Prof. Jan Bosch, 12 May 2020
This week, I had a meeting with the leadership team of a company that has asked me for help to accelerate their growth. We’ve been reconvening regularly and going through the process of defining who we are and what our purpose is as a business, identified the key avenues to accelerate growth, created a plan to execute on and operating mechanisms to follow up.
The weird thing is that we’ve been consistently running behind the plan in terms of execution and when I pointed this out to them, I got the usual excuses of internal dependencies, external factors outside the control of the team and so on. However, at the core, something else was going on. The team has been working together for more than a decade, during which the company went through some difficult times that resulted in their having become extremely careful and risk avoidant. Over the years, they’ve developed a set of habits that ensure wide safety margins. For instance, any new hiring only takes place after the revenue from customers for the new hire has been guaranteed for a long time to come.
The surprising thing is that these habits might have been useful at some point in the past, but at this stage where the company has raised a good chunk of funding, there’s no reason to be avoiding financial and business risk. Instead, with the whole COVID-19 situation, now is the time to invest and expand the team with great talent that’s now available because of many companies scaling back.
Not only are the current set of habits counterproductive for what we’re looking to achieve. The team even fully recognizes and admits that this is the case. And yet, as individuals and as a team, they struggle to let go of their habits and old ways of working.
This example is an instance of normal human behavior. Even though we tend to think of ourselves as rational beings that are occasionally bothered by these pesky emotions, the reality is that we’re irrational beings that are, according to some research, for more than 95 percent of the time driven by habits and that have a tendency to post-rationalize our entirely irrational behavior. The brain is a fantastic story-generating machine and most of the time, it’s generating stories explaining to ourselves why we did something.
In many of the companies and teams I work with, I’ve observed the same situation and it’s the leadership team that tends to be at the heart of it. For all the explanations and excuses of why we are in the situation we find ourselves in, basically, it almost always is the leadership team that’s hampering the company’s development and growth. And in the few cases where there really are external factors at play, it still behooves you as a leader to take responsibility anyway as it causes you to shift your mindset from a victim to the protagonist of your own story.
'Is what you’re doing actually the best course of action under the circumstances?'
I don’t mean to say that leadership teams of companies that aren’t doing so well need to be universally kicked out and replaced. Instead, I’m asking you, dear reader, to spend more time reflecting on what you do, how you behave, why you believe you do these things and to what extent it might be that you’re post-rationalizing non-constructive behavior. The only way to break out of these situations is by continuously holding up a mirror to yourself and carefully analyzing whether what you’re doing is actually the best course of action under the circumstances. To me, that’s the most effective, or even the only way, to continuously learn, improve and reinvent yourself and your organization.
As Lao Tzu famously said: “Watch your thoughts, they become your words; watch your words, they become your actions; watch your actions, they become your habits; watch your habits, they become your character; watch your character, it becomes your destiny.” And I believe that we should all aim for the highest destiny we can accomplish in our lifetimes.