High performance leadership/decisions: business game research findings
Finding 1: Top Performers avoided the "Presumption of change" trap.
Evidence for Finding 1: Even though the game starts with each team inheriting a business from the previous executive team 95% of the participants showed no curiosity regarding how successful the previous leadership team had been and why!
It is amazing that almost all new leaders focus on what they need to change but not what they need to preserve. What to change is only part of the challenge and for whatever reason (ego, identity, peer pressure ...) showing a lack of respect for the previous team's achievements seems to be a good predictor of sub-optimal performance.
Finding 2: Top Performers suspended assumptions, thoroughly reviewed all available instructions/background research and actively sought out any available expert input.
Evidence for Finding 2: Senior teams or functional experts generally did worse in the game than expected and junior teams/non-functional experts generally did better than expected.
As people become more experienced and competent they often become more fixed on their "Golden Rules" ("this always works" or "never do this"). Whilst Golden Rules are generally a good and necessary thing they can also close people down to a fresh examination of the facts available to them. In many cases the evidence which was available would have directly challenged these golden rules if it had been properly and objectively evaluated.
Finding 3: Top Performers rigorously followed the discipline of evidence-based decision-making.
Evidence for Finding 3: 90% of the teams made at least one critical decision which was based purely on hunches or past prejudices rather than any actual evidence.
Evidence-based decision making is the discipline of supporting every key decision with a reference to one or more sources of written evidence of an objective nature. Ideally this evidence should be representative and quantitative but it can also be purely anecdotal provided it can be verified by a third party.
Finding 4: Top Performers were prepared to make painful choices and tradeoffs on their priorities where necessary.
Evidence for Finding 4: Team performance was assessed against a balanced scorecard of 5 key indicators covering revenue, profits, market share, customer growth and organisational maturity. In no case did any single team ever perform better than all the other teams on all 5 of these indicators.
For example, in the game to build market share you may need to focus investment on new customers but to build revenue you may need to focus on existing customers who spend more. In benign market conditions you might not need to make a conscious choice between these two however in difficult trading conditions it may simply not be possible to achieve both and you have to make a choice. Top performing teams always seemed to have a clear hierarchy of priorities - "this first, then this second then this third" - which guided their actions at critical points.
Finding 5: Top Performers displayed "coherence" of strategy and action.
Evidence for Finding 5: Over 85% of the teams accidently took actions which were inconsistent with the strategies they had developed at the start of the game. When this was pointed out they almost always responded that they did not wish to change their strategies.
A key question in determining whether you really have a "strategy" is what did you decide NOT to do. If you cannot answer this question then you probably don't have a strategy and are navigating reactively in response to changing circumstances. This usually leads to "mission drift" and consequent under performance.
Finding 6: Top Performers are open to collaboration, even with "competitors", and are always looking for advantage through "mutual learning alliances".
Evidence for Finding 6: Even though the teams were not explicitly competing against each other within the game less than 10% of them entered into any dialogue whatsoever with the other teams to explore if they could legitimately help each other or share useful information/experiences.
As well as learning from your colleagues you can also learn from your external partners, customers, suppliers and even your competitors. For example, if you are building a new market it can be an excellent strategy to collaborate with competitors to help build something that will become worth fighting over later. If you operate by the mental model/golden rule that anyone who is not my friend must be my enemy then you are handicapping your ability to learn faster than your competition which, in the end, may be fatal for you in your market.
About Ken ThompsonKen Thompson delivers keynote conference speeches, workshop facilitation and in-house consultancy in four key business areas:
- Creating High Performing Teams in enterprises including Virtual and Mobile Teams (based on the Bioteams Book)
- Establishing effective Collaborative Business Networks enabling companies to co-operate effectively in areas such as sales and product development (based on the book - The Networked Enterprise)
- How to use the latest social media technologies including blogging and online communities to promote enterprises, brand, organisation or event
- Development of graphical on-line interactive Business Games, Dashboards and What-if Simulators for organisations to support Performance Improvement, Strategy Development and Executive Team Development.
Bioteams Books Reviews
I have been thinking a lot about what happens when a leader gets under severe pressure, usually because things are not going according to plan. It seems to me this is the very essence of real leadership and where leaders can really justify their salaries. BUT according to Professor Dietrich Dorner, in his excellent book The Logic Of Failure: Recognizing And Avoiding Error In Complex Situations, there are two very tempting but ultimately disastrous tangents a leader can pursue in a crisis instead of addressing the real issues.