What are the best combinations of moves?

Are we seeing and hearing what we need to see and hear? . . .

Dave Kinnear1-On Leadership

I came across a recent article from a person who is a sales trainer (no names to avoid embarrassments and conflicts) and who seemed to have suddenly awoken to discover that consumers and businesses are no longer buying the way they used to buy. “Gosh,” I thought, “where the heck have you been?” On the other hand, the comments made the point that I and others have been making for over a year now – maybe close to two years, namely that things have changed and they aren’t coming back.

After reading the content, I decided it was worth passing along. I got a quick response from one of the people on my mailing list stating that the author was “99% hype and 1% content.” My colleague apparently knows this person and stated that the author “had never lead a sales team but was good at speaking and selling books.” Although he didn’t say so, I assume that he therefore discounted the content in that particular article. Perhaps not, I haven’t yet inquired. Still, I was a bit surprised at the response.

The response got me to thinking, and that’s always dangerous. The premise of the article was that buyers had changed because of this recession. The author also indicated that things were not going to “go back to the way they were.” Since the buyer has significantly changed habits, then so must the salesperson. This all makes sense, agrees with much of what I’ve been concluding and matches what we’ve been discussing on this subject for a long time now. So why was my colleague “dismissive” of the article? Apparently because he deemed the source less than credible based on his own evaluation of the gentleman’s experience – or rather, lack thereof. I know I do the same thing, even though I try to guard against it. I think we all succumb to being judgmental from time-to-time. Our view of the world sometimes keeps us from seeing other possibilities.

What I’m wondering is how much we truly miss about what’s going on around us because we have made judgments about people and/or situations. I’m concerned about how much information we dismiss because it doesn’t fit what we believe – “I believe it therefore I see it!” And the reverse is also true, if I don’t believe it, I’m likely not to see it, or at least I won’t acknowledge it. And we know what happens when people are in that state of mind: the government regulators did not see the problem with Madoff despite being shown the problem by an astute whistleblower. Same thing with Enron and same issue with the rating agencies – no one wanted to believe the worst so they simply did not see it until it all collapsed like a house of cards. Yes, things were complicated, but let’s face it, people just did not want the hear the bad news – until it was too late.

How many of us are still not wanting to hear or see and so are actually not hearing or seeing what we need to hear and see? I don’t mean simply the bad news, but also the good news or news that we have to change and reconsider what it is we do and how our business model works. I believe it was General Eric Shinseki who said: “If you don’t like change, you’re going to like irrelevance even less.” So what is keeping us from changing, from seeing the need to change? Maybe it’s preconceived notions, or firmly held value judgments, or simply not wanting to move outside our “comfort zone.”  Here is a quotation from this month’s HBR:

Companies, not surprisingly, don’t all follow the same strategies during a recession. That could be because of differences in executives’ cognitive orientation during a crisis. According to Tory Higgins, a Columbia University psychologist, human beings are hedonistic—we avoid pain and seek pleasure—but they differ in how they try to achieve those aims. There are two basic modes of self-regulation. Some people are driven most by goals, such as achievement, advancement and growth. These promotion-focused individuals are motivated by ideals and aspirations that provide pleasure if realized and disappointment if not. Other people are prevention-focused—concerned mainly with safety, security and responsibility. They strive to avoid bad outcomes, experiencing relief if they succeed and pain if they fail. Situations have a potent influence on cognitive orientation: A recession, for example, can trigger a response that overrides a person’s usual orientation.

By applying this perspective to our empirical research, we were able to classify companies and their approaches to managing during a recession into four types:

Prevention-focused companies, which make primarily defensive moves and are more concerned than their rivals with avoiding losses and minimizing downside risks.
Promotion-focused companies, which invest more in offensive moves that provide upside benefits than their peers do.
Pragmatic companies, which combine defensive and offensive moves.
Progressive companies, which deploy the optimal combination of defense and offense.

The question is, of course, what is the best combination of moves? If you have a subscription to HBR, you will be able to read the full article (link above). According to the authors of this piece, the odds that a company will significantly outperform their competition (by 10% or more) on both top and bottom line growth after the recession were: Prevention focused, 21%; Promotion focused, 26%; Pragmatic focused, 29% and Progressive focused, 37%. Here is the summary of how the best moves “shake out”:

Companies that simultaneously focus on increasing operational efficiency, developing new markets and expanding their asset base outperform, on average, in sales and EBITDA after the recession.  So what are our preconceived notions keeping us from doing? Are we fighting the change we know is necessary? Are we leading our companies in the right manner to exit this recession in the strongest possible manner? Have we changed our business model so that we are part of the strong performers? Or are we letting preconceived notions, fixed world views and rigid judgments about how we want things to be keep us from thriving?