Issue No. 332 of Your Weekly Staff Meeting features a powerful—and mind-rattling—book about uncertainty and how to recognize the bends in the road ahead. It will be on my Top-10 book list for 2015. You must buy it! And this reminder: subscribe here for Drucker Mondays, as 52 guest writers share their favorite quotes and commentary from the book, A Year With Peter Drucker.
Perceptual Acuity Dinners
Huh? What’s a “perceptual acuity dinner?”
Before I tell you why five CEOs have dinner together four times a year, let me mention that this issue’s book, The Attacker’s Advantage: Turning Uncertainty Into Breakthrough Opportunities, by Ram Charan, will certainly be on my Top-10 book list for 2015—and might be my book-of-the-year. Buy it!
I’m privileged to serve as board chair at Christian Community Credit Union (and by the way, I run their "sponsorship" above at no charge). This summer at our board’s annual planning retreat, we read Charan’s latest book, in advance, and then every board member shared a 10-minute chapter review. It was energizing—because the book is so current, mind-bending, and alarming. (This is the third Ram Charan book our board has read.)
Mike Pate, executive director of Transformation Ministries Camping (three camps in California and Arizona) just took his leadership team through the book last week.
Ram Charan writes:
“Uncertainty has always been a challenge to business, but never before has it had the intensity and potential to change industries and destroy companies as it does today. Business leaders can be on the defensive, or they can be on offense, prepared to lead decisively. The ability to deal with uncertainty is perhaps the paramount skill leaders must have to be successful in this era. Without it they risk becoming personally obsolete and driving their companies off a cliff.”
Do you know the difference between operational uncertainty and structural uncertainty—and why it matters?
(From Ram Charan’s website): “…Ram Charan shows what skills are needed to be able to spot the disruption that is coming, and what actions are necessary to take advantage of these changes. While many leaders know how to cope with operational uncertainty—when, for example, revenue fluctuates—the same cannot be said for dealing with structural uncertainty that can alter the money-making patterns of a company, industry or entire economic sector.”
The reviewer adds, “Charan demonstrates the huge upside offered by structural uncertainty and provides the concepts and tools—such as being able to spot the catalysts of disruption, building organizational preparedness, developing a financial understanding of the consequences—to take advantage of forces that are creating new customer needs, market segments and ways to make money.”
Just look at the chapter titles. How can you not read this book?
1. Bends in the Road
2. Why Structural Uncertainty Is Different
3. The Mathematical Corporation: The Algorithmic Revolution and the Rise of the Math House
4. Searching for Early Warning Signals
5. Building Perceptual Acuity
6. Identifying the Catalysts of Structural Change
7. Seeing What Catalysts See
8. Tools to Build Perceptual Acuity
9. How Tata Communications Expands the Organization’s Lens
10. Going on the Offense
11. Defining the Path
12. A Mind-set for Offense
13. Kaiser Permanente’s Path Through the Turmoil in Health Care
I plan to read this book again—because while it’s very well-written, the concepts cannot be mastered in a quick read or a cursory review. The insights and the principles from the book are now part of the lexicon at every meeting of the Christian Community Credit Union board of directors. Heed these warnings:
• “Uncertainty is not something to fear.”
• “Taking control of uncertainty is the fundamental leadership challenge of our time.”
• “The advantage (in businesses) now goes to those who create change.”
• “Taking advantage of the emerging landscape will almost certainly call for significant changes in how you define your business.”
• “The greatest risk of all is that leaders who face the need for radical change will deliberate too long and discover that the world has passed them by.”
And more elbows-in-the-ribs:
"No matter how successful it has made you, your past experience won't ensure success in the new world.”
“Most of the 360-degree evaluations companies use focus on essentially the same traits. I have yet to see one that includes those qualities that I believe are now crucial for meeting the fundamental challenge of our time: perceiving the sources of uncertainty ahead of others, taking advantage of uncertainty to go on the offense, and preparing and steering the organization to adapt in tune with sudden changes in the environment.”
“He [G.M. Rao, the chairman of GMR, India’s largest infrastructure business] once told me that every bend in the road contains a message about a future growth trajectory that someone could explore and exploit if he or she looked at it though a different lens without being controlled by an existing core competency.”
“People often miss these early warning signals because they’re ‘flying at low altitude,’ immersed in the daily operating details of the business.”
On perceptual acuity (a big theme throughout the book), Charan gives this definition: “Perceptual acuity is your human radar for seeing through the fog of uncertainty so you can act before others do.”
CNN owner Ted Turner had it by seeing the future of 24-hour news, while “SONY’s leaders slept through the dawn of digital music: a stunning lack of perceptual acuity from the company whose Walkman was one of the groundbreaking products of the 1980s.”
Charan notes, “The greatest test of perceptual acuity is the ability to pick out catalysts and seeds even when the signals are weak, meaning that they are intermittent or seem irrelevant. Retailers lacking perceptual acuity might, for example, have underestimated the significance of Apple’s bringing in Angela Ahrendts as senior vice president of retail and online stores in 2014.
“What sort of nuttiness, one might ask was it to hire the highly successful CEO of Burberry, one of the world’s best brands, to run a mere division—one that is not even Apple’s largest revenue generator?
“The perceptual acute person would immediately ask questions:
• Why would such a creative and accomplished executive give up a role as CEO to take on a lesser job?
• Is she perhaps a catalyst who will totally reconceptualize what the stores do?
• What might her intentions be?
• One hypothesis would be that she may convert them into a mecca for fashion and luxury, not just for hardware and software. [More on page 40!)
• They should add to their mental data bases the fact that Apple invited fashion journalists to its September 2014 unveiling of the Apple Watch.”
(The editors at Fortune magazine may have read Charan's book. Read the Sept. 10, 2015 article, "What the Heck Is Angela Ahrendts Doing at Apple?")
Charan shares practical tools for practicing perceptual acuity because it’s “now part of your job and will raise your value as a leader.”
He adds, “You need to be on the alert for what is new and what is an anomaly, contradiction or oddity.”
Yikes! This review is already too long…and you’ll miss oodles of important stuff unless you buy this book.
So…what about those perceptual acuity dinners?
“Your social group, too, can sharpen your antennae. Surrounding yourself with people from different industries and backgrounds, with different cognitive bandwidths and attitudes about risk-taking, helps you see the same world through different lenses. Discussing your external perceptions lets you test them against theirs, so you have a better chance of being accurate.”
In his chapter, “Tools to Build Perceptual Acuity,” he highlights a mid-forties CEO, “Clare,” who meets with four other CEOs four times a year for dinner. “Their meetings, and informal conversations between get-togethers, serve as a sounding board for each to cross-check thinking and provide a foundation for superb foresight.
“In addition, they all make it a habit to seek out and listen to people whose endeavors or expertise gives them insight into external change. They create a multiplier effect magnifying each other’s power of observation.”
There are dozens of weapons in the attacker’s arsenal—and (have I mentioned this?) you must read this book, perhaps, to even survive.
To order from Amazon, click on the graphic below for The Attacker’s Advantage: Turning Uncertainty Into Breakthrough Opportunities, by Ram Charan.
Your Weekly Staff Meeting Questions:
1) To develop a mind-set for offense, the author says it will “almost always require taking action before you have a crystal clear picture of all the factors your success will depend on.” Where is your organization or department on the continuum between Still Learning versus Bold Leaping?
2) Assess your team members, board members, and/or volunteers. Who already demonstrates the paramount skills required to deal with uncertainty? What can you do to inspire, encourage and resource them? (Step 1: buy this book!)
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As we cycle through the 20 buckets, here is an insight from Chapter 3, The Strategy Bucket, in Mastering the Management Buckets. According to Mike Tyson:
"Everybody has a plan
until they get punched in the face."
For more insights and resources, visit the Strategy Bucket webpage.
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