The highly challenging modern business environment that business leaders need to master is characterized by exponential change; an increasing speed of market transactions and business cycles; increasing ambiguity and complexity of global, interconnected and multifaceted markets and business operations; more, new, and higher risks; and lots of positive and negative surprises.
Not surprisingly, in its most recent Global CEO Study 2010 that was fittingly titled “Capitalizing on Complexity,” IBM found out that most CEOs want to master the complex future by developing a creative leadership approach. Unfortunately, in the tradition of the management paradigm of the 1950s and 1960s that defined managerial functions as planning, organizing, directing and controlling, many business leaders and managers have problems coping with complexity. Today and in two weeks’ time, I will share with you six strategies that allow you to unlock your habits, rigidity and fixations and become more flexible and tolerant toward complexity, uncertainty, ambiguity and change.
1. Understand the complexity and related (strategic) risks you face
As a business leader, invest time to understand the strategic risks that your firm faces in your industry, and assess both the impact and the likelihood of each identified risk. Visualize the results in a Strategic Risk Map, then generate ideas for strategic actions on how to deal proactively with the most threatening strategic risks — or even turn them into an opportunity for growth.
Then, activate the preventive or mitigating action (such as buying insurance or a financial hedge, or producing a contingency plan), and acknowledge the existence of those risks that you chose not to address proactively due to their lower likelihood and/or projected impact. Finally, regularly review your strategic risk map and make necessary adjustments.
2. Learn acceptance
Most business leaders and managers like to take charge, to actively and dynamically drive things forward, to stay on top of everything, to plan for future success, and to control any risk. One of the most frustrating experiences for a business leader, and particularly if you are impatient like me, is to accept that regardless of how much we push and fight, how much we aim to address risks proactively, there are certain events beyond our control: A near collapse of the financial sector sends most world economies into a recession and even nullifies the business plans of companies in unrelated industries; a volcanic eruption in Iceland surprisingly grounds all air traffic in Europe, forcing you to change your travel plans or even temporarily close your production due to missing spare parts supplied just-in-time by air shipment; or one of the top talents in your management team gets a “too-good-to-say-no” offer from another firm and decides to jump ship.
Regardless of how much you fume, swear and bang your fist on the table: There is nothing you can do about the situation. So learn acceptance and let go of what you cannot change. Occasional pleasant and unpleasant surprises are part of life. Use any unwelcome surprise as an opportunity to stop and show gratitude for all the positive things that you’ve enjoyed in your life.
3. Become a habit tracker and breaker
As you read this sentence, please fold your palms in front of your body (like you do for prayer in some religions). Do it now before continuing to read. When you observe your folded hands, you will notice that one thumb is lying on top of the other. What I want you to do next is to first unfold your hands and then refold them again “the other way around,” so that your other thumb is positioned on top this time. Do it now, and monitor your feelings. Words that people tend to use to describe this experience are “unusual,” “strange,” “awkward,” “abnormal,” “weird,” “don’t like it,” and “uncomfortable.”
This simple exercise gives you a chance to witness the standard human response to change — and the shadow side of habit. In essence, habit is a useful human simplification strategy to reduce the complexities of life. For example, you may drive to work every day using the same route (which years ago, you decided was the shortest distance between your home and office). However, a habit may bring out its shadow once the world we live in changes, and we’re unable to abandon our habits and try something new. For example, you suddenly notice that every morning for the last days, your trusted speedy route to work is clogged because major new construction work has started; unfamiliar with alternative substitution routes, you’re trapped in traffic and now suddenly always arrive late at the office.
Flex yourself by first tracking all things that you do habitually. Then, make it a habit to regularly fight your habits by doing something new at least once a week: Make lunch appointments with other colleagues or clients instead of always heading for lunch with the same buddies. Try out a new restaurant instead of hanging out at your regular restaurants. Try out a new dish in the new restaurant instead of falling back on your typical favorite. And have a conversation about a completely different topic — e.g., if you love to converse about the stock market, talk about your favorite movies instead. You get the idea. Occasionally breaking your habits exposes you to new stimuli and ideas and expands your horizon.
What are the other three tips for creatively dealing with complexity? Come back to this column in two weeks, when we will continue to flex ourselves to better succeed in our more complex business world.
© Dr. Detlef Reis 2010. This article was published in parallel in the Bangkok Post under the title “FLEX yourself to break habits and flourish in complex times” on 11 November 2010.