Labyrinth- the Art of Decision-Making

by Pawel Motyl

  In this extraordinary way, Bernardo Provenzano, an authentic leader managing the organization’s values, succeeded in rebuilding the power of the Mafia, which the authorities had classified as a mission impossible, and restored its old culture and values.

  In the letters that the capo di tutti capi sent from his hideout near Corleone, seven rules were apparent, which the leader called on his people and other families to observe:

  1.Be invisible: Don’t raise a fuss. It’s better you are not spoken about at all than that others speak ill of you. In the worst case, suspend your activities.

  2.Negotiate: Be calm and determined; express yourself clearly. Teach your people the art of negotiation—it’s better than imposing your will by force.

  3.Work for the community: You must be seen as working for the good of your society. So always listen to people who come to you with personal or business problems, and as far as you can, give them aid and assistance.

  4.Have God on your side: Show that you are a man of deep faith and morality, and that you respect the rules, including the need for punishments and justice.

  5.Be politically flexible: Do not get attached to a single ideology. Seek allies everywhere.

  6.Be creative: In case of scandal or bankruptcy, you must reinvent yourself, show how much you’ve changed.

  7.Be modest: Show you are a normal man, just like anyone else. Do not be arrogant or snobbish. Be close to the people. 17

  Seventy-three-year-old Bernardo Provenzano was finally arrested on April 11, 2006, not far from Corleone, and subsequently incarcerated, having been sentenced to life imprisonment in absentia in 1992. He died on July 13, 2016, from complications following bladder cancer surgery. The Cosa Nostra that he rebuilt is currently viewed as one of the most dangerous Italian Mafias, and the annual income from its illegal activities is estimated at over $100 billion.

  The Leader as Architect of the Decision-Making Infrastructure

  The charismatic leadership model has been seriously devalued, not only because people look for other features in a leader these days, but above all because it is so fallible, as demonstrated by the innumerable people who once basked in glory from earlier successes and later tumbled headlong into failure in the context of the new normal. The once popular saying that it’s lonely at the top sounds today more like a warning than an observation. If you’re truly alone in making decisions, the risk of making an error becomes gargantuan. As a result, many far-sighted, intelligent leaders try to surround themselves with teams that can provide the support required for making better decisions. An excellent example of this is EXCOMM, which was set up by President Kennedy and played a vital role during the Cuban missile crisis in 1962 (see Chapter 4). A similar thing happens in business organizations, where the measure of a leader is the caliber of people they can attract to the company and surround themselves with.

  So, creating a good decision-making infrastructure isn’t just about establishing procedures, principles, and norms; it’s also about ensuring that the process involves the right people, people who understand their role and have a sense of responsibility toward their employees. This might make it look like a recruitment issue, but it’s not—although finding suitable candidates is a real challenge. The greatest issue lies in motivating those you already employ and focusing their energies in the right direction. In other words, you have to get them truly engaged.

  Highly interesting, but none too comforting, results emerged from research carried out by Professor Heike Bruch from the University of St. Gallen in Switzerland. Bruch, who specializes in engagement, motivation, and organizational energy, decided to investigate a simple question: What percentage of managers in a typical company combine the two aspects in their daily practice— focusing on the organization’s priorities and investing energy in their job. As a result of her experiment, Bruch identified four groups of managers:

  The procrastinators (lack both energy and focus). They work because they have to and they are frequently diligent. However, they lack initiative and don’t go the extra mile that would set them apart; and, of course, they put off today what really can’t wait until tomorrow. They may look busy, but they achieve very little, if anything. As Professor Bruch’s research showed, on average, 30 percent of the managers in a company are of this variety.

  The disengaged (display focus but lack energy). As the name suggests, managers in this category tend to distance themselves from their jobs. They lack motivation and a sense of responsibility and many exhibit what Bruch refers to as “defensive avoidance”—they hide from problems, convincing themselves the problems don’t exist rather than facing them and looking for solutions. Other disengaged managers opt not to act, even when they understand a problem and its magnitude. This category accounts for 20 percent.

  The distracted (well-intentioned with high energy level but correspondingly low levels of focus). These people are often perceived as the driving forces within an organization because of their propensity to confuse motion with action—you’ll see them buzzing about everywhere, in an apparent frenzy of activity. They tend to respond to crises by acting rather than reflecting, which can make them all the more dangerous. They typically find it difficult not only to develop strategies, but also to adapt to change. To top it all off, this enthusiastic, albeit misguided, bunch frequently overcommit themselves, thus putting even more pressure on their already fragile ability to focus and prioritize. According to the research carried out by Professor Bruch’s team, these people can make up to as many as 40 percent of the management cadre.

  The purposeful (focused and energetic). This is the group that everyone we employ ought to belong to—this category of managers are engaged and clearly understand the organization’s vision, strategy, and priorities. They work hard and are the most likely to achieve critical, long-term goals. 18 Some simple math tells us that effective managers constitute barely 10 percent of the managers in organizations.

  In other words, 90 percent of the managers we employ or who work alongside us, despite apparently working hard, are ineffectively engaged, something that Professor Heike Bruch named “active nonaction”—they work intensively but produce nothing. They’re the corporate equivalent of hamsters running on a wheel.

  In terms of decision-making, each of the three ineffective types create serious consequences in their wake. The procrastinators typically generate a crisis of inaction, ignoring what really matters. A similar problem appears in the case of distracted managers—even though they are far more engaged in their work than the procrastinators, their efforts resemble firing a single large cannon at lots of random targets, none of which is the right one. Decisions taken by distracted managers are also typically botched, causing amazement among their peers: How could such a hard-working and energetic person miss something so important? Disengaged managers, though, are another matter—the key factor in the decision-making process in their case is the quality of their team, because while these managers set out the right path, they cannot drive the machine in the right direction. If their team and colleagues were able to take over this task, the decision would be implemented properly.

  Frustrating tales of such people are everywhere, arousing incredulity and irritation in equal measure. I recall a highly talented and experienced marketing person who worked for one of my clients and who enthusiastically launched himself into repositioning the company’s products. He was fully engaged, sacrificing his personal life and spending long evenings and entire weekends at his desk. At first, his team was delighted, because their new director was competent, professional, engaged, and hard-working. Sadly, though, after a few months he was fired because, while he was changing the image of the company’s products, he was doing it in a manner that was totally at odds with the accepted strategy and vision for the development of the product portfolio. He displayed a classic mix of high energy, poor concentration, and inadequate understanding of strategic priorities.

  Even more striking i
s the example of someone I worked with for over a year. Observing this individual was reminiscent of watching a lizard basking in the sun, gathering its strength for its next move. Mr. Lizard (let’s call him so, seeing as we’ve already met Mr. Turkey on these pages) behaved just like this, punctuating spells of relative activity with long periods of idleness. What was worse, though, is that Mr. Lizard possessed a truly extraordinary mind—he was a highly rational and logical person, with an excellent business instinct; thought strategically; and was also unusually creative. In short, he would have been an ideal leader, were it not for his lizard-like habit of basking in the sun. Unfortunately, his was an independent, specialist position where it wasn’t possible to assign him a team to implement his ideas. Mr. Lizard had to do that himself. He fell out of favor in the company because of the irritation created by his coming up with great ideas and decisions but not following through on them. Mr. Lizard could think, but he didn’t act. The irritation grew exponentially when it was noticed that some of Mr. Lizard’s brilliant, unimplemented ideas were being adopted by the competition.

  Promoting a culture that fosters good decision-making means creating an environment in which employees are fully cognizant that they must take responsibility for any consequences of their decisions. This demands setting precise, unambiguous boundaries within which any given person can make decisions. Research by J. Richard Hackman, a psychology professor at Harvard University, showed that the best combination was to set out the direction and limits, and then leave the employee to choose their own path to meet the agreed parameters and norms.

  The recipe for success in constructing an effective decision-making infrastructure therefore means combining two elements: setting up sensible decision-making processes and procedures, which are constantly revised (RCA is a great help here), and constantly communicating the vision and goals that a given individual or team is responsible for. People who know where they’re going and who are given the freedom to make their own choices within their own area feel a much greater sense of responsibility toward achieving their goals than when methods are imposed on them. Micromanagement, whereby the way to carry out every step is minutely detailed and there’s an almost obsessive need to show employees what to do at every single step, is a perfect way to kill engagement—especially in the case of talented individuals with the potential for significant professional development. 19 The way to motivate a builder isn’t to tell him to put one brick on top of another, but to show him the glorious cathedral he’s involved in building. Antoine de Saint-Exupéry once said, “If you want to build a ship, don’t drum up people to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.” Authentic leaders always remember this.

  As defined by Peter Drucker, leadership is inextricably connected with decision-making, and vice versa. Leaders bear a heavy burden—they’re expected to make the right strategic choices about issues that have powerful potential consequences and to improve the world around them so that the decisions they make are as good as they can possibly be. The quality of leadership affects the quality of decision-making, something that can be observed in every organization, not only in the world of business, although it is much more measurable there. Following Drucker’s line of thinking, good management, or “doing things in the right way,” isn’t enough nowadays, because an unpleasant feature of the new normal is the paradox we looked at earlier: you can behave in an entirely rational manner that is profitable and logical yet still make a fatal error if a decision contradicts your declared values and the promises made by your organization’s brand.

  However, courageous decision-making often turns people into leaders. Those who aren’t afraid to step forward in a difficult situation and make the right decision are perceived by others as extraordinary individuals worth following. When people are seeking reassurance, they look to brave individuals who have a clear vision and who are self-assured and, above all, successful. Leadership emerges when there is authority composed, on the one hand, of knowledge, experience, and outstanding personality, and on the other, of achievements resulting from making the right decisions (few wish to follow those who consistently fail).

  Anyone who has ambitions to become a leader should bear in mind that knowledge and experience are gained over many years, but our characters are shaped throughout our lives. This aspect of the leadership puzzle, then, is developed long-term, with experience gradually filling in the gaps. The good news is that you can’t suddenly go backwards in this respect, because it’s impossible for us to lose our experience, or for our character to change overnight. Far more dangerous are the paradoxical challenges of good decision-making and the successes that result from it. In a world of black swans and the new normal, it’s easy to slip up and to lose your authority and position as leader through a single decision. And if that weren’t bad enough, the most common cause of spectacular errors lies not in external factors, but in ourselves. Even worse, we have little control over many of these internal processes, as we shall discover in the following chapter.

  In our crusade to become better leaders, we are our own worst enemy.

  The Four Roles of a Leader in Decision-Making

  Visionary and strategist. As a leader, you decide in what direction the entire organization will go, and you ultimately choose the strategy. Be led by solid data and logic, and don’t allow yourself to be seduced by past successes and a sense of invincibility. Don’t forget about the soft aspects of an organization’s functioning, as they play an ever-more important role these days. Be bold and prudent at the same time. Engage as many competent and intelligent people as you can in the process, ensuring that there’s room at the table for those who most often disagree with you. Don’t make the same mistakes as Napoleon, Hitler, or Johnson. Be aware of the pressure you place (consciously or not) on those under you. The stronger your force of personality and the greater your successes, the more likely you are to become an authority to them, someone whose opinions and decisions they accept uncritically. It is an extremely dangerous state of affairs, and one that is difficult to escape—after all, we all like it when people agree with us. Authentic leaders constantly question the status quo, even if they created it.

  Agent of change. You are responsible for shaping reality. If you are able to carry out the first task of a leader, and you set out a bold vision, taking strategic decisions for the organization, make sure the system is going in the same direction. Force the organization to accept that change is necessary to realize that vision. Decisions made but not implemented are among the saddest and most infuriating reasons for failure, and the world is full of great ideas that were never realized (don’t fall into the same trap as Mr. Lizard). Change not only people’s attitudes, but also the systems and tools the organization uses. Changes for the better are often hindered by an outdated system, gripping people in the talons of old solutions.

  Architect of organizational culture. Shaping the mode of operation and people’s attitudes and behavior is an especially difficult aspect of change management to implement. As a leader, you are the driving force behind the organizational culture, and your actions have an enormous influence on the attitudes and behavior of others. People observe you more closely than you think. Encourage others to make decisions that support your vision. Reward model students, who contribute the most to achieving those goals and create measurable values. Remove those whose attitudes and behavior are not consistent with what you have chosen for the company. Be like a wise capo di tutti capi: be led by values that make the organization strong, and be merciless with those who abandon them.

  Creator of the decision-making infrastructure. Remember that in the new normal, “loneliness at the top” is both outdated and ineffective. You need allies, as you won’t be able to analyze the gigantic amount of information and impulses flowing from the exponentially unraveling world of the new normal without help. Build courageous, competent teams whose members understa
nd and support the vision and values you want to promote. Create wise procedures, build mental security, engage lots of co-workers in the discussion. Trust your people, but be ruthless with those who betray that trust. Build your own EXCOMM.

  8

  My Favorite Enemy

  In Chapter we met three very poor advisors in the decision-making process: authority, sunk costs, and conformism. Each of these demons uses the same bait, our faulty cognitive mechanism, which tricks us into making apparently rational decisions that may not actually be quite so rational. Under real or imagined pressure, we make choices that aren’t the best, and stunned, we only realize the folly of our decisions when it’s too late.

  If you thought these three seemed threatening and difficult to avoid, then brace yourself for what you’re about to read, because they are only the tip of the iceberg. In this chapter, we’ll meet the greatest foe of leaders and decision-makers.