In week three of our seven-part thought leadership series on the Seven Tough Truths of Effective Leadership, we will examine the role of difficult or often unpopular choices.
One of the core objectives for leaders in the armed forces is “Complete the mission, look after your troops” – this perfectly illustrates the third tough truth of effective leadership. Leaders must look after their people, but sometimes hard choices must be made. Sometimes, these two objectives are starkly and dangerously at odds. If a leader can’t make these difficult decisions, the situation is likely to decide for them, and if this happens, the leader loses credibility and influence. When we think of the attributes of great leaders, rarely, if ever, do we find ‘indecisive’ on the list.
While thousands of business books emphasize the importance of going for win-win outcomes and doing the right thing by all parties in negotiation and conflict management, the reality of competitive business is that sometimes somebody will lose, and difficult, unpopular choices must be made. Many contemporary win-win, do-the-right-thing views on leadership are based on Kantian ethics and extended in business philosophies such as Stephen Covey’s ‘Think win-win.’ Covey’s view that “Win-Win is not a technique; it’s a total philosophy of human interaction” ignores the reality that a Kantian view requires good faith actors on all sides of the negotiation. It assumes there are enough resources for all to prosper.
It might be fair to say the philosophies of Kant, Covey, and others were designed to counter the most common failure of human interactions – many people approach negotiation and conflict with a ‘win-lose,’ competitive mindset, which drives them to extract the maximum value for themselves. While many people talk ‘win-win,’ the reality is that many people think “win-lose” or “win-don’t care” – the focus is on getting what they want with little or no care for others. This mindset comes from a basic animalistic drive that assumes finite or scarce resources – in negotiation; this is a ‘zero-sum’ game where one party’s gain is another party’s loss.
In a zero-sum game competing with ‘bad faith’ actors for finite essential resources, playing hardball may be required to protect the business and the leader. However, some leaders default to these tactics in every scenario – they adopt a ‘win at all costs’ mindset even when the competition is for a non-essential, abundant resource they may need to negotiate again. Leadership is rarely about short-term, transactional relationships with people, and resources are seldom scarce over the longer term. In a zero-sum game with more abundant resources, an effective leader may avoid taking a rigid win-win posture and taking the other party to the cleaners, knowing this might harm their reputation and longer-term options.
Sometimes, there are what seem like impossible choices. The submarine captain who must decide to seal off a compartment and sacrifice some of their crew to save the whole ship still needs to make a decision, or they risk losing the entire vessel. Fortunately, business leaders rarely need to make life-or-death decisions. Still, they must often make difficult, unpopular decisions like firing many people in one division to safeguard the rest of the business. They know they must sacrifice some of their people to complete the mission.
Of course, in a non-zero-sum game, you lose nothing by letting the other party gain something. Effective leaders may let the other party have more than their fair share to improve their relationship and reputation and potentially gain zero-sum concessions in future negotiations. The application of proper Kantian ethics relies on non-zero-sum game conditions. Among all the decisions leaders need to make, this is one of the easiest. However, there are situations where the situation seems simple, but there is complexity below the surface.
The first example of this complexity is the concept of six degrees of separation, turbo-charged by social media. A leader may be in a situation where they are in a one-off transactional negotiation with someone they firmly believe they will never see again. However, the world is increasingly smaller, and our connections are growing exponentially. It is increasingly difficult to predict when someone you want to do business with might know someone who knows someone you once screwed over in a business deal years ago.
Another less predictable complexity is the connections between resources, mainly when limited resources are extracted from or combined with abundant resources. If a resource is incredibly plentiful, a zero-sum game exists on the surface - it costs you nothing for another party to have some of this resource. However, if a limited and valuable resource can be extracted from an abundant resource, it makes the abundant resource more valuable. In this situation, you may need to compete more aggressively for what appears to be an abundant resource, mainly if you are competing against a bad-faith actor who will harm you if they gain more.
This exact scenario played out in World War Two. The abundant water resource seems harmless enough in water-rich continents like Europe. However, within that abundant resource is a limited resource known as deuterium, or heavy water, used to make nuclear weapons. Based on this, the Allies bombed dams holding this abundant resource (water) to decrease access to the limited resource (heavy water), thereby hampering the Axis atomic program. While this may appear to be a horrendous act depriving the civilian population of an essential resource, this strategy fell squarely in the camp of Machiavellian ethics, where “the end justifies the means.”
Conversely, leaders also need to consider where they can collaborate with ‘good faith’ actors in the spirit of healthy competition to improve industry standards and outcomes for customers and communities. A ‘Moral Machiavellian’ philosophy is more likely to prevail in industries like health and education because collaboration will drive innovation and better societal outcomes. However, in most industries, there is hyper-competition, where multiple businesses compete for scarce resources such as people and raw materials. It is sometimes in business leader’s interest to act in bad faith and deceive each other to improve their chances of securing scarce resources.
While ‘right’ and ‘wrong’ may seem cut and dried in many situations, effective leaders need to consider all the strategic, long-term implications of situations because even in non-zero-sum games and abundant zero-sum games, it may not be the best decision to let the other party win. Leaders need to make hard choices, and sometimes good leaders need to do what would appear to be ‘bad’ things to secure long-term goals. Doing the right thing may not always be best for the leader, their business, or society – this is one of the tough truths effective leaders must resolve.
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