Leaders need imagination and courage

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Ram Charan<br />Source: http://www.ram-charan.com/
Ram Charan

Today, the world is much more complex and the pace of change faster. This presents leaders with a new challenge. They need to be experts in leading change – and this requires them to develop a new skillset, and be able to hone the right instincts.

In the past leaders have needed to make subjective judgements based on ambiguous and constantly evolving factors. They needed to pull the relevant information from multiple sources. They needed to weigh up the risks associated with making decisions too quickly or not quickly enough. They needed to be able to delegate while maintaining the overall control.

Some of these challenges have been around for centuries. Some are new. But combining the skills required for both is not easy.

We were interested to read an interview with Ram Charan who advises senior leaders. He talks about his experience in the recent Harvard Business Review (November 2013).  In his 35 years of experience, he concludes that making the right decision today is much harder than it was 10 years ago.

CEOs can’t rely on analytics any more, Charan explains, they have to select information from a variety of sources while staying focused on the customer. Despite the ambiguity, leaders need to be focused on specific and concrete options when coming to a decision.

Today there are also many more second- or third-order effects that can result from a decision. It is not just a question of understanding whether an investment will be profitable. There is a greater level of complexity in terms of community issues, government issues, the reaction of competitors and the power of innovation.

But you can’t let that stop you from making a decision, he says.

Charan’s three keys to better decision making are:

  1. Perceptual acuity – the ability to see change coming before anyone else
  2. Qualitative judgement – drawing on your instincts and experience
  3. Credibility – having the trust and respect of others so they accept your decisions

What does that mean for the future?  Leaders will still have to be willing to make tough decisions and follow through.

Some people are paralysed by the fear of making the wrong decision and therefore will not act.  But Charan states that if leaders have credibility, then one wrong decision won’t ruin their reputation. Whereas not making a decision will.

Tomorrow’s CEOs have an exciting but challenging future ahead of them.  The pace of change is not going to slow down, so leaders need to become better at understanding what change means and using it to their advantage.

At Able and How we’re currently talking to business leaders in the UK and around the world about how they can develop the new skills needed to lead change. They can see the real value in it. And we enjoy working with them.

We believe that CEOs who really understand what change means and how to mobilise their organisations around it, will also be able to make better decisions.

– Hanna, London


Read the interview with Ram Charan here: http://hbr.org/2013/11/you-cant-be-a-wimp-make-the-tough-calls/ar/1

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