Making decisions when faced with change.
Our founding partner, Alan Kinloch, had learnings in his career from both MIT & Harvard.
The tenor of this was Innovation in entrepreneurialism and leadership and is particularly relevant now as the global economy enters a recessionary period that will likely last 4-6 years. Strength of leadership will determine how a company performs in the next 36 months where the risk and opportunity resides. Having the correct mindset at board or senior management level is the difference between companies who decline and companies who find growth when challenge arrives.
What was Alan’s fundamental learnings from these prestigious educational titans? Well 1+1 does not equal 2 in business! In maths yes, but in business it needs to be more than 2. It must be more than 2.
Let’s discuss this statement.
In leadership you need diversity of thought. Very few people have a monopoly of wisdom, even Einstein & Hawking were not right 100% of the time. They drew from other opinion/thinking and added their contribution to that thread of discussion which of course strengthen the discussion.
The key in senior leadership is to have opposing voices and to allow these to be heard. Most challenges have multiple solution paths. Some risky but rewarding, others safer and less rewarding. Some defy logic and are a clear gamble, while others inevitably have fatal outcomes, be that failure or acquisition.
The answers lies in the middle of the individuals who run companies. Companies that have a dominant figure (RBS/ Burmah Oil/Standard Life) who overly exerts their influence will suffer, as their characteristics, be that risk aversion or a heady ‘gung ho’ approach, dominates with damaging results. RBS is a good example of a King complex leading to fatal consequences. Standard Life went from managing £200bn to only £2bn due to poor leadership driven by one individual.
Last week in Edinburgh the Institute of Chartered Bankers ran a small informal discussion into Corporate Ego and failures at board level. They did not pull punches when discussing board governance failure. RBS, Bank of Scotland, Standard Life and Burmah Oil! All companies listed on FTSE100 that have been gutted by failure at board level. This event was run at the ‘Library of Mistakes’, a small intimate library that explores and champions learnings from business and human mistakes/failures.
The balance between a defensive or offensive business approach is critical. More so when companies enter a recessionary period. This balance of oversight and discussion is found in the combination that lies in a management or board governance where individual strengths find the answers in the middle.
This is 1+1 not equalling 2. In a company, when 1+1 does equal 2, then the board or management team is too similar or overly dominated.
The same logic applies to 100% of 50% not being the same as 50% of 100%. This isn’t maths, this is business.
The focus of the MIT/Harvard course was Innovation Driven Enterprises (IDEs). This is of course companies like Skyscanner, Hubspot, Marketo, SalesForce, but is any company who explores a better way of how they do business or how they refine their products/services in a changing market, or arguable the most important change being that of economic impact/challenge on your customers.
How you make business decisions must be informed and shaped by your customers. The growth, even in the deepest part of a recession, will be found by understanding your customer changing needs and wants. It’s also useful to know what your competitors’ strengths and weaknesses are.
Do not make or allow decisions to be driven by fear or ego. Make decisions solely to acquire customers.
Contact Alan to arrange a meeting to discuss how we can help.