Dealing with Dilemmas E-Book

Frank Buytendijk

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 389

Veröffentlichungsjahr: 2010

Beschreibung

Observing how business management is obsessed with analysis andnumbers, Dealing with Dilemmas shows there is an entireclass of problems that cannot be solved by analysis: businessdilemmas. Dilemmas, representing a large part of strategicdecision-making, require the opposite approach of analysis;synthesis. Dealing with Dilemmas shows how popularperformance management methodologies can be used in new andpreviously unexplored ways. It authoritatively shows you how yourbusiness can move forward strategically in ways previouslyimpossible. * Shows dangers in current thinking around analytics andperformance management * Includes practical case examples and interviews with C-levelexecutives and government officials world-wide, both in commercialenterprise and public sector * Makes the most nebulous of management processes, strategyformulation, insightful and links it tightly to strategy executionand performance management. Filled with case studies and examples, this book reveals howyour business can start solving dilemmas and move forwardstrategically.

Leseprobe

Table of Contents

Praise

Title Page

Copyright Page

Dedication

Foreword

Preface

Acknowledgments

CHAPTER 1 - What Is the Problem?

What Is a Dilemma?

A Short Overview of History

CHAPTER 2 - Strategy Is about Making Choices, or Is It?

What Is Strategy?

Strategy Content

Strategy Process

Strategy Context

Make the Choices that Create Options

CHAPTER 3 - All Kinds of Dilemmas, but Just a Few Types

Identifying Dilemmas Using the Balanced Scorecard

Value or Profit?

Long Term or Short Term?

Top Down or Bottom Up?

Inside Out or Outside In?

Optimize or Innovate?

Listen or Lead?

Two Types

CHAPTER 4 - The Strategy Elastic

Strategic Bias

Neutral Zone

Strategically Stuck

Strategic Stretch

Strategy Elastic

Profiles in Performance

Time to Look in the Mirror

Misalignment

CHAPTER 5 - Dealing with Dilemmas, or Not?

How Not to Deal with Dilemmas

How to Deal with Dilemmas: Either/Or

How to Deal with Dilemmas: And/And

The Right Mindset

Dealing with Dilemmas Roadmap

CHAPTER 6 - To Decide or Not to Decide, That Is the Question

The Eye of Ambiguity

A Few Examples

CHAPTER 7 - This and That

Many of These versus Many of Those

Lifting the Constraints

Efficient Frontiers

One Big This versus One Big That

Cost Cutting

Improvement of Return

One Big This or One Big That: Round Two

CHAPTER 8 - You and Me

Morality and Ethics

Three Elements to Resolve You-and-Me Dilemmas

A Structured Approach

Top Down and Bottom Up

Value and Profit

CHAPTER 9 - Now and Later

Long Term and Short Term

Listen and Lead, Optimize and Innovate

Scenario Planning: Seeing What Others Do Not See

Scenario-Based Strategy Maps

Case Study: Tier 1 Talent

CHAPTER 10 - Increasing the Stakes

Interorganizational Dilemmas

Stakeholder Alignment Map

Conclusion

CHAPTER 11 - Closing Thoughts

Meta-Synthesis

Relationships, Human Behavior, and Culture

APPENDIX - Company Profiles

Notes

About the Author

Index

Praise forDealing with Dilemmas

“Frank excels in taking a broader view on performance management, and in being able to formulate his inspiring ideas and observations in a clear and understandable way. A formidable combination.”

—Dr. Carsten Bange, Founder and Managing Director of Business Application Research Center (BARC)

“Buytendijk challenges best practices and offers a new view on decision making in business and public sector.”

—Dr. Edmund Stoiber, former Minister-President, Bavaria, Germany

“Dealing with dilemmas is an integrated and perpetual challenge when developing an international business. This book takes an interesting and thought provoking deep dive into the intricacies lying behind all the important decisions we have to make every day.”

—Steen Riisgaard, CEO & President, Novozymes A/S

“All executives face dilemmas. Frank Buytendijk, a performance management expert, does a terrific job of combining research, executive perspectives, and a practical view to improve our leadership skills and help us reconcile dilemmas.”

—Heidi Melin, Chief Marketing Officer, Polycom

“Dealing with Dilemmas is important reading for anyone involved in the development and implementation of corporate strategy. This book explains why most companies, using a purely analytical approach, fail in these endeavors. It provides keen insight into how to identify, understand, and address the dilemmas companies face. By following the innovative framework presented in this book, a company can increase its chances of success.”

—Dr. Raef Lawson, Vice President of Research and Professor Emeritus, Institute of Management Accountants

“Frank Buytendijk’s new book takes us on a personal, cultural, and organizational journey into the nature and art of decision making and strategic planning. Rather than reiterate time-worn treatises on these subjects, truly out-of-the-box thinker Buytendijk takes a different perspective, borrowing from philosophy, psychology, economics, and strategy management, and in the process shakes up our preconceptions until we see things in a new light.”

—Wayne Eckerson, Director of TDWI Research

“How to deal with dilemmas is an important part of effective leadership. Strong leaders have a moral compass to guide them through difficult decisions. Buytendijk not only describes the strategic aspects of dilemmas, but also addresses the moral aspects of decision making.”

—General (ret.) Dick Berlijn, former Commander Dutch Armed Forces

“Frank has captured the essence of what confounds management today—a lack of willingness of senior leaders to encourage their teams to bring real issues to the executive suite. Until leaders are willing to listen and help their companies solve complex dilemmas, they will be suboptimizing their organization’s full potential to meet customer needs.”

—Bill Fitzsimmons, Chief Accounting Officer, Cox Communications, Inc.

“Analytics are really important for optimizing the business, but for reaching real breakthroughs where you optimize and innovate at the same time, you need more than crunching the numbers. Buytendijk provides many practical examples and new ways of thinking on how to achieve that.”

—Jeroen van Breda Vriesman, Member of the Board, Achmea

Copyright © 2010 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data

Buytendijk, Frank.

Dealing with dilemmas: where business analytics fall short / Frank Buytendijk. p. cm.

Includes bibliographical references and index.

ISBN 978-0-470-63031-0 (cloth), ISBN 978-0-470-76846-4 (ebk); ISBN 978-0-470-76847-1 (ebk); ISBN 978-0-470-76848-8 (ebk)

1. Strategic planning. I. Title.

HD30.28.B898 2010

658.4’012—dc22

2010007799

Dedicated to Henry Mintzberg

Being confronted with the traditional view of strategy being a purely analytical, well-defined process, I always felt intimidated.

Henry Mintzberg’s work taught me that, instead, strategy is messy and mixed up. You learn as you go along, interpreting ambiguous information and trying to cope with conflicting requirements. I feel much more comfortable with this view.

Foreword

By DR. DAVID P. NORTON Co-creator, the Balanced Scorecard, and Founder and Director, Palladium Group, Inc.

Organizations exist to create value for their stakeholders. Strategies describe how they intend to create that value. Mastering the formulation and execution of strategy must be viewed as a central competency of every organization. Research shows this to be an elusive goal: 80 to 90% of organizations fail to execute their strategies. There are two basic reasons for these paltry results. First, there is no generally accepted way to describe a strategy. Unlike the financial domain where frameworks like income statements and balance sheets exist to support measurement and communication, the description of business strategies becomes a set of sound bites developed by inspirational leaders. Second, management systems are not linked to the strategy. Personal goals, budgets, investments and compensation are linked to short-term operational and financial goals. If you can’t describe a strategy, you can’t link it to the management system. You can’t manage what you can’t measure. And you can’t measure what you can’t describe. It should not be surprising that 80 to 90% of organizations fail to execute their strategies.

When Bob Kaplan and I developed the concept of a Balanced Scorecard nearly 20 years ago, we were faced with this dilemma. Intellectually, all agreed that organization performance must be looked at in the long term. Accountants used the term “going concern” to convey this. Yet measurement systems intended to motivate performance were focused on the short term, generally measuring financial lag indicators. We developed a simple tool called a strategy map to address this problem. The map hypothesized that while financial value for shareholders was the ultimate measure of organization performance, this value was created by building satisfied customers. Customer satisfaction, in turn, was created through internal processes such as quality supply chains, product development and relationship management. Excellence in these processes was, in turn, derived from intangible assets like human capital, culture and technology. The strategy map created a framework of cause and effect that allowed us to deal with the performance dilemma of long term versus short term.

In this excellent book, Dealing with Dilemmas: Where Business Analytics Fall Short, author Frank Buytendijk extends the logic of the strategy map to explore several additional dilemmas that frustrate those responsible for executing strategy. Is performance to be managed top-down or bottom-up? Inside-out or outside-in? Do we listen to the customer or do we lead them? Do we optimize today’s organization or innovate tomorrow’s?

There are no simple answers to these questions. That is the nature of a dilemma. Yet we must develop approaches to deal with them. The answer, in my experience is captured in the work “balanced.” Business strategies are a mixture of short-term and long-term, top-down and bottom-up, listening and leading, and so on. The art of the successful executive is to find the balance that is appropriate at different points of time.

Frank Buytendijk is to be commended for the insights and awareness that this book brings to the market. It is an important work that will enhance the effectiveness of your organization.

Preface

“Synthesis is the essence of managing: putting things together, in the form of coherent strategies, unified organizations, and integrated systems. This is what makes managing so difficult—and so interesting. It’s not that managers don’t need analysis; it’s that they need it as input to synthesis. Where to find synthesis in a world so decomposed by analysis?”

Henry Mintzberg, Managing, 2009

We are obsessed with analysis. We believe that if we have all the data, and are smart enough, we can solve any problem. In looking for smart people, we test their analytical skills. We invest millions in computer software to analyze customer behavior and business performance. Many professional people even call themselves analysts (I was one for many years at industry analyst firm Gartner).

Why is everyone so obsessed with analysis? Analysis is only one style of solving problems. Analysis means taking one big thing (like a problem) and breaking it apart into separate pieces to understand the whole thing. We seem to have forgotten all about synthesis, the opposite approach. Take two or more ideas and combine them into a larger new idea. Tackling a problem in this way might lead to entirely new insights, where problems of the “old world” (before the synthesis) do not even occur anymore. Where analysis focuses on working within the boundaries of a certain domain (breaking one big thing into smaller pieces—inside the box), synthesis connects various domains—out of the box.

Why are there no people calling themselves synthesists?

Synthesis is particularly useful when one is confronted with something more fundamental than a straightforward problem—such as a dilemma. Dilemmas in strategic decision making is a subject that has fascinated me for years. It seems that many managers are struggling with it. This is probably because straightforward analysis does not help that much. And it is hardly an obscure problem. Many management gurus have pointed out the importance of reconciling dilemmas, and have identified high-performance organizations that apparently have found ways of doing so. But how do they do it?

Clearly, you can spend a lifetime studying dilemmas and still have no practical answers. What I have tried to achieve with this book is to make some fairly complex concepts accessible and readable, in order to ignite a spark of inspiration and enable a better understanding that dilemmas are not something to be scared about. Doing the research for this book has been quite an experience, broadening my own horizon. The book contains insights from the fields of philosophy, social psychology, intercultural management, mathematics, economics, performance management, innovation, and operations, and a very wide range of strategy topics. I also conducted a survey, the Global Dealing with Dilemmas (DwD) Survey, with a total of 580 respondents. I asked them about the strategic dilemmas in their business, but also about their own personal choices and ways they deal with a dilemma. Finally, throughout the book I share what I have learned through various interviews with top managers around the world. As dealing with dilemmas is what they struggle with every day, these interviews were surprisingly open and engaging.

In my previous book, Performance Leadership, I ended by answering a very fundamental question: What is an organization? Most would define it as a group of people sharing the same goals. However, rarely is this the case. In fact, in many cases the parties involved have conflicting requirements. Employees may look for job security, whereas shareholders value the flexibility of a quick reduction in force to save costs. Your customers want a good product at low cost, whereas suppliers try to maximize their profits in selling their products to you. In fact, an organization is better defined as a unique collaboration of stakeholders that reach goals and objectives through the organization that none of them could have reached by themselves. For that, they need to reconcile their differences, facing some stakeholder dilemmas. This thought was a good start for Dealingwith Dilemmas: How do we reconcile these various (sometimes even conflicting) requirements?

FIGURE 0.1Dealing with Dilemmas

While writing this book, I returned to explore another fundamental question: What is strategy? Everyone seems to have his or her own answer. “A plan of action to achieve a particular goal” is the simplest definition of strategy, and “making those big choices” would describe strategic management very well. I subscribe to a different school of thought that defines strategic management as the art of creating options. We cannot predict the future; we can merely be ready for it. The more we can shape our plan of action while going forward, the better it is. And as far as this concerns making big choices, it should be the choice that creates the most options.

There are so many angles to the subject of dilemmas, it is easy to get lost. There are different things that cause dilemmas in strategic decision making, and if you understand those causes, you can work to prevent them—or sometimes even better—embrace them. There are also multiple types of dilemmas, and each type requires its own toolbox. The graphic shown here provides a high-level mindmap of what causes dilemmas, and what you can do to tackle them. This mindmap also serves as the structure of the book.

Summing it up, creating options and finding synthesis are the two corner pillars of this book. They opened up a world of creativity for me, and I hope this book does the same for you.

Acknowledgments

There have been many people who have graciously offered their help, and their contributions have made this book what it is. First, I would like to thank Toby Hatch, who was a coauthor of an article on “scenariobased strategy maps” that has become the larger part of Chapter 9. Furthermore, Toby has been a great help in designing the DwD survey and doing the analysis. My gratitude to Claudette Kints, who also helped with the survey design. I would further like to thank Dr. Pietro Micheli of Cranfield University School of Management, who was also a coauthor of the “scenario-based strategy maps” article, for his guidance throughout this book project. He has provided a listening ear and has kept me on track on many occasions. Thank you, Jim Franklin, Steve Hoye, and Dr. Ziggy MacDonald, for your help on Chapter 7, which discusses portfolio management and operations research.

Of course, I would like to express my great gratitude to all who have been so kind as to donate their time, and allow me to speak with them. In alphabetical order of the companies they represent (see the Appendix for all company profiles): Jeroen van Breda Vriesman, member of the Board, Achmea; Bill Fitzsimmons, chief accounting officer, Cox Communications; Nirmal Hansra, former chief financial officer, Fujitsu Australia Pty. Limited; Steen Riisgaard, chief executive officer, Novozymes; Heidi Melin, chief marketing officer, Polycom; Jack de Kreij, member of the board and chief financial officer and Ton van Dijk, chief information officer, Vopak. Special thanks go to General (ret.) Dick Berlijn, former Commander Dutch Armed Forces, and Dr. Edmund Stoiber, former prime minister of Bavaria, the largest state in Germany. Furthermore, I would like to thank the executives who were willing to talk with me but who preferred their companies to stay anonymous.

Then there are 580 thank-yous to all respondents to the DwD Survey. I would also like to acknowledge the help of the Chartered Institute of Management Accountants in the United Kingdom (www.cimaglobal.com), the Institute of Management Accountants in the United States (www.imanet.org), and Cranfield University School of Management (www.som.cranfield.ac.uk) for supporting the DwD Survey and sending it out to their members and students. My reviewers spent many hours going through the manuscript and providing me with feedback, and I am deeply in their debt. Thank you, Ivo Bauermann and Jim Franklin of Oracle Corp., Randy Russell of Palladium Group, and most of all my good friend, Tess Rutgers van Rozenburg. I would especially like to thank the members of my family, who helped by entering the countless copies of the paper version of the DwD Survey into the survey system. Last but not least, I would like to thank Tim Burgard and Stacey Rivera at John Wiley & Sons for believing in this project from the beginning and Dexter Gasque for keeping the project on track.

Most of all, I would like to thank you for picking up this book. I hope you will enjoy it. Please also visit the web site, www.frankbuytendijk.com, for more information.

FRANK BUYTENDIJK The Netherlands, 2010 [email protected]

CHAPTER 1

What Is the Problem?

The test of a first-rate intelligence is the ability to hold two opposing ideas in the mind at the same time and still retain the ability to function.

F. Scott Fitzgerald

“If you are not part of the solution, you are part of the problem,” and “Don’t bring me problems, bring me solutions” are executive mantras that can be heard all over the Western world. Western management culture has a solution-oriented view on problems. Oops, sorry; I am not even allowed to say “problem.” I should refer to it in a more positive way and call it a challenge.

We live the 80/20 rule, where we realize that 80% of a solution can be realized in 20% of the time, while the remaining 20% of the solution would cost 80% of the time. We state that “better is the biggest enemy of good.” We are action-oriented. Time is money. Any decision is better than no decision. Keep it short and simple.a

For instance, the corporate scandals in the early 2000s were based on companies evading rules—accounting rules and legal rules. But more rules, like the Sarbanes-Oxley regulations in the United States, did not solve the problem. On the contrary, organizations found different ways of creatively dealing with business ethics, leading to the credit crunch a few years later. The breach of trust of the corporate scandals was replaced by a breach of trust due to the excessive banking bonuses, immediately leading to a demand for even more regulations.

Or consider large multinationals that often have special curricula for high-potentials—a small group of young employees who have the potential to make it to the board level. For decades it was seen as the task of the company to run its executives’ development. They were told which trainings to take, and which expat assignments to accept. People’s own leadership was not accepted. Times changed, and the opposite approach was adopted. People should be responsible for their own education, and true talent would surface, anyway. But part of being a leader is also learning to take on less popular assignments, such as a project in a remote country. Now it is clear that neither of these opposites work. Truth is in the middle. Corporate objectives should lead the direction of executive development, but the way it is filled in can best be left to people themselves. Different people have different ways of learning the same lesson.

In your personal life, think about repressive medication. If you have a headache, you can take painkillers. Painkillers can cause drowsiness, for which you can take a different medication. As a side-effect this may cause blood pressure problems, for which . . . , and so on. And somewhere down the line you can bet the side-effect of a certain pill is having headaches. One problem causes the next; in this case, it is a vicious circle.

Trying to solve a problem without a true understanding of it leads to “solutions” that are reactions. Reactions tend to magnify the problem (by throwing more money at it, or imposing even more regulations), or lead to exchanging one problem for the opposite problem, or create a vicious circle. Only if you do see the true cause of the problem, you can move to a higher level of understanding.

At the core of many thorny problems—personal problems, business problems, or social problems—that somehow keep repeating themselves lies a dilemma—a difficult choice of some sort. If you delve deep enough, it becomes apparent that there is no simple solution. This is not a popular thought in Western management culture. Dilemmas put you on the spot. Whatever decision you take, there is an unacceptable downside. Dilemmas make managers grumpy; there is no way out, no way you can win. Dilemmas cause what psychologists call cognitive dissonance. This is what happens if two processes of thought (cognitions) clash. This dissonance is an unpleasant experience, leading to negative emotions such as anger or frustration if the dissonance cannot be lifted. It is perfectly understandable that dilemmas cause strong emotional reactions.

But not understanding, seeing, or acknowledging a fundamental dilemma underlying your problem will not make it go away. At least a dilemma forces you to stop and think about the consequences of what you are going to decide, and equally important, the consequences of what you are deciding against. Studies of human cognition show that when people grapple with opposing insights, they understand the different aspects of an issue and come up with effective solutions.1 This is true for individuals as well as teams. Particularly in teams with a strong culture, being faced with a problem can easily lead to “groupthink.” One person with formal or informal power suggests a solution, and we all start implementing it, happy that there is a way forward. A dilemma does not allow groupthink to happen. It requires every individual involved to discover where he or she really stands.

I think managers should be happy facing a dilemma—it is a sign they actually have developed an understanding of the problem at hand. Derived from what Einstein said, a dilemma is an opportunity to fundamentally solve a problem, as understanding the dilemma lifts you to another dimension of insight. And there are ways of doing that. Dealing with dilemmas does not have to be a threat.

What Is a Dilemma?

There are many ways to describe the difficult choices that we face.b A dilemma can be defined as a situation requiring a choice between equally undesirable or unfavorable alternatives. It is a state of things in which evils or obstacles present themselves on every side, and it is difficult to determine what course to pursue. It comes from the Greek terms, di- (two) and lemma (premise). If there are three options to choose from, this would be called a trilemma, and more than three options would lead to a polylemma. In practice, however, dilemma can be used in the case of more than two options as well.

Although it means something entirely different, the term paradox is often used in relation to dilemmas. A paradox is a self-contradicting statement or proposition that may have some truth anyway. “I always lie” would be a paradox, or “One must sometimes be cruel to be kind.” This term also has a Greek background. Para means “contrary to” and doxa means “opinion”; in other words, a paradox represents something other than what you would think. Contrary to a dilemma, a paradox does not force you to choose; it is more of a conceptual exercise.

A catch-22,2 from a military regulation in a novel of the same name by U.S. novelist Joseph Heller, is a frustrating situation in which one is trapped by contradictory regulations or conditions. For instance, safety regulations may require the use of certain materials in the kitchen of a restaurant, while health regulations clearly forbid this. Or think of needing a physical address to open up a bank account, while the landlady requires you to show you have a bank account before she accepts you as a tenant. Although not correct, a catch-22 is often referred to as a dilemma as well. Close to the term catch-22 is a Mexican standoff, a strategic deadlock in which no party can ensure victory. In the Western-movie cliché, it is portrayed as several people each pointing a gun at each other. The dilemma that it poses is what to do. Doing nothing does not resolve the situation; lowering the gun creates vulnerability while shooting leads to likely being shot as well.

Executive View

Heidi Melin, chief marketing officer at Polycom, emphasizes the difficulty of choice. A dilemma is a problem that makes you stop and think. This can be on the personal level or professional level. A dilemma represents a fork in the road, and the decision you are going to take has a large impact.

Dilemmas can be found in any complex organization, Bill Fitzsimmons, chief accounting officer of Cox Communications, observes. He has a very straightforward description: A dilemma is a multidimensional problem, like most issues that reach the executive level. If it had not had multiple angles, it would not have—or should not have—reached the executive level. It is the task of top management to deal with dilemmas. In Mr. Fitzsimmons’ view, dilemmas should not be seen as a nuisance, but should be understood. Avoiding dilemmas does not make them go away. Treating them as a nuisance leads to merely passing the problem along instead of tackling it. And the buck stops in the executive offices.

Dr. Edmund Stoiber, former prime minister of Bavaria, the largest state in Germany, stresses a different point: Dilemmas can also appear through bad decision making. Dilemmas can be the consequence of decisions that are not well thought through. When making far-reaching decisions, the consequences for all involved stakeholders should be clear. If this is not done correctly, irreversible damage may be done. You need to be very careful and conscientious in decision making.

Perhaps the best-known dilemma of all is the prisoner’s dilemma,3 which comes from a mathematical field called game theory. In this dilemma, two criminals are being caught for a serious crime. It is clear they are guilty, but there is no definitive evidence. They are put in separate jail cells and cannot communicate with each other. The police make the criminals a proposal. If they both remain silent, there is nothing the police can prove other than illegal possession of a firearm, and both will go to jail for six months. If one testifies against the other, while the other remains silent, the betrayer walks, while the other receives a ten-year sentence. If they betray each other, both get a five-year sentence. It is clear that the best course of action is to remain silent, but you cannot be sure the other will make the same decision. Most likely each will consider what is good for himself first, and turn the other in.

Dilemmas such as the prisoner’s dilemma can be a stimulating intellectual exercise. But once confronted with a pressing dilemma yourself, you would probably feel differently.

Many dilemmas exist only in the mind. We have to make a difficult decision, and no matter what decision we make, it has negative consequences. Suppose a dear aunt, at whose home you eat regularly, cannot cook very well. Do you tell her this, as you want to be honest and because your sense of integrity suggests this? The negative consequence will be that your aunt will feel hurt. Or do you simply say dinner was delicious out of empathy, making your aunt feel good? The drawback will be that nothing changes in terms of her cooking.c This dilemma is based on a conflict of two positive values both of which you hold dear: truth and empathy. Whatever the choice, you violate your values. Another example: You are in a conversation and you have forgotten the other person’s name (and there is no one around you can ask inconspicuously). The longer you wait to ask, the more awkward it becomes. You cannot ask anymore, as it has become embarrassing. But not asking, and not being able to address the other person by her name when saying goodbye, is equally embarrassing.d

Other dilemmas are more serious. For instance, you need to fire an employee as the company is downsizing. The logical choice may be a senior manager, who is doing very well in his job, but whose area of responsibility is not core to the business. The problem is that your senior manager is 55 years old, is the sole provider of income in his household, and likely will not find another job. Another option would be to fire a young high-potential who came into your department a few months ago. He or she might easily find another job, but the excellent work of this person was just starting to pay off. What would be your decision? Or take a lawyer who learns about an upcoming liquidation of a police informer. The rules prohibit the lawyer from reporting this, but what if the police informer is a friend of a friend? And consider a doctor who is confronted with two immediate cases in the emergency room: a famous older person (a government official) and a nine-year-old child. Only one can be treated at a time, and there is a good chance the other will not make it.

Global Survey

In the Dealing with Dilemmas survey, I asked respondents what they would decide, being the doctor in the emergency room. Of all respondents who chose one of the options I provided, 85% would save the child, 6% the government official, 3% whichever one had family in the waiting room to avoid difficult decisions, and 6% would flip a coin. Respondents were also able to provide their own answers. The most common answer people came up with themselves was to treat the one that came in first. One respondent tried to reconcile with the politician, telling him there is a nine-year-old kid, and trying to get agreement from the politician to treat the child first. One respondent found a higher moral ground. He would consider the religion of both people. If the politician were religious, he would treat the child first, knowing that if the politician were to die, he at least would know he would be going to a better place. I am not sure how to interpret the responses of a few others. One suggests treating the politician first, because of the ramifications for the hospital, while the parents can always have another child. And someone else added he would treat the one that had family in the waiting room first, assuming that the other would have no caring family or friends. The reality, of course, is that you cannot expect doctors to make calls like this. There are protocols that doctors follow. In this particular case the protocol is called triage.

In another question, I asked the respondents to imagine they were the CEO of a small company (‘you’) and had been working on a large deal for almost a year. If you win the multimilliondollar deal on the table, you could expand the business. If you lose the contract, you would have to fire 20% of the employees, some of them in their fifties, and others having families with small children. The dilemma is clear, a choice between integrity and responsibility. Your contact is indicating that if you would pay him $10,000, the contract is yours. Forty percent of respondents would expose the employee of the prospect to his boss, 48% would not pay, 9% would actually pay, and 3% would even resort to blackmail (“If you don’t give us the deal now, I will report you to your boss”). Some respondents were very creative in their schemes, including establishing a bank transfer, and then exposing it to the prospect’s employee’s boss, or even spending the same amount of money to hire a private detective to find something with which to blackmail the contact. Some respondents place themselves outside of the dilemma. It is simply “cost of sales” in certain countries. Others make it depend on the circumstances. One person—I guess with a sales background—asks if it is a transactional deal (deliver the goods and move on) or a relational deal (service delivery and repeat sales opportunity). In the former case, he would pay; in the latter case, he would not. Others ask themselves what are the chances it would come out publicly. They define the dilemma differently, namely between the chance of success or of being exposed themselves. One wonderful answer came from someone who wanted to know what the prospect’s employee would use the money for—it could be for a good purpose.e One person found a moral middle ground for himself: Pay the bribe out of his own pocket. This is one of those dilemmas that can be easily avoided—it appears only if you do not think through your customer-interaction process. In case you feel there is a chance of ethical issues arising in a deal, make sure there are always several people in the meeting and involved in any decision. Involve other stakeholders at the customer level, and make sure several people of your own company attend.

Other dilemmas may appear among people, between you and someone else, or between two other people who turn to you for a decision or input. In dealing with dilemmas like this, we can learn from the field of negotiations. Successful negotiations are based on a win-win situation, where parties focus on what binds them, instead of what divides them. Dilemmas between people are often based on strong mutually exclusive desires. For instance, in a personal relationship, one partner may want to have a child, while the other does not want that at all. That is a pretty binary choice that has to be made, with not much middle ground. In business terms, two executives may have a strong disagreement about the strategic direction to take. Making a certain acquisition or not is also a clear and binary choice—it is either yes or no. Colleagues from different cultural backgrounds may have completely opposing views on what it means to respectfully treat each other, and may even play the “either he is leaving or I am” card.

Dilemmas between people can be full of emotion, indeed. And in the heat of the fight, we forget that the choices presented might constitute a false dilemma, often called a sucker’s dilemma.4 The choices presented are not at all the only options on the table. “Either he is leaving or I am” is narrowing down an argument to an escalation path only—an ultimatum. “Clean up your room now, or go to bed early,” “my way or the highway,” “now or never,” “either you’re with us or against us,” or “if you don’t listen, the consequences will be yours” are sucker’s dilemmas we have all heard.f Who says it is one or the other? There might be many different ways to deal with the issue. The moment you get sucked into such a dilemma, you do not think about solving the matter at hand, but feel you have to make a choice. You are thinking or, and not and anymore. How could I satisfy my mother and clean up my room, while first finishing the videogame I am playing? How can his way be combined with my way, so there is a mutual way instead of a highway? Is it possible to delay “now” a bit while satisfying the other person’s sense of urgency, so that “never” never comes?

Fortunately, most daily dilemmas are small and not of cardinal importance. In fact, most dilemmas are not even real. They are what I call “chicken-or-beef” dilemmas, based on a psychological phenomenon called loss aversion. People prefer avoiding losses over acquiring gains, or in other words, when facing a choice, they focus more on what they do not get than what they will. The biggest problem in choosing between chicken or beef for dinner is that if you choose chicken, you will not have beef, and vice versa. Despite how good the chicken looks, the idea of not having beef is stronger. The only loss in this dilemma is the loss of the option of beef, not even the beef itself.g If you truly examine everything you would call a dilemma, the majority of them would be in this category.

A Short Overview of History

The basis of a dilemma is a contradiction—often the contradiction between good and bad. Doing the right thing might lead to bad results; for instance, helping one person in the emergency room does not improve the chances of the other. Doing something bad might lead to good results, such as saving the company by winning a large order involving a bribe. The idea that everything consists of opposites goes back to the concept of yin and yang5 in ancient China. Originally meaning the shadowy and sunny side of the mountains, yin and yang came to represent all dual or polar aspects of the world: dark and bright, good and bad, noisy and silent, soft and hard, slow and fast, feminine and masculine. Yin and yang are opposites, but part of a mutual whole. (See Figure 1.1.) There cannot be one without the other. Yin and yang also interact; they transform each other. After high comes low, after day comes night. In the traditional yin-yang symbol, this is represented by the small dot of white in the black part of the symbol, and vice versa.

FIGURE 1.1Yin and Yang

The Greeks adopted similar thinking; however, they used the idea of opposites to find truth, through a rational and logical discussion. This concept is called dialectical inquiry, or Socratic reasoning.6 The Socratic way is based on formulating hypotheses (“So, if A is the case, logically B must follow”) and asking questions (“And what would it look like if we add C to the mix?”). Philosophers have used Socratic reasoning to ask themselves the big questions, for instance, about what is right or wrong, or what is good or bad. Can something bad lead to something good? For instance, “If we agree that killing a person is bad, is it also bad to kill a person who is about to kill several other people, in order to prevent those killings?” Or can something good lead to something bad? For instance, “If marriage is a holy institution, should one be encouraged to get married to a person with a history of domestic violence?” In the modern age and in business terms, we can use dialectic inquiry to challenge assumptions and best practices.

In his books, Mintzberg is known for his Socratic style, challenging what we believe is true about management sciences. For instance:

It has become a popular adage in some quarters that if you can’t measure it, you can’t manage it. That’s strange, because who has ever really measured the performance of management itself? I guess this means that management cannot be managed. Indeed, who has ever tried to measure the performance of measurement? Accept this adage, therefore, and you have to conclude that measurement cannot be managed either. Apparently we shall have to get rid of both management and measurement—thanks to measurement.7

The Socratic method is still in use today—for instance, in law schools, where the teacher continues to ask questions and solicit answers from the students. The aim of the approach is to explore different sides to a complex legal matter. Many what-if style questions are being asked to explore how tiny circumstantial differences can lead to entirely different outcomes. But in most business educations, dialectic inquiry is not taught and not understood.

For centuries, no new philosophical developments in this area occur, until the German philosopher Georg Wilhelm Friedrich Hegel (1770-1831) comes along with a breakthrough, trying to explain the evolution of philosophy. Hegel’s dialectic consists of a three-step process: thesis-antithesis-synthesis. h The process starts with a current situation or common wisdom, called the thesis. The situation usually has a strong disadvantage, such as an unexplainable phenomenon in a theory, or needs of people not being met. This at one moment leads to people adopting the opposite belief, approach, or situation. This reaction is called the antithesis. It solves the previous disadvantage, but brings new disadvantages as well. We are now in the stage of a dilemma: Both thesis and antithesis present dominant disadvantages. So far, this is nothing new, as yin and yang provided the same insight. But where with yin and yang the pendulum keeps swinging between opposites, Hegel offers a way out. He introduces the idea of synthesis, where over time the two opposites will fuse, or reconcile, creating the best of both worlds. And then, interestingly enough, the synthesis becomes the new thesis, what is believed to be true, to be eventually challenged by an antithesis once again. The pendulum swings after all, but on a higher plane.

In our own time, for instance, self-regulation in a free market was deemed unacceptable after the corporate scandals in the early 2000s. It led to a strong reaction, with strict regulations, such as Sarbanes-Oxley, consisting of many specific rules with which to comply. It introduced a huge bureaucracy in large enterprises and, although certain fraud attempts may have been prevented, discussions around executive compensation and risk management were still prolonged, into the economic recession of 2009. The synthesis? Regulations should not be based on strict rules, but based on principles, where organizations need to explain how they adhere to the principles of good corporate governance. Or think of the development of Western society itself, starting out as a tribal environment where every tribe was self-sufficient. The antithesis to this became the feudal society, with kings and emperors ruling their countries. These were more efficient, but were taking the needs of only the few into account. The synthesis between the tribal and feudal societies is the democracy. We are ruled by elected leaders, but the key to a democratic society is that the government aims to take the needs of all stakeholders into account. Closer to business, think of competition. The thesis of business was collaboration—entrepreneurs in a certain trade in a certain city would be part of a guild. This led to the antithesis of all entrepreneurs competing with each other, as that would be better for the price of goods and quality of service. Today, many organizations engage in “coopetition,” where they compete and cooperate at the same time. Think of airline alliances, or automobile manufacturers sharing certain parts to create economies of scale.

Recently, dealing with dilemmas as part of leadership has got the attention of management thinkers in multiple disciplines. Trompenaars, widely recognized as a leading thinker in intercultural management, even defines leadership as the ability to reconcile dilemmas8—to be able to inspire as well as listen, be strategic as well as have an eye for detail, and centralize your organization around local responsibilities. Called one of the most influential psychologists of his generation, Howard Gardner defined the synthesizing mind as one of the five important mindsets for the future. Management guru Jim Collins speaks of the tyranny of the or and of embracing the genius of the and.9 The tyranny of the or