Have You Revisited Your Assumptions Lately?

"A man who views the world the same at 50 as he did at 20 has wasted 30 years of his life" - Mohammad Ali

An assumption that what worked in the past would also work in the future, can become a major obstacle to high performance. As Steven Snyder explains in his book : Leadership and the Art of Struggle, the real secret of success resides in people's mind-set. Dr. Paul Zak, Director of the Center for Neuroeconomic Studies at Claremont Graduate University, states that our brain functions and the chemicals it releases may have a connection on our strategies for organizing and managing. Neuroscience is uncovering both the power of the brain on human behavior and the power of organizational environments on the brain. It has started to impact leadership development and shall shape it further.

Our assumptions about workplace is based on our experience on managing an enterprise in an industrial society. The leader in an industrial age company was a fountainhead of knowledge. He was supposed to know more and direct the organisation towards its goals. Jack Welch is a prime example of such a leader, a firm believer of command and control. However, when choosing a successor, he had the wisdom of shedding his assumptions and probably realized that his leadership style was obsolete even at GE. Perhaps, the new age does not need a command and control leader like himself but a consultative, humble person like Jeffrey Immelt. Immelt apparently demonstrated a superior capacity to grow, which was the most important criterion in the choice. Welch knew that he could never envision the challenges a CEO might face ten to fifteen years into the future. The successor should be a person who would have to rethink and reinvent GE.

Today, knowledge, the new age capital of the VUCA (Volatility, Uncertainty, Complexity, Ambiguity) economy, is ever expanding, gets obsolete fast, is fragmented and distributed. A leader may not know more that many of his subordinates and ability of shedding past assumptions, beliefs and practices coupled with speed of learning would determine success in future. It has become imperative for a leader in a VUCA world, to move ahead from a jaundiced thinking and "I know everything" approach, to a more collaborative and receptive, reverse learning. The younger peer group is more talented and exposed to the rigour of dynamic changes, open to change and with reduced biases.

Let us revisit some of the assumptions in the workplace which are a legacy of the industrial society and assess whether they still hold true.

Extrovert vs. introvert leader

According to a new study published in the Journal of Applied Social Psychology, narcissism increases one's chance of winning a job interview. And the more extroverted someone is, the more likely they will be hired. In short, we hire leaders because they interview better and display an aura of invincibility. There is a widespread assumption in organizations that extroverts make better leaders and whose energy, self-confidence and charm lead him inexorably up the corporate ladder.

It is no surprise that extroverts are more likely to have serious road accidents, participate in extreme sports and to place large financial bets but introverts suffer fewer accidents and traumatic injuries. Their overconfidence and desire to outsmart their peers overtakes prudence.

In our book The VUCA Company, we have numerous examples of extroverts who failed as leaders. One such person joined as CEO of an old established conservative South Indian Bank. He has a successful track record in some of the new aggressive private banks and finance companies. From day one, he believed that he alone had all the knowledge, skills & competencies to run the bank and moved fast to turn the bank into an image of the companies he left behind. He assumed that what worked wonders at his erstwhile companies would also work here. The result was a huge increase in new branches, a much larger manpower with attendant costs but not rise in business. He was asked to go and after many years, the Bank is still struggling in coming to terms with his excesses.

After a tumultuous crisis in the global banking system, the banking sector is actively seeking CEOs who can bring a bit of stability to their institutions. While it's still important for leaders to inspire their workers, banking CEOs now also need to be able to project a dependable air, at least in public, experts say. "Humility and high levels of self-awareness are now desirable. Five years ago they were not necessarily sought-after attributes".

Star Performers

Assumptions about talent mindset also abounds in our companies which sees the long lines at at our IIMs to hire the best and the brightest and later indulge and fawn over them. According to Malcolm Gladwell's The Talent Myth, the modern corporation, the system is considered only as strong as its stars, and, in the past few years, this message has been preached by consultants and management gurus all over the world. During the nineties, Enron was bringing in two hundred and fifty newly minted MBAs a year. Once at Enron, the top performers were rewarded inordinately, and promoted without regard for seniority or experience. Enron was a star system, what their consultants said that companies ought to do in order to succeed in the modern economy.

It hired and rewarded the very best and the very brightest-and it is now in bankruptcy. The reasons for its collapse are complex, needless to say. The broader failing at Enron was their assumption that an organization's intelligence is simply a function of the intelligence of its employees. They believe in stars, because they don't believe in systems. In a way, that's understandable, because our lives are so obviously enriched by individual brilliance. Groups don't write great novels, and a committee didn't come up with the theory of relativity. But companies work by different rules. They don't just create; they execute and compete and co-ordinate the efforts of many different people, and the organizations that are most successful at that task are the ones where the system is the star. Southwest Airlines hires very few MBAs, pays its managers modestly, and gives raises according to seniority. Yet it is by far the most successful of all United States airlines, because it has created a vastly more efficient organization than its competitors have.

Another management mindset is to recruit people who can join "running" or start performing from day one. This is a fatal assumption for a senior position in assuming all organisations are clones and what works at one place will also work at another.

Assumptions and mindsets can undermine performance not only at individual levels but also ingrain itself in the collective psyche. Over a period, the CEOs selects senior managers and Board members who have attitudes and behaviour similar to his own and deny access to contrary thinkers. They tend to think alike and develop same sets of assumptions and beliefs as the CEO and this mindset percolates downwards in the organisational culture. Richard Fuld as CEO of Lehman Brothers systematically brought to the top management, like minded executives and those who showed independence were either asked to go or removed from positions of influence.

For example, sidelining of Chief Risk Officer Madelyn Antoncic, a woman who was known as "Wall Street's Queen of Risk Management". She had a smart but cautious mind, which dealt with the risk rather than with the maximum profits that might accrue. Madelyn was a bear by late 2006, advising caution, pullback, and extra study. So they just threw her out.

This collective mindset makes itself visible in many ways. The attitude of large companies when entering a new market is to think big, this is a mindset which is difficult to shake. They have many assumptions, principle being that you can use the same strategies to succeed here as in their home markets, principally US, Europe and Japan. In a new market, even a large company should start small in niche or segments where market leaders are weak. P&G has been struggling for years, suffering heavy losses, with Ariel by going into head on competition with Hindustan Lever's Surf. AG Lafley, who recently returned as the CEO of Procter & Gamble after a gap of four years, observes that it was a mistake to take big rivals such as Hindustan Unilever head on when P&G first entered India. It would have been much easier to build a beachhead in the market if it had first attacked segments where big rivals were not present in, such as baby care and skin care.

Misperception of the commonness of one's beliefs has five primary sources

- Surrounding Oneself With Similar Others
- Attending to One's Own Views the Most
- Believing One's Own Behavior Is Based on the Situation and Others' Is Not
- Filling in the Gaps in Ambiguous Situations
- Needing To Validate One's Own Beliefs

The responsibility of a leader is to tap resources that fulfill higher purposes and let us accept it candidly; it cannot be achieved in seclusion. If one wants to lead, leader must plan for an empowered and collaborative organisation. The HBR(Feb 2006) article The Seasoned Executive making style called such a leader integrative type. People using the integrative style don't necessarily look for a single best solution. Their tendency is to frame any situation very broadly, taking into account multiple elements that may overlap with other, related situations. Consequently, they make decisions that are broadly defined and consist of multiple courses of action. When working with others, integrative decision makers like lots of input and are happy to explore a wide range of viewpoints, including those that conflict with their own, before arriving at any conclusion.

Why is it so difficult to shed assumptions and mindsets? According to Alvin Toffler in his book Rethinking The Future, the reason is simple: anyone who attacks a dominant paradigm too early can expect to be regarded with suspicion. But paradigms - including management paradigms - are not cast in stone.

"In order to grow, a business must have a systematic policy to get rid of the outgrown, the obsolete, and the unproductive." said Peter Drucker. In the end, mindsets are just beliefs which can be changed.