Leadership
The Biggest Challenge Faced by Leaders of Today
Are you trusting too much? Or too little? Both have downsides. Who do you trust? How much? So many questions!
I like to describe leadership (in whatever form, at any level) as the ability to make the right decisions, with available information.
Leaders cannot hesitate.
Decisive capabilities make a leader successful.
The leaders of yesterday had a better time making decisions than the leaders of today. That’s simply because the information was centered on a few individuals and in libraries.
Leaders of today, however, have to deal with information overload. Knowledge is decentralized — a lot more people can voice their experience and facts keep changing constantly. Data bears the onus of interpretation and not merely that of presentation.
Did you know that before the early 1970s, the titles of CFO, CHRO, and others didn’t exist? The early 1900s had a simple leaner structure in business leadership. You can imagine that the organizations of yesteryears were simple lean structures that promoted action in the lower levels and direction to be set at the top level.
But, then, what happened?
Simply, put. The information revolution. A 2016 HBR article points to the rise of CXOs in organizations:
The 1990s saw the appearance of Chief Information Officers, Chief Marketing Officers, and others. In the 2000s, the number of Chief Supply Chain Officers in large firms shot up in several industries, while the “War for Talent” spurred companies to add Chief Talent Officers to their benches. General Counsel also rose to the top in response to SOX and other crisis-induced regulations. More recently, even Chief Happiness Officers have appeared and many CEOs are feeling pressure to add a Chief Digital Officer.
(Source: https://hbr.org/2016/07/the-ballooning-executive-team)
Why does a CEO need so many functional leads? Simple — because the informational complexities and subject matter complexities have grown exponentially. Moore’s law for the business organization:
Similarly, at your level, you might find that you have to delegate the decision-making or complexity management to a setup of L2 managers. In a product function, you’ve to rely on other PMs, Tech Leads, Design leads, Data Science Leads, and so on… to get the best set of options for your take decisions.
However, as you’ll see, trusting people — the way you’ve always been doing it — is not going to work in the long term.
I’ve experienced this personally — trusting someone with the complications of technology has led to failed products — simply because personal ambitions and biases have come in the way of the overall goal.
What are the problems of trusting people often?
Common wisdom states that if an individual is right the last 5 times, they will likely be right in the next 2 times. Think about the people who’ve been right in your team — you give their words more weightage, sometimes outright importance, on topics foreign to you. Sometimes, you break your intuition on it.
Unfortunately, that shouldn’t be the case. Here are the reasons why:
Being right about a decision are mutually exclusive and independent events
With an abundance of information available and the choice matrix fielding as many variables that you can account for, being right about a decision is more about luck, than about skill.
Think about the last 10 decisions you’ve taken and try to understand how many out-of-control factors (i.e. factors you had zero control over) were responsible for the success. More often than not, a lot of things had to ‘fall in place’ for the decision to be right.
If you do this exercise for the last 100 decisions, you’ll quickly notice that as you grow, your ability to weed out the wrong options becomes better, but not vice versa. That’s why I always say that good leader are good at being less wrong. You can’t be right all the time.
The same thing holds for others, especially those you trust.
Increased scope with each success
Again, the common approach leaders have adopted towards individuals who’ve been successful in the past is to increase their scope. You’d have seen this within your organization — a finance exec good at Mergers & Acquisitions is now made responsible for the team that does M&A and Financial Planning. Or a CTO made in charge of Product management.
Both those actions are bad — they’ve proven success in a specific domain, but now they’re made responsible for things outside of their domain.
And now, the problems begin. These individuals, who’re psychologically victims of their hubris, think they have to be right here too. What do they do? Commit the following sins:
1. Errors of omission and commission
2. Endowment effect
3. Status quo biases
4. Confirmation bias
All of these impact your organization badly, reducing morale and worse, giving you the leader an incorrect direction.
Greed & God complex
Human greed is an underlooked but important factor when you analyze your trust circle. If you analyze the ambitions of everyone in the team, you’ll notice that some people are more likely to be affected by their rise in the organization (for monetary/status reasons) than others.
Greed can also manifest as uncontrolled ambition. The result of this is that the person in your circle doubles down on their decision — demanding it to be right.
Those who have a gallery view of their success also are overcome with the God-complex. The failed notion that they cannot be wrong — ever. Results are the same: Lack of humility to accept that they’re wrong, sometimes. They have to be right, all the time.
How can you prevent these things from happening?
You can’t really. These are up to individuals. You won’t succeed at being a leader if you’re out there figuring out the complexities.
Here are some things you can do to avoid this problem:
Be cautious of people with ‘right’ streaks.
For the reasons stated above, people who’re ‘right’ consistently have a lot more to lose — and hence can commit to the sin of doubling down on their decision.
Surround yourself with people who provide different perspectives
It’s easy to surround yourself with ‘yes-men’. They’ll provide an echo chamber of positive interpretations that can ultimately lead to your failure, especially if your decision has far-reaching impacts.
Be cautious of people who create silos
One of the things that people who have god-complex is to create silos of their decision areas. They make statements such as “This is my domain — and I’m the only one who can speak about it”. As you go higher up the ladder, you’ll notice that people have a lot of cross-functional experience. Individuals who do not allow for healthy debates on their domains tend to hamper your decision-making ability by forcing their opinions strongly.
Understand the difference between smart people and bullshitters
Smart people tend to think before they talk — they take time to ingest new information and craft an answer that is balanced out what they know and the situation at hand. Bullshitters will say a random thing and move on. A bullshitter says so many things to so many people that they increase their surface area of being right about something.
Heed warnings from others
This has happened multiple times with me and those I’ve observed. The megalomaniac you trust to help you decide better is seen as one by the rest of the team. If you get a signal from the team that this exists, start being critical of their decisions. That’ll either have the effect of bringing the person down to the ground or helping you get rid of them altogether.
Either way, you succeed.
In conclusion, leaders who can differentiate opinions from facts are more likely to succeed. Try to empathize with your inner circle and retrospect your decisions. Biases towards individuals are a no-no.
Thank you for reading!