“The needs of the many outweigh...

business-goal-planning How are your recent leadership decisions impacting your business tensions?

...the needs of the few...or the one.”

Over the last few months, this dialog between First Officer Spock and Captain Kirk in the 1982 movie, Star Trek II: The Wrath of Khan, keeps popping up based on many of our coaching conversations thus far this year. If you are a fan of the genre, then you know the circumstances behind the brief dialog between these two characters. The reason it keeps coming up is it highlights one of the key challenges all leaders face in a VUCA (Volatile, Uncertain, Complex, Ambiguous) business environment. The challenge of leading through competing performance tensions in the business!

While the quote speaks to competing tensions between the many versus the few or the one, the idea of competing performance tensions is not new. What is new is the context in which these tensions reveal themselves as leaders navigate the new reality of today’s business environment. The three performance tensions, identified by Dominic Dodd and Ken Favaro in their 2007 book, The Three Tensions, are: Profitability versus Growth, The Short Term versus The Long Term, and The Success of the Organization as a Whole versus that of its Individual Parts. The secret to sustainable success is for leaders to not look at these tensions as either/or rather as both/and. We will look at each of these in a more recent context and what leaders must consider in their decision-making thought processes.

Profitability versus Growth: Growing margins AND top-line revenue is challenging on a good day and can be daunting in today’s VUCA business environment. However, we find that one of the biggest obstacles to achieving success in these competing tensions is old thinking. Leaders get comfortable with how profitability and revenue growth were achieved in the past. More than likely, this success was achieved in better times without much effort or thought into how the success was achieved. It’s what we call: success by accident. We recall a time in a previous corporate leadership role where the team achieved double digit gross margin improvement, double digit client satisfaction improvement and double-digit client renewal improvement all within the same fiscal year. It required very different thinking from past successes such that the past did not prevent a different future. In short, leaders must think different in order to do different!

The Short Term versus The Long Term: The definition of what is long term versus short term has changed dramatically over the last five to ten years, especially in the post-pandemic new reality. We remember the days of the five-year plans of old to now leaders struggling to get comfortable with a three-year strategy. Regardless of timeline, the philosophy of making the right short-term decisions with the long-term impact in mind still holds true. The assumption here is the leaders have a defined vision with enough long-term clarity to see where the short-term decisions connect. An additional challenge here is leaders making most of their short-term decisions proactively. When most of their near-term decisions are made reactively in response to external and internal forces, there is typically very little alignment to any long-term goals!

The Success of the Organization as a Whole versus that of its Individual Parts: This is the tension we are seeing more than the other two, especially among senior leadership teams. In chapter 10 of their 2019 book, Ignition: A Guide to Building High-Performing Teams, authors Gordon Curphy, Dianne Nilsen, and Robert Hogan address the unique aspects of senior leadership teams. One of the key challenges on these teams is what the authors call First Loyalty. Where does the senior leadership team’s first loyalty lie, with the team they are on or the teams that they each lead. The most frequent response by far is the latter. However, if the first loyalty is to a part of the organization, how can the leadership team collectively and collaboratively lead the whole organization to achieve desired results and sustainable success? They can’t!

A VUCA business environment presents many challenges to leaders as they navigate the new reality. Part of the new reality is that the right decision today may very well need to be changed tomorrow as the assumptions and conditions of the original decision change. However, it is still necessary to make these new decisions through the context of how they impact all elements of the entire business, now and in the future!

How are your recent leadership decisions impacting your business tensions? If you are not sure, we can help!

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Sunday, 21 July 2024