Driving value or being driven by fear

A response to ‘apocalyptic’ change narratives

Some people love horror movies. They enjoy the adrenaline pumping through them as they imagine themselves the victims of some malign character or force, all the while knowing that it is a fantasy – a waking dream from which they will wake when the movie ends.

There is an echo of this mindset in the ‘real world’ when change agents interpret the injunction to first create a sense of urgency (Step 1 of Kotter’s 8 step change model) as an invitation to frame the case for change using fear as the driver. Some like to refer to “the burning platform” as a way of invoking a commitment to change, while others encourage leaders to “never waste a crisis (and if you don’t have one, go and create one)“.

The main problem with fear being the driver is that it encourages people to focus on moving away from problems, rather than towards inspiring goals. There is a fundamental difference in the mindset of a group when it is motivated by adding value rather than running from threats, especially when fear and stress impede creativity.

The innovation (value-adding) problem was recently highlighted by ANZ Bank chairman David Gonski. The Age reports him saying that risk-taking has become a career danger for professional directors, as a new AICD / University of Sydney report – Driving Innovation – blamed a focus on compliance as one reason Australian boards were failing to prioritise innovation.

Balanced decisions

Directors of both commercial and non-for-profit entities do need to take account of risks when making decisions, but this will desirably be embedded in decision-making focused on adding value.

Every decision made by the board and management involves a trade-off between benefits, costs and risk. Where the ‘sweet spot’ can be agreed in this trade-off, the board can and should commit to the proposed innovation. Where the cost or risks outweigh the benefits, then they should not proceed.

Adding value

When focusing on value, this model offered by Deloitte is helpful.

https://www2.deloitte.com/us/en/insights/industry/public-sector/future-of-work-in-government.html

Strategic decision-making not only needs to assess emerging client and business needs and opportunities, but also to answer the value-adding questions:

  • What can we do more of?
  • What can we do better? and
  • What should we do differently?

In doing so, there will also be a need to balance workloads and resource allocation by identifying:

  • What should we do less of? and
  • What should we cease doing?

Compliance obligations

Not-for-profits are bound by more than historical conventions. They are only allowed to operate within a regulated environment when they comply with specific obligations. Directors are held to high standards by regulators, the media and the wider community, and it is not surprising therefore that they are ‘careful’.

In professional associations, they are even more inclined to caution because they are acutely aware that they represent their entire membership. Consequently, they tend to make more conservative decisions than they might in their own practices or businesses. Promoting their fear is only likely to make them more risk averse, and therefore, less innovative.

Inspiring improvement

Fear of organisational redundancy is a much less inspiring driver than an aspiration to deliver better value and more relevant services to members.

In my view, just as directors have a responsibility to focus on adding value for their members, those advising boards on strategy and innovation would frame their (often valid) improvement suggestions more constructively, if they too focused on adding value (being solution oriented) rather than using fear (being problem oriented) as the change driver.

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