It’s been four weeks since the 2016 Presidential election was decided.
It’s been four weeks since the 2016 Presidential election was decided. Donald Trump will become our 45th President in January. I have been thinking deeply about what his Presidency will mean for CEOs around the country as well as the future of strategy and company culture.
As you read this issue of THRUUE Points, I urge you to divorce what I’ve written from the divisive politics and discourse we observed throughout the election. I know that’s easier said than done. But THRUUE Points reflects our business opinions and expertise, and is in no way tied to political agenda.
There is no playbook for what is about to happen, and CEOs and boards must rethink their fundamental assumptions and plans. Strategy and culture have never mattered more.
Hello in There…There…There…There………
Confirmation bias—the tendency to interpret new evidence as confirmation of one’s existing beliefs or theories—can be so consuming that it jolts an entire population as happened on election night. It lulls leaders into believing the same things that led to previous success will lead to future success and dulls your ability to anticipate or accept outcomes that don’t fit with what you believe. I often think of the famous moment when the leaders of Blockbuster Video laughed off Netflix’s suggestion for partnership because Netflix’s model didn’t fit in their biased view of the video industry, which they thought they had conquered.
It’s clear from market reactions that few organizations had contemplated and priced in what a Trump Presidency would mean for business model. The media also played a significant role in confirming conventional wisdom, creating echo chambers that prevented too many leaders from anticipating and preparing for the outcome that actually happened. Now, we are all playing “catch up,” parsing previous words and ideas to understand what changes are in store and what they will mean. To do so effectively, we must challenge our own confirmation biases. CEOs must ask:
- How am I making time to think deeply?
- What am I reading to help me see what’s happening across the market, and what bias is in the data presented?
- What bias do I myself hold in the questions I ask and the way my leadership team thinks?
Boards must ask:
- What if assumptions in our strategy do not come to pass; what must happen then?
- What might unfold that we should humble ourselves to now contemplate?
- How effective a board are we, and how often are we pushed out of our comfort zones to think?
- What if we challenged the orthodoxy of how we govern and moved to a new, smaller model where our only focus would be bringing diverse and completely un-entrenched expertise? Would such a construct make any difference in sustaining our organization and enabling success? If it would, then what is preventing us from adopting it?
Board Chairs must ask:
- What role am I playing in creating an echo chamber that fails to consider opposing (even uncomfortable) ideas?
Considering divergent ideas and perspectives will make the difference between getting the next big ideas right for your organization or succumbing to failed strategic assumptions and outdated mental models. It is only through diversity of skill, gender, race, cultural background, age, experience, and domain knowledge that echo chambers dissipate and biases decrease.
The Future of Strategy
From a strategy standpoint, the next eighteen months will feature boards and CEOs rethinking their big ideas. Our changing reality is now settling in. What the President-elect says he will do in his first year means we must prepare for seismic changes in immigration policy and a potential reset of health care financing and health entitlement programs. Trump has also signaled changes in global trade and commerce agreements, national security, homeland security, energy, infrastructure investments, and many policies that have the potential to dramatically impact how we do business in America and abroad. While no laws have yet been passed, the probability of major change with cascading secondary consequences has increased significantly.
No industry will be immune to changes in policy, taxation, or investment perspectives. For- and not-for-profit business models alike will need to rapidly adapt and be frequently questioned by their boards. Relevancy is at stake. The risk profile for every organization has permanently shifted, and organizations must identify and imagine the new risks they can control and those they cannot.
CEOs should commission scenario planning and creative group sessions with leaders to envision what could happen over the next four years. Such scenarios should be brought to the board, which should then review their most well-settled strategic plans in the context of what’s possible. Imagination, the humility to admit mistakes, and openness to divergent thinking are the secret ingredients in strategic planning, and they are even more critical in the face of such seismic change. Idols of industry will be toppled much faster than most will imagine possible. New opportunities will also now present themselves, but only if leaders can think beyond the provincial and that which makes them most comfortable.
Ultimately, I believe every strategic plan produced in 2017 should have a new section called “Humility.” Within it, leaders can openly state that their work products were built with imperfect information and data that may be measuring outcomes of the wrong game. This humble mindset will provide the vaccine needed to avoid confirmation bias in every board meeting to come. 2017 will be the year of agile and humble planning.
The Focus on People
It was fascinating to watch how other CEOs dealt with the end of the election. Apple’s Tim Cook and LinkedIn’s Jeff Weiner, for instance, wrote emails to their employees with a powerful balance of empathy and inspiration.
Cook invoked the power of Apple’s mission and vision as he told his employees, “While there is discussion today about uncertainties ahead, you can be confident that Apple’s North Star hasn’t changed.”
Weiner, too, invoked the company’s vision, as well as the importance of its core values: "…the realization of our vision—to create economic opportunity for every member of the global workforce—has never been more important… I will continue to treat others, regardless of who they voted for, in a way that's consistent with [our values system]. I hope the same holds for everyone at our company—that no matter our political leanings…we take care of one another.”
What these two leaders show us is that purpose, vision, and values are their source of safety and connection during times of uncertainty. They always are. CEOs can’t litigate political winners, but they can connect employees to why their organization exists and they can model the values and behaviors that will sustain their organization—and people—through both good and difficult times.
At THRUUE, we had a fire-side chat the day after the election. Grounded by our core value to be “reflective,” I felt it was important to come together as one team to support each other, provide a space to speak without judgment, and process our new reality together. My colleague Jonelle Lesniak expressed pride in THRUUE for providing the “psychological safety” for such a discussion. Her comment, which invokes a cultural practice alive inside one of the most valuable companies in America, struck me as a very big idea that leaders should consider when looking to the values and culture of your own organization.
Google put the notion of psychological safety on the map when the company discovered it as the “secret sauce” of the spoken and unspoken norms inside its highest performing teams. Google leaders and employees alike hold the “shared belief that the team you are working in is safe for interpersonal risk-taking.”
Think about that idea for a moment. With how many teams have you felt truly safe to take interpersonal risks? Lack of safety may be the reason employees left your organization this past quarter.
Safety is local, personal, and primal. It can’t be legislated, declared, or unleashed through traditional matrix management structures. It can only come alive through a relentless focus on culture and sustained management attention on creating an innovative, open environment. During a time when employee fear, societal division, automation, and uncertainty about the future are so palpable, nurturing and rewarding the safety of ideas is especially powerful. Leaders should help their organizations get as good as Google at unpacking what psychological safety means for their people. After all, safety can only come alive one CEO, one leader, one team, and one employee at a time.