Dilemmas in the News – Page 2 – Transcend Strategy

Leaving Oz On Rubio-Colored Slippers

The Republicans face a dilemma and it’s a big one. During the 2012 election, Obama won over Hispanic voters by better than a 70-30 margin. Though Democrats always win the majority of Hispanic voters in national elections, this was quite a comedown for Republicans from the 44 percent of Hispanics who voted for Bush in the 2004 election. After the election, consensus quickly built among party insiders and strategists that without a plan to appeal to this growing demographic, Republicans would find the White House out of reach.

“We could have won this election if the party had a better brand name with Hispanics,” said Al Cardenas, chairman of the American Conservative Union, speaking to Nicolas Riccardi of the Associated Press. “I don’t believe there’s a path to the White House in the future that doesn’t include 38 percent-40 percent Hispanic support.”

Ideas have consequences, and this meme-that the White House would soon be beyond reach-quickly found its way into Republican orthodoxy. Immediately, the party began promoting its young immigrant and non-white stars, and Republican members of Congress turned nearly 180 degrees on the immigration issue. Senator Marco Rubio of Florida proposed a comprehensive immigration bill that accomplishes much of what Democrats have sought for a decade, and he did it without much pushback from the party. It’s astonishing really, since in the spring of 2012, most of the primary candidates for the Republican nomination tried to outdo each other in how tough they could be on restricting a path to immigration, particularly for undocumented Hispanics. Rick Perry’s campaign really came apart after he told the other candidates “they didn’t have a heart” on issues related to undocumented Mexican immigrants!

Heads They Win, Tails We Lose
But coming around to reality on immigration doesn’t solve the party’s electoral woes. It’s just the start of a long and overdue rebuilding process. As a recent cartoon by the Washington Post’s Tom Toles illustrates, Republican’s lose either way in the immigration debate. [Ed. The cartoon shows a donkey and an elephant discussing an immigration bil. The donkey says “If you don’t sign, you’ll lose votes.” And, the elephant responds “If I do sign, you’ll gain votes.” ] If Republicans don’t sign a bill they lose Hispanic votes in the next election. If they do agree to allow more immigrants into the US and naturalize some of those who have resided here illegally, they may still lose because newer immigrants tend to vote Democratic.

Given all of this, what is the right strategy for the Republican party – hang in with traditional positions and values? Soften on this set of issues to “buy” Hispanic votes? Promise changes in return for support (i.e., sell the future to win the present)? The correct answer of course is none of the above. US democracy depends on there being two party options available. By available we mean able to win and capable of governing. This takes issue-leadership and broad appeal. Both parties need to be able to represent the needs of the vast majority of the country’s citizens. Rehabilitating credibility and capacity is needed – it’s overdue. This is substantial, long-term work, not a set of cosmetic touch-ups packaged and positioned by marketers. The right strategy for the party is one that respects and leverages core Republican values while simultaneously re-establishing itself as modern and open to today’s young people and immigrants. That won’t be done overnight.

The Installed Base Problem
One concept we can borrow to examine the Republican dilemma comes from the world of technology: the installed base. An installed base is the set of individuals who have adopted your product. Many products exhibit “network effects” i.e, the product becomes more valuable as more people use it. Political parties exhibit a form of this that market researchers call “social effects”: adoption by others updates or validates your self-image or opinion, and increases your social utility. In short, as a political party becomes stronger—has a larger installed base—a positive feedback loop is created. It becomes easier to pass legislation and more voters may want to identify with that party. But in technology there is a down side to having a huge installed base – with growth comes resistance to change, as long-time users become accustomed to the status quo and reject efforts to improve or update features, creating an opening for competitors.

A highly inflexible installed base hampers a political party’s ability to make timely policy changes. Before long, strength becomes weakness, and the same things that lock in a loyal core, lock out a growing majority of voters. Republicans have a strong, installed base who historically have been opposed to social changes from women’s liberation to liberalized immigration policies to gay marriage. But, like Microsoft in the ’90s when the company had to satisfy both legacy DOS users and those who wanted a faster modernization of Windows, Republicans need to hold onto current voters while reaching out to new ones. They are already taking the first tentative steps down that road, recognizing that there is no inherent conflict between Republican tenets and openness to the latest generation of immigrants. But any significant influx of new Hispanic voters will probably help Democrats in the short term.

The strategic necessity to change the party’s position on immigration becomes clear when you plot the relationship between possible legislative outcomes against changes in the historic Republican position (see diagram). If the Republicans take a hard-line position against immigration reform, they are handing elections for the foreseeable future to the Democrats, with very little prospect for gains, regardless of what happens with new immigration legislation. Ironically, the impact on the party’s fortunes appear worse if they succeed in scuttling legislation, which now appears unlikely (lower left). Only if they make the position change now can they set themselves up to gain a larger share of immigrant votes in future elections and contribute to a sense of national unity on this key issue.

Four Types Of Digital Marketers

Nearly all large firms today have developed ecommerce, digital advertising, social media, and content marketing capabilities. But there is wide variation in how effective companies are at leveraging the digital domain to make real-world profits. Now, researchers at Booz & Company have put together a great diagnostic tool for firms to evaluate their digital maturity. It appears in the article “The Four Types of Digital Marketers“* by Matthew Egol, Christopher Vollmer, and Klaus Hoelbling in the latest issue of strategy + business.

The perceptual map plots what the authors call customer-centricity, a term that describes the “new marketing orientation made possible by digital media.” The map describes two key aspects of customer-centricity. On the vertical axis is customer insight and analysis, measures of how well the firm knows its customers and their online behavior. The horizontal access measures platforms and capabilities, the digital technology that provides the ability to act upon customer insights to increase sales and profitability in both the online and physical world. The four evolutionary levels of digital marketers are:

Quadrant 1 Scholars: These are firms that have gathered customer information but have yet to turn their insight into profitable products and services that can be delivered via ongoing customer relationships.

Quadrant 2: Novices are still learning about digital marketing. They lack the deep technology platforms and the customer knowledge to begin integrating real world and online efforts.

Quadrant 3: Pioneers may have robust e-commerce offerings but they are not integrated well enough with customer insights. Pioneers lack some of the highly personalized features presented by sites like Amazon or the ability to turn customer interactions into information that will drive all aspects of the business.

Quadrant 4: Leaders. Companies such as Apple and Nike are creating robust end-to-end customer relationships that span both physical and retail environments as well as customer needs and experiences in daily life. Their offerings and interactions are informed by customer insight at each step of the development, sales and service process.

Send comments to us.

*”The Four Types of Digital Marketers” by Matthew Egol, Christopher Vollmer, and Klaus Hoelbling, strategy + business, 2012.

Lance Armstrong’s Dilemma

We love our heroes. We hate to see them fall, but when they do, they fall twice as hard. Lance Armstrong’s achievements as a cancer survivor, competitive athlete and fundraiser place him in a rare class of his own. Revelations that he (may have) cheated to win, and pressured his teammates to do the same, are disconcerting. Graced with remarkable talents, it feels tragic to us that he would succumb to a desire to win at any cost. Dilemmas abound in this case, for Lance Armstrong himself, for the professional cycling world and the bodies that oversee it, for the charitable organization founded by him to raise money to fight cancer, and finally, for fans who find themselves torn, not knowing whether to criticize him for such a moral lapse or stand by him for his courage, accomplishments and contributions. Let’s take a look at a few of these.

Part 1: How he got into this mess
Why do people cheat? Dan Ariely’s latest book, The Honest Truth About Dishonesty, explores the slippery slope of rationalization that renders lying and cheating acceptable. Hardly a rational process, lying is strongly influenced by social and psychological forces. If we are surrounded by cheaters, if we feel justified to lie, it becomes easier to do so. Step by rationalizing step, Armstrong slid into the lie. He is torn between the desire to advance his own interest and win versus respecting common rules and honoring fair play. Recovering from life-threatening testicular cancer, he may have needed a boost. Most survivors of aggressive cancer treatment feel lucky just to return to a normal daily routine, let alone push their bodies to compete with the world’s top athletes! Where is the clear line between therapeutic drugs and performance-enhancing drugs? Does his health condition justify bending the rules? How much artificial assistance is defensible, and what is the likelihood of detection?

Figure 1. © Transcend Strategy Group 2012

Armstrong is not the first and won’t be the last to feel the intense draw of temptation; from the corrupting power of the dark side of the Force in Star Wars to the mythic tale of Robert Johnson selling his soul in exchange for mastery over the guitar, we are all too familiar with the archetype of otherworldly ability-at-a-cost. What are some of the options Armstrong might have considered? Following the noble path of Selflessness (upper left quadrant), while admirable, is not an easy choice for fierce competitors, and clearly Armstrong is that! Shooting for the upper right box where Self Interest and Common Good intersect may be ideal, but perhaps not a real option here. The lower left quadrant, Foolishness, looks at first like a nonstarter, but a moment or two’s reflection shows that it happens all too often: remember Tiger Woods and Michael Vick? The final option, the one he appears to have chosen, is to do whatever it takes to win. Morality aside, outright pursuit of self-interest can be risky. Get caught, and the price you pay will be high. Armstrong got caught and is paying a hefty price for not managing this dilemma better.

Part 2: The outside-in perspective: cycling world and fans
How do we judge the choices and actions of others? Which is more important, intent or outcome; difficulty or result; style or substance? Is it ever OK to do bad things to achieve a greater good? Who decides when it is acceptable to reset conventional boundaries of right and wrong? If you could have killed Hitler in 1938 before the atrocities of the Holocaust occurred, would you have pulled the trigger? If you could hide the fact that you or someone else did something like this, would you, or is it more important that they be held accountable for the crime they committed? It took anti-doping agencies over a decade to finally render a stinging judgment against Armstrong, prompting a lifetime ban on any further competing and the retroactive loss of his seven Tour de France titles. Legal complexities and costs aside, this must have been a tough decision to take, given the predictable consequences to the man, the sport, the many fans, and the cancer cause for which his foundation has raised over $500 million.

Figure 2. © Transcend Strategy Group 2012

This matrix looks at the dilemma from the perspective of the leaders of the eponymous Lance Armstrong Foundation. On the one hand, they will want to stand by the founder and through solidarity, preserve the integrity and value of the organization and its capacity to do good (the horizontal axis). But on the other hand, as evidence against Armstrong mounts, credibility and survival depend upon facing reality, and seeing that truth and justice prevail (the vertical axis). Where will they end up? The best outcome they can hope for at this point is a graceful exit and transfer of leadership (upper right quadrant). They have started down this path. Armstrong stepped down as head of Livestrong on October 17th. Time will tell if the organization and Armstrong can successfully transition allowing the great fund-raising and awareness-raising work to continue.

Part 3: How he deals with the mess he’s in
Lance Armstrong has announced he will not challenge or fight the charges. The emotional, reputational and financial costs are punishing (Forbes estimates his earnings in 2010 from endorsements and speeches were in excess of $17 million). While appearing to accept the verdict, he rejects its accuracy, stubbornly maintaining his innocence. He has just tired of trying to prove it. The operators of the Tour de France are so convinced of his guilt that they have decided not to pass along the title to any of the other top competitors from the seven years in question. Doping, they say, was rampant in the sport during those years.

Figure 3. © Transcend Strategy Group 2012

How then should we depict Armstrong’s current dilemma? He has a great deal at stake, and at 41, many productive years ahead of him. We could look at money versus reputation, or, personal needs versus those of his charitable foundation. Globe and Mail reporter Hayley Mick has an interesting take on it (Armstrong’s dilemma: Fess up or shut up), looking at whether or not he admits to his guilt, when and how. In her article published on October 23, she follows the fates a number of other high profile figures caught in similarly embarrassing transgressions, some of whom were forgiven while others were not. Bill Clinton famously abused the power of his presidential office, then admitted his guilt through a very public and painful process, and in time returned to great popularity and prominence. He found Redemption. Baseball’s Barry Bonds and sprinter Ben Johnson both were found guilty of doping, both denied wrong-doing, and consequently, remain Pariahs who have not been forgiven. While Armstrong may be looking for a Graceful Exit, his refusal to take any responsibility for the mess he finds himself in is causing him to Lose Credibility, and become a Pariah to his charitable foundation and the sport he loves. Simply denying guilt doesn’t make it disappear. When you have been caught red-handed, it’s too late to cover up; you need to acknowledge the facts, take responsibility for your part in how things turned out, and swallow your lumps. Admitting guilt is not the opposite of protecting your reputation. It turns out it is the route you must follow if you want to recover it.

Send Comments to alex@transcendstrategy.com

A Debatable Dilemma: Mitt 2.0 versus the President

Last week’s presidential debate exemplified a core dilemma for each of the presidential candidates (…we couldn’t help but notice). The GOP badly needed Romney to come across as presidential, human and credible, without abandoning his conservative values and position. Challengers must prove they belong in the office. Obama needed to hold onto the moral high ground of civility and respect while communicating strength and the ability to win battles. In this case, that meant exploiting conspicuous weaknesses in his opponent’s recent performance.

Put another way, Romney had to tone down some of the most conservative positions he took during the primaries, in order to effect a believable shift to the middle. This could be seen as crafty campaigning or craven pandering, what is referred to in a New York Times editorial this Saturday as The Moderate Mitt Myth and by John Cassidy in the Financial Times as Mitt 2.0. Obama needed to step out of his own shadow and take a few risky swings at the ball. In this contest, waiting for the other guy to mess up won’t be enough to win; you have to define and sell your platform.

How did the candidates do in the debate and in managing their respective dilemmas? And from a dialectical perspective, what do they need to do for the next debate?

There is little question about who won the debate – Romney came out roaring and Obama could not locate his mojo. What happened? As dangerous as analogies can sometimes be, try this one. It’s a boxing match, but only one fighter is throwing punches…Romney of course. The other guy has been trained in the higher martial art forms, and is waiting for his opponent to get reckless in his aggression so he can capture and turn his energy against him. He has done his homework and knows that the other guy always does this. Trouble is, in this fight, his adversary has done even better preparation than him. He lands blow after blow without losing his composure or creating any openings. The fight ends with one bruised fighter still waiting for his chance to throw a punch. Interestingly, this is how many Republican primary debates ended as well, with Romney’s enemies not really landing hard blows.

The Next Challenge

Entering the second debate there are new questions about the President and the challenger as well. Will Obama’s second round debate performance be enough to counter suspicions that he is at heart more a very smart theoretician than the man of action leader America desperately wants and needs? Can Mitt continue to hold conflicting positions without being forced to explain how x and not x can coexist?

From a dialectical point of view, what advice can we offer? Barack, your opponent is stretching the limits of personal credibility by wanting it all – keeping the Republican core happy while convincing significant numbers of women, Hispanics and other non-traditional voter groups that he really does care about them and that they should trust him. Force him to take a public stand on tough issues: that will prove difficult if not impossible.

Mitt, you have the momentum, and the Prez is limping. The nation is indeed in rough shape, and whatever the reasons for it (really, who cares at this point?), progress on key issues has been limited. Force Obama to choose between hiding in the high ground (and thereby convincing voters he is all promise and no action), and jumping into the muck of bare-knuckle fighting and name-calling (compromising his pristine image). Whatever you do, don’t allow him to successfully straddle the two positions.

Someone Will Pay

It is no secret why both candidates are somewhat mute on articulating sharp policy positions, and prefer to paint their opponent’s views as ineffectual or reckless. The US economy faces tough choices. Policy options like raising taxes, lowering deductions, cutting spending, tightening benefits, and pursuing various economic stimuli, all invoke fervent opposition. Someone will have to pay, and both candidates hope to persuade voters that future pain will be borne by someone else. But the debate about what really comes next is one Americans need to have.

How Do We Win?

So here’s another 2 x 2 take on what may happen in the upcoming debate. One candidate is on his game and the other is not. There is a clear winner, but perhaps, just possibly, the electorate has been manipulated into their beliefs, and their opinions will lack the balance that we hope shapes outcomes.

It is possible that both candidates get it terribly wrong, and we watch a messy exchange that does not enlighten or inform. And finally, maybe, if we are lucky, they will both come prepared, focused, able and willing to truly debate the issues in a way that lets voters know them and their respective positions. Perhaps we are being naive in believing a series of debates can sway opinions enough to matter, but history suggests it has happened before: remember Nixon and Kennedy in 1960! Informed democracy, it’s possible. Wouldn’t that be sweet!

SEND COMMENTS TO ALOWY@SYMPATICO.CA

Comments

October 17, 2012. The phrasing attempts to put a light touch on a serious subject, which is refreshing, but the dilemma axes seem to me to miss the core dilemmas facing the candidates.

For Obama, ‘Maintain High Moral Ground’ versus ‘Project Strength’ do NOT pose a dilemma. Not projecting strength is not a real option in any political battle.

At the end of the piece ‘Romney On His Game’ vs ‘Obama On His Game’ do NOT pose two horns of a dilemma. They may pose alternative scenarios … also, the middle ground on both axes is a high possibility.

If you revise, here are some suggestions. The debates are about domestic policy on the one hand and foreign policy on the other. The real dilemmas for Obama might be… how to keep highlighting Romney’s weakness on foreign policy (where he is weak) even if the question is about domestic policy (where he is stronger), or, how to convince the electorate that they should care about foreign policy when they mostly care about jobs and the domestic economy.

These examples attempt to identify dilemmas involving content, not style …
–Tom Emodi

October 17, 2012. Tom, Thanks for taking the time to share your thoughts; vigorous challenge is more than fine by me. In fact, it’s the hallmark sign of the dialectical process working!

Our goal with every 2 x 2 modeling exercise is to explore an essential aspect of a complex situation in a way that sheds new light and informs action. Last night’s debate reflected multiple points of tension between the candidates. The three we presented in this post certainly showed up. (So did the one you propose in your note). Speaking specifically to them,

1. Obama’s dilemma of Moral Ground versus Projecting Strength…much of the debate was about his ability to achieve this balancing act. Morning-after reports are giving the president high marks on exactly this – the Benghazi incident proved to be a pivotal flashpoint in the debate.

2. Romney’s dilemma of Reaching out to Non-traditional Voters versus Maintaining his Conservative Base…Obama pressed him on this throughout the debate, and post hoc assessments are that Romney lost some important ground with women voters.

3. On their Game or not…I’d say both candidates came ready to rumble, and the electorate witnessed an engaging and informative exchange.

What makes these dilemmas? You raise a good question here. It’s a dilemma when there is tension between forces and when there are meaningful costs and trade-offs involved in choosing one option over the other. So, does Obama put his presidential persona at risk by being aggressive? I believe so. Does Romney stand to lose one constituency by courting the other? Yah. Is there risk to each of the candidates coming ready to battle hard? Might they be tempted to draw in their horns, risk less in the hopes of avoiding any irretrievable gaffes? Sure they would.
-Alex Lowy

October 16, 2012. I agree with your assessment of the response. I agree most definitely with the writer that the redistributive, communitarian, liberalist model offered by Obama is not deeply in American DNA, but I also have to note that there have been periods of crisis and perceived crisis when Americans looked to the governance model of activist government to reorient the American trajectory. I cite three examples: Lincoln, Teddy Roosevelt, FDR — the middle one being fodder for debate. A counter-model is Stevenson’s losses in ’52 & ’56. Social liberalism did not trump national security during the nervy years of the Cold War.

The question will turn for Obama on whether enough Americans still believe in his vision of government as an instrument of social cure (read: social liberalism). He cannot count on a second lightning strike; the hope’n’change election of 2008 will not be subject to redux. America is deeply divided and Obama still has many voters in his corner. But does he have enough?

Where I will beg to differ with the writer is re: Romney. I think he’s right to pan the absence of a unified worldview, although to be brutal about it, mainstream Americans are in no position to connect the dots of any grand theory. My disagreement stems from this observation:

“Romney’s fundamental problem Is that he really is the corporate CEO, who can afford to have no core values or beliefs whatsoever – just outstanding skills at reading the environment, developing an approach to accomplish goals and then solving problems as they arise. That is why he is hard to nail down and often seems contradictory.”

I think there’s virtue-of-necessity to be made here. A deep vein in the American political psyche that can always be mined to advantage is pragmatism. What works is good. Now let’s find someone who has a plan to make things work. Romney does not need an integrated, highbrow network of conceptually calibrated and integrated ideas. He needs “solutions” to problems. He needs to make thing work. And that’s where Mr. Hopey-Changey failed. All the big-brain atmospherics are as nothing with the American electorate without solutions. Back to Lincoln, TR & FDR…each was an active solver of problems. No deep ideological constructs or high-minded visions (Wilson & Carter). Romney can speak directly to the aching heart of America not by saying: “I feel your pain” but by saying: “I’m a pain-dissolver. Let’s get busy with practical, pragmatic solutions.”

In the VEEP debate, where Biden sabotaged himself with a parade a ghastly visuals, there were observable carrots in the test group response meter (CNN) every time certain words were thrown out. These spikes seem to me to be associated with words like “solution”, although “solution” is the one that I remember vividly. I thought: There it is. Americans are hurting. They’re not looking for ideological models. They don’t care of the cat is black or white. They need a cat that will mouse successfully. And this is where Romney can position himself as solutions guy — keeping in mind that solutionism can be hard, tough work. There are no packages with pretty pink ribbons. Hard decisions will have to be made but…”I’m the guy to make them”. Obama is very vulnerable to this presentation because he’s the incumbent and it appears that most Americans feel he’s had a lackluster 1st term. Therefore, the killing question is: Does President Obama merit a second term? Has he showed us enough of that sleeves-rolled-up American pragmatic get-it-done-ism to deserve re-election? Since the answer to that question is “no” or “hmmmm, not really”, then the next question is: “Why not give Mitt a chance? Why not vote Republican for president but vote Democrat is House & Senate races to hedge the bet?”

Obama and Biden may have already beaten themselves. Romney’s best chance now is to look presidential, look fresh and energetic, talk about solutions, hard work, the challenge ahead, challenge the American people to do what they’ve always done: rally, and not beat himself by tumbling into one of the many bear traps that will be laid out for him (abortion, war with Iran, intervention in Syria and a possible confrontation with Russia).
—Stu Wooley

October 16, 2012. Just read your article on the dilemmas of the debate. I see both candidates on exactly the same strategy with the electorate – the Jack Nicholson Few Good Men strategy: “The truth! The truth! Son, you can’t handle the truth!” Unfortunately that is the only strategy that seems to work for anyone now running for office.

Your analysis was, I thought, both thoughtful and incisive. My own sense is that each candidate also faces a larger issue.

Romney’s fundamental problem is that he really is the corporate CEO, who can afford to have no core values or beliefs whatsoever – just outstanding skills at reading the environment, developing an approach to accomplish goals and then solving problems as they arise. That is why he is hard to nail down and often seems contradictory. That is why the base has never trusted him. Tom Friedman, on Charlie Rose the other night, made a good observation. He said, “You could interview me for two hours on the Middle East and I would never contradict myself, because I would answer each question on the basis of my overall unified view of the region, and not need to remember a long list of specific answers to specific questions.” He heavily implied, and I think he’s about right, that since Romney has no unified worldview, he is taking each question as it comes and on its own terms.

Obama, on the other hand, faces the problem that, while in my judgment he does have a core view of an American future, if he laid it out clearly, he would make Dukakis look like “Landslide Mike.” He has a very communitarian view – the government’s role is to level results despite differences in talent, work and virtue. This is not what built America, it will not solve our problems, indeed it will worsen them, and in any case it is not remotely in synch with American voters, beyond the ethnic minorities, who believe in the government as benevolent redistributor based on their historical experience of civil rights legislation.

I know there are some who argue the opposite – that in fact Obama is exactly like Romney in the “no core beliefs” model, only instead of the CEO problem solving model, he is in the group facilitator model. You may recall me talking about a distinguished psychiatrist who studied political personality and psychology. His rule of thumb for understanding world leaders was “Understand their first professional success and their first professional failure, for they will spend the rest of their lives trying to duplicate that first success and avoid that first failure.” In that regard, Obama’s first professional success was being elected editor of the Harvard Law Review. What few people know is that he was elected on something like the seventeenth ballot, after being no one’s choice. The leftist (critical legal studies) guys and the right (The Federalist Society) guys, who were warring armed camps but both without a majority, deadlocked the process for the first 16 votes. Obama supposedly during this process established himself as without a strong view and thus the two sides finally gave up the fight for supremacy and elected him. They assumed they would at least get a hearing from Obama, which they would not if the “other side” was elected. If that psychiatrist is right, perhaps we really do have two candidates without a core.

Oh yes, you are sunnier about the Nixon-Kennedy debates than I. The only news from that debate is that visuals win every time regardless of substance. In many ways, the visuals of the first debate killed Obama, and the visuals of Biden weren’t much better. So of course the consultants are both coaching their guy, “ Don’t worry about what you say, just win the visuals!”

We’ll see. Increasingly I think we won’t find a real leader until we hit the debt wall sometime in the next several years. And worse, we then run the risk that the type of leader who arises in that situation is often not a very attractive proposition!
–Rich Lauf

October 16, 2012. Rich, Loved your response. You remain my favourite cynic! Bar none. Why, because you are willing to get informed and you have a big heart.
–Alex Lowy

Critical Thinking For Business Leaders: Alex Lowy Interviewed In Malaysia

“Great leaders pay attention to both the short-term and the long-term, sales and development.”

Alex Lowy has made several consulting trips to Malaysia in recent years, both teaching and meeting with business leaders and clients. On his most recent visit he conducted a project for Job Hunt Training called “Critical Thinking & Strategic Problem-Solving Skills For Leaders.” This interview is reprinted below.

Alex Lowy, world famous author and business consultant will be in Malaysia in January 2012 to conduct an in-house project titled Critical Thinking & Strategic Problem-Solving Skills for Leaders organised by Job Hunt Training. People’s Edge caught up with Lowy and he shared his thoughts on the concerns of the business world today and named his favourite CEO.
Alex Lowy is known worldwide for his book The Power of the 2 x 2 Matrix which he co-authored with his colleague Phil Hood. The publication of this book also led to a unique way of problem solving for business leaders called the Dialectical Solutions MethodTM. Stephen R. Covey the author of the world-wide bestseller The 7 Habits of Highly Effective People called it, “An exciting new approach to problem-solving that transcends our old ways of thinking that actually changes us into creative, responsible beings in which solutions abound.”
Another of Lowy’s book, No Problem, published in 2007 is taught in business schools in Canada, the United States and here in Malaysia. Lowy also travels around the world giving seminars on critical thinking and problem -solving for business leaders based on the Dialectical Solutions MethodTM.
Lowy started his career as an educator before moving on to the corporate world. In 1994 he co-founded the think tank called The Alliance for Converging Technologies with Don Tapscott and David Ticoll. Starting off as the head of research he eventually rose up to be the President of the company and built up the company to 60 consultants who served a client list of over 30 major corporations worldwide.
In 2003 Lowy founded the Transcend Strategy Group. Lowy is in demand as a strategic adviser and educator for major companies. He is also an adjunct faculty member at three business schools in Canada (Schulich, Toronto, St. Mary’s, Halifax and Memorial, Newfoundland) where he specialises in teaching Critical Thinking skills to executives. His articles on strategies and decision-making have appeared in major business journals such as Strategy & Leadership, Business 2.0 and Group and Organization Studies.
Could you tell us a little about yourself – where you were from and how did your interest start in training and especially in your areas of expertise in business strategy?
During my post-graduate studies, I was very fortunate to learn from a professor who was a leader in the field of creative thinking. After completing a course with him, he offered me the opportunity to co-teach his next class and then to work with him and some of his colleagues on several non-university client projects. The heart of what we did back then was to challenge our business and government clients to think more creatively while remaining within a clear and supportive structure.
The interplay between these two forces, freedom and structure, had a powerful and beneficial effect on their output. I was fascinated by the apparent paradox and the degree to which the two factors were interdependent. The resulting creative tension did not only enhance innovation. It produced a better quality of attention, communication and ultimately, thinking.
You’ve held several jobs before you finally founded your own consulting company Transcend Strategy Group. Out of the jobs you held which would you consider were the ones that had a profound influence on the way you saw how businesses and talents were managed?
I spent ten years as Director of Training & Development for the City of Toronto, Canada’s largest city. During that time I saw a wide range of leadership styles and effectiveness. Great managers could lift a poor work team up; weak managers could destroy the best work unit. We did a study of 43 of these managers over a three-year period, and found that learning and a positive problem-solving approach played a big role in creating effective leaders.
I worked for three years for Shell, leading a High- performance Work Design project. We experimented with four variables: processes, organisation structure, job & work design and rewards. By improving these things, we succeeded in doubling plant productivity while reducing staff levels by fifty percent.
Several insights from these experiences have remained with me: excellence in leadership and in work performance are not accidental; organisational values and culture have a large impact on how individuals and teams behave, and finally, learning is common to healthy, high-performing functioning.
Your name is synonymous with Dialectical Solutions Method (DSM). Briefly could you tell us what it is and how did you come up with it?
In 2004 I co-authored The Power of the 2 x 2 Matrix with my colleague Phil Hood. We studied the problem-solving approaches of the very best executives and organizational consultants. We found that they regularly thought in a dialectical manner. What this means, is that they considered opposing arguments and trade-offs before making any big decisions. They resisted the temptation to pick simple solutions to complex challenges. Thinking in this way helped them to develop a more mature perspective, often leading to a useful reformulation of the issue. The DSM consists of the core, recurring steps they followed, leading to identification of the core dilemma, which can be modeled, analysed and resolved.
You have travelled the world conducting seminars and workshops. What gives you pleasure in these activities?
I learn a great deal from visiting other cultures. My children are now in their 20’s so this is an ideal time for me to be on the road a little more. It gives me great pleasure to see individuals and organisations finding value in the ideas and methods I have developed. And, I am always curious to see how culture and local practices influence which approaches will work best.
The world economy seems to be in crisis and a lot of blame is being directed at corporations and their greed. This has spawned movements like Occupy Wall Street which started off in the US and seems to be spreading elsewhere in the West. As a business strategist and consultant how do you view all this? Has corporate malaise set in?
A lot of people are understandably frustrated and frightened by economic uncertainty and the apparent inability of their public and private institutions to fix things. From uprisings in Egypt and Libya to rioting in Athens and now the Occupy movement, people are voicing their dissatisfaction and their desire for positive change and responsible leadership. This is bigger than corporate malaise. Just how big a change is necessary remains to be seen. It’s easier to know we have a problem than it is to identify a solution all parties can support.
“A lot of people are understandably frustrated and frightened by economic uncertainty and the apparent inability of their public and private institutions to fix things.”
“Innovation and new competition can come from anywhere; there is no room for complacency!.”
What are corporations doing right and wrong these days?
This is a challenging time to be leading a large or mid-sized company. Innovation and new competition can come from anywhere; there is no room for complacency! Three trends I find encouraging are in the areas of technology, innovation and culture. Corporations are quickly embracing new and better technologies, improving quality and lowering prices; they are seeking innovation from external sources (witness P & G’s goal of finding more than 50% of new product ideas outside of the firm), making them more agile and generally open, and many are pursuing positive work cultures as a source of performance advantage and as a way to attract and retain top talent. On the less positive side of things, there is a short-term, financially driven mentality that is hurting many organisations and will render them uncompetitive as they lose key staff and under-invest in their futures.
Everyone is saying that the 21st century is the Asian century with China leading the way. With greater shift and emphasis to Asia, will the current business strategies etc which are all mainly from the West have to be retooled and re-adjusted to meet Asian values and system?
That is probably a question that others who work more actively in both regions can answer better than I. Based on my experience delivering seminars in Malaysia, I would say that similarities outweigh differences. Especially for those companies that compete on a global scale. Efficiency, quality control, innovation and agility are not options, they are fundamental requirements. Remember, the lessons of the Quality Improvement movement led initially by Westerners like Edward Deming and Joseph Durant found their fullest success in Japan, contributing to the growth of companies like Toyota.
How important is critical thinking and strategic problem- solving for leaders especially in these challenging times?
The challenges facing private and public companies continue to become more complex, varied and unpredictable. To respond to this, leaders need to be adept at thinking flexibly, critically and strategically. This means learning methods and techniques for framing and addressing issues effectively. And it requires expanding self-awareness so that personal preferences, biases, hopes and fears don’t hijack decision- making processes without one even noticing. The leaders of organisations set the tone for how others respond to challenges. They need to send the right signals about the value of critical thinking and lead by example.

Who are the CEOs that you admire and why?
John Chambers of Cisco Systems has been an exemplary high-tech leader. He provides a vision that doesn’t waver, and he resists the pressure to over-celebrate victories and over-worry in rougher periods. The company is dedicated to excellence through knowledge and execution. Top talent is recruited and tends to stick around. Cisco is a leader in acquiring other companies, and makes a point of quickly and effectively integrating the new companies and their employees without losing their unique value.
At a smaller, local and not-for-profit level, a woman named Judy Hills has impressed me. I met her a decade ago when I joined The Canadian Psychiatric Research Foundation, a volunteer Board whose primary purpose was to raise funds to support psychiatric research. Working with a small budget and staff, Judy was able to mount numerous events, raise the required funds, attract and retain a high profile, blue ribbon Board, publish a series of mental health booklets for industry and the schools, and establish credibility and important links in the psychiatric research community. She inspired volunteers to help achieve all of this, maintained a strong sense of vision that gave the enterprise coherence, and was always humble.
Steve Jobs said in his biography that was published posthumously that one of the reasons why great companies eventually fail is because they place too much importance on the salesmen and elevate them to decision-making positions while ignoring the engineers, designers etc who work with the products. He said the salesmen focus on increasing sales for short-term benefits while giving less importance to the development of superior products and in most cases they know nothing about the products. In the end it is the lesser quality of the products and their inability to be innovative etc that finally heralds the downfall of the companies. How true or false is this you think?
There is some truth to this, but I believe it is almost always more complicated. The saying, “Success has many parents…while failure is an orphan” has much truth. Lou Gerstner famously brought IBM back from the brink in the early ‘90s after being CEO at RJR Nabisco and at a major division of American Express. He lacked the technical knowledge that was common for chief executives in the computer industry, yet was able to achieve a recovery that his industry peers could not match. He held the company together, strengthened core offerings and increased sales. Great leaders pay attention to both the short-term and the long-term, sales and development.
What has life taught you?
That is a big question! Top of the list of life lessons for me are appreciation, focus and learning. On Appreciation: life is such a gift, and it is a pity to waste energy on lamenting what you are missing rather than celebrating the things you have the good fortune to enjoy. This is one of those lessons that becomes clearer as one gets older, and I am old enough now to realise its importance. Approaching experiences with an attitude of appreciativeness makes every day meaningful. On Focus: there is only so much any of us can accomplish, even those with relatively large resources and talent. By focusing on the important things, and by developing a limited set of capabilities and interests, we can achieve more and realise our potential more fully. On Learning: the benefits of learning so outweigh the effort and the costs, and there is an endless succession of things I want or need to learn. Not only is there practical value in learning, but it feels good. I am a better person when I am open to learning.