Dr. Lee Thayer, whose observations and proddings had a powerful and profound influence on my understanding of leadership and why businesses and organizations generally struggle, offered a clear explanation of why most companies are managed poorly and fail to realize their potential. Thayer observed that “people prefer problems they cannot solve over solutions they do not like.” It speaks to basic psychology and that people tend to avoid pain. It also defines what is at the core of what undermines efforts to address the cause of their problems.
It is not that we ignore the problems that destroy our organizations. We avoid what is painful in favor of what feels expedient. When we find that our decisions are failing to fix our problems, rather than accept the painful solution that might be the only way to fix things, we pursue solutions that feel more agreeable and continue to avoid what we dislike at any cost. Those costs are often catastrophic.
Management is pure science built on measured evidence of cause and effect.
The accounting system invented by the Knights Templar in London in 1185 has been a durable method for keeping track of the business of money. These warrior monks created the world’s first bank and enabled financial transactions to be made safely and securely for the merchants of war they swore to serve. It is essentially the same system used today throughout the world.
Today, there are myriad things that companies must manage well to succeed. Failure to manage legal compliance will shut you down quickly. But no less important are systems to train workers, measure their performance, and control costs, expenses, inventory, and cash flow. Add IT, communications, security, R&D, manufacturing, customer service, and sales, and it is clear that business management is complex. But not nearly as complex as the human beings you depend upon to manage these things properly.
The best way to manage your company well is to lead your people more effectively.
The problem is that poorly managed companies fail quickly, and poorly led companies fail eventually. That is because leadership binds the things you manage to the core of your operations. Leadership activates management, elevating your organization’s performance like sugar activates yeast to make dough rise.
In my experience with clients and the CEOs I meet, there is constant frustration over what goes wrong: the things that shouldn’t happen or the things that must but do not. The bigger frustration is dealing with people who fail to perform as they should.
Unless you understand that leadership is not management, and management is not leadership and that all these problems are related to your ability to effectively influence people, you find yourself playing whack-a-mole and never winning.
