Vital Smarts, a group who introduced the Crucial Conversations concept to the world, conducted a survey of 2,000 managers regarding “financial agility.” What they found was remarkable, in the words of study authors Joseph Grenny and David Maxfield. “We found four critical business moments that predict with incredible precision how well and how fast an organization responds to economic threats.” The way executives responded to these situations determined how the company was positioned for future success.
These are the four crucial moments:
- A senior team is first confronted with financial data that may indicate a crisis.
- Really good solutions step on some senior toes, and are therefore seen as “un-discussable.”
- Members of the leadership team have agreed on action and need to follow through with their stated commitments.
- The decision is made to cut costs across the organization by a specified percentage.
From Financial Agility to Strategic Thinking
Let’s look at how these four situations can predict future success beyond financial agility to include strategic thinking and strategic dialogue.
Those organizations that were able to weather storms, and even become better positioned for the future, respond to these four moments by:
- Dealing with the data swiftly and openly with lots of dialogue rather than top-down commands.
- Creating an environment in which those “really good solutions” that may step on some toes can be put on the table and considered.
- Clearly and visibly holding each leader accountable for delivering on the stated commitments.
- Having the team, through open dialogue, make more rational decisions regarding where cuts should be made, rather than pursuing an “across the board” cut that could undermine critical strategic initiatives and do more damage in the long term.
The successful facilitation of these moments has a lot to do with strategic thinking and strategic dialogue, and how senior leaders provide real strategic leadership to their organizations. Each of the four moments is a strategic moment when the senior leaders can sit down and have a focused dialogue, starting with: “What does it look like when we’ve been successful in dealing with this crisis?” They then work through the strategy process, develop a clear action plan, and implement changes.
The point here is that strategic thinking is not just an occasional or annual exercise; it is a state of mind and a set of behaviours that help to ensure the organization thrives. In many organizations, leaders continue to miss the opportunity to use these moments to liberate, inspire, and embolden their leadership talent.
Bob McCulloch is a Co-founder and Principal with Strategic Retreats. He is a strategic advisor and executive coach to senior leaders and their teams. His clients represent companies across a wide array of industries as well as all levels of government and several not-for-profit organizations and associations.