A little while ago Entrepreneur magazine published an article titled 5 Visionary CEOs and Their Key Traits That Every Leader Should Master. In it the character traits of leaders like Elon Musk, Nick Woodman, and Alan Mulally were highlighted and readers were urged to embrace focus, adaptability, resilience, and relentless innovation to succeed. The visionary leaders were lauded for their success and the article urged those who would emulate them to mirror themselves on these corporate heroes.
But one thing was missing from the article and from the list of traits: decision making ability.
Visionary leaders make good decisions. They make good hires, they make good strategic choices, they have a notion of how markets will change and choose the best ways to take advantage of those shifts.
But despite these visionary leaders working in some of the most complex industrial systems on the planet (or even off the planet, in Musk’s case) these decisions usually come down to the intuition and market-reading ability of the person in charge.
And that’s a problem.
A FedEx or a ZapMail?
Whether you’re trying to put humans on Mars or launch a new product just in time for the Holidays, you’re going to be working in a complex system. Supply chains, product cycles, social systems, transport, energy, and regulatory regimes all impact on a leader’s ability to make a good decision in a complex system. Those who ‘trust their gut’ and can convince their shareholders to do the same make decisions based on what they feel, know, or understand. It can work, to a point – but when it fails it fails big time.
Fred Smith had some intuitions about how the transport, delivery, and logistics industries could be transformed and so he founded FedEx. Now a global giant, Smith’s intuitive decision making in founding the company is held up as proof positive that having a good ‘gut’ is essential to being a visionary leader. But what about Smith’s other big idea – do you remember ZapMail? If not, you probably aren’t alone.
ZapMail was FedEx’s play for the emerging market for document transmission by fax. With ZapMail a customer could have FedEx physically collect and fax a document for them or, if they were going to fax often, FedEx would install a ZapMail fax machine on-site. It lasted all of two years before the plunging cost of fax machines meant the ZapMail service was shuttered. Closing the business hurt, but FedEx even lost when selling off the parts: all the fax machines were sold as scrap for $1 million to a savvy Californian firm that ripped out the valuable chipsets and sold them for $8 million!
Fred Smith is proof that making one good gut call (founding FedEx) doesn’t mean all your gut calls will be good (ZapMail) – but can you do better?
Do You Feel Like a Lucky Visionary?
In the Harvard Business Review management consultant Eric Beinhocker explained:
The properties of complex adaptive systems present particular challenges to the development of business strategy because people have a natural tendency to look for patterns. Indeed, the human drive to find patterns is so strong that they are often read into perfectly random data. Moreover, human beings like to assume that cause directly precedes effect, which makes it difficult to anticipate the second-, third-, and fourth-order effects of path dependence.
If you make an intuitive decision that turns out well in such a situation, concludes the HBR, it’s because you’re lucky, not gifted.
So do you feel lucky enough to bet your business on intuition, or would you prefer to pursue your vision with technology driving a better decision making model?
Intuition can take you a long way in business but as things get more complex, you’ll need more than just a gut feeling to make the optimal call. Technology like the applications we develop at Cosmo Tech are designed to help decision makers find the optimal strategy and make the optimal decision every time. Visionary leaders still need to be focused, adaptable, resilient, and they need to innovate to get ahead. However, it’s only when they do this and choose to take advantage of the complex industrial and business systems they seek to master that they’ll be able to move beyond simple good luck to a technologically augmented intelligence decision management vision.