If you want to build a thriving business, get good at disagreement – fast.
Back in November, Corporate Punk staged an event with our friends at Wallace LLP. Called Talking The Tightrope, it explored a critical but often under-looked area of business: the art of difficult conversations.
It was a great evening. A hand-picked selection of our senior clients from Private Equity and the corporate world attended, for a lateral look at some of the people-related challenges that result from trying to do hard things well.
Why do difficult conversations matter? Why should you, the leader, pay attention to this issue? And what are some of the things that you need to consider as you do? Those are the questions that I set out to answer as part of our contribution to the evening.
Here’s an edited transcript of my speech. If you prefer to watch rather than read, a (relatively low-fi) 20-minute video can be found here.
I hope you find what I had to say interesting and useful.
“Difficult conversations are a predictor of business success in the 21st Century.
In other words, businesses that are going to be most successful in the 21st Century are those that master the art of ‘talking the tightrope’ – the art of having difficult conversations. This skill will become ever more important in the context of various technological changes that are on the way and how businesses will need to change as a result of them. In essence, conversations between individuals in business will need to evolve in order to drive a different kind of output than might have been the case historically.
So, what do I mean by that?
Firstly, let’s consider an article that was published by the Harvard Business Review in 2014. This article asserted that in the 21st Century, there are two things that successful businesses do:
- Prioritise increasing revenue over decreasing cost
- Compete on differentiators other than price
That feels like quite a shift from the activities that drove the success of a lot of businesses in the 20th Century. In those days, the focus was mostly on how performance could be optimised on the factory floor; on how the production line could be made to work more efficiently. Indeed, Management Consultancy is a discipline that was founded to improve the efficiency of all those people doing all those routine tasks – how do we optimise their performance?
But that article in the Harvard Business Review asserts something totally different. It asserts that growth doesn’t just involve driving down costs.
Turning to another relevant source, in 2016 the World Economic Forum produced a report called ‘The Future of Jobs’, based on interviews with a significant number of HR and Strategy experts from a range of global organisations. It asserted that the top three qualities that will be required in business by 2020 are as follows:
- Critical thinking
- Complex problem solving
That’s another significant shift. In 2015, number two on that list was ‘coordinating with others’ and number three was ‘people management’. But those capabilities will shift quite far down the rankings over the next few years. Meanwhile, what we are seeing is increasing priority given to such questions as: how do we think about complicated problems? How do we collaborate and become more creative and productive at work?
It should feel intuitively true to anyone who has lived through the likes of Brexit, Trump, the ongoing slow collapse of America as a superpower, the rising dominance of Asia in economic terms, and so on, that we live in incredibly volatile, uncertain, complex and ambiguous times.
In the world of business, the VUCA nature of things means that a lot of the time, there are no absolutely good answers. There are no right answers, certainly. Indeed, in the work that Corporate Punk does, we often help people to parse the difference between very narrow differentiators to determine courses of action that could have very distinct outcomes.
In the world of business, the VUCA nature of things means that a lot of the time, there are no absolutely good answers. There are no right answers, certainly.
So, you take a volatile, uncertain, complex and ambiguous world, and bring it together with the idea that there are no right answers. That, again, starts to drive us towards the need for complex problem solving, critical thinking and creativity.
The second thing, and perhaps the most important thing to think about in this context, is what’s actually driving the change in the nature of work?
Over the next, say, 10 to 15 years, we are going to be seeing more logic-based processes becoming the preserve of robots, machine learning and artificial intelligence. In fact, we can see it happening already. Any accountant will tell you that bookkeeping is slowly disappearing as the machines learn to do more and more. And what is really interesting here is the rate of development – the pace at which it’s speeding up.
So, if robots can perform logic-based processes, what’s left? This is the central question for anybody who still wants to be in business in 15 to 20 years.
There are fundamentally two things that robots can’t do:
If we firstly consider caring… Well, for example, unless we have deep care for the person we are having a difficult conversation with, we can allow our own emotions to ride roughshod over the best course of action, which is fundamentally unproductive and can lead to an unhelpful outcome for the individual that we are, as a leader, notionally there to serve.
Caring really matters, but I would argue that in a business context, creativity is actually more central.
At Corporate Punk, we define creativity as ‘the ability to out-think and out-smart the competition’. If you’re fundamentally arriving at original answers to difficult questions, and driving competitive advantage in doing so, that’s creative work. It’s often not defined as creative work, because when I say ‘creativity’ to people they usually think bean bags, they think idea days, they think vision workshops. They don’t actually think that people in HR or accounting or compliance can be creative. But good, effective people are being creative all day, every day, albeit sometimes in small ways.
But what the world of work is bad at doing is building organisations that harness creativity in ways that focus on increasing revenues using differentiators other than price.
Something to think about with this is that a lot of the overarching narrative about work at the moment hasn’t fundamentally acknowledged this shift. It hasn’t fundamentally acknowledged the fact that the way we’ve been used to working in the past is slowly dying out.
We’re seeing lots of things going on, such as gig economies starting to be a thing, marketplace businesses starting to be a thing, we’re hearing about AI and robotics starting to be a thing. It all sounds terribly complicated and threatening.
Creativity is the ability to out-think and out-smart the competition.
But in truth we just need to hang on to this simple fact: logic-based processes are going the way of the dodo. Caring and creativity are the things that will matter in business going forward. Are you capable of building a business that prioritises those by 2020?
Continuing that thread, let’s now think about what a creative business looks like. It’s easy to think about creativity in business when you’ve got a guy talking to you in a t-shirt and paint-splattered trainers, but most of the businesses we work with aren’t like that. We work with a lot of Private Equity businesses, for example, and a lot of corporates who are struggling to change.
What does creativity mean in practice?
To establish that we need to break it right down and look at it in detail. At Corporate Punk, we did some really interesting work around the attributes of creative cultures and, with our Psychologist partners, we found there are fundamentally 7 attributes of properly creative cultures:
- Autonomy – How autonomous is the culture of the business? This is a really interesting question. How autonomous are people and what are they empowered to make decisions around? Autonomy is super-challenging for a lot of leaders for all sorts of reasons, not least ego and status threat.
- Irreverence – Probably my favourite word in the English language, which is not surprising for a guy who set up a company called Corporate Punk. Irreverence is fundamentally about the ability to slaughter sacred cows, to challenge the status quo, to go up against our own assumptions and, crucially, to talk about how what we have done in the past might need to be different moving forward to allow us to get ahead in the future. In many instances, irreverence is absolutely critical to charting the best possible course.
- Vision buy-in – When we think of vision, we tend to think of a form of words that can sit somewhere on reception as a kind of Mission Statement. What do we mean by vision buy-in? What we mean is everybody having a shared understanding of the same long term organisational goals and then actually engaging with those. Are they bringing their own perceptions to work or are they actually not bothering at all? Vision buy-in really matters. We can’t have a creative culture without a collective sense of where we’re heading to.
- Flexibility – How long does it take to have a good idea? It can take 3 minutes to have a good idea; it can take 3 months to have a good idea? It took me about 18 years to have the idea of Corporate Punk from when I started my career. Flexibility is the ability to carve out time for non-linear processes. In a lot of organisations it’s really difficult to prioritise this. Speaking with a client a few months ago, he turned around and said to me “It’s really great working here because I can read a book and people think it’s work.” It was a great moment, because, yes, that is work. Creative thought processes are non-linear – you’re looking for those connections, you’re looking to feed the mind. Creativity is a highly ambiguous thing. We’re waiting for inspiration to strike. How do you build the flexibility into your operating model in order for that to happen?
- Openness – This is about that ability to actually be honest about how it is you’re feeling, and to communicate around this with others, in ways that genuinely get heard.
- Risk tolerance – This is another one of my favourite concepts. Risk is fascinating; I spend a lot of time talking to clients about risk. Risk is fundamentally a subjective notion. What we mean by ‘risk tolerance’, in the context of how we diagnose cultural issues within organisations, is to what extent are you able to live with ambiguity?
- Conflict – Conflict is a beautiful thing. If you are ever working with a bunch of people doing creative work, you are going to get conflict. It’s great, because it gets you somewhere better in the end – if you harness that conflict well in the context of your interpersonal dynamics and your interactions.
Fundamentally, if you boil it right down, creativity means dissent. It means an ability to turn around and say “I disagree with you in terms of the decision you’re making, the idea you are putting forward, the way you’re thinking. You also disagree with me and that’s OK. And we can live with that. We can work with that. We can move through that.” And, for all the reasons I highlighted at the beginning, those skills are becoming even more critical. We’re living in a volatile, uncertain, complex, ambiguous world, where there are often no right answers and where logic-based processes at work are defaulting to the robots. There’s not much competitive advantage to be created there [in the logic-based world]. Creative thinking and action is the stuff that helps you get forward.
Creativity means dissent. It means that ability to turn around and say “I disagree with you in terms of the decision you’re making, the idea you are putting forward, the way you’re thinking. And we can work with that. We can move through that.
Now let’s state the obvious thing: most businesses are absolutely abysmal at harnessing those sorts of dynamics at work. That’s not a criticism, it’s just a function of where businesses have been for the last 50, 60, 70 years versus where they need to go next.
Let me explain this from three different angles.
Firstly, businesses tend to build systems and processes that, fundamentally, are there to do one thing – to say no. As soon as you hear the phrase ‘decision-making process’ in a business, you can pretty much guarantee that no decisions are being made. That’s the purpose of decision-making processes in businesses, most of the time. We were working with a global client who spent a billion Euros a year on marketing. Their entire process around how they calculate how to spend that billion Euros had fundamentally been created to do one thing – to ensure that it doesn’t change much year on year. And then they wondered why they were losing market share.
The second thing is that businesses are really bad at aligning incentives to desired business outputs. If you are trying to foster a culture of creativity, a culture of dissent in your business, what outcomes are you incentivised to deliver? In other words, how are you incentivising the behaviour you seek in your business? It’s a really interesting question. For example, we worked with a large FMCG company, which was trying to fundamentally re-orientate its entire Marketing function. It transpired, after we had done two days of hard workshops, that the team was being bonused based on the same TV driven metrics it had been bonused on since about 1965. It’s absolutely critical that the incentives align to the desired output.
Thirdly, leaders can be really bad at doing the emotional work necessary to embrace what you might call status or role threat. One of the really challenging things about dissent is when you have worked really hard to get into a position and somebody who is effectively junior to you – and might actually be, in a way, emerging competition – starts to disagree with you. That can challenge the ego. It can fundamentally challenge your status within the organisation as well. How do you work with those dynamics?
All of these things are functions, ultimately, of the cultures we build.
I’ve mentioned a lot about culture and, like creativity, I think it’s helpful to briefly define it.
Culture is a collection of narratives that exist within your business. Culture is fundamentally the stories that get told inside your organisation about what you are doing, why you are doing it and how you are doing it.
When you change those narratives, you change the culture. And culture is this fundamental thing that influences a lot of other things. For instance, your culture will influence your ways of working because the narratives you tell drive what’s important, which drives what gets prioritised within the processes you create. Your culture will drive your structure, because it will start to drive stories around who is important; the precedence of different functions over other functions and individuals over other individuals. And your culture will certainly start to drive the quality of the inter-team dynamics that you have as well.
Culture is fundamentally the stories that get told inside your organisation about what you are doing, why you are doing it and how you are doing it.
There was a study done back in 1999 that took place over 12 years. Businesses that had performance-enhancing cultures grew by an average of 682% over the period of those 12 years. Businesses that didn’t have performance enhancing cultures grew by c.160%. That’s huge difference in business performance there. Drucker says ‘Culture eats strategy for breakfast.’ That’s fundamentally what he means, and it’s interesting to continue exploring it.
We see, for example, in Private Equity, that immediately after deals get done growth tends to go soft. A lot of the time it goes soft for a number of different reasons, such as changing leadership expectations, growth expectations and those kinds of things. However, when you delve right into it, there’s not really a narrative that’s existing within the organisation to be able to make sense of the new world order. What to do about that new world order? What to do about the investment that you’ve just made? Narrative is often absent, or if it’s there, it’s fairly toxic. And the one thing I can promise you is that in the absence of meaningful communication, people will always believe the worst or the weirdest thing. That’s an absolute fact of business life.
Culture really does matter, which brings me to the final points I want to touch on.
If you buy into the argument put in front of you here and you are starting to think about how you can evolve your culture to be fundamentally more creative, here are three pieces of advice.
The first thing I would have a think about is getting clear on the relationship between the change that you want to create, and the business value that you expect it to deliver – and how you are going to measure the relationship between these things.
When you work around culture change, as we at Corporate Punk do, you find that a lot of the time nothing at all gets measured in respect of culture or the culture change agenda. How do you expect anyone to take you seriously then? So here’s the question to answer: why bother trying to change the culture? What’s its relationship with business performance, and what are you going to measure to prove value? Most culture change processes fail because they don’t establish that upfront, which means not enough thought has been given to what the organisation is trying to achieve – there’s no clarity around objectives, never mind clarity on strategy.
If nothing gets measured in respect of the culture, or the change you want to create, how do you expect anyone to take you seriously?
The second thing is that we have to embrace a truth about human nature – everybody lies. The reason for this is to do with how our minds work. At least 80% of our decision-making happens in the non-conscious parts of our brains, which basically means we don’t really understand why we have the thoughts and feelings that we do, so we tend to lie when we’re asked to explain to others.
Particularly when you are working as a consultant, you get very sensitive to this. We know that most people don’t understand why they feel the feelings they do, and furthermore as soon as you bring in somebody to help or drive a change process, everybody tends to go into a mode of post-rationalisation and self-protection. What that mandates in any meaningful change process is the fact that you have to embrace proper, rigorous psychology at the organisational level.
There are lots of tools that can be brought into the workplace to help with this and at Corporate Punk, we have a range of interesting innovations that can really get to grips with exactly what’s going on, how and why, within an organisation.
The third thing is to not be afraid to start small. In a lot of cases, the problem with culture change is that no one knows where to start – so, I recommend you start with something small.
One of the most exciting things to think about here is this idea of interpersonal interactions and how we can make a meaningful difference, not only to the way those interactions are received, but the broader narratives that take place in our business.
For example – because it’s relevant to tonight’s event – perhaps you can get a reputation for releasing talent well; get a reputation for handling simple but difficult one-to-one conversations well. That will really help to galvanise the right sort of narrative within your business. You can’t really get good at having conversations that are about deals and about strategy, which inherently have conflict and ambiguity at their heart, if you can’t have a sensible conversation about somebody’s career progression – or inability to progress.
Ultimately, dissent is difficult. Conversations can often be difficult, especially when they are trying to head somewhere unfamiliar. Mastering how to talk the tightrope can also be difficult, but the key thing is to at least start trying. But many organisations simply can’t or won’t.
And they will be the organisations that don’t make it through the immense period of upheaval in our working world that is already starting to bite.”