The Peter Principle states that: “In a Hierarchy Every Employee Tends to Rise to His Level of Incompetence”. In other words, people stop being effective, which has been the topic of many leadership studies, examples of which are mentioned below. In my experience, effectiveness or competence is not so much a matter of knowing everything there is to know about the Value Chain but how one organizes the knowledge one already acquired and how to direct that organized knowledge towards the realization of the purpose for which the business was created. This organizing and directing is what I call “The Missing Link in the Value Chain©”. It reduces systemic risk!
On Friday 28th February and 1st March, 2014, in partnership with the Center for Executive Development at UCSD’s Rady school of Management, we make a start at defying the Peter Principle that plagues so many professional careers unnecessarily. Here are the facts:
- The average 10-year tenure for executives has dropped from 8.1 years to 6.3 years.
- The lead time for a new CEO to implement his/her agenda is 3-5 years.
Michael E. Porter, Jay W. Lorsch, and Nitin Nohria:
The 7-Surprises of New CEOs
CEOs must assume ultimate responsibility for the success and failure of the entire Value Chain because they can exercise ultimate authority to change it. In other words, they feel the pressure to perform and experience the surprise of their limited organizational influence; when they use their ultimate authority unilaterally, they loose it.
Tom Baker and Sean J. Griffith:
Predicting Corporate Governance Risk: Evidence from the Directors & Officers Liability Insurance Market
The main determinants for assessing risk and quoting a premium are the insured’s personality and the organizational culture they create; which is a reflection of his/her personality.
Capitalizing on Complexity
- Leaders in for-profit, non-profit and government organizations admit that they are overwhelmed by complexity and events.
- They Identified Creativity as their most promising solution. Given the fact that the average 10-year tenure is 6.3 years and that the lead time for seeing results from a new agenda is 3-5 years, one has to be rather courageous to pursue a creative agenda when there is little time remaining for correcting any mistakes. Mistakes are very likely when doing something new for the first time.
Creativity, the solution identified in the IBM study, is not just another silo of specialized knowledge, a tool, or best practice. Moreover, there is no “Idiots’ Guide to Creativity”. Creativity is imagination in action, which requires a rigorous understanding of the character and nature of the entire value chain; the relationships between means & ends and cause & effect. Anything less is trial & error, which is a poor defense when being held accountable for under performance.
Leadership education has shown an insatiable appetite for what the late Col. John Boyd USAF would have called “Gold-Plating” the business system. What he meant was adding expensive advanced tools, driven by best practices, aimed at increasing efficiency. However, the unintended consequences are erosion of effectiveness. Moreover, every next round of cost cutting seems to be more expensive while earning a diminishing rate of return. Examples can be found in disappointing performance data, such as top- and bottom line results, customer loyalty, employee engagement, the war-for-talent, executive turn-over rate, burn-out, inauthentic organizational behavior, lack of moral fiber, fraud, and generally unsustainable business practices.
The unwavering pursuit of more and better of the same solutions that have proven their ineffectiveness in the past is symptomatic of ineffective leadership. When extrapolating the cliché exhortation “Doing more with less” you get “Doing everything with nothing”, which is nonsense. After all, when you keep cutting cost, you will soon disable the business’ capacity and capability to realize the purpose for which it was created in the first place. This is known as “Predatory Cultivation”, which I call “The Black Knight Syndrome”, after a scene from Monty Python’s movie “The Holy Grail”.
The only solution to persisting and recurring problems was given to us by Dr. Albert Einstein decades ago, when he said: “The significant problems we have cannot be solved at the same level of thinking with which we created them”. In other words, instead of looking for answers, convincing ourselves of the validity of a proposed doctrine, we need to educate our mind by obtaining intellectual organization, defining terms, and suggesting connections among apparently disparate matters. When a doctrine stands in the way of progress, we need to break the rules -change our level of thinking and evolve.
Professional leaders are capable of quick and sound judgment in spite of incomplete or misleading knowledge and risk of serious consequences in the event of error. To that end, Boyd for Business & Innovation intents to increase participants’ understanding of the dynamics and interrelationships of the various organs of an organism, in order to achieve success in complex environments when coping with new and unforeseen circumstances. Insight and understanding are the traits of a craftsman, who is more versatile in his/her abilities and requires fewer tools. Craftsmanship is a trait of Professionalism.
By addressing the significant problems that individual leaders face personally -being overwhelmed by complexity and events- they become empowered to solve the significant challenges faced by their businesses. When providing them with just one solution, as with a best practice solution telling them what to do and how, they can solve one problem. By teaching them how to think, they can solve challenges that come their way for the rest of their lives.
Are you a forward thinking leader on your way to the corner office who wants to make a difference for your business your country and for yourself? Are you passionate about helping others become successful in their job and thereby creating a legacy that is worth celebrating? Then we cordially invite you to join this unique two day conference. Please register today at: http://Rady.UCSD.edu/Exec/Open/Boyd-Conference
You can address any questions regarding the conference to Hans@AnticipatedOutcome.com