Conversation 2: On Parenting, Management, or Leadership

Previously we discussed that management theory, as taught in the USA and propagated around the world, is not value-free. Quite the opposite, it is a manifestation of the American culture of individualism and elitism, management being a class of people different from workers, subordinates.

Yes.

Not to decide is to decide not to decide.

Furthermore, you claim that management is needed because there is change. If there were no change there would be no need for management. But then we would be dead, because change is life.

You also said that change produces problems and opportunities, and whether they are problems or opportunities it is up to us, and you will tell us how to convert problems into opportunities.

I suggest that managing change involves two processes. First, you must decide what to do, and then you have to implement your decisions. Would you agree that to decide and not to implement is useless?

But some people cannot decide. They feel they do not have enough information or they are scared of the risks involved.

Notice: Not to decide is to decide not to decide. You are actually deciding by default. Assume you are in front of an intersection. That is a change, a new phenomenon on the road. You have to decide what to do: left, right, or go back. Assume you cannot decide for the reasons you spelled out before. What happens now? By default you have decided to stay in place. You decided not to decide.

That could be the worst decision of them all.

You are right. Will Rogers said it best, and I am paraphrasing: Even if you are on the right road, if you do not move, a truck can run you over.

When there is change, there is no way to avoid deciding and then implementing that decision.

For managing well, both processes are necessary, and together they are sufficient. So our diagram of the leadership process looks like this:

DIAGRAMA

These processes—deciding and implementing—are value-free. You can apply them to manage anything from a criminal underworld to a community of saints. Whenever there is change, you must make decisions and you must carry out those decisions.

But are both factors really necessary?

As I have said, not deciding, or procrastinating, is a decision. You cannot escape the fact that whenever there is change, you must make a decision, or the change itself will de facto make the decision for you. And while making a decision is necessary, it is not sufficient. You also need to implement the decision.

It is interesting that business schools, or schools of management, do not teach much, if anything, about implementation. All the courses are about how to make good decisions whether in marketing, finance, or economics. As if assuming that if the decision is a good one, it will be implemented.

As you will see soon, that explains to me why, in my experience, newly minted MBAs are a pain in the neck. Without experience they complain all day long about why their wonderful ideas do not get implemented. They need some scars on their knees to realize that good decisions, although they are very good, often do not get implemented and bad decisions do, and for a reason.

Why?

To manage well, you need both to make effective decisions (decisions that produce the de- sired results) and to implement them efficiently (with minimum energy possible).

DIAGRAMA

You are not managing well if you make bad decisions that you implement well, or if you make good decisions that you implement badly. For instance it is better to have a mediocre strategy that is implemented than to have the best strategy ever not implemented. You are right. Even a billion times zero is still zero. But I have a doubt: A decision is not a good one unless it includes a plan of implementation. Thus, all that is needed for managing is to make a complete decision, which should include the detailed plan of implementation, then implementation is nothing more than to do it.

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It’s not so simple. Look at your personal life: How many decisions have you made that you never implemented? Even though you sat down and made a list of exactly what you would do—you even planned all the details of implementation—yet you still did not implement the decision.

Do you smoke? Maybe you overeat? Since you know these activities are bad for you, you’ve probably decided to change those habits. Yet you probably still go on behaving the same way despite having a detailed plan to implement change.

You mean I’m not in control of my life?

Are you? Have you implemented all the decisions you’ve made to change?

No, I have not. For example, I’m still struggling with losing some weight. I’ve made the decision to change my diet many times, but have not succeeded in doing it so far. It’s embarrassing.

The same holds true for almost any organization. Management might decide to change direction, markets, product lines, or the culture of the organization. Often it will have great difficulty implementing the decisions, implementing the changes. The same phenomenon occurs in the governing of countries. Many leaders, even dictators, complain that their decisions involving change do not get implemented. For instance, Hitler could not force the implementation of his decision to burn Germany in front of the advancing Allied forces. His decision was never carried out, although he had total power to execute anyone who didn’t follow his orders.

His order to destroy Paris was also ignored, although he could have executed those who disobeyed him. Even though he held power over their lives, people still did not follow his orders.

The quality of the decision can neither predict nor assure the probability of implementation.

Levi Eshkol, the Prime Minister of Israel, was criticized for not carrying out a certain decision. His response was, “I have com- mitted to decide. I did not commit to implement.”

I repeat again, the quality of the decision can neither predict nor assure the probability of implementation. Some decisions that require change, even if they are outstanding, do not get im- plemented; and some bad decisions get implemented swiftly.

Why is that?

Because the two processes—what makes for good decision making and what makes for good implementation—are incompatible. It’s as if you are holding two books: One book tells you how to make good decisions, the other tells you how to implement decisions. For implementation, if you follow the instructions in the book on how to make good decisions, those instructions will undermine your efforts to implement the decisions efficiently. And in making decisions, if you follow the instructions in the book on how to implement efficiently, they will undermine your capability to make good decisions.

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I’d understand that better if you gave me an example.

Look at political systems. Which system is designed to increase the probability of making good decisions? For that purpose, the system fosters open discussion and vehemently pro- tects the freedom of information, speech, and the press so that good decisions can be made?

Democracy.

That’s right. And have you noticed how difficult it is in a democracy to implement public policy decisions that require change? The system may make good decisions, but the legitimate political dissension necessary to make a good decision becomes a stumbling block in implementation. My experience with leaders of democratic systems is that they complain their policies don’t get implemented as swiftly as they would like, or don’t get implemented at all.

Now, which political system fosters quick implementation of decisions by not allowing dis- cussion, dissension, or questions?

A totalitarian system.

Yes. And totalitarian regimes usually make bad decisions. Why? Because efficient implemen- tation is carried out by forbidding freedom of the press, dissension, and discussion. It’s “do it or else.” This inhibits the exchange of information necessary to form educated judgments. Instead of quality decisions, such regimes eventually produce biased decisions based on the prejudices of the dictator, with horrible outcomes.

Study history: Dictators eventually harm the country they lead. Eventually. Because by not allowing dissension, information does not flow well, and the decisions are based on biased judgments of the dictator. There is no discussion, no validation of the decision, and eventu- ally bad decisions will be made, destroying the country.

Are you saying that good management is democracy in decision making and dictatorship in implementation?

Correct! This does not apply just to management of companies. In personal life it means that in order to make a good Good management decision, you must be open-minded. You must operate “democratically” within your own mind and with other people. Listen to your own voices of dissension in your head. Ask for the opinion of others who do not necessarily agree implementation with you and understand why they disagree or dissent. Can you learn anything from their dissension? That is democratic decision making. But once a decision is made, you must become “dictatorial,” which means you must commit to the decision, be strong willed, and carry it through. No more debating back and forth.

Good management is democracy in decision making and dictatorship in implementation.

That’s easier said than done.

Absolutely. Democracy in decision making and dictatorship in implementation is what I call “democratship.” It is a difficult process. Many people mismanage by having the sequence upside down: They’re dictatorial in decision making and democratic in implementation.

That’s me, I think. I’m dictatorial in deciding to lose weight: I have made up my mind absolutely and I have made a list of what I can eat and what I cannot eat and how much. There will be no more discussion. This is final, I say. And I remain resolute until the sandwiches arrive. I then conveniently turn democratic and heed the voices of dissension.

You’ve got the idea, my friend. You must have democracy and dictatorship in the right sequence. You must be capable of being democratic and then dictatorial. The difficulty is in the word then. When do you stop being democratic and start becoming dictatorial? When do you quiet the voices of dissension?

Some people are democratic in decision making and continue being so during implementation. They’re inefficient because they keep changing their decision based on who was the last person to talk to them. These are the people you might beg to decide and stick to a decision, and stop changing their mind all the time. On the other hand, some people carry out efficient implementation too early on in the decision making process. They close their mind too quickly. They’re difficult to reason with because they don’t listen well. They end up making decisions in a hurry: shoot first and ask questions later. These are the people you beg to stop running forward with implementation because the decision was made in such a hurry you have not discussed the matter sufficiently.

Democracy is an effective system but not an efficient system, while dictatorship is efficient but not effective as a system.

It looks like what you are saying is that democracy is an effective system but not an efficient system, while dictatorship is efficient but not effective as a system.

Right. If you try to make democracy an efficient political process, it will lose its effectiveness. To be efficient it will cut down on dissension, freedom of speech, and transparency of information. There will be less democracy and the result will be faster implementation of solutions to problems, but some decisions might have bad repercussions.

By the same token, are you saying that totalitarian regimes cannot be effective?

The Soviet economy, in its central planning mode, had difficulty producing according to plan. It even had food shortages. Totalitarian regimes are efficient but ineffective. The more democratic they become, the more effective they can be. But then they’d have to give up some political efficiency. They’d to give up on some power and control, which are the essence of a totalitarian regime, and that’s not easy for them to do. People usually want some- thing more without losing what they have. They prefer more to instead of.

To manage, lead, parent, or govern well means to decide and implement, to be democratic then dictatorial. It is not easy. You must decide and implement, be open-minded and resolute at different times. You have to know which frame of mind is correct and at which time. Defined this way, the managing process is all-encompassing, universal, and value-free.

DIAGRAMA

External-Internal Integration

Here is another complexity to the leadership process. We already discussed that when you decide and implement your decision, what you are doing is causing change, and that change creates new problems.

DIAGRAMA

The new problem could be worse than the initial problem I was trying to solve.

This reminds me of a cartoon I once saw: A man walks into a medical building. In the lobby there is a directory with the names of all the doctors and their specialties:

Dr. Smith, cardiologist, suite 202

Dr. Horvat, pulmonary diseases, suite 303

Dr. Mondlak, internist, suite 404

The last one is Dr. Goldber, side effects, suite 1001

We need to make decisions and implement them, but decisions that will make the situation better not worse.

I understand that. We will always have problems as long as there is change, which means as long as we are alive. But how do you make decisions that will not make the situation worse?

Let us address this important issue. We already discussed that the cause of all problems is…

Disintegration.

So if disintegration is the cause of all problems, what do you think the solution is?

We will always have problems as long as there is change, which means as long as we are alive.

I see where you are going. If the new decision we have made and implemented causes more disintegration then it is bad. And if it makes for integration then it is good. Right?

Yes and no. A leader needs to adapt the organization to the changes happening in the market. If it is a non-profit organization the same still holds; there are changes out there to which the organization has to respond, or, even better, pro-act.

It is an effort to integrate the organization with the changes out there. But those efforts to integrate the organization with the environment in which it operates cause disintegration in- side the organization. As we have said already, all the subsystems do not advance and change in synchronicity. Marketing and sales efforts change to react, or pro-act, to the changes in the market; but operations, production systems, do not change as fast. Accounting changes even slower, and human resources changes the slowest. People do not easily change their behavior and values.

Efforts aimed at external integration cause internal disintegration. To integrate internally, we need to slow down the changes aimed at the external environment. That means that internal integration now causes external disintegration.

You see, this is complex. All this cannot be done simultaneously. A leader, manager, prime minister, or parent has a double role: disintegrate internally to integrate externally; and disintegrate externally to integrate internally. The challenge then is how to keep both orientations integrated.

If she only integrates internally, there is no growth. If she only integrates externally, it is not a sustainable growth.

What is the solution?

There is a sequence. All living systems disintegrate and then integrate. All living systems sleep after being awake. That is true for people, fish, trees—all living systems.

When you were awake you were falling apart dealing with change. Then you stop to sleep for some hours, and what happens when you sleep? You integrate. Then when you wake up in the morning you are fresh and ready to go and disintegrate again.

What happens if you do not sleep, let’s say, for a week or longer? Eventually you fall apart. The same holds true for companies if they do not periodically integrate, because all organizations are living systems.

If she only integrates internally, there is no growth. If she only integrates externally, it is not a sustainable growth.

No company should grow exponentially, with its curve of growth going up, up, up. It will eventually collapse; it is only a question of when. Continuously going up will end up going down eventually.

What do you suggest?

The revenue or profits curve should go up, then sideways for a while, then up again, and then sideways again, like stairs. Build, consolidate, and build again, to subsequently consolidate again.

But even a stairs function—integrate, disintegrate—is only second prize.

Why is that second prize? You just convinced me I need to sleep and not be awake all the time.

Because it reflects discontinuity. To go up requires one kind of leadership, typically very entrepreneurial. To go sideways requires a very different leadership, one that is internally oriented and wants to put order and systems in the organization.

In a stairs function, companies change leaders at the discontinuity points: Too much change and the company is falling apart? Fire the leaders and get a financially oriented person to restore order. But then, after a while, the company is stymied, going nowhere. Fire this leader now and hire a new entrepreneurially oriented one. This causes a lot of wear and tear in the company.

Unless you have a leader who is capable of changing orientation: First she is externally oriented and then turns around and is internally oriented.

What is the first prize?

Work on the outside and, at almost the same time, work on the inside. Do not allow too much disparity between the two efforts. In other words, constantly watch the organizational internal-external alignment. Do not allow the disparity to grow too large. Do not chase too many opportunities. They might be a problem in disguise if you are not internally aligned. (Remember opportunities can be problems and problems can be opportunities.)

Isn’t that too difficult for one person to do?

People whose style is to cause change externally are not the ones who are comfortable with integrating internally. And those who are comfortable with putting the pieces together internally are not the ones who like to cause change and integration externally. There is a conflict of roles and thus of styles.

Absolutely. A well-managed system needs a complementary team. Building a company is like digging for gold in a mine: One person digs, the other person has to build the infrastructure so the mine does not collapse. Growing a family takes also a complementary team. One parent is working outside, earning a living; the other one makes the house a home, integrates. Look at the person you married. You most probably married someone who complements you in style. Someone who is strong in those characteristics in which you are weak, and vice versa. Thus, when we introduce our spouse we might say, “Allow me to introduce you to my better half,” and the spouse might say, “No, no, let me introduce you to my better half.” Each one is the better half of the other. Together they form the perfection needed to lead a system, in this case a family.

A well-managed system needs a complementary team.

But how do I do it in a company?

In a company you should have one meeting to look out- side and another one to look inside. Have strategic meetings discussing what to do with the changing market. Then have a separate meeting about how the company is doing internally. Identify where the cracks are, i.e., what the internal problems are, for example, in the roles people have to perform, in the organizational structure, in authority, in the reward system, in whom you hire, etc., and deal with them.

Why can’t I do them at the same meeting?

Because you will get confused. Looking at the complications of the inside you will stop hav- ing the urge and willingness to deal with the outside. Also, each might require different people attending the sessions.

As a CEO you are the bridge. You should be listening to both sides and deciding how much change on the outside and how much change in the inside is desired when and how. You should perform the balancing act between outside and inside.

Only the CEO has that role?

No, it does not have to be the CEO. It can be the head of any strategic business unit. Whoever has the role of making profits or, for a non-profit unit, whoever has the leadership role of getting the results for which the organization exists.

But these efforts—inside-outside alignment, focus on adapting to market, and then stop changing out there and fix the inside—mean conflict.

There will be conflict whenever there is a complementary team. The aggressive team mem- ber deals with how to adapt the organization to the changing environment. The stable, sensitive one stabilizes and integrates the company. We need the diversity of styles and diversity means conflict. So, there is no management of change without conflict.

There is no change without conflict, period. Change is life, and life means problems, and prob- lems need to be dealt with, which means conflict, and conflict causes pain.

Life is pain, is that what you’re saying?

Yes, I mean that. No one likes conflict unless they have a mental disorder.

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Conflict takes energy. It is painful and thus people look for solutions where there will be no more conflict. People look for continuous harmony. Love sells. Bookstores are full of books about how to avoid conflict, how to live in harmony. Religions promise that if one follows their belief system they will end up in heaven. The idea that there can be ongoing harmony and no more conflict and no more pain has been the selling proposition of religions, of feel- good gurus, and of political ideologies like Communism. But get real. It will not happen. It cannot happen because of…

Change.

There is no change without conflict.

As long as there is change there will be conflicts. The more change the more conflicts. The faster the rate of change the faster and more chronic the conflicts. Do you realize more people were murdered in wars in the twentieth century than cumulatively in the history of mankind? As change is further accelerating and technology offers more and better weapons of mass destruction, like chemical devices and nuclear bombs, in the twenty-first century we might as well destroy ourselves all together.

Change is life and life is a long string of never-ending problems, and the attempted solutions give rise to conflicts.

Now I understand why people say: “Life is a bitch and then you die.”

In almost all cultures I know they say: “Little children, little problems. Big children, big prob- lems.” We will always have problems as long as we live. We will stop having problems only when we die. On the tomb of Nikos Kazanstakis, the author of Zorba the Greek, it says: “No more hope. No more fear. Finally free.” We are finally free, no more pain, when we die.

But conflicts can be destructive.

You bet. That is one reason, maybe the major one, why people do not like change.

They want to change, to solve a problem, as long as there is no change. Do not avoid conflict by avoiding change. Avoiding change is avoiding life. When there is no change there is death. The idea is not to avoid change but to make conflicts caused by change constructive and not destructive.

Do not avoid conflict by avoiding change.

Good idea. How?

Conflict is energy. It is like rushing water. You can make electricity if you know how to harness it or, if not, it will cause a destructive flood.

How to harness, not dissolve, conflict is an excellent subject for more conversation.

Great, I’m looking forward to it.