I am a business leader who has traversed...
It's time more chief executive officers owned up to the need for, and embraced, point-to-point navigation to steer their businesses. This means going forward in logical, small steps – and turning back to look for another direction if it doesn’t work out.
Currently, we expect a CEO to know exactly where they are taking their organisation at all times – despite overwhelming evidence that this is an impossible task. We expect them to have a strategy; to lay out a plan. They must provide reliable earnings guidance, and avoid disappointing the stock market and its impatient analysts and investors.
Yet one of the great success stories of Australian business had the courage to reject this approach. Wesfarmers’ former managing director Michael Chaney left the firm in July 2005 after 13 years in the top post. During his term, Wesfarmers’ share-market value swelled from just over $1bn to more than $15bn, elevating it into Australia's top ten companies.
So how did he do it? In a 2002 interview with Chris Cheatley of ceoforum.com.au, Chaney ascribed Wesfarmers’ growth to the concept of 'logical incrementalism'.
“You can't predict the future, so we just go forward in logical, small steps,” he said. “If it works out, we keep heading in that direction; if not, we pull back and look for another direction.”
This is point-to-point navigation. But if this idea of a more dynamic, act-learn-act-learn approach to managing strategy is so compelling, why isn’t it more prominent in today's leadership orthodoxy? I think it's because leading this way asks leaders to openly acknowledge they don’t have all the answers. It requires the periodic destruction of ideas and business models that aren't working.
Today we need to run our businesses in an agile, restless and flexible way . We need to stop pretending they’re like an ocean liner that can be steered from the bridge by one all-knowing captain.
I’ll soon be exploring the navigation metaphor for myself when I serve as a member of Arup's support team on the Shackleton Epic, a re-enactment of Sir Ernest Shackleton’s perilous 1916 Antarctic journey, considered one of the greatest survival stories of all time. You’ll hear more from me here on Thoughts about the leadership experience we’ll be delivering based on Shackleton’s own approach.
In the meantime, I'd love to hear your thoughts on how business leaders might benefit from knowing less and backing their people to do more things, differently.