Smart Leaders Operate in Two Dimensions

by Jay Deragon on 09/12/2013

counts & countedToday’s Smart leaders have two simultaneous ways of thinking, two seemingly contrary points of view. While most find that perplexing they find it ordinary. It is a multidimensional approach to viewing opportunities through lens supported by both tangible evidence, the first dimension and intangible capabilities, the second dimension.

Smarter leaders understand that some things are predictable, measurable and thus allow for forecasting the future results. On the other hand they also know that innovation, change and creativity are less predictable and less definable. The Smart leaders  understand both approaches are equally important and they, and their entire organization, are able to run in both dimensions at the same time.

The First Dimension

Many organizations are led by one-dimensional thinking.  Call it the first dimension, the emphasis is”what gets measured gets done” and out of that thinking came management by results, KPI’s, the world of statistics, measurement, rigor and process improvement which was all about controlling, predicting and improving outcomes, results.

These management methods placed heavy emphasis on managing the tangible things that could be counted, scored, evaluated, compared and benchmarked so that a male dominated business environment could keep track of who scored the most points at the end of the game. The rewards for winning were fat bonuses for the generals, big dividends for the stockholders, less than 7% increases for the employees and a thank you note to all the other stakeholders.  The customers got a promise for improved products and better service next year.  The old media applauded the results and propagated the promises.

Then the next year started and the game began all over with new targets to reach, higher expectations of productivity, lower supplier cost, new products to reach into new markets and deeper revenue streams from existing customers.  After all, what gets measured gets done. Nothing wrong with this picture or is there?

The Second Dimension

The truth of any situation is not always empirical. A Smart Leader knows that there are always two “truths,” an empirical truth and an intuitive or uncertain truth.  Both are critical and one without the other is simply an incomplete picture.

This second dimension is the recognition that you cannot substitute leadership with measurement.  The leadership piece is critical because the system causes outcomes, not people.  And no matter how well you might measure things, you have to lead the system to change the outcomes.  Failure to lead is now transparent because people are tired of hiding the lack of leadership and the manipulation of data for selfish gains. People respect smart leadership.

Businesses and organizations have tended to co-opt the empirical side – the control side – and simply ignore the less tangible, softer side.  Consequently, managing the intangibles has been ignored, just as innovation deployments fail more often than not today.  But again the internet and all things social has pulled back the curtain and now made the intangibles tangible..

Smart Leaders understand that the intangible side is as important as the tangible.  Combining these two dimensions – a deep understanding of the power of the tangible and a deep understanding of the power of the intangible – is what will lead us to smarter leadership practices.

{ 3 comments }

Dan Robles September 12, 2013 at 11:11 am

How do you do it – every day, you dig into some unknown fountain of wisdom and pull out truly relevant blog post. Dat after day, year after year…how?

Anyway, I met with Paul yesterday and he was discussing how Banks and Insurance companies ORIGINATED on the basis of personal relationships. A banker would lend on the basis of soft criteria such as family values and resilience in a community. Even the life insurance bible published in 1912 that the economic value of a person is 10% and the social value of the person was 90% when considering underwriting limits. What if we could go back to those old equation (if they worked well then and they would work well now) then maybe we can rediscover all of the lost “Value” that is REALLY sinking the balance sheets of the modern corporation.

Jay Deragon September 12, 2013 at 1:39 pm

Hey Dan, good to hear from you….

Personal relationships still work well but what has changed is how we “signal” what we value. Titles, the schools we went to, the moeny we make, the places we live no longer represent “social capital” rather social capital has been transformed into what we share and say that adds value to a community regardless of who shares it. The lost value is the paradigms in which old value was filtered. Take the filters off and we discover new value being shared by people regardless of the old filters we put on people based on “status filters”. Make sense? A post will be forthcoming discussing these issues in further details……stay tuned 🙂 The value game is being played out with different rules….

Satyakam Biswas September 12, 2013 at 7:00 am

I find it amusingly true and agree whole heartedly that the lack of second dimension often leads to uncertainty in the future as the situation grows complex and requires the leader who can balance the both: empirical and intuitive

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