Companies Survive By Accepting Brutal Information
Jim Collins, a brilliant business thinker, explored in his pioneering Good to Great guide what distinguishes the most successful and enduring organizations from others. His team analyzed data from 1,435 companies and finally selected 11 exceptional companies to investigate and uncover what they had in common.
Many of the overlapping characteristics of these eleven companies questioned the traditional notions of corporate success. One of the main features was a phenomenon that Collins defined and named after a famous military leader, James Stockdale. (Picture)
Stockdale was a former naval officer and vice presidential candidate. During the Vietnam War, he was a senior officer and was held as a prisoner of war for over seven years. During his captivity, Stockdale was repeatedly tortured, suffered constantly, and had little reason to believe that he would find out alive.
What ultimately saved Stockdale's life was his ability to process the reality of his situation while at the same time reconciling this realism with a firm, optimistic belief that he would survive and return home.
Years later, when Collins interviewed Stockdale while researching Good to Great, Stockdale shared that he had decided in captivity to transform the ordeal into "the defining event of his life that he would not trade afterwards."
This led Collins to ask who was struggling most with the mental strain of imprisonment. Stockdale replied, "Oh it's easy. I can tell you who didn't make it. They were the optimists."
When Collins was incredulous in his answer, Stockdale continued:
"They were the ones who always said," We'll be out by Christmas. "Christmas would come and it would go. And there would be Christmas again. And they died of a broken heart."
Collins and his research team found that each of the 11 companies examined had survived an existential crisis. Collins found that the management team reacted with a strong psychological duality. On the one hand, they stoically accepted the brutal facts of reality. On the other hand, they kept an unshakable trust in the endgame and the obligation to assert themselves as a great company despite the enormous challenge.
Collins called this psychological duality the Stockdale paradox. It may never have been more relevant than it is today.
Business failure and the Stockdale paradox
Many organizations will not survive the COVID-19 crisis for reasons beyond their managerial control. However, I believe that if we look back on many business failures and missteps, we will see repeated leadership failures related to the Stockdale paradox.
There will be cases where the leaders lost hope early, were too pessimistic and could not bring their teams together.
We usually see organizations that run out of runways or critical resources because they are too optimistic in their planning. Their misjudgment or unwillingness to acknowledge the deep downturn and the extended time frame of the crisis will hamper their ability to adapt to rapidly changing conditions.
It's scary times with an overwhelming amount of brutal facts, including the fastest economic decline since the Great Depression. Trying to protect teams from this reality only results in them having false expectations and going blind later. These will be the “broken-hearted” teams who lack the resilience and determination to make it.
Instead, it is critical for leaders to calmly tell their teams what they need to know and help them understand their role as part of the solution.
Do you think that you will overcome this crisis without optimism and long-term visions obscuring the brutal facts. Accept this reality, commit to being resilient, and develop a plan for you, your family, and your organization to live to fight another day.
To better understand the Stockdale paradox, this short video from Collins explains it in detail. It is a must and a big part for your family, friends and teams.
"You must never confuse the belief that you will eventually prevail – which you can never afford to lose – with the discipline to face the most brutal facts of your present reality, whatever it may be." – James Stockdale
Contribution to the Branding Strategy Insider by: Robert Glazer, founder and CEO of Acceleration Partners
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