Three beliefs that hold companies back in the face of crises

How do we make deci­sions in an uncer­tain world? We can only devel­op a strat­e­gy based on hypothe­ses. Over time, they stick and become men­tal mod­els. The prob­lem is that we live in a time that is becom­ing less and less pre­dictable. An increas­ing num­ber of unex­pect­ed events means that some of our beliefs become obso­lete more quick­ly. What makes the dif­fer­ence, then, is the abil­i­ty to iden­ti­fy our mod­els to ques­tion them. This is dif­fi­cult and often cost­ly. But the sur­vival of a busi­ness may depend on it.

Here are three points where men­tal mod­els can become entrenched. And three ways to avoid becom­ing trapped.

The trend towards hav­ing a rai­son d’être has put iden­ti­ty back into the cen­tre of the game. “Who are we?” almost takes prece­dence over “what do we do?” But the two ques­tions come togeth­er into one: com­pa­nies are human soci­eties, and each has its own iden­ti­ty. Rely­ing on this iden­ti­ty makes it pos­si­ble to mobilise the troops, to draw up a strat­e­gy and to focus on the fun­da­men­tals. It does­n’t mat­ter whether we empha­sise val­ues or the core business.

The prob­lem is that iden­ti­ty is also a trap. More pre­cise­ly: it becomes a trap if it is cen­tred around the obvi­ous and ready-made for­mu­las. In the face of an exis­ten­tial cri­sis, cling­ing to this rou­tine iden­ti­ty can be fatal. Con­verse­ly, sal­va­tion can be found in re-explor­ing this iden­ti­ty. Two exam­ples illus­trate this per­fect­ly, the first often cit­ed, the sec­ond less well known.

Iden­ti­ty becomes a trap if it is cen­tred around the obvi­ous and ready-made formulas.

Kodak’s mis­ad­ven­tures are a para­ble of what not to do in the face of a major par­a­digm shift. It was at Kodak in Rochester in the 1960s that an engi­neer invent­ed dig­i­tal pho­tog­ra­phy. But the com­pa­ny missed this rev­o­lu­tion because its core busi­ness was pho­to paper. The men­tal mod­el here was its busi­ness mod­el. A busi­ness mod­el so prof­itable that it had no inter­est in ques­tion­ing itself… until the day the mar­ket dis­ap­peared, and the com­pa­ny with it.

Kodak’s less­er-known coun­terex­am­ple is its com­peti­tor Fuji­film. Shak­en by the same rev­o­lu­tion, the Japan­ese com­pa­ny was able to ques­tion its iden­ti­ty and go beyond the obvi­ous. From this self-ques­tion­ing arose a dis­cov­ery: the busi­ness of pho­to paper is not paper, nor pho­tog­ra­phy. It’s the chem­istry. It is by rede­ploy­ing this iden­ti­ty as a chemist that Fuji­film has been able to invent a future for itself.

To get away from the obvi­ous, Fuji­film’s man­agers and employ­ees had to make the effort to reflect. They had to dis­tance them­selves from their activ­i­ty, from the image they had of it. And admit to them­selves that they were going to hit a wall. It is not easy to tell the King he has no clothes! Who will be the first to say it?

The under­ly­ing issue here is that of con­sen­sus. It also has many advan­tages in good times: when we get along well, we work bet­ter and faster, with­out wast­ing time argu­ing or hav­ing to jus­ti­fy every­thing. In dif­fi­cult times, it also allows the organ­i­sa­tion to come together.

But in the face of uncer­tain­ty, in the event of a seri­ous cri­sis, a major dis­rup­tion, in short, when we move from the con­tin­u­ous to the dis­con­tin­u­ous, con­sen­sus becomes dan­ger­ous, and poten­tial­ly dis­as­trous. Here is a his­tor­i­cal exam­ple of how a con­sen­sus reached a lit­tle too quick­ly could have had ter­ri­ble consequences.

In 1962, the Amer­i­can admin­is­tra­tion was faced with an exis­ten­tial threat as a result of the Cuban mis­sile cri­sis: the USSR sent nuclear mis­siles to the island and the ships were on their way. The com­mit­tee con­vened by Kennedy quick­ly agreed that the only effec­tive, albeit ter­ri­ble, option was to raze Cuba to the ground. The pres­i­dent then spoke: « I hear you. But how will our chil­dren judge us? Then he left the room. This moment is fun­da­men­tal: by leav­ing the room, the pres­i­dent allowed for anoth­er group dynam­ic to be cre­at­ed, which would allow dif­fer­ent solu­tions to emerge in a few days, includ­ing the block­ade, which was final­ly adopted.

Kennedy’s actions changed the game, by alter­ing the frame­work of the dis­cus­sion. Alfred Sloane, the leg­endary head of Gen­er­al Motors, had made it a rule not to let a con­sen­sus be estab­lished too quick­ly. “Does every­one agree?” he would say. “Real­ly? Then I’ll post­pone the deci­sion until next week.” And in the mean­time, some of his staff would come to him with new ideas. 

Kennedy and Sloane were not timid per­son­al­i­ties afraid to make deci­sions. They offer us a les­son: beware of con­sen­sus, and do not hes­i­tate to call it into ques­tion if it forms too quickly.

Jeff Bezos, the boss of Ama­zon, is known for being tough and stub­born. But he almost always forces him­self to be the last per­son to speak in a meet­ing, oth­er­wise the dis­cus­sion would quick­ly become focused on his ideas. Here we see a charis­mat­ic leader who is wary of his own author­i­ty and who, in the same spir­it as Kennedy or Sloane delays con­sen­sus, holds back from express­ing his ideas in order to encour­age his col­lab­o­ra­tors to express themselves.

Because lead­er­ship is also a men­tal mod­el, all the more com­pli­cat­ed because of the com­bi­na­tion of a per­son­al dynam­ic (an indi­vid­ual clings to a mod­el, for exam­ple because it has been suc­cess­ful in the past) and a social dynam­ic (the lead­er’s man­age­ment style ends up being com­mu­ni­cat­ed to the organ­i­sa­tion). True lead­er­ship is both about cul­ti­vat­ing this mod­el, which is a source of effec­tive­ness, and about not let­ting it stag­nate. There is an art to learn­ing to extract your­self from your own lead­er­ship model.

There is an art to learn­ing to extract your­self from your own lead­er­ship model.

This does not mean doing with­out it, and again, there are no good or bad mod­els. Let’s take the “ver­ti­cal pow­er” mod­el, which has been revived by some polit­i­cal lead­ers over the last twen­ty years. As we know, the top-down nature of the deci­sion ends up ham­per­ing the feed­back process. How­ev­er, this mod­el also has its advan­tages: a ver­ti­cal com­pa­ny can also be very inno­v­a­tive because the boss pro­tects his sub­or­di­nates. This was the case at Apple under Steve Jobs.

But prob­lems arise when the mod­el becomes self-evi­dent, and we no longer know how to ques­tion it. A British boss, for exam­ple, told me his prob­lem: not enough ‘team engage­ment’. He admit­ted that he did not ask his employ­ees for their opin­ion but jus­ti­fied this by explain­ing that he did not want to under­mine his lead­er­ship. He was anx­ious to be respect­ed and had allowed him­self to be trapped in a men­tal mod­el from which he was unable to escape. He was still able to see that it was not work­ing! Sim­ple adjust­ments or tech­ni­cal solu­tions are not enough to cor­rect this type of dys­func­tion. It is the mod­el itself that needs to be set aside.

Any lead­er­ship mod­el would ben­e­fit from being “brought to the table” from time to time. Or at least to be tak­en out of its com­fort zone. A good way of doing this is to move away, some­times phys­i­cal­ly. Oth­er things will be said, oth­er things will be observed. Try hold­ing a meet­ing in a fac­to­ry and not in the board­room, for exam­ple. Anoth­er method is to encour­age a form of diver­si­ty – not so much ‘moral’ as cog­ni­tive – in delib­er­a­tion and deci­sion-mak­ing bod­ies. Dif­fer­ent back­grounds, peo­ple who have been test­ed in the field, will be an asset on a board.

Lead­ers and organ­i­sa­tions that have man­aged to emerge from seri­ous crises have been able to iden­ti­fy their mod­els, to ques­tion their iden­ti­ty, to break the con­sen­sus to reopen the game. Men­tal mod­els are habits that we no longer pay atten­tion to. They are use­ful… right up to the point where we for­get about them. It takes a bit of prac­tice not to get trapped in them.