November 04, 2012

Learning to Thrive in the Downturn

With the endless din of dire predictions and anxiety over the downside effects of the global economic crisis, the world seems a mighty scary place right now. As conditions in the world change dramatically, most business leaders, driven by fear, are reacting to the situation in an attempt to ride out the turbulence and hope that conditions will soon begin to return to normal. Their actions may help them survive another day, but do they add up to a strategy for thriving in the downturn?

In learning how best to survive in the crisis, many executives we speak with appear to be taking actions that are out of an old playbook – Contain costs! Leverage our best customers!Increase productivity! One executive we spoke with, the COO of a major global bank, described with great pride his change to the corporate travel policy to “fly economy for domestic” as a major milestone in his efforts to manage through the crisis. While it is essential to address urgent needs, like raising cash and containing costs, this type of reactive learning relies on winning formulas and options for action that leaders know and trust. Their desire to appear in control by being in action limits their ability see further ahead. Like a racehorse wearing blinders, they are unable to see deeper, integrated possibilities to strengthen their enterprise and position their company for accelerated growth.

At worst, reenacting these old habits ends up reinforcing the status quo and defending a leader’s interests. At best, they get better at what they have always done. They remain secure in the shelter of their own worldview, unaware that they are isolated from a changing world.
What if today’s reality is the new normal?

There is no doubt that the crisis is real, deep, dire and is having a devastating effect on the lives of millions of people. Yet to only focus on triage is to perpetuate the past - past assumptions of how to thrive – and to preserve what is in place. This thinking denies that there is a new reality, and new realities most certainly demand new thinking about how to lead.
Our work in China over the past 15 years lends us a very different perspective to this crisis, with a significant difference in its implications. The equivalent word to ‘crisis’ in Chinese is “weiji”, which actually translates as “crisis and opportunity”. Therefore, what the English-speaking people see as a crisis, the Chinese see as a crisis and opportunity.

Yet it is not just a matter of semantics. The difference is very meaningful in today’s world as it is a better attitude to adopt to combat the worsening global economic woes. It is an entirely new capacity to see an emerging reality – both as it is and as it is evolving – and cultivate the actions that increasingly open new possibilities and alternative futures.

Turning a management tradition on its head

Building this capacity requires leaders to suspend many of the behaviors that have made them successful in today’s technology- and earnings-driven world. In order to connect deeply to the present reality and what is emerging, leaders must resist their bias to the dominant question “What should I do?” and instead begin to ask “What should I think?”

The first step in developing this new capacity is to turn a Western leadership mindset on its head. The notion that effective action is at the heart of great leadership has been inculcated – and in many ways institutionalized - into our management culture. Business books like Winning by Jack Welch; Execution by Lawrence Bossidy and Ram Charan; and Good to Great by Jim Collins have sold millions of copies by stressing action over strategy as an edge for success. We certainly don’t dispute the importance of acting: thinking without acting is of little value. But we believe there is an overemphasis on getting results without the deeper learning perspective that supports right action. It’s a bit like losing the forest for the trees – a leader’s sense of urgency and drive gets them to the next milestone, but the road they’re on could be heading off a cliff. That’s the kind of thinking that got us into the current crisis and now - driven by fear and anxiety - the desire to act urgently without serious suspension of old thinking may limit many a leader’s ability to see clearly ahead. To approach this crisis and most every business problem with the question, “What should I do?” is to foreclose options before they can even be explored.

Seeing clearly

To thrive in our current climate, leaders need to cultivate a new kind of knowledge about what is emerging in their world. By stopping their habitual ways of thinking and acting, and entering into a place of reflection, assessment and integrative learning, leaders can begin to learn to see what new threats and opportunities are coming into play. We regularly observe many Chinese executives demonstrate this capacity. Using a highly refined capacity for integrating – a kind of internal mapping - they are constantly assessing their environment and exploring options like moves on a 3D chess board.

When asked to describe their thinking process, many of them talk about non-thinking. They describe an internal discipline of switching off the stream of certainties based on prior assumptions, because they have been taught that perception is not reality. By quieting the conversation in their mind that is always comparing – “this is how I’ve done it in the past;” or “this is how it should be” - and disciplining their emotions, they allow a situation to emerge and present its true nature. From this new seeing comes a clearer, more powerful path to attaining the goals that they desire to achieve and the unique capacity to act and create.

 

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