The Economist Magazine recent article addressed the seminal problem of what risk will hurt you the most – either what you don’t know or what you know but don’t interpret properly and implement remedial action. The article focus was on the shadow banking system [non-bank financial systems] and the recent recession. But the lesson learned [or not] was that the key economic risks were not buried in data but rather in “plain view” – inflated housing prices and some banks low capital level. But “plain view” facts are not literally in plain view if you do not see them. Some refer to this as black swan risk management. Whatever you refer to it as, the circumstances of these past few years is a reminder that if you change the way you look at things, the things you look at change. If so, how are you changing the way you look at 2011?
Values and traditions are two words that come to mind when we think of the upcoming holidays in December. But these are also the two words that the Economist magazine [October 30th] cited as the most important “intangible things” for good corporate governance [versus “ideal constitutions”]. Why? Because recent studies show that corporate culture trumps corporate checklists when it comes to predicting the success of a company. Unlike check the box rules, a good corporate culture fosters good habits. So what values and traditions do you want to carry forward into 2011- and which ones do you want to leave behind in 2010? December is a good time to “mull it over”.
How do you know that the answer to your current problem may just be very simple but, because you assumed it was too complex or expensive to resolve, you were afraid to ask for help? Conversely, how do you know that an issue you have that seems simple may, in fact, be a whole lot more complicated – so you can’t afford not to solve it or it will get even worse? How do you know unless you ask? Here is one example. The saying goes that great companies are bought – not sold. If so, ask yourself why anyone would want to buy your company? If so, why? If not, why not? How do you know unless you ask?
Fundamentally speaking, strategic planning is basically a 3 step process. First, a company’s Vision is supposed to be abstract and directional. Most companies know it answers the question WHAT you are all about. It’s a picture of the future. Step two, your Mission Statement is your purpose. It’s your concrete descriptive version of your raison d’être. It’s WHY you are a company. Step three is to figure out HOW you plan to connect your Vision and your Mission. The right brain approach is to focus on core values such as trust, respect, and team work. The left brain approach is to list all the Goals and Tasks to implement the Vision and Mission. The former is more intrinsic, the latter is more extrinsic. Some companies tend to emphasize one or the other – you need both. Thinking in the conjunctive is too often neglected because we tend to habitually follow our personal proclivities under the assumption that critical – linear thinking is the only way to go. The problem is that it fails to take advantage of lateral [non-linear] thinking. As Apple Computer coined it, we need to “think different[ly]”.
Are you spending most of your time “making decisions” or “solving problems” as Peter Drucker once phrased it? How do you tell the difference? Decisions are often about next year, solving problems is usually about this year. Decisions can be very few, problems are often many. Decision making is usually on the balcony. Solving problems is usually on the dance floor. Decisions are often the most productive use of your time. Solving problems is often the least productive use of your time. Decisions are usually about strategy. Solving problems is usually about tactics. Want a simple test? Ask yourself, how big is the impact of the time you spent on the last matter you worked on? I’d like to hear from you.
The famous business consultant Edward de Bono once wrote: “Too much experience within a field may restrict creativity because you know so well how things should be done that you are unable to escape to come up with new ideas.” Creativity at the corporate structural level is not a non sequitur. Why? Because corporate culture starts with how you think. Do you know how you think? If you don’t, then as they say, perhaps you’re too close to the problem. If so, who is on your corporate culture team? I’d like to hear from you.