we still find leaders whose main purpose in life seems to be avoiding all surprises, eliminating all risk and injecting the need for absolute certainty into every vein of the organizational operating system. This preference for stability is a bias. It can not only add to the cost of unexpected events, but can cause the organization to be blindsided when the events of the future were actually predicable in advance.

    The psychology of stability bias can best be described by reference to its many faces.
    • Anchoring
    – to an old paradigm or practice that is false
    • Loss aversion
    – to overestimate the loss and underestimate the gain
    • Sunk cost fallacy
    – the factoring of past costs into future opportunity
    • Status quo bias
    – defiance of the natural pressures of progress

    The pursuit of stability in a world that always has been, and will continue to be unstable is a bias of ignorance that defies logic. Rather than seeking stability, the best leaders know that reasonable risk requires reasonable assumptions about the discontinuity of markets and the opportunity that sits rich in those very moments.

    Social Bias …
    Humans prefer peace and harmony over conflict and discord. At times, we may even prefer false harmony over hard facts and cold objectivity. The net result is, we often chose to avoid the uncomfortable in order to buy time for the sun to rise and wash away our anxiety.

    The world of business is not built on the fairytale belief we can eliminate conflict and disagreement and still achieve superior performance. In fact, high performing organizational cultures require some grit in their wheels and a tolerance for heated debate, especially in the presence of senior leaders.

    The risk of social bias creeping into organizational culture is high. It includes:
    • Groupthink
    – a belief in consensus as the holy grail of decision making
    • Sunflower management
    – the tendency to keep bad news from the boss
    • Passive aggressive malfeasance
    – nodding heads while planting knives in the backs of others
    • Superficial congeniality
    – the desire to win favour by going along with the crowd

    An organization which does not carefully tend to the poisonous elements of its culture, and reveal themselves in these and other social biases, is destined to find itself irrelevant in a world where diversity is an asset, and new thinking is the secret to serial success.

    Clear Heads & Cognitive Maturity …
    It should not surprise anyone to learn that senior leaders and executives can be just as immature as their most junior employees. Scary thought when the stakes are much higher on the executive floor than on the loading dock. While it might be easy to sympathize with the pressures felt by executives who have incoming missiles aimed squarely at their heads, it is not unreasonable to expect them to be able to think clearly, even in the midst of crisis and confusion.

    Yet – that is the exception rather than the norm!

    Leaders need to excel at many things, but cognitive maturity is the least we can expect of those whom have been entrusted with guiding our organizations. The number one cause of poor judgment is bias, and the fact that bias impairs the decision making acumen of leaders has not had enough discussion, debate or research.

    As a result, it is left to leaders to police their own leadership teams and their organizations. It only makes sense that tools and practices be put in place by leaders to eliminate the risk of bias.

    Cognitive maturity means:
    • widening the intellectual lens
    • broadening the diversity of ideas and insights
    • deepening the experience repertoire of their team

    Leaders need to work harder at examining the quality of their own decisions, as well as those made at all levels below them.

    Curing Macular Degeneration …
    There are many horrific diseases in our world, but the loss of your eyesight must surely be among the more frightening and debilitating. Macular degeneration is a disease that slowing shuts down your field of vision and leaves you with a blank spot in the centre. This is exactly what happens to some leaders!

    Their biases block out the objectivity of good vision and distort, or even hide, some of the most important information needed to make great decisions. Bias can cloud the judgment of all of us, but it is especially damaging in the executive suite where access to data, insights and experience should all come together into a rich pool from which the leader can draw to validate their perspective.

    Too often, the greater the bias the harder it is to penetrate the walls of those cocooned inside their false belief. In organizational life, there is rarely a reward given to those
    who stick their neck out and express a contrary view – let alone dissent. The fallacy in this logic is strange since the degree of risk is directly related to the accuracy of how a situation is viewed.

    Curing diseases of the eyesight is something we can work on as leaders. We are not helpless victims on a one way road to irrelevance. Leaders can implement the same type of rigorous discipline to eliminate bias that they use to eliminate problems in other precious parts of the value creation equation across their business.

    The starting point?

    Overcoming our bias about the fact we have no biases to begin with!

    Steps to Take :: Actions to Consider
    The biases that undermine strategic decision making often operate in full
    force during meetings. The suggestions below, which were developed by Dan
    Lovallo of The University of Sydney and Olivier Sibony of McKinsey, are useful.

    Make sure the “right people” are involved
    Ensure diversity of backgrounds, roles, risk aversion profiles, and interests.
    Cultivate critics within the top team. Invite contributions based on
    expertise, not rank. Don’t hesitate to invite expert contributors to come
    and present a point of view, without attending the entire meeting.

    For the portion of the meeting where a decision is going to be made, keep
    attendance to a minimum, preferably with a team that has experience making
    decisions together. This loads the dice in favour of depersonalized debate.

    Assign Homework
    Make sure pre-decision due diligence is based on accurate, sufficient,
    and independent facts, and on appropriate analytical techniques. Request
    alternatives and “out of the box” plans. Consider setting up competing
    fact-gathering teams charged with investigating opposing hypotheses.

    Create the Right Atmosphere
    As the final decision maker, ask others to speak up (starting with the most junior person), show you can change your mind based on their input, and strive to create a “peer-like” atmosphere. Encourage expressions of doubt, and create a climate that recognizes reasonable people may disagree when discussing difficult decisions.

    Manage the Debate
    Before you get going, make sure everyone knows the meeting’s
    purpose and the criteria you will be using to make that decision. For
    recurring decisions, make it clear to everyone that those criteria include
    “forcing devices” (such as comparing projects against one another).

    Take the pulse of the room – ask participants to write down their initial positions,
    use voting devices, or ask participants for their “balance sheets” of pros and cons.

    Use pre-mortem techniques to expand the debate. Promote counter
    anchoring by postponing the introduction of numbers, if possible. As
    well, “reframe” alternative courses of action as they emerge by making
    explicit “what you have to believe” to support each of the alternatives.

    Follow up
    Commit yourself to the decision. Debate should stop when the decision is made. Connect individually with initial dissenters and make sure implementation plans address their concerns, to whatever extent possible. Monitor pre–agreed upon criteria and milestones to correct your course, or move on to backup plans.

    Conduct a post-mortem on the decision once its outcome is known. Periodically, step back and review decision making processes to improve meeting preparation and mechanics, using an outside observer to diagnose possible sources of bias.

    Solving Canada’s Business Crisis – The Brutal Facts

    Download as a PDF

    Download as a PDF

    In Our View …
    It has become increasingly obvious, to those who watch the global economic scene,
    that Canada is at serious risk of becoming a marginal player on the world business
    stage. There are many complex and historical reasons for this, but chief amongst
    them is the fact our long standing “deficit of ambition” has finally caught up with us.
    Our luck and good fortune have evaporated, and complacency has conspired to put us
    at a disadvantage in a world where drive, innovation and urgency have become the
    touchstones for business and economic success.
    In my new book “Straight Talk on Leadership – Solving Canada’s Business Crisis”, I
    provide both a diagnosis as well as a prescription for this predicament. In this edition
    of Navigate, I draw upon data and research which not only reinforces my concern, but
    sharpens the perspective and adds weight to my arguments – for those who might
    otherwise reject the core premise.
    Amongst those who have arrived at virtually the same conclusion are:

    Deloitte – The Future of Productivity Report I OECD – Economic Survey I World Economic Forum
    Conference Board of Canada – How Canada Performs I Martin Prosperity Institute
    The Institute for Competitiveness and Prosperity

    Canada desperately needs its business leaders to wake up from their self-induced
    slumber, and join together in a dialogue of national economic renewal in order to
    chart a national economic plan for the future. The issue, as I attempt to scope it
    here, is not so much a criticism of how well we are doing, or have done, but how well
    we are living up to our potential to perform even better. It is by that measure that
    virtually all experts agree we are in decline.

    It is our competitiveness gap. It is our prosperity gap. It is our national dilemma.

    The Productivity Challenge …
    When it comes to their own businesses, leaders generally understand the minute
    details and special dynamics of organizational productivity. They intuitively appreciate
    how the various interrelated inputs lead to the eventual outputs. They understand
    how paying careful attention to each part of the value chain can impact the bottom
    line. Somehow, when it comes to the national economy, the pursuit of our collective
    long-term interests, and improving the overall performance of the consolidated
    Balance Sheet and P & L, we fall victim to a severe case of “best practice amnesia”.
    Productivity improvement suddenly becomes an unspoken, complex mystery we
    choose to ignore rather than address.

    There is no shortage of reputable business leaders and organizations sounding the
    alarm bell about the decline in relative productivity we have allowed the country to
    fall victim to.

    Here are just a few quotes from Deloitte’s “The Future of Productivity Report”.
    “A finite window of opportunity is presented by today’s promising economic conditions. To
    capitalize on this window of opportunity, business leaders must fundamentally re-examine
    their attitudes towards intelligent risk to ensure their future competitiveness.”

    “A significant portion of Canadian firms mistakenly believe they are making competitive
    levels of investment when they are not – causing them to slip behind their peers.”

    Canadian business leaders must wake up to the crisis we have created and work hard
    to overcome our national “deficit of ambition” which is causing us to cruise on auto
    pilot when we should be surging forward with fierce resolve and boundless energy.

    Declining Advantage …
    There will be many Canadians (and no doubt many business leaders) who will read
    this and deny the existence of any problem whatsoever. They will charge hyperbole,
    exaggeration and overstatement. They will point to how well Canada came through
    the recent global economic crisis, the strength of our banking system, and the fact our
    national budget deficit would be the envy of many. In fact, they may not take kindly to
    any suggestion at all that Canada is falling in global presence and relevance.

    Canada’s Comparative Productivity vs. the U.S.A.

    Mid – 1980’s 91%
    Today 80%

    Average Workers Contribution to GDP per hour

    USA $60.77
    Canada $47.66
    Source: Deloitte – The Future of Productivity Report

    Unless we take aggressive steps, right now, to reverse this trend, we will not only
    become even less competitive on the expanding global scene, but we will no longer
    even be able to compete within the slowly shrinking confines of North America. At that
    point, our proximity to the vast US market will have gone from being an advantage to
    becoming our biggest curse.

    We need the courage to lead ourselves out of the wilderness of rapidly diminishing
    relevance, and it must be business leaders, not governments, who show this leadership.

    The New Creative Destruction
    It was back in the 1930’s the expression “creative destruction” was coined to describe the
    natural process of economic renewal and regeneration which underpins the passage from
    one economic era to another. Joseph Schumpeter’s principle showed how organizations
    (and also countries) move along a continuum on which, as they mature. They eventually
    come to a point where they have a choice to make – adapt, transform, reinvent or die!

    In the case of Canada, the evidence would seem to indicate that forces have conspired
    against us. It’s time for business leaders to heed the call of the mounting evidence, and
    shift from chronic mediocrity to hypercompetitiveness.

    The Yanks and Us and Others …
    Sleeping next to a giant has both its benefits and its disadvantages. It has been
    Canada’s good fortune, during a period of American economic dominance, that we
    could easily trade with our cousins to the south without any of the cultural, linguistic
    or other barriers the rest of the world might put in our way. We rode the American jet
    stream for all it was worth, and for Canadian businesses, it provided a comfortable,
    reliable source of growth.

    Growth is not so easy to achieve in the new world order, and it will certainly not just
    come to us, we will have to go out and get it – the hard way! While it can be tiresome
    to constantly benchmark ourselves against the USA, it does offer a sharp contrast to
    sober our reality, especially when it comes to labour productivity growth.

    This measure of relative competitiveness has been in decline for many years. In the early
    1980’s, the US and Canada were in an almost dead heat when it came to productivity.
    However, for 30 years now, the rate of growth in GDP generated per hour in Canada
    has been slower than in the US, and the gap has consistently widened.

    Today, our productivity per worker is only 78.3% of the USA.

    GDP per hour (2012)

    Norway – $74.88 I USA – $63.22 I Australia – $54.86 I Canada – $50.25

    Countries with Labour Productivity Growth greater than Canada:

    Korea I Russia I Czech Republic I Hungary I USA I Sweden I Japan I Austria
    Finland I Israel I UK I Australia I Spain I Portugal
    France I Belgium I Germany

    The Widening Investment Gap …
    Canadian companies appear to be afraid of growth or, at a minimum, simply don’t
    know how to chase it or maintain it as a necessary part of sustainable business
    success. According to The World Bank, it is easier to start a business in Canada than
    almost anywhere else in the world (except New Zealand and Australia). However,
    the evidence suggests we have a huge challenge when it comes to growing our
    businesses into significant size and scale.
    Deloitte’s “The Future of Productivity Report” puts it very well (if all too painfully)
    when they suggest our problem is the fact we seem to excel at “turning our gazelles
    into water buffaloes”. According to Statistics Canada (June 2011), this inability to
    grow from a small to a medium sized business in Canada is most starkly revealed
    in the underperformance of our medium sized companies. While our large and
    small businesses do their share to contribute to GDP, it is the nascent medium sized
    businesses that are letting us down.

    Contribution to GDP by firm size

    Large Business – 45.7% I Small Business – 41.9% I Medium Business – 12.4%

    A study of companies who have crossed the five year threshold of existence shows
    that, amongst the OECD countries, only 2.66% of all our Services firms and 3.16%
    of our Manufacturing firms would be considered high growth by world standards.
    This dismal result places us squarely in the bottom quartile of all OECD countries.

    The Importance of SME’s …
    Canadians are not as well informed as they should be about the composition of our
    national business foundation. This leads to misconceptions and misunderstandings
    about what actually makes business tick in our country. We are too easily influenced,
    and perhaps enamored, by the big companies which make the headlines (BlackBerry,
    most recently) or by the huge profits of the big banks (every Quarter). The fact of
    the matter is, Canada is actually more a nation of shopkeepers and small business
    operators than of corporate giants of global repute.
    The difference is important in terms of understanding how employment is created,
    how export trade is done and how policy is set to encourage growth and investment.

    Here are some key statistics from StatsCan and Industry Canada as at July 2012:

    • Number of employer businesses – 1,122,000
    • Number of small businesses (fewer than 100 employees) – 1,100,000
    • Percentage of Canadian businesses with fewer than 100 employees – 98%
    • Percentage of all businesses considered Good Producing – 22.7%
    • Percentage of all businesses considered Service Producing – 77.3%
    • Small business contribution to GDP – 30%
    • Percentage of total Labour Force in small business – 48%
    • Survival rate of small businesses after 5 years – 51%
    • Percentage of small businesses owned by women – 17%

    At the top end of the market, even our largest companies are virtual minnows when
    it comes to the number of employees they have compared to the USA.

    Top 50 Firms by Employees (Average Number)

    Canada – 43,000 I USA – 249,000

    Entrepreneurship in Canada …
    It has long been felt Canadians are more risk averse than our American cousins and,
    when it comes to business, the evidence is compelling. Two bits of data support this.

    Deloitte’s Executive Risk Behaviour Index
    (Measuring the relative risk appetite of business leaders)

    Canada 47.4%
    USA 57.7%

    In short, we abhor risk and hate uncertainty, and wonder why our success is tempered!

    StatsCan / Industry Canada Survey of Business – 2011
    (Noting the most frequently cited obstacles to innovation)

    Risk and Uncertainty – 47%
    Lack of Skills – 28%
    External Financing – 25%
    Regulatory issues – 18%

    Interestingly, the most popularly reported barriers to business success (lack of access
    to financing and the burden of regulatory compliance), when combined, still comprise
    less of a burden than does plain, simple, old fashioned fear of risk and uncertainty.
    In a world where risk and uncertainty are on the rise, it is hard to imagine how
    Canadian business can survive, let alone thrive, unless we stiffen our spine and begin
    to develop a tolerance for ambiguity.

    Canada’s fear of global trade, which can be measured by the comparatively few
    Trade Agreements we have entered into, is another factor holding us back.

    Number of Free Trade Agreements in Place

    European Union Countries – 70 I Chile – 52 I Mexico – 44
    Singapore – 24 I USA – 17
    Canada – 10

    Death by Starvation ….
    It seems, from the OECD Report on Research and Development, that Canadian
    business invests less in business R & D than the OECD average. In fact, our fear of the
    unknown and love of certainty, result in us investing less than 1% of GDP, when the
    OECD average is 1.6%.

    This means we rank behind the following countries:

    Israel 3.4% I Korea 2.8% I Finland 2.7% I Denmark 2.1%
    USA 1.9% I Belgium 1.3% I Australia 1.3%

    It also means we are in the bottom quartile, along with countries such as:

    Italy .7% I Hungary .7% I Portugal .7% I Estonia .8%

    Another revealing fact, from the same OECD Report, shows the rate of R & D
    investment (when compared to the 27 OECD countries) actually gets worse by size of
    company. In other words, our ranking falls the bigger the company size.

    • Small firms (fewer than 50 employees) – Canada ranks 8th out of 27
    • Medium sized firms (50 – 250 employees) – Canada ranks 15th out of 27
    • Large firms (more than 250 employees) – Canada ranks 16th out of 27

    This tells us the bigger we get, the more we starve ourselves to death!

    Steps to Take :: Actions to Consider
    We have much to be grateful for in Canada. No one can take that away from us.
    We remain a sought after destination for many less fortunate in their homelands,
    who choose to come to our shores in search of opportunity, tolerance and justice.
    Unfortunately, the lustre is off the promise and, in relative terms, we are slipping
    backwards. In the words of Deloitte’s “The Future of Productivity Report”, “Canadian
    companies accept the traditional progression as inevitable, blaming their eventual
    decline on circumstances beyond their control”. It need not be that way!

    Wake-up Canada
    We need to banish our overconfidence and complacency. According to Deloitte’s
    report, a stunning 36% of Canadian companies actually believe they are doing better
    than they really are, while another 17% know they are underperforming and don’t
    care. Somewhere along the line, we need to enter into an adult conversation with
    ourselves, bereft of clouded judgment, over confidence, delusion and naiveté.

    Think Fast Forward
    The past is no guarantee of success, especially in a world shaken by new forces, both
    economic and social. While the rose coloured glasses of nostalgia may provide some
    comfort on a cold night, they will not help us envision a path forward. We are going
    to live in the future whether we like it or not, so better we design the future than
    become captives to someone else’s design.

    The World is our Oyster
    The Canadian brand resonates everywhere in the world, but if we don’t leverage our
    brand, the inherent value will be lost. It’s time for Canadian business to be bold and
    venture off the safe confines of North America. We will find friends and customers
    elsewhere, waiting to accept us as partners in shared success and growth.

    Build Global Leaders
    The world of business is a global business, and Canada needs to develop young
    leaders who are both willing and capable of innovating and being as comfortable
    in Dubai as Detroit, Mumbai as Miami, and Hong Kong as Hollywood. We
    have not done a good job of preparing for the global economy when it comes
    to our leadership bench strength and, while it is overdue, it’s not too late.

    Plan the Attack
    Canada needs a Strategic Plan. We have outsourced our national economic future to
    elected officials and bureaucrats who may be well intentioned, but are even less qualified
    than our business leaders. The country has good minds and original thinkers and it’s
    time to harness them, for the sake of our country, and ask them to put the future of their
    nation ahead of their self interest. It will not be easy, but then nothing worthwhile ever is!

    Place Smart Bets
    While Canada is large in terms of geography, we are small in terms of population. We
    have to conserve our resources, and apply logic and common sense to the choices we
    make. Like every Canadian family, we can’t always have everything we want and we
    have to make choices. No one has a crystal ball, and some choices will require risk,
    but we are better to place a select number of wise portfolio bets, rather than ride the
    risk free route to average results in a world that demands more and rewards the brave.

    Execute with Brutal Determination
    Throughout history, Canadians have risen to the challenges facing them time
    and time again. We will have to do it once more. It is part of the Canadian DNA
    to dig in and fight when the chips are down. There can be no corner of Canada
    left behind. We need all Canadians to put their shoulder to the wheel. All that
    remains is for someone to give us a solid business case and a good cause.

    Deny, Defend, Disrupt – It’s Your Choice!

    In Our View …

    It does not seem as though we will be returning to the “good old days” of predictable growth and a reliable economy anytime soon. Experts from across the globe are pretty much aligned around a view which suggests turbulence will be the norm for as far ahead as we can reasonably see. As a result, leaders will need to rethink their approach, and develop a new set of coping mechanisms and business strategies. The good news is, this has been the subject of considerable study for years and we have a storehouse of knowledge with which to formulate our thinking and craft our responses.

    The ideas shared in this paper have been shaped by several people, including Phillip Kotler and Edward Lorenz and their views on Chaos Theory, Clay Christensen and the work he has done on Innovative Disruption and Richard D’Aveni on the nature of Hypercompetition. The last two individuals were recently included in The Thinkers 50 list of the most important and influential thinkers of our times.

    A common theme emerges from their work, advocating the urgent need for a new framework to help guide business leaders. It goes well beyond the belief “innovation is at the core of all economic development”, as first promoted by Joseph Schumpeter in the 1930’s. It suggests we need to go much, much further and create a vibrant new marketplace, a marketplace for competing ideas, where new ideas challenge old ideas and disrupt our thinking in the process.

    The Power of Purposeful Choice …

    We all have choices, although sometimes it may not feel that way. In fact, we usually have more breadth and variety in our choices than we allow ourselves to believe. It is during periods of significant change and turbulence that important new options most freely present themselves, but only if we allow ourselves to see them.

    A choice to defend – to shrink, go small or erect barricades to provide a feeling of safety is not likely to work very well. It is an illusion!
    A choice to deny – to ignore, dismiss or minimize the fundamental nature of the external change is the first step on a slow drift to irrelevance.
    A choice to disrupt – to meet like with like, and to meet change and uncertainty with even more change and uncertainty, is the choice of the truly competitive organization and its leader.

    Consistency is not the answer in a world where inconsistency, chaos, turbulence and confusion have become the norm. Leaders must shift their view and come to realize there is no value in attempting to develop a sustainable competitive advantage. In a world of increased speed and ever shifting quicksand beneath our feet, the very idea of sustainable advantage is dead. The only viable strategy is one built on serial disruption, where organizations intentionally shift all the time and, in so doing, outmanoeuvre their competition by becoming more unpredictable themselves and, therefore, harder and harder to catch.

    The Fear of Bold Choice …

    Not that many years ago, people like Michael Porter were arguing the very opposite of what now has become the only rational choice for crafting organizational strategy. There has been a huge and willing market, over the past twenty years or so, attracted to the undeniably comforting premise leaders could somehow put order and predictability into their business model to help defend against the forces of the free market.

    Leaders everywhere were easily convinced that strongholds could be erected which would become barriers to intrusion by others. The problem was that while Porter was right about organizations having to make smart and intentional tradeoffs, he missed the part about the fact those tradeoffs were not static.

    In the intervening period, we have come to learn the markets move in their own way, on their own schedule, and in directions we cannot very often predict. Leaders of the future must think about strategy in a much different way and not allow themselves to be seduced into believing they can erect strong, permanent and impenetrable walls to protect their organizations.

    Organizations, and their leaders, can easily become victims of their own hyperbole but, thankfully, we have others, like Professor Jagdish Sheth of Emory University, who have made a career out of analyzing the root cause of leadership failure. He reminds us the devil rarely lies outside our gates, and that most pain, death, dysfunction and destruction comes from within the walls of the organization.

    His excellent book, The Self-Destructive Habits of Good Companies, is a useful read at a time like this.

    The Forces of Strategic Disruption …

    Strategy should never have been conceived of, nor promoted, as a “position” you can somehow carve out of granite, with your bare hands, and then defend forever and ever.

    • Strategy is not static – it is dynamic
    • Strategy is not wisdom – it is intelligence
    • Strategy is not proprietary – it is free market based

    Great strategy is all about intelligent opportunism and the ability to quickly identify and respond to emerging circumstances in real time. As such, strategy is best built in the heat of chaos and confusion and emerges from the forces of disequilibrium created by events outside of the organization.

    We live in exceptionally turbulent times which means, by definition, we are subject to violent, random and agitated events that are totally unpredictable and often not even rational. This is, no doubt, a scary prognosis for those who live in a bubble formed around the essential belief great leaders can build a fortress to keep the enemy at bay.

    On the other hand, this is a thrilling and totally brilliant moment for those leaders who understand the times in which we live and are not handcuffed by the mindsets of the past and the false glory of rules which have become outdated, if not irrelevant. In a world of relentless, recurring and perhaps permanent disruption, the prize will go to those who can ride the wave of opportunity and develop strategy based on the ability of their organizations to change course as the moment dictates.

    Institutional Complacency …

    In a world spinning faster and faster, the perils and risks of complacency, at both the personal and organizational levels, have been multiplied. While it is hard to imagine any period of time in which lethargy and laziness were ever the right approach in business, they are certainly a tonic for failure today. The cost of institutional complacency is often well hidden and, yet, it eats away every day at the very fibre of an organization and serves to reduce its effectiveness, agility and performance.

    In the organizational context, the forces of inertia and gravity are everywhere, and they are insidious. The leader of any organization with an ambition to be relevant, must be on constant and vigilant patrol for the signs of this self-inflicted institutional disease. Of course, if the source of complacency sits at the very top of the organization chart, then we have an even more serious challenge.

    The forces of strategic disruption, and fleet-footed opportunism, take full advantage of the complacency of others. They feed generously off of its fat, and savour any chance to devour the competition. To some, it is like shooting fish in a barrel.

    As counterintuitive as it might seem, leaders have to initiate their own chaos and disruption internally, if they want to have any hope at all of honing the skills required to do battle, on the outside, with the real competition. The modern leader knows that bracing against attack is not the best tactic, and so fueling the organization with the courage and ability to disrupt becomes the number one priority.

    Dynamic Resilience …

    In a world of intelligent opportunism, the high performing organization of the future needs to be able to sort through, choose and then act on, those opportunities most worthy of pursuit. This begs a nimble leadership team with an ability to galvanize action. This capability is, in part, what Peter Schwartz spoke of in his book Inevitable Surprises and which his colleague Arie de Geus has preached for years, since his time as the head of Shell Oil Company’s Strategic Planning Group.

    More recently, this theme was picked up and expanded upon at the World Economic Forum in Davos in a keynote address by its founder and Executive Chairman, Klaus Schwab. He used the term “dynamic resilience”, and explained the theme was chosen because resilience is the ability to adapt to changing contexts and withstand sudden shocks, both of which are increasingly common occurrences.

    This capability is needed more than ever if for no other reason than the fact the four traditional elements of unique competitive advantage have been levelled.

    • Price – has been diminished, as higher quality has intensified everywhere
    • Timing – has been diminished, as proprietary know-how expands more quickly
    • Entry Barriers – have been reduced, through a rapid shift to disintermediation
    • Deep Pockets – are less important, as risk capital is more readily available

    Shaping the Opportunity Architecture …

    Uncertainty rules the planet, and it creates opportunity in the cracks and chasms which appear as we shift from one place to another, or from one business model to another. Opportunity breeds in these cracks.

    • The more uncertainty we have, the more cracks we have
    • The more cracks we have, the more opportunity we have

    In order to remain relevant in the midst of wave after wave of uncontrollable disruptive threats, and to seize the advantage resident in the disruptive shifts we are seeing, leaders need to focus on two of the very important things which they can, in fact, control.

    They need to:

    • Improve the depth, breadth and quality of their insight
    • Improve the overall level of organizational preparedness

    The best approach for leaders is to “rehearse the future” by rigorously applying the best practices embedded in the science of future oriented scenario planning. This discipline, which has largely been ignored by most organizations in more stable and predictable times, becomes the only viable approach in times like this. It will serve to pressure test the resilience of the organization, and improve the scale and scope of opportunity.

    Sustaining Performance vs. Disruption …

    We have already noted how important free choice is in determining the success and viability of any enterprise. One of the most important choices a leadership team must make is whether their strategy will be framed as a defensive posture, to sustain current levels of performance, or whether it will be more aggressive, in an effort to improve performance through disruption. These are starkly different options.

    Canadian author and business expert Michael E. Raynor has addressed this choice in his excellent book The Innovator’s Manifesto: Deliberate Disruption for Transformational Growth, in which he reminds us of some crucially important factors in dealing with disruption. Not surprisingly, they are very different from those applied in stable times.

    • In the early stages of any new phenomenon or change, our knowledge is limited and is little more than astute observations.
    • As a result, the more unknowns we face, the more complex the work and the more our intuition comes into play.
    • The objective is to identify the concepts that have the seeds of sustainable success, and then pursue them.
    • Based on a changing context, the leader must be willing to come to new conclusions that clash with those of the past.

    Watch Who You Hang With …

    In a world with an ever more vibrant free market in which people exchange ideas and bring a greater and greater variety of experiences, there is a real need to pay attention to those you surround yourself with and listen to. Our social media addicted world makes it easier than ever before to tap into this market, but leaders still have to build their “communities” in a smart manner.

    • Leaders who only tune into the frequency of their closest business colleagues and like minded friends are putting themselves, and their organizations, at serious risk.
    • Leaders who only spend time in their own industries are unlikely to have the receptors necessary to pick up new signals identifying mega shifts that cross industrial or product borders.
    • Leaders who do not broaden their networks to include those living at the fringe of new ideas and new thinking will deprive their organizations of the insight needed to seize the opportunities which come from disruption.

    In today’s world, more than ever before, you will only be as good as those you surround yourself with, listen to and include in your efforts to better understand the environment.

    Steps to Take :: Actions to Consider

    We are not hostages to the random forces of the free market.

    We are not prisoners of the change monster who chases us every day.

    We are not powerless in the midst of forces that may, at times, overwhelm us.

    We have free choice, and we deserve to be judged by the choices we make. In our view, no one has done a better job of describing this than Phillip Kotler and John Caslione in their book Chaotics: The Business of Managing and Marketing in the Age of Turbulence.

    They have done a brilliant job of summarizing the characteristics of companies that have lived a long and healthy life.

    We have shared them below as a recipe for leaders who wish to seize the opportunity this moment presents, the opportunity embedded in disruption.

    Sensitivity to the World Around Them
    The best leaders in the world have an acute and finely tuned radar for sensing and identifying shifts in both the business and the social context. They appreciate the need to be vigilant in continuously scanning the environment and interpreting the signals.

    /Awareness of their Identity//
    The best organizations in the world know who they are and what they stand for. They are confident in their own skin and are not easily tempted to jump on fads that pass in the night. They place the importance of culture right alongside that of strategy.

    Tolerance to New Ideas
    The best thinkers in the world are broad minded, curious and open to the new and the different. They embrace new ideas and concepts, and resist the cocoon of complacency and the illusion of the status quo. The pioneers of the future will be those who seek out new knowledge and understanding in an effort to make sense of the world.

    Valuing People Not Assets
    The best run companies in the world place people first, even before customers. They know and understand that it is people who create value through their insight, ingenuity and passion. They appreciate that machines and buildings and systems are only there to enable human capability to be leveraged.

    Loosening Steering and Control
    The best leadership teams in the world are not obsessed with maintaining order and enforcing control. They are more inclined to actually be the chief agitators for freedom, experimentation and more breathing room. They know that no one leader, or group of leaders, can get the best out of the opportunities which present themselves by tightening the vice of control and centering it around the executive table.

    Organizing for Learning
    The organizations that thrive and excel in times like these are organizations that see learning opportunity in everything they do, and turn themselves into lean, mean learning machines, producing new learning at ever expanding rates of return.