It might give you a warm feeling inside, but being right isn’t so important. Right is relative. Consider those who, at the end of 2019, believed they had the right business strategies, then, overnight, Covid struck, and they very quickly became very wrong.
Change is here to stay
In fact, rapid and continual changes like this are probably the most prominent feature of the digital economy. The pace of change that digital technology drives means you never know what is going to arrive to turn your right decisions into the wrong ones and I guarantee you won’t predict for how long your right decisions will remain so. It could be a week, a month or a year, but increasingly it is equally likely to be a matter of minutes. So why do so many people obsess about being right when “right” is so intangible?
A lot of this is bound up in traditional business teachings. In the old days bosses were dictators and employees did as they were told. This approach to management worked to a point when competition wasn’t that tough, business models were simple and things moved pretty slowly. However, things have been speeding up for decades … and then came digital, which added booster rockets to our concept of change. According to MIT Sloan businesses that aren’t digitally savvy today perform one-third less well today than a digital business. You don’t need me to point out where traditional businesses are heading then, but that course has been set only because senior executives persist in trying to run traditional businesses in the digital age.
Digital is different
Digital businesses are complex. They require far more knowledge about a wider range of specialist subjects than any one person could possibly grasp. You need experts with in-depth knowledge of hundreds of narrow subjects and a very different approach to resourcing and managing them in order to run a business these days. The old command-and-control approach of traditional leaders just can’t cope.
The need for a new approach to management
Command-and-control and the people who adopted it rely on the perception of infallibility. A work-force isn’t going to follow orders from someone who’s decisions have a reputation for being wrong. This approach to management is therefore reliant either on the belief, misplaced or not, that the leader is pretty well always right (or on a workforce that doesn’t care, is not committed to the business and is only in it for the wage packet). This is how the relationship between leadership and infallibility was established.
Today, the pace of change is so rapid and the number of influencing factors so great, that your chances of being right about pretty much anything of any consequence are pretty slim. This fact alone is why many business leaders are terrified by business transformation. By definition it takes them into a world where infallibility is no longer a realistic prospect.
You would think business leaders everywhere would be relieved to have the burden of expectation that they would always be right lifted from their shoulders. However, in the digital economy, the importance of being right is usurped by that of being quick, and quick is the antitheses of what the process-based, deliberate and ponderous practices of pre-digital business teachings were founded.
I’m a marketer. That means I help businesses align to the opportunities of the digital economy and that inevitably requires business transformation. But that’s not a case of replacing one set of rigid processes, products and services with another. Because things change so rapidly in the digital world, every day presents new challenges and offers a new horizon. Business transformation marks the end of the state of routine that traditional businesses find themselves in and a switch to one of constant change. And that’s what makes it hard. Especially if traditional practices and attitudes are ingrained.
Your business isn’t about your product
Because the digital marketplace is founded on this shifting sand, innovation becomes fundamental to business survival. Traditional businesses are bad at innovation. Most were built on product, but today products are transient. They are no longer what businesses are about. Today the focus is on “purpose”. A business’ purpose is to solve a specific problem for it’s customers. That problem will change day-by-day, so the solutions will too. The products you produce contribute to your solution, but they have to keep up with this.
At the centre of any transformation is the process of acknowledging or discovering your purpose. Many businesses I have worked with have found that understanding this leads them to the realisation that their products are obsolete. There truth is, much of the cost of what they have (mostly mistakenly) called “marketing” has been to keep dead products walking. In fact real “marketing” is about developing relevant solutions to customers’ problems, not trying to persuade people that the best you can offer is the best they will get. However, that’s another big subject in itself.
Unlocking innovation
It’s easy to see why businesses founded on command-and-control are not fertile ground for ideas. However, it’s not always bosses that stand in the way of innovation. I often find it at least as difficult persuading employees to contribute their ideas as it is to stop bosses shooting them down. It’s hardly surprising of course. Businesses that have been successful in the pre-digital era usually were so because their workforce just got on with what they were told to do, without question. I’ve found businesses where employees only tabled ideas they thought their bosses would approve of and that’s not how innovation happens, nor how businesses work these days.
A business headed by a dictator will also selectively breed out employees who question the status quo. They breed out diversity too, which is another important requirement for innovation. Consequently, many workforces I have encountered don’t immediately respond when you remove the barriers that have dissuaded employees from challenging the status quo.
The importance of diversity
Because of its complexity and the number of individual areas of expertise it requires, a twenty-first century business must be diverse and democratic and leading such an organisation is a different game. I’ve explored this subject more than once in the last couple of years, so I’m not going to go further down this avenue here.
What I do want to do though is start you thinking about this obsession with being right. It’s long been said that US businesses have been more innovative in the past because the stigma that Europeans attach to failure is less prevalent there. The well known sentiment “He who makes no mistakes, achieves nothing” (Or whatever wording you are familiar with) has never been more true.
If the market landscape is changing daily and you have to respond immediately to those changes you will make mistakes. Probably a lot of them. The mark of great leaders therefore becomes not how many mistakes they make, but what proportion they represent of all the decisions they make and the consequences they have. Michael Conroy who later became chairman of Publicis Europe explained to my younger self that you have no idea in advance which of your decisions are of any real consequence. Their numbers are few, so you may as well just go with what evidence you have and not waste time agonising. Leaders who are either exceptionally smart or who have a lot of experience and the ability to learn from it will score better in this. However, it’s within every leader’s scope to raise their score if they focus less on being all-knowing and instead enlist the opinions, thoughts and ideas of the experts that surround them.
The priority has to be to explore new ideas. It’s said that in Ralph Halpern’s time at Burton Group, he instigated a development programme that involved having more than twenty pilot stores, for different concepts operating at a time. The principle was that if just one of these worked well enough to justify expanding it to more stores it justified the cost of the failures. Meanwhile those that didn’t measure up were closed down to give way to others. The same applies these days only it’s more important and far faster-moving.
I’ve adopted the same principle with some of my clients. With one of my clients we introduced the practice of launching ranges of a number of product variants. We measured their sales against a pre-determined model. Those variants that fell short were consigned to the clearance programme, while the successful ones were rolled out.
I’m not suggesting we all put our lamest ideas into trial. We design criteria that every innovation has to meet at every stage in its evolution, so only those that show promise ever get produced. However, the important thing is that testing doesn’t slow the process down. Again, the compulsion traditional businesses have to eliminate risk through countless layers of testing is a hinderance no businesses can afford today.
It’s not a blame game
Fear of fallibility goes hand-in-hand with blame culture. In fact, it’s difficult to identify which comes first, but there’s no place for either in business today. I should make it clear at this point that blame and accountability are very different concepts. We all have to be accountable. Again, traditional business practices are to blame where a blame culture exists. If your sales team are competing against each other, or you have different divisions or departments within your organisation that are competing you are failing.
Competitivity of this kind is unhealthy. It breeds finger-pointing and division. A leader’s aim should be to unite every member of it’s brand community — not just employees, but investors, suppliers, distributers, partners and customers — behind a single idea. Only when you achieve this will you be able to operate at the level of efficiency you need to succeed.
My advice to everyone in business is own your mistakes, but stop insisting on being right, stop blaming people who do stuff for their failures and stop pointing fingers at others in order to make you appear superior in some way. The truth is, it has the opposite effect and in the long run it’s only going to reduce your chances of business success.
Phil Darby
October 13, 2021