Instead of catering to the whims of an established base of short-term shareholders, Polman focused on getting the shareholder base he wanted—attracting the long-termers who valued growing real returns over inflating expectations. And the policy has worked: Unilever’s top fifty shareholders now have an average holding period of seven or more years.
The Double Down
Back when he was working out the plan, Polman was torn between wanting to take a long-term perspective and needing to adapt to the short-term focus on the capital markets. He saw that, by and large, a long-term focus is great for the business and the world; it provides room to invest, incorporates externalities, and spurs innovation. But a short-term focus is what the capital markets demand, including mandated quarterly reporting, in the name of discipline and accountability. A short-term focus has the potential to produce happier shareholders, too, because satisfying shareholders becomes the primary objective of the company.
Polman wanted the deliriously happy shareholders from the short-term model as well as the real, sustainable growth from the long-term model. But he couldn’t get both by acting as most CEOs do and simply accepting the trade-offs. Instead, he doubled down on the long-term model, using total transparency as the leverage point to produce happy shareholders. His new solution wasn’t about making his current shareholders happy; it was about attracting new shareholders who would be happy with a long-term orientation and sustainable growth.
As he explains, his solution depended on being very clear and unapologetic about the game plan: “Transparency builds trust . . . We spent a disproportionate amount of time explaining why a more socially responsible business model is actually also a better model for the shareholders longer term—if you are a long-term shareholder. We made it very clear to shareholders that this model would give them consistency of delivery, where every year we would grow faster than the market, where we would improve stability.” Polman was open about the fact that Unilever’s approach might not deliver the highest profitability every year, but he promised it would deliver consistently, year after year. And so it has.
His Job in the World
Polman, like many of the integrative thinkers we’ve met, tends to speak of his resolution of trade-offs matter-of-factly. Just as Jack Bogle described the notion of an index fund as “obvious,” Polman argues that his new business model was a relatively simple matter: “I’ve never actually believed in that trade-off [between the short term and the long term],” he says. He knew a better answer—better for Unilever and for the world—was required, and he set out to create it. Pressed on how he was able to overcome the trade-off while many of his peers have not, Polman is charmingly blunt: “I think it is a cop-out. Any CEO can decide that he shouldn’t get paid too much. Any CEO can decide to think long term, if you need to change things and you value change . . . I think it is courageous leadership that is missing. The excuse is that the market won’t let you. There are things the market obviously will not understand, and there are limitations. But we have a license that is much broader than any of the CEOs claim.”
In other words, Polman sees it as his job to create a great choice. And he argues that the task is well within his capabilities. This is Polman’s way of being in the world, his stance about how the world works. Stance, it turns out, is a crucial piece of the integrative thinking puzzle.
EXPLORING STANCE
In The Opposable Mind, Roger defined a stance as “how you see the world around you, but . . . also how you see yourself in that world.”7 Your stance is the sum total of your mental models about the world, an overarching frame of the world and your role in it. Our colleague Hilary Austen, in her study of artistry, uses the term directional knowledge to capture the same idea as stance, explaining that it contains both identity and motivation: who you are and what you are trying to do. She writes that directional knowledge “provides the orientation for practice . . . [It] is in large part tacit and deeply embedded. It rarely bears scrutiny except in times of transformational change within a personal practice.” Your stance, she argues, “is quietly developed and often taken for granted.”8
Your stance plays an important if little-examined role in your life. The stance you have about the world, and your role in the world, drives you to act in specific ways (and not in others). These actions then help determine your outcomes.
Two Chefs
How does stance affect actions? Consider two chefs. Both chefs have the same number of years of training and experience. They both have access to the same professional kitchen, the same ingredients, and the same tools. They also have the same notional intention: to make, say, a dish of braised veal. The only thing that separates them is their stance about what it means to be a chef.
One believes that food is love: the chef’s job, he believes, is to take the best ingredients available and prepare them with genuine affection for the ingredients and for his diners. The dish he produces is simple and delicious—a steaming, fragrant bowl presented without undue fuss.
The second chef has a different stance. She believes that food is art and that we feast first with our eyes. Her job, then, is to make her dish not only taste wonderful but also look beautiful. Her dish is presented with precision and flair, carefully constructed and delicately placed just so.
These chefs’ dishes could not look more different. The diners’ experience of them is different as well, despite the same ingredients, tools, and intention. It is the stance of each chef that drives these very different outcomes.
Stanford education professor Carol Dweck has done a great deal to demonstrate the significant impact of stance on our outcomes in life. Dweck’s work—captured in her 2006 book Mindset: The New Psychology of Success—focuses on one specific aspect of stance: whether you believe that intelligence is fixed. She strikes a contrast between two possible mindsets (her word for stance): a person with a fixed mindset sees personal characteristics (intelligence, creativity, humor) as being set for life, as “carved in stone”; a person with a growth mindset, in contrast, believes that basic qualities can be cultivated over time, through effort and attention.9
These mindsets translate to actions, as Dweck demonstrated with a group of fifth graders. Dweck and her team began by giving the kids a set of intriguing but doable puzzles. The kids had fun with them. But as subsequent puzzles got harder, kids with a fixed mindset enjoyed the puzzles much less and spurned the opportunity to take the hard puzzles home for practice. The kids with a growth mindset “couldn’t tear themselves away from the hard problems” and asked for ways to practice with more such puzzles.10 If your stance is that smartness is innate, Dweck found, you will behave in ways that fit with that view. Moreover, by cutting yourself off from learning, you will ensure that you do not, in fact, get smarter over time.
Modes of Learning
The good news is that, like intelligence, your stance isn’t fixed. It can change. But merely wishing for a more productive stance isn’t enough, because we are fighting against a natural inclination toward single-loop learning, another useful concept from Roger’s mentor Chris Argyris.11 In this default mode of being, when we get an outcome we dislike, we go back and question the actions that produced the outcome, tweaking and adjusting our actions in hopes of getting a better outcome next time (see figure 9-1).
This mode of learning seems like a good thing. After all, shouldn’t we all seek to learn from feedback? Yes, but single-loop learning is myopic. It narrowly focuses on the proximate antecedent—the action we took—while ignoring a more potent causal force: our thinking, including the reasons, rational and emotional, that we did what we did. In the face of a negative experience (or a positive one, for that matter), we rarely go back to examine our thinking, let alone to probe the stance that informed our thoughts, to see how they may have contributed to the outcome. If our reasoning is often implicit, stance is even more so, which makes it challenging to understand whether our stance makes sense, to see how it helps or hinders us, and to explore how it
contributes to our outcomes.
Figure 9-1. Single-Loop Learning
But it does. Imagine a young man, Jason, who is looking to meet a romantic partner. Unaware of Tinder, Jason goes to a bar and tries his best pick-up line on the first attractive potential mate he encounters. If he succeeds in striking up a conversation, Jason’s view will be reinforced that hitting on people in bars is a great way to hook up. But if the person shoots him down, Jason will typically explain away the failure as one of execution: it was the wrong line, he didn’t deliver it very well, it was the wrong person, bad timing, or bad luck. It is unlikely that Jason will question his underlying thinking about the best way to find a date and his stance about relationships and romantic connections. Jason is most likely to stay in a single-loop learning mode. Single-loop learning is suboptimal in situations that produce success—but is disastrous in the face of failure. The single-loop mode tends to leave us stuck, confused, and floundering.
Double-loop learning, in contrast, requires that we take a step back to reflect on the reasoning that produced our action, exploring the thinking that helped produce the outcome. Argyris likened the questioning process to a journalist asking follow-up questions. Sure, the journalist can gather the facts of the story—what happened and the actions that led to those outcomes—but getting to why those actions were taken in the first place is what’s important. And once you get to the why, the real learning can take place (see figure 9-2).
Figure 9-2. Double-Loop Learning
The why is composed of the particular thinking and reasoning related to this situation and these specific actions, but it is underpinned by a more general stance about life. In short, it’s important to consider both the thinking and the stance when you seek to understand your outcomes, especially if you hope for different outcomes in the future (see figure 9-3).
What does all this mean in practical terms? It means we need to be willing to take the metacognitive step, not only as we work through particular business challenges but also as we more generally operate in the world. We need to think about our own thinking and explicitly link our stance to our outcomes. It means that we need to ask, What did I think that led me to take this action? And what stance would produce that thinking? To what extent is my stance helpful to me in producing the outcomes I desire? If it is unhelpful, how might I go about shifting my stance?
These aren’t easy questions. And the task of changing your stance can be daunting. How do you change something you may not fully understand? That’s why it’s important to first increase your understanding of your stance—and to do so proactively rather than right in the middle of a crisis. This is a slow and reflective process of bringing your stance to your conscious awareness, asking what you think and why you think it.
Figure 9-3. Looping Back to Stance
Try This
Reflect on your own stance about decision making. What do you believe are the attributes of effective decision makers (for example, quick thinking and nimbleness)? What could that model of effective decision making say about your stance on how the world works and your role in the world? (For example, about the world, your stance might be, “It rewards the first person to get to the right answer”; about your role in it, “I must push to get to the right answer quickly.”) Then what actions of yours are influenced by this stance? How do you see your stance play out day to day? (For example, “I reward those on my team who quickly come to a decisive position and defend it.”) Finally, what are the outcomes, good and bad, that follow from your stance, thinking, and actions? (For example, “My team is good when it comes to quick individual action, but we have lots of bickering and hard feelings when we try to collaborate in real time.”)
There is no right stance about the world. There is no single, most successful way to be. But for students and leaders who have gone on to be successful in their use of integrative thinking, our observation suggests that they see integrative thinking both as a process and as a way of being. They use their experiences with integrative thinking—the journey to solve wicked problems in new ways and create great choices where none previously existed—to build a productive stance about decision making. This stance has elements that are about the world and elements that are about their role in it. We share it here not as a prescription (i.e., you should hold this stance) but rather as a spur to reflection (i.e., what might happen if you experimented with holding this stance). For a summary of this stance, see figure 9-4.
A STANCE ABOUT YOUR WORLD
For integrative thinking to become a way of being, it is important to believe three things about the nature of the world.
The world is complex, so we understand it through simplified models. These models are constructions and are (at least a little bit) wrong.
Humans have a natural desire for closure. Without a feeling of being finished, we would be suspended in cognitive limbo all the time. We get physical rewards from reaching closure—a jolt of pleasure in our brains that drives those of us with a high need for cognitive closure (as psychologists call it) to struggle mightily in the face of ambiguity, desperate to get to the end. Getting to the feeling of certainty that we derive from coming to closure isn’t a purely rational process. Rather, it is deeply emotional—a “feeling of knowing” that is pleasurable, reassuring, and relatively immune to attempts to shift it.12
Figure 9-4. An Integrative Thinking Stance
Integrative thinking becomes a way of being only when we reframe the idea of closure. In integrative thinking, we are never truly finished with our models. Every model we hold, no matter how much we value it, is still only a model. And that model is flawed. As Paul Polman says of the models that dominate the corporate world, “Many things the CEOs have been taught . . . [are] contrary to what you actually need in today’s world. But because we’ve been taught that, we are self-reinforcing and make . . . the situation worse.”
Rather than blindly accept orthodoxy, in integrative thinking we question the premises of that orthodoxy and push to understand the ways in which it’s imperfect. This is possible only if we accept that all models are simply constructions, and that they are incomplete. And if that is true, opposing models become helpful.
The world is understood in different ways by different people. These opposing ways of seeing the world represent an opportunity for us to improve our models.
Our own models are limited. But it can be hard to see and understand how they are limited, and to improve them, without seeking to understand opposing views of the world. As we detailed earlier, we tend to default to thinking of opposing models as wrong, and we define those who hold them as either stupid or evil. Our first instinct when we hear something at odds with our own view is to dismiss that alternative view and to distance ourselves from it. In integrative thinking, we take a different stance. Faced with a view at odds with our own, the response is, “That’s different from how I have been thinking about it. Say more.”
Haley, who studied integrative thinking in grade 12, highlights the power of this perspective: “In the past, I probably would have talked more and not listened as much, if I’m being honest. Something that is really important, I think, is realizing it’s not all about you. You can’t value your opinion over others, just because it’s yours. Realizing that everyone is equally valuable to the conversation, even the people who don’t talk as much, was the biggest thing . . . They really do have valuable things to say!”
Former General Electric CEO Jack Welch shared a similar take when he spoke with Roger in 2005: “I want someone who will argue with their teammates over a direction,” he said. “You don’t want to sit around with consensus and all agree. That’s the biggest waste of time in the world.” Shutting down opposing views may be our natural instinct, but it gives us little chance to make our models better.
Practically, openness to opposing models is about curiosity. One of our favorite examples of a corporate group expanding its own capability for curiosity comes from Canada Post, the national postal opera
tor. Over the past five years, Canada Post has committed to training all of its leaders in integrative thinking through its LEAD 2.0 executive training program. In one of the earliest cohorts, as one group was working on a daunting action learning project, it created a new team norm: whenever individuals had opposing views—whether on the content of the project or on the process of working together—the team would go straight to quickly building pro/pro charts for the two perspectives. It became the way the team members communicated, and it helped build a team practice of diving into opposing models. It helped shift the organization’s way of being when it comes to opposing models.
The world is full of opportunity to improve our models over time, as long as we are open to the idea that a new answer is possible.
Integrative thinkers see the world as a place of possibility, understanding that the arc of human history has been one of refining and changing our models of the world over time. In science, for instance, we taught Sir Isaac Newton’s fundamental laws of physics as the right answer. It was the way we understood the physical world for hundreds of years. It was the best model we could hope for—until Albert Einstein came along and said, essentially, that it was a very good model, but it left out some important things. Einstein went on to create a new model that advanced our understanding considerably.
Creating Great Choices Page 17
