One of the more challenging aspects of working with clients on strategy is helping them let go.
- Let go of businesses that don’t fit their strategy.
- Let go of people who are destructive to their goals.
- Let go of the need to avoid bad news.
It is far easier to add and very difficult to let go of something, especially if you are the one who added it in the first place.
Once an executive has advocated for an action and sees it through, they tend to hold on. They may justify what others see as reasons to make a change.Emotions play a powerful role in how we evaluate information and what we decide to do with it. Click To Tweet
This happens not because people are foolish but because they are human beings. Yes, even you analytical types who are shaking your heads while reading this!
For example, leaders who advocate for an acquisition are less likely to sell it later, even if it performs poorly. A new leader, looking dispassionately at the situation and fearing no repercussions from changing his or her mind, can more easily let go. After all, it wasn’t their idea.
Two phenomena that play a role are the confirmation bias and sunk costs. The confirmation bias leads us to take note of and give weight to, information that confirms what we already believe. When confronted with disconfirming information, we can dig in our heels and feeling attacked makes it worse.
The notion of sunk costs says that having made investment X, we should keep investing so that we don’t waste the original effort, time and money. This leads many a person down an increasingly treacherous path. As Will Rogers has famously said, “when you find yourself in a hole the first thing to do is stop digging.”
Though bankers often think of themselves as data-driven people, they tend to use less critical judgment of a client once they have established a good track record. They will make additional investments, even when a business is sliding downhill, believing that the leaders can get it back on track.
The same phenomena lead us to hold onto people or relationships that no longer work for us. Consultants continue to work with clients who are difficult, don’t pay on time and wreak havoc on schedules. A consultant I know told me that he spent 10 months getting an agreement with a client. Ridiculous.
Another leader took over three years to remove a COO who was mediocre, arrogant in his interactions with the board and of questionable ethics. It was a relief to everyone when the CEO finally let go.
Many companies have a habit of only looking in the mirror once a quarter and then only after the full treatment from the marketing and PR teams. No one expects leaders to let the public into the sausage-making room. However, if no one except the insiders are ever in there, the air gets stale.
Someone whose sole purpose is to help a business improve can help leaders see things they aren’t seeing, confirm some things they are seeing and help them move faster. What does the leader need to do?
- Let go of the need to be right.
- Let go of the need to avoid unpleasant truths.
As one head of strategy said to me recently, “sometimes your feedback and advice were like castor oil but I knew you had our best interests at heart.”
That leader had the courage to listen. It paid off.