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Current Business Reality: Do You Have the Courage to Confront It?

Courage to Confront the Current Business Reality

Martin Luther King eloquently shared his “I have a Dream” speech and inspired all of us to not just focus on what is possible but also the current harsh reality of racism in the 1960s in the United States.

Peter Senge, the noted management and leadership scholar coined the phrase, creative tension, to inspire all of us to focus simultaneously on both our vision and our current business reality. He said that if we only focus on vision, others could consider us to be too optimistic and naïve. Dr. Senge said if we, however, only focus on our current reality, we could become discouraged and doubtful of ever achieving our vision and goals. How does this affect our current business reality?

Dr. Senge encourages us to focus on both; our vision for what is possible for our teams and our organizations as well as simultaneously focusing on the current business reality so we are not in denial or delusional.

Jim Collins, in his book, Good to Great, writes about a conversation he had with US Navy Vice Admiral and aviator, James Bond “Jim” Stockdale who shot down over Vietnam in 1965 and was a prisoner of war for the next 7.5 years. In this discussion, Collins asked Stockdale about his coping strategy during this period of captivity. Stockdale reported, “I never lost faith in the end of this story, I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.”

When Collins asked Stockdale who did not make it out of Vietnam, Stockdale replied, “Oh, that’s easy, the optimists. Oh, they were the ones who said, “We’re going to be out by Christmas.” And Christmas would come, and Christmas would go. They they’d say, “We’re going to be out by Easter.” And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.” Stockdale then added, “This is a very important lesson. You must never confuse faith that you will prevail in the end-which can never afford to lose-with the discipline to confront the brutal facts of your current reality, whatever they might be.

Witnessing this philosophy of duality, Jim Collins went on to describe it as the Stockdale Paradox.

I’ve seen leaders who lack the courage to confront the current business reality. Sometimes they don’t want to deal with the harsh facts or they remain naively optimistic about other people’s capacity to drive positive results regardless of the situation.

I worked for a leader early in my career that was absolutely delusional about the professionalism of his key leaders. He trusted but did he not verify. He let some of them bully him. He did refuse to acknowledge the high cost to the organization. The new leaders at all levels did not feel safe to share their concerns or even observations but he could not connect the dots to his key leaders and their styles. He hired change agents but then he allowed their peers to withhold information and resources so their success was limited or painfully prolonged. He never found his voice with his key colleagues, or at least he never demonstrated this when I worked for him.

When we remain in denial or even delusional, we tend to create a lot of chaos and confusion within our teams. When we have the courage to confront the brutal facts and take action based on those facts, we are able to create alignment at all levels. Then we find our business reality.

The key to having the courage is to focus on the facts and the data. Without the facts, it’s human nature to make up stories and put our own spin on these stories. “I know next quarter will be more robust”. “I know Bob and I know Bob didn’t mean to blow up that way in front of the team.” “I know everyone is committed to the same things.”

In order to build alignment, grow organizations and exponentially increase shareholder value, we must:

  • Get the facts backed up by data
  • Articulate to ourselves our values, our vision and our commitment to this organization
  • Find our voice so we can articulate all of this to others clearly, concisely and consistently
  • Demonstrate the courage to install consequences for bad behavior.

If you are interested in an executive dashboard in a cloud-based platform that supports everyone in staying focused on the facts in a positive, productive way let me know. We’ve analyzed them all and can give you a balanced perspective on the best ones.

Katharine Halpin has been facilitating transitions and M&A transactions since 1995. Long before that, however, she was able to identify leadership and management gaps and became a change agent leading efforts to close all those gaps.
The clients of The Halpin Companies consistently report they make more money and work fewer hours as a result of using our proprietary, proven methods to build alignment at all levels and grow shareholder value by a factor of 2-3 consistently and quickly.

3 Requirements of C-Suite Transitions In Today’s VUCA Environment

Tsunami

The United States is experiencing unprecedented numbers of transitions in the C-Suite in part due to the retirement of baby boomers. There are significant risks to our economy and to organizations if these transitions do not occur in a strategic, well-thought-out manner. These risks include:

1. Decelerated organizational growth caused by unmitigated risks or a lack of strategic alignment.
2. Unsustainable defined benefit retirement plans.
3. Negative social impact on local communities if new leaders do not share the long-term values of an organization such as investing in the local community and economy.

 

How can current leaders prepare for this tsunami of volatility and change? How can organizations innovate at the level that is now required while simultaneously introducing new leadership?

How can new leaders absorb their significant responsibilities and guarantee the organization can sustain success? The solutions to these challenges are simple but not easy. These solutions, while simple, do require building a strategic framework for a well-thought-out process that includes experimentation, reflection to capture learnings and then more experimentation.

A successful transition at any level requires numerous iterations of these simple steps.

Here are the three required components for a successful C-Suite transition:

1. A collective mindset is required, one that allows every leader to focus equally on both the current reality of the environment from a variety of perspectives (not just historical financial and productivity metrics) and the Vision and Growth Plan. A balanced perspective is formed based on metrics, data, and substantive stakeholder input. If leaders focus only on the current reality, the pace of change, the required innovation, and the challenges to manage human capital, they can easily be overwhelmed by the magnitude of these challenges. If they only focus on the Vision and Growth Plan without putting them in the context of the current challenges, leaders can be in denial or even delusional about the gap between where an organization is and what is required to take that organization to the next level of success during volatile times.
2. A current leadership team that is high performing and shares a commitment to not only the organization’s success but to each colleague’s individual success is absolutely required. Without this level of commitment, decisions can be made that have unintended negative consequences to another part of the organization. With this level of commitment, win/win solutions will emerge. This shared commitment requires an investment of time. Win/win solutions are not attainable without the time to thoughtfully align around decisions.
3. Having the right leaders with the right strengths in the right roles is fundamental. Many leaders today have been promoted because of their ‘individual contributor’ skills and expertise. While being an expert accountant or auditor or engineer is a tremendous foundation on which to build a career in leadership, our pace of change requires leaders who are committed to successful executive transitions and who are
• resilient,
• flexible,
• innovative,
• good communicators,
and most importantly can bring out the best in others so they build cultures where stakeholders at all levels feel engaged, empowered, and encouraged.

For more thoughtful articles that reflect this, please see:

21st Century’s Most Valuable Assets

“The good news is that accelerating change, creative destruction, and new business models are all opportunities for the venturesome. A unifying theme as the economy transforms is that in almost every business, barriers to entry are coming down. Opportunity is more widely available than ever. Every person and every organization can possess the 21st century’s most valuable assets:
• openness to new ideas,
• ingenuity, and
• imagination.”

Why Every Aspect of Your Business
is About to Change
Geoff Colvin
Fortune Magazine
October 22, 2015

 

If you want to drive your company’s transitions in a strategic, proactive manner, bring in a trusted advisor beyond the normal scope of investment bankers, CPAs and attorneys. It is important to help keep the “people part” of the merger or acquisition on track.

 

We strongly encourage you to bring in experienced professionals with a track record of accelerating growth during transitions. If you have any questions or if we can be of service, we may be reached at 602-266-1961 or via our website at www.HalpinCompany.com

 

 

About Katharine Halpin

 

Katharine Halpin has been facilitating transitions in organizations of all sizes since 1995. She founded The Halpin Companies in an effort to fill a void she saw everyday in her CPA career. “Transactions fail to accomplish the forecasted goals simply because no one is focused on getting the right people in the right roles driving the right results right away.”

 

She has amassed a suite of tools and methods to exponentially increase the value of an organization by actually leveraging the transition. Many of the clients of The Halpin Companies have realized growth of 200% to 300% as they prepare for a transaction and move powerfully through the transition.

 

For more information or to discuss this in more depth, contact Katharine at (602) 266-1961 or [email protected]