All executives deal with crises. It’s part of doing business. But according to Harvard Business School professor John Kotter, not all leaders are particularly good at it. In short, most executives rely on old methods to tackle new challenges — and are surprised when they don’t work.
In his latest book with co-author Holger Rathgeber, “That’s Not How We Do It Here! A Story About How Organizations Rise and Fall — and Can Rise Again,” Kotter uses a fictional story about a failing meerkat colony in need of drastic change to highlight his points.
The book’s ultimate lesson: executives should restructure their organizations so that more ideas come from front-line employees.
Talent Economy spoke more with Kotter on the subject. Edited excerpts follow.
In the book the main character says, “Today is not the past.” How should leaders interpret this?
The reality is we human beings — not just leaders — behave as if today was the past. We have habits. We live in cultures that kind of confine us to things that made sense in the past. From what I’ve seen, leaders who are good at reminding themselves of a kind of an obvious truth are very aggressive in thinking about and talking about that. What’s different? What’s changing? What are the implications of what’s changing? They do it by themselves, and they get their executive committees to spend time talking about it. It’s an awareness. It’s a focus by themselves and with their teams. If you don’t do that, it’s easy to get swept along with habits and cultures that are basically built on the past.
Why do leaders tend to focus on what’s worked in the past, despite it not working currently?
That’s not just leaders — that’s just human beings. It’s amazing how often once we settle into a pattern, and it doesn’t work, you’d think logically, you’d stop and say, “Ok. Whoops, this isn’t working. What would be better?” But human beings, by and large, unless it’s a super crisis, they will continue. Why? I think part of it is unconscious fear. That can just stop you from calmly sort of thinking about, “Ok, now, this isn’t working. Why? What’s changed?” A huge lesson here is just how much the emotional component and the unconscious component plays into all of this. Even though we think of ourselves as very rational animals, emotions play. And in this case in ways that get us stuck.
How can people work to overcome this mindset of staying in the past?
Explicitly, on a regular basis, make a note. Talk to it with others. Talk to it with your executive committee. Another thing that helps: Fear gets in the way, but talk about opportunities. Get a leader to think in terms of what are the big opportunities out there. Get them to think about it as not just a dry, rational, above-the-neck intellectual exercise, but what they find personally exciting. What are their aspirations? It’s amazing how much that evokes positive stuff and can pull people, in a sense, not just push them.
As a result, because of this positive desire, they start actually acting differently, including doing a real assessment of what are we doing that’s getting in the way right now? What are the barriers to our achieving this thing that we are now beginning to see is so sensible and so exciting? It’s the pull; it’s the excitement; it’s the emotional thrust that can break through the habits and culture of “humpf, humpf, that’s not the way we do things here.”
In times of crisis what are the best ways to solve big problems?
To some degree, it depends upon what kind of crisis it is. There are crises that people know very well because they happen all the time. Those kinds of crises, which have nothing to do with the basic system, those are a matter of over time you develop almost rules of thumb for Crisis A and Crisis B because they reoccur.
There’s a different kind of crisis, and that is when something fundamentally shifts and you’re feeling it immediately, but there is no way it is going to go away by a short-term fix. It’s the sort of crisis that you haven’t seen 15 or 500 times before, so you do not have a methodology for dealing with it. Those are more crises that say maybe something about customers is fundamentally shifting; this isn’t going to be solved this week or this month. We have to deal with any immediate effects as fast as we can.
The even bigger problem is to start saying, “There’s a broader thing going on here. What is happening that isn’t just the past, and what are we going to need to do?” Which might take some time. It might take six months, two years, five years, to actually change the operation in some significant way to deal with this new business reality.
Most organizations are pretty good with the first type of crisis. But with this second kind, organizations and leaders have a lot less experience with it, yet we’re getting a lot more of these as the world changes faster and faster. Now we’re back to this is a strategic, large-scale change problem. Those get solved in a very different way. There are people that think that it’s this long-term/short-term deal. Which do you want? Well, you’ve got to deal with both kinds of crises. It’s not an either/or; you’ve got to be able to deal with both. And ideally, you want to build a system, a whole organization that can keep you on budget and plan each and every day, week, quarter. At the same time, have this longer-term outlook about what are the big opportunities and know how to mobilize the troops in that direction to make big things happen.
What’s the business risk of not adapting to new ways of problem solving?
In business, the most typical one is you delay, you delay, you delay, and eventually something really bad happens. You miss your projections, the stock market is unforgiving, you can miss quarterly earnings by some ridiculously small amount, and the next thing you know, you’re bought up by somebody who slices and dices you out of existence. So the stakes are huge.
Now, if you’re a typical person running a mature organization in a mature industry, you haven’t seen that enough to really feel that problem. Maybe you read about it occasionally in Fortune or Harvard Business Review, but you haven’t seen it up close, so it’s an abstraction, not a reality. But the reality is more and more safe harbors are disappearing, and more and more people are at least vulnerable to some consequences from not being able to keep ahead of the curve, transform, adapt. The consequences can go all the way up to catastrophic.
Lauren Dixon is an associate editor with Talent Economy.