PACE: Another Ben Franklin Invention
Disruptive times call for transformational leaders with a knack for addressing complex problems. To navigate effectively, we must learn to let go—and become more complex ourselves.
We live in an age of accelerating disruption. Every company is facing up to the profound changes wrought by digitization. Industry boundaries have become permeable. Data, algorithms, and artificial intelligence are changing the nature of forecasting, decision making, and the workplace itself. All this is happening at once, and established companies are responding by rethinking their business models, redesigning their organizations, adopting novel agile-management practices, and embracing design thinking.
We’ve had a front-row seat at many such transformation efforts. Their importance, and the challenge they pose for institutions, has been well documented by management writers. But comparatively little attention has been paid to the cognitive and emotional load that change of this magnitude creates for the individuals involved—including the senior executives responsible for the success or failure of these corporate transformations. What makes the burden especially onerous is the lack of clear answers: the very nature of disruption means that even the best, most prescient leaders will be steering their company into, and through, a fog of uncertainty.
In our experience, five personal practices can meaningfully contribute to the mind-set needed for leadership effectiveness during transformative times. They are extensions of timeless principles of centered leadership; taken together, they can be the building blocks of your personal inner agility:
- Pause to move faster. Pausing while remaining engaged in action is a counterintuitive step that leaders can use to create space for clear judgment, original thinking, and speedy, purposeful action.
- Embrace your ignorance. Good new ideas can come from anywhere, competitors can emerge from neighboring industries, and a single technology product can reshape your business. In such a world, listening—and thinking—from a place of not knowing is a critical means of encouraging the discovery of original, unexpected, breakthrough ideas.
- Radically reframe the questions. One way to discern the complex patterns that give rise to both problems and windows of emergent possibilities is to change the nature of the questions we ask ourselves. Asking yourself challenging questions may help unblock your existing mental model.
1. How PACE came to be
Anticipating tough questions at an upcoming board meeting, the CEO and CFO of a global manufacturer met to review the status of a substantial merger they had engineered about twelve months earlier. It wasn’t a pretty picture. Despite following the integration plan closely, despite intensive scenario planning, and despite clear, achievable targets, productivity was falling. The more the two dug into the results of their grand plan, the more heated the discussion. The CFO wanted to shutter a dozen factories in the company’s expanded portfolio. The CEO, who had promised that the merger would lead to bold innovation, wanted to increase funding of those very plants, since they were making the ambitious products the company would need in the long run. Despite having worked together for quite a while, the two men had such differing views that neither knew how to move forward together.
Claiming this space is hard, and there are no silver bullets. Some CEOs like daily meditation. We know one CEO who takes a ten-minute walk through the neighborhood around his office—leaving his cell phone on his desk. Others regularly catch a minute’s worth of deep breathing between meetings. The repetition of such practices helps them pause in the moment, interrupt well-grooved habits that get triggered under duress, and create space to practice something different.
Pausing requires substantial self-awareness, and you may not get immediate results. Every bit of benefit counts, though, and if you don’t start the journey of learning how to decouple from your context and the immediate response it provokes, you’ll find it harder and harder to be open to new ideas, or to become a better listener—both traits that are critical at moments where your own vision is clouded.
2. Years of Building and Tweaking
The information was interesting. But the CEO and CFO agreed that they were still largely in the dark. They decided that they would next meet with all the members of the executive team. They needed the help of many voices.
With the whole team gathered, the CEO and the CFO listed their assumptions about what might have caused the productivity slump. Then they went around the room, asking questions: How may we be wrong? What else is happening? Who sees this differently? The chief human-resources officer, a quiet fellow during most discussions about operations, spoke up to say that absenteeism was at an all-time high. The vice president of marketing mentioned that the company’s largest customer had complained recently about the call center. As more managers weighed in, patterns started to emerge, patterns that had nothing to do with numbers. The vice president of strategy, who was in the process of moving into a new house with her new husband and children, said, “This reminds me of my kids. Joe and I were so focused on making the move happen efficiently that we completely missed the fact that our kids were anxious. They needed to be reassured, not told they were moving into the perfect room! I wonder if fears and anxieties in our employee base could be driving this.” Together, the managers came to a jarring realization: they had failed to reassure employees about this massive change in their lives.
But embracing your ignorance is hard. Letting go of your need to know means challenging your own identity as exceptionally competent. One CEO we know pretends to have a long dinosaur tail that represents all her life experience. In meetings, she imagines that she tucks it away beneath her. It’s comforting that it’s there. It allows her to lean back and access a sense of self-sufficiency that can be summed up by the thought, “I am enough.” That comfort shifts her into a deeper listening mode, where she’s unencumbered by the urge to provide a quick answer. She feels that she’s able to hear not just the words and ideas of others, but the subtext of conversations. Since adopting this practice, she’s received feedback that people feel more empowered and creative when meeting with her.
The embrace of ignorance cuts against the grain for most of us and can take a lifetime to master. To get started, ask yourself some probing questions. First: “Do I suspend judgment and listen for what is below the words, or do I listen for what I already know or believe?” If it’s the latter (as it is for so many of us), go on to this second one: “What would I have to let go of to truly listen?” Third: “What is the very worst that could happen?” The answer to that can help you find the hidden fear that you may need to befriend. And, finally, there’s a fourth: “Am I the leader I want to be?” If the answer is “not yet,” then you know why embracing ignorance must become a priority. Asking these questions may not dissolve the reactive habits that hold us back, but they can begin a process of letting go to find new capacities within ourselves.
3. The Fastest Growing Type of Financing
The CEO and CFO of our global manufacturer could have reacted in two ways to that boardroom discussion. They might have said, “Let’s get back to basics and just attack productivity. After all, that is the problem we set out to solve.” But they chose to pursue a bigger question: “What kind of culture do we want to create?”
After the meeting with the executive team, the CEO and CFO set out on a “listening tour”—a valuable executive response that becomes even more important as technology increases the clock speed of our lives. For ten days, the two leaders toured plants and visited regional offices, listening to shop-floor workers, managers, division-level HR executives, and operations specialists. They didn’t go in with predetermined questions.
Then the CEO and CFO again assembled the executive team. Now, armed with a panoply of varied, often colliding perspectives, the team could dig into the root causes of those productivity decreases. This wide-open, wide-ranging dialogue reset the direction of the merger. New goals were set on new timetables, based on a better understanding of what employees needed and the way employee networks in the merged company fed off one another. The CEO and other leaders revived the sense of purpose that employees had felt for so long by transparently recentering the company’s transformation on the customer. They also empowered a set of shop-floor change agents to drive the shift through every layer of the company. It wouldn’t be hyperbole to say that answering the bigger question—what kind of culture do we want to create?—saved the merger.