Prudent Decision Making

PrudenceSt. Ignatius of Loyola said, “Prudence has two eyes, one that foresees what one has to do, the other that examines afterword what one has done.”

Ignatius, was the founder of the Jesuits, an order of Catholic priests. He was born in 1491, of a family of minor nobility in Spain. As a young man, Ignatius Loyola was inflamed by the ideals of knighthood (one might even say vanity).

In 1521, Ignatius was gravely wounded in battle. While recuperating, he experienced a spiritual conversion. Reading about the lives of Jesus and the saints made Ignatius happy and aroused a desire in him to do great things. Ignatius realized that these feelings were clues to God’s direction for him.

Over the years, Ignatius became expert in the art of spiritual direction. He collected his insights in his book The Spiritual Exercises, one of the most influential books on the spiritual life. With a small group of friends, he conceived and founded the Society of Jesus (Jesuits) as “contemplatives in action.” (from ignatianspirituality.com)

The Jesuits are arguably one of the most consequential Catholic orders of all time. Their impact on education, evangelization and church leadership (the current pope is a Jesuit) speaks for itself. I have always been intrigued with Ignatius and the concept of “contemplatives in action.” It is an oxymoron in most business circles (you are either a thinker or a doer), but it is a driving force in my life.

Contemplating and acting can be difficult for us as individuals and as leaders of firms. Leaders often fear looking indecisive or making a mistake when the firm’s future—or their role—is at stake. Firms are filled with competing agendas and decisions carry opportunity costs. Big (and not so big) decisions can threaten long-standing beliefs and stir up emotional upheaval. Leaders may make decisions that are politically expedient, travel the path of least resistance or avoid confrontation. It is very dangerous and often unproductive to take the easy way out or to act without thinking through the ramifications of the decision. If you were to ask most leaders if their decisions were effective, most would answer affirmatively. I have found, while leaders do much thinking and acting, their decisions are not necessarily effective, cohesive or prudent.

Aristotle defined prudence as recta ratio agibilium, “right reason applied to practice.” The emphasis on “right” is important. We cannot simply make a decision and then describe it as a “prudential judgment.” Prudence requires us to distinguish between what is right and what is wrong. According to St. Thomas Aquinas, prudence does three things: 1. To take counsel, 2. To judge soundly and 3. to command their employment (i.e. act).

A large part of our work at Prudent Pedal is helping leaders make prudent decisions that drive growth and build long-term success. Building on the thinking of Ignatius, Aristotle and Aquinas, this is how we help. 

Three Parts of a Prudent Decision

Step 1: Take Counsel

One must take counsel carefully from one’s self and others. Failure to deliberate is rashness, which leads to impulsive and ineffective decision-making and confuses activity and action.

We gather the relevant information during this stage, starting with a consideration of our principles. Prudence is about truth: the truth of what is, what is right and what must be done. We must know what is true before we are free to do what is right. This includes an awareness and acceptance of our own moral values, our firm’s values and our mission as a firm. If our firm’s culture and mores dictate that a certain act is inappropriate, then there is no need to deliberate; we know not to do it.

While deliberating, we must also carefully examine the concrete situation, to be sure that we fully understand it. Firms often misconstrue anecdotes for data and feelings for facts. So often, we don’t deliberate honestly, but rather focus on the aspects of the situation that we want to see. Prudence demands openness to the whole truth of the situation, including our long-held beliefs, prejudices and agendas. With this step, it is absolutely critical that we be completely honest about the decision with others and ourselves.

Step 2: Judge Soundly

After deliberating with counsel, we fairly weigh all of the evidence. Judgment separates the relevant from the irrelevant and applies it to the issue at hand.

This is where firms most often stall in making strategic choices. Choices have opportunity costs and firms are loathe to limit their partners and practices or, more importantly, to seed discord. Unfortunately, we can’t contemplate forever; we have to reach a conclusion. Failure to make a judgment is called indecision. Procrastination, perfectionism and fear of failure are common indecision traps.

Prudence lies in the readiness to sacrifice today’s gain for tomorrow’s greater reward. Our judgments should be guided by optimism, new possibilities and hope. Prudence is about stewardship and expressed with an attitude of realism, not scarcity or greed.

Step 3: Act

Once we judge the right thing to do, we must act. If we determine the proper action but then fail to implement it, what’s the point? We do not exercise the virtue of prudence until we actually do what we have judged to be right.

Failure to carry out what we believe to be the proper decision is irresoluteness. Most firms make hoards of decisions but never manage to keep them; instead they swing back and forth like a pendulum. Thinking about an issue without arriving at a practical result does no one any good, but making a decision and then impulsively altering course can create a lack of clarity about direction and values that damages the firm even more. Does “the flavor of the day” ring a bell? 

Takeaway

Prudent decisions are not risk averse, selfish or calculating.

The first part of prudent decision-making knows the goal; the second part knows how to choose the proper and right means to obtain the goal; the third part acts.

With prudence in the spiritual world, we look at every decision in light of the ultimate goals—goodness and happiness.  In the professional services world, we look at it in terms of integrity, service and fitting results.

Analyze the steps of counsel, judgment and action in your firm. Identify where your firm does well and where it falls short. Once you recognize the firm’s weakness, you can work on that area of prudence and become a contemplative in action.

Be prudent.

The Spring Doldrums of Professional Services Marketing

Spring Doldrums in Professional Services MarketingMost firm’s marketing plans are screeching to a halt about this time of year:

  • The big tradeshow has sucked up more time and money than expected.
  • The new product or service was launched and is now languishing.
  • The big research study has not gotten a statistically valid sample.
  • The brochures have been produced and placed on the shelves.
  • The firm’s thought leaders are too busy serving clients to produce that seminal piece of thought leadership.

There are many excuses or perhaps just silence. The May-June doldrums mark the point when the energy of most annual marketing plans begins to run dry. Why does this happen? Quite simply: it happens because most marketing plans are not informed by strategy, and are not plans at all, but are instead a list of discombobulated tactics.

Strategies define clear markets and clear objectives. Think of things like penetrating a market, achieving a certain market share, attaining a certain number of clients, reaching a level of brand awareness, producing X amount of leads or achieving a net promoter score. These objectives are easily measured. Either you have achieved them or you have not. Marketing does not end because tactics have run out.

Now is the time to evaluate actions to date. Firms should be asking: How did we measure up, where did we exceed our goal, where have we fallen short? What have we learned? What is fuzzy? Where do we need more clarity? Where do we need to reallocate resources?

Takeaway

Marketing is about a relentless pursuit of understanding, anticipating and meeting client needs. If firm leaders are not holding marketing accountable throughout the year and accept tactical actions instead of strategic results, the firm has no one else to blame but itself for the ROI on its marketing investment. Do not let marketing slow down now or at any point when trying to achieve the vision for the firm.

Be prudent. 

 

Six Beliefs Of Hazardous Firm Cultures

DangerContributed by Ted Harro

Some organizations should have a warning label: Caution, working here can be hazardous to your health. Complications could include high blood pressure, weight gain, insomnia, and bleeding ulcers.

Behind every hazardous work culture there’s probably at least one dangerous leader who sets the tone. Crawl a little further into these leaders’ heads. Probably, they live with beliefs that make counter-productive behaviors seem totally rational and healthy. I heard those beliefs vocalized by an administrative assistant a while ago in such bald terms it took my breath away.

I was about to start a strategy session with a leadership team. She was organizing the otherwise-empty room, setting out breakfast, dropping off snacks.

She said quietly to me, “I wish I could be here in the meeting.”

I paused, sensing something else was coming. “I mean, how do you do it?” she asked.

It’s a good question. How do I do it? I wondered.

Wait, do what?

So I asked her, “What do you mean by ‘do it?’”

She smiled slyly. “How do you get a group of senior leaders to actually work together? It must be a huge challenge.” She blinked at me knowingly. I stared back, puzzled.

“Ummm. Well, it has its moments but which challenge are you referring to?”

“Well, let’s face it. All of these people got here by stepping on others, by using and abusing people, by watching out for themselves. How do you get them to turn that off and start working together?”

Her belief system was stunning. Leaders use. Leaders lie. Leaders scrap. Because of their inherent selfishness, leaders are highly unlikely to work together.

I later learned that she had cut her teeth at a top professional services firm, one equal in reputation for excellence and aggressiveness. I couldn’t help but wonder if those formative experiences had shaped her view of leaders and work and what’s possible in a company.

Just like family backgrounds have a profound impact on how we see the world, so our early companies often shape how we see life. We pick up their beliefs and attitudes like lint – or sometimes we have an allergic reaction to them and choose to go the opposite way.

Unlike family backgrounds, we can exercise some choice about our companies of origin – at least early on in our careers. So now, when talking with young people entering the workforce, I’m going to give them a little advice: choose your company of origin carefully. We all like to believe the myth that we’re independent thinkers, impervious to the influence of those around us. It’s a lie. And we should get over it.

Here are a few beliefs you might pick up from the behaviors around you early in your career:

  • Cut-throat vs. Collaborative: If your early companies allow colleagues to be cut-throat, you’ll start to believe that you have to watch your back if you want to survive. But if your early companies expect people to help each other out – sometimes sacrificially – you’ll start to believe that loyalty and teamwork will help you thrive.
  • Corner-cutting vs. High Integrity: If your early companies are willing to bend the truth to sell stuff, you’ll start to believe that the sales goals justify the means. But if your early companies only make promises they can keep to customers, you’ll start to believe that integrity leads to long-term success.
  • Perfectionistic vs. Learning-Driven: If your early companies punish people for making mistakes, you’ll start to believe that you should keep your head down if you want to survive. But if your early companies encourage people to take smart risks, you’ll start to believe that accelerated learning is the best path to long-term earning.
  • Passive-Aggressive vs. Straight-Talking: If your early companies carefully avoid confrontation, you’ll start to believe that it’s smarter to passively resist things you don’t like instead of dealing with things head-on. But if your early companies practice constructive truth-telling, you’ll start to believe that caring enough to speak the truth is the smartest policy of all.
  • Takers vs. Servants: If your early companies only care about customers because of the profit they bring to the company, you’ll start to believe that customers are conquests or even opponents. But if your early companies show radical concern for customers, you’ll start to believe that all great work starts with the attitude of service.
  • Hype vs. Substance: If your early companies do token “community service” or “social responsibility,” you’ll start to believe that work is primarily about making money and keeping up appearances on everything else. But if your early companies have woven social responsibility into the very fabric of their business models, you’ll start to believe that great work always serves the common good as well as the bottom line.

Many of us are past those days of choosing our companies of origin. We have a stack of beliefs we’ve picked up along the way at our various employers and clients. But we aren’t powerless about this either. We aren’t doomed by the attitudes we picked up. We just have to challenge them a little bit.

Here’s how. Start by recognizing beliefs when they pop up, often in statements that begin with “all” or “none.” For example, the assistant I described above had a belief, stated bluntly as “All leaders are self-serving, Machiavellian liars.”

  • Ask yourself, “Where did I get that belief?” Play back the situations and characters who shaped that thought.
  • Ask yourself again, “Is that belief really true now? Does it need to be true now?” Does that belief pertain to your current situation or are you saddling today with yesterday’s beliefs?
  • Think for a moment about how those beliefs might be holding you back in your work today. Are they making you less trusting, less giving, more cynical, more defensive? And are those responses helping you do your best work?
  • Choose models and mentors for your future who help you do your best work with your most constructive mindset. They shouldn’t be pollyanna-ish any more than they should be hardened cynics. They should be those who are at home with the way things are, while still being their best selves.

Wherever you are, do all in your power to create your own exemplary workplace – a place where you’d want your child or your best friend’s child to have her first work experience.

Be prudent.

Four Keys To A Successful Breakthrough – contributed by Ted Harro

Four Keys

“I’m worried about where you’re going here!” It had taken the CFO a day and a half to finally burst. He had been watching our planning session proceed, only commenting when his financial expertise seemed relevant. But after the CEO’s description of his expansive vision for the company, the CFO had finally had enough.

“What are you worried about?” Chris the CEO said, a little stunned that his normally taciturn financial sidekick had been so direct.

“You’re telling us all of the beautiful things our organization should be doing. It sounds great on the surface. You call it vision. I think it’s really mission creep.”

I felt a familiar mix of reactions to this exchange. On the one hand, I was rubbing my hands together with anticipation. This moment in the planning process can precede a breakthrough, that moment when we climb beyond superficial solutions and find creative alternatives to deep issues. This company desperately needed a breakthrough. Its market was depressed. Its products were aging. Business as usual could end up badly.

On the other hand, this moment can get messy. Though I’ve never personally experienced labor beyond witnessing the birth of my two sons, the process of a leadership team achieving breakthrough can look like collectively giving birth. There’s pain. There’s pushing. You get stuck for what seems like an eternity.

The whole experience sometimes scares people off. Teams fear getting stuck. The leader fears giving up control. Many teams either avoid the whole chaotic affair or they do a sanitized, superficial version of the process that promises safe outcomes. While tidier, there’s no baby after that approach. Maybe you get to cradle a doll that looks and coos and even pees like a baby. But the real thing comes from the mess.

After the CFO’s outburst, I called a break. I knew what was going through Chris’s mind. He had had private reservations about opening up his strategic planning process to his team, fearing that the group would slam on the brakes when he wanted to go in a different direction.

Out in the hall, Chris asked me, “How should I handle this situation?”

“Don’t worry,” I said. “In the end you won’t have to lead a charge in a direction you don’t believe in. But we might just be on the verge of a breakthrough.”

Chris took a deep breath. We agreed that he would listen carefully to his team members, to understand where they were coming from, to try to find that place where their points of view intersected with his.

In other words, to wait for the breakthrough.

After the break, I called the group back together. “I’ve been talking with Chris over the break. Here’s what it looks like to me: Like many visionaries, Chris wants to stretch your organization to achieve more for your customers and stakeholders than we’ve ever even imagined. He sees possibilities. Beyond that, I think he believes that holding pat is actually a risky path, maybe even a slow death.” Chris nodded his head.

“Others in the group are worried that this expanded vision will set unrealistic goals that they will never meet. They’re worried they’re being set up to fail.  You want to succeed. And success means hitting realistic goals.” The CFO and a few others in operational roles gave knowing smiles.

“OK,” I continued. “We’re at a point in the process where it’s time to go for breakthrough. This isn’t on our agenda because you can’t plan for when it will happen. It’s a detour. But if you’re up for it, it could be very productive.”

We dove in to a rigorous and difficult conversation that had an unusual outcome: everybody got a version of what they wanted. Here’s why:

  • The team members vocalized their concerns. They needed coaxing at first. They stumbled around with their thoughts. They trod carefully, aware that they were dangerously close to stepping  on Chris’s toes. To support the process, I took their point of view and agreed with some of what they said, trying to get them to extend their necks further.
  • The leader listened. Chris hung in there on his own vision but he listened to their concerns. He supported their desire to be successful. He avoided the two usual tactics of leaders in this situation: he neither shut people down nor did he shut himself down. Together, they kept digging and waiting and believing that an answer would emerge.
  • They were honest and skillful. This is very different from being honest and unfiltered. If Chris had been unfiltered, I think he would have said that he was about to blow his stack and that he was bound and determined to expand the mission of this organization whether the team liked it or not. If team members had been honest and unfiltered, they would have rolled their eyes and said, “There you go again. You always do this. And it winds up creating messes that we have to clean up.” Neither of those approaches would have been helpful. Instead of being their worst 5-year-old selves, they were their best grown-up selves. That made a difference in how long they could hang in during the mess.
  • The mission was clear and compelling. Though it may have seemed a throw-away exercise at the time, we had spent a good chunk of time earlier in the session talking about why each member of the leadership team chose to work at this organization at this time – besides the chance to earn a paycheck. They had a surprising amount of commonality in motivation. They all wanted what was best for the company and the community it was serving. The mission was important and highly personal to each of them. Most of all, the mission was way bigger than themselves.

Even when you persevere in the labor for a breakthrough, it doesn’t always happen – at least not on schedule. And when you do get a breakthrough, it will need tender care and feeding until that fragile new life is ready to leave the hospital and venture into the big, bad world. But you dramatically increase your chances of seeing that breakthrough burst into life, seemingly out of nothing, when you navigate the mess skillfully like these folks did.

You Don’t Have a Marketing Problem

Head in the SandIn 2002 Rajat Gupta, then managing director of McKinsey, pushed the firm’s head of marketing and public affairs, Javier Perez, out of the firm. The reason: multiple partners had shared their dissatisfaction with the firm to writer John Byrne in a wide-ranging feature in BusinessWeek.

Gupta had spent his tenure refocusing the firm on growth. He put a halt to what he considered money-wasting research, implemented what was known as “100 percent cubed”—bringing 100 percent of the firm, 100 percent of the time to 100 percent of the world. The firm had grown from 58 offices to 81; from 3,300 consultants to 7,700 and it nearly doubled its revenues from $1.2 billion to $3.4 billion.

The average tenure of a Fortune 500TM CMO is around 18 months. While the tenure may be longer for marketers in a professional services firm, life can be a lot more messy. I have held senior marketing roles at some of the world’s best consulting firms and have consulted at many others.  A theme that arises time and time again is how ineffective marketing is—whether the problem is strategy, organization, leadership or something else.

Firms’ actions swing like a pendulum as they try to drive growth and get marketing “right.” They hire “doers” and then they hire “thinkers.” They fire the “thinkers” and then hire “doers.” Partners want only marketers who understand law firms, accounting firms, architectural firms, then they want anything but. They centralize, and then they decentralize marketing. They align marketing with geography, and then they swing to lines of business. Firms buy technologies, hire cold-callers to get leads, add budget and take budget away. The pendulum swings back and forth desperately searching for a solution to their “marketing” problem.

When these activities and the co-morbid destabilization are in a firm, it is a telltale sign that the firm is not focused on the right “problem.” After achieving its results, McKinsey’s directors had begun to worry if the focus on growth had cost the firm its soul. Do you believe that Gupta’s firing of Perez had any impact on the quality of press coverage the firm was getting? Do you think it appeased the dissatisfaction of the McKinsey managing directors?  Do you think that bringing in another marketer changed the trajectory of the Gupta’s vision?

Takeaway

Marketing is a visible and easy scapegoat for problems that the leadership of a firm may be unwilling to address. True: there are incompetent marketers, but let’s be honest about how much pull any non-partner marketer likely has inside most firms.

At the heart of any thriving firm is a culture of integrity, leadership, authenticity, stewardship, client-focus and great people. Market opportunities come and go. Brand relevance ebbs and flow.  Competencies grow and die. Culture remains.

What was the culmination of Gupta’s tenure at the top of McKinsey? It was his indictment and ultimate conviction for insider trading.   While your firm may not be dealing with insider trading, ask yourself, “Do I have a marketing problem or is something else going on?”

Be prudent.