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Thinking the Unthinkable:
The New Leadership Imperative

By Holly G. Green

People ask me all the time what I consider to be the biggest challenge facing today’s business leaders. I don’t even hesitate on this one. It’s not foreign competition, new technologies, the rising cost of energy and raw materials, unstable financial markets, or anything like that. It’s the automatic assumption by most business leaders that we still live in a fairly predictable world.

Think about it. Six months ago, who would have thought that Toyota would be in the position it is today? Here we have one of the largest, most successful, most respected companies in the world. A company known for its commitment to building dependable, high-quality products. And now it faces a crisis that is not just destroying its hard-earned reputation, but could well put it out of business.

That’s unthinkable!  And yet it’s happening right before our eyes.

Sales of Toyotas are plummeting. The U.S. government is launching a full-scale investigation into the company’s business practices. And lawyers around the globe are licking their chops in anticipation of the tidal wave of lawsuits about to be unleashed in regards to the faulty floor mat/throttle issue.

If Toyota is found to be at fault, and if it turns out they had knowledge of the defective design and did nothing about it -- both of which appear to be likely scenarios -- punitive damages could run into billions of dollars. Not even Toyota could withstand that kind of a financial hit and still survive.

I’m not saying the unthinkable will happen. But the possibility that Toyota could go out of business in the near term is very real. And that’s the kind of world we now live in. Until we incorporate this fact into how we run our businesses, we will continue to put them at risk.

Let’s look at the other side of the coin.

A year ago, most people were ready to write General Motors off for good. Sales were slumping, market share had sunk to unprecedented lows, and the red ink was piling up. Onerous labor contracts continued to weigh the company down. And despite the huge government bailout, many feared the company couldn’t innovate fast enough to stave of total defeat.

Now, the tide may have turned. The company has shut down or divested itself of unprofitable divisions. Labor has agreed to unprecedented contract concessions. And, in the face of Toyota’s current woes and a slightly improving economy, sales are starting to rebound.

Do you think that a year ago GM senior management was asking themselves, “What would happen if our biggest competitor suddenly went under?”  Of course not. That would have been unthinkable. Yet, here we are. Even if Toyota doesn’t go under, the game has changed dramatically in GM’s favor. And no one, especially those so desperately trying to turn GM around, saw it coming.

Strategic planning is all about looking around at what’s going on today to see where our businesses need to be tomorrow. But we can no longer predict the future with any degree of certainty. History is less and less predicative. The world simply moves too fast and there are more moving, interdependent parts than we dreamed possible a few short years ago. Often, before we even have time to get clear on where we’re going, the conditions that led us to that decision have already changed.

Leading a business in this kind of environment requires a new way of thinking. Which raises the question: given that most business leaders still view the world as fairly predictable, how do we train ourselves to think differently?

The answer can be spelled out in four simple words: pause, think, focus, run. Here’s what I mean by that:

  • Pause. Make it a regular habit to back away from the day-to-day and take a hard look at the world around you. Evaluate what is happening outside your industry as well as inside.

  • Think. Constantly challenge your beliefs and assumptions about what you know to be true about your customers, your markets, your industry and the way you do things inside your organization. Take nothing for granted.

  • Focus. Identify opportunities to add value to your customers in ways that nobody else is doing. Identify significant initiatives that support leveraging those opportunities, get and keep everyone in your organization clear on achieving them.

  • Run. Implement quickly, with focus and flexibility, knowing in advance that your new initiatives will not unfold exactly as planned.

Then repeat above process.

During the think phase, develop the habit of engaging in scenario planning. Ask questions like. “What would happen if our biggest competitor suddenly went out of business?   If we had no constraints, how would we solve the ‘unsolvable’ problems in our industry? What is taking place in other industries or other parts of the world that we could use to transform our industry?”

Many companies do this once a year during the strategic planning process. In today’s world, that will no longer suffice. When a company as large and as seemingly invincible as Toyota can have the rug pulled out from under them so quickly, it’s clear that the old rules no longer apply.

Pondering the imponderable should become an everyday occurrence in organizations. If you want to be a successful leader today, thinking the unthinkable needs to become a way of life.

Read other articles and learn more about Holly G. Green.

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