At this month’s Innovation Day, KnowledgeBrief clients were joined by Dr. Claudia Nagel, Hull University Business School, to explore integrating unconscious and emotional aspects into decision making, to achieve not only better decisions but also a better implementation of the strategy developed.
Corporate strategic thinking is often led by a data and planning based approach, resulting in new strategies derived from past corporate performances. However, in practice, past experiences are only helpful if you’re in the same or similar situation.
What has been left out so far in corporate strategy is the specific characteristics of the strategic situation, which is uncertainty. Everything is so interlinked in today’s world that uncertainty is inevitable. The competition is stronger and more unpredictable than ever and things simply change.
As a leader, the key is to understand what’s different and how the rules are changing to influence the decision making process. To improve the strategic transformation process, consider three basic Kantian questions:
- What can I know? Where shall I focus and where do I look? Where do I want to look?
- What ought I to know? How to decide and how does the decision-making process work? And what shall I do with the results?
- What may I hope? Metaphysically, psychologically and neuro-scientifically – how will the future of the corporation develop?
New situations and uncertainty entails human emotional reactions such as fear and anxiety, which in turn influence the thinking of the leader, the management team and the organisation considering corporate strategy. Human beings are not as rational as many would like to see, and rationality is not always the best model to follow when making decisions.
However, nobody in management talks about fear and anxiety – it is one of the most taboo subjects. This is a problem since the information hidden in these feelings cannot be adequately processed. Leaders would be more successful if they were more willing to reflect on these feelings.
The key is to manage the emotions to reach better strategic decisions. This means being aware that they are there, rather than ignoring or denying them. Turn towards the fear and deal with it by asking yourself: What aspects of the future do you fear exactly? What does this say about the possible future of the company? Great leaders of today should have a high capacity for introspection and self-reflection.
Leaders must also remember that tension between an increasingly uncertain future and the expectations on managers of firm decisions, conviction and direction can cause a negative impact. Organisations end up changing either too much or not changing at all. How do you run a business when people want freedom but need stability? Or when organisations want to aim for novelty, but needs usefulness? A paradox has the (dis)advantage to not have a solution. Leaders should be capable of holding the tension by dealing with ambiguity and paradoxes.
It is essential that top management are capable of creating a safe space for sharing and reflection. This is meant as a place for talking about emotions and for people to share their insights on the future of the organisation from introspection and self-reflection. For the strategic transformation process to succeed, an organisation needs to develop in top management level the capacity for empathy, cross-understanding on an implicit and explicit level of thinking AND feeling.
Next month, clients – including Linklaters, Home Office and Warrington CCG – will examine integrating creative techniques into their agile processes. For more information, please view the Innovation Day page.