Knowing the right path is easy. Taking it is damn hard
Many a great company has failed because brave decisions were required but not faced and taken
“I always knew what the right path was. Without exception, I knew. But I never took it. You know why? It was too damn hard.” Words from the seminal speech made by Lieutenant Colonel Slade, portrayed by Al Pacino, in the movie Scent of a Woman. We’ve all faced that.
True leaders, often elected into positions of power by the popular vote, have established their positions of influence, their reputations, their integrity, by taking the right position on matters of substance, not necessarily popular at the time, but having proved to be right.
In business it is not that simple and it’s not just up to you. Stakeholders must be persuaded. Constituencies must be consulted, opposition must be fought. Agendas must be known, understood.
It’s not always possible to gather all this consensus, to do what’s right (even if you’re lucky enough to have the information and the foresight). So many variables have to come to the party, particularly that most elusive of partners, capital.In some ways, capital is the least difficult input in an investment decision. Capital knows what it wants, right? Well, not always. Established capital has established boundaries of application, mostly for good reasons – don’t step out of your comfort zone, don’t challenge the rules. Brave capital goes where established capital won’t venture.
Clever capital managers listen hard. For new ideas, investment imperatives and compelling arguments, so that the capital they manage can deliver superior returns (risk adjusted, of course).
This is doing the right thing. Doing the right thing attracts even more capital to manage, which enables more diversified risk within a portfolio, which builds foundations and success. Albeit in hindsight, testing whether the right thing was done with scarce capital can be objectively measured and mathematically compared. Judgment calls are more complicated.
But it’s actually doing things that presents the real challenge. The shareholders own the capital and get the mandate, fair enough. What’s right for the business, though, is best sensed on the ground, by the executives. The reality of the operating environment of the firm, its challenges and opportunities, is a complex matrix of day-to-day events and developing currents, both from within the company and imposed by the external environment, particularly the competition.It’s hard enough to find the right course, but it takes real courage to acknowledge that you’re taking the wrong bearing, and you need to change, or go back or just do something now, for no apparent reward, other than the knowledge that it is right, in the long term. It’s impossible without trust between stakeholders.
Many a great company has failed because brave decisions, required in changed circumstances, weren’t faced and taken. But you can only agree what is right if shareholders and management have the same perspective, the same mandate, the same purpose, the same time frames, and a shared understanding of the facts. Absent this basic alignment, if you operate in a world of competitors, you’ll fail.
Taking a firm position on a difficult decision is a lonely place. It is so much easier to follow the path of least resistance, just go with the flow. You surely can’t get into trouble if you stay within the boundaries of “what we’ve always done”.
But you also can’t make a difference.The test is not always objective, and the proof isn’t immediate – you can’t judge the deep foundations necessary for long-term success by quarterly performance measurements, and you can’t ignore the facts – rosy pictures are fairy tales.
The hard stuff takes time to implement and the wisdom of the leap of informed faith upfront may only become conventional wisdom after your term at the helm has expired, but that’s no reason not to do the right thing, now.
CEOs and other leaders tasked to fix things within a faulty organisation aren’t selected to perpetuate the error, to fit in. They’re chosen precisely because they bring something different to the equation, to see what’s wrong and then to have the courage to fix it, no matter how many noses need to be put out of joint. If you want the past, don’t hire the future.
Valuable judgment is built on learning from past mistakes. Very few decisions are perfect, but as the saying goes, people mostly regret what they didn’t do.
If you sit still and ask yourself whether what you’re about to do is right, you’ll always get an answer: it’s usually right. Do it, because you can’t be you anymore if you don’t.
Mark Barnes is CEO of the Post Office.