What Got You Here Won't Get You There

 
That’s the catchy title of a 2007 book by Dr. Marshall Goldsmith, an award winning author, business thought leader, professor and executive coach who heads the Marshall Goldsmith Group of consultants (mission: to help successful leaders get even better) and maintains the free Marshall Goldsmith Library. He has written and/or edited 35 books, mostly about leadership, learning, change and personal improvement. I found a copy of this book at a library sale recently, and I recommend it, but that’s just background.

Some weeks earlier, I had agreed to help kick off a senior management meeting at a company run by some former colleagues of mine who had escaped from an insurance company claims environment nearly 20 years earlier to start up their own specialty claims business. Over the years their business flourished, expanding in scope and size to the point where the founders knew it was time to pull together their management team and discuss what needed to be done to move the company to the next level. They wanted me to help set the proper tone for their meeting by talking about change challenges and reviewing some of the things successful companies do, and don’t do.

Since I was heading off on vacation, I thought I would spend some of my leisure time preparing by re-reading my favorite articles about successful companies, and by reviewing some of the many notebooks I had filled over the years with on-topic material. I also brought along Goldsmith’s book, and read it through one rainy day. If you haven’t read it, I think I can give a quick overview without spoiling it for you. The theme is that most of us have bad habits, and even if those bad habits somehow helped to get us to a certain level, they might just prevent us from moving to or being successful at the next level. When I read through the habits (like delusional thinking, denial, overconfidence, failing to listen, dismissing feedback, failing to plan, blaming failures on external, uncontrollable factors, and allowing distractions to interfere with achieving objectives) I started feeling a bit uneasy, even embarrassed, because at one time or another in my career I knew I was probably guilty of all of them.

But then it hit me—Goldsmith was writing about personal, individual habits, but companies are collections of people so they have their own habits and ways of doing things (their culture.) Entrepreneurs imprint their own habits on their company, so they directly influence their company’s success through their imagination and insights, their willingness to take chances, their resiliency, their commitment, and the unique set of skills, behaviors and attitudes they bring to the effort. Through scrambling, innovating, scraping by, doing without, overextending and even overpromising, the successful ones keep their businesses going, and growing. Of course it’s not a linear path to success--they lurch, they make mistakes, then they recover and learn from them. But one fine day they realize they are actually making it, competing successfully in whatever business niche they selected. At that point one of two things can happen:

• They celebrate, relax, and begin to suffer from the “complacent lethargy” that Jim Collins and Jerry I. Porras (Built to Last) called the “We’ve Arrived Syndrome”
• They start to dream about expanding their business, diversifying into other products and services, entering new markets, making acquisitions...you know, taking their business to the next level.

Maybe both things happen. But if they get past the dreaming and start in on the planning, they often realize that the skills and behaviors they used to get their business going and help it survive may not be the ones they need to make it thrive at the next level. So what’s a company to do at that point? Of course that’s what my former colleagues wanted to get into at their meeting.

So at the management meeting I ended up sharing with the group some of the most impactful (to me) things I have learned about successful companies, such as their tendency to operate with three perspectives simultaneously: strategic, governance and control, and execution. Sounds reasonable, but juggling those three can be complicated and counterintuitive at a smaller company, where managers often prefer to stay within their comfort zone and focus on execution. But even with flawless execution, a company still needs both a winning strategy and a capable governance/risk management protocol in place to ensure long term success.

Successful companies tend to share certain characteristics:

• They have strategic clarity
• They have objectives and performance metrics that encourage behavior that supports their strategy
• Their rewards are aligned with achievement of those objectives and performance metrics
• They provide regular, constructive feedback to individuals regarding performance against objectives and metrics

Successful companies share certain capabilities:

• Talent (knowledge, skill and will)
• Speed (capacity for rapid, meaningful change)
• Learning (across silos and boundaries)
• Shared mindset (on the same page)
• Accountability (willingness to accept responsibility for behaviors and results)
• Collaboration (leveraging relationships, sharing work and responsibility)

I had the management team do a quick capability self-assessment from two perspectives, rating themselves as a management team, and then rating their company as a whole on a scale of 1 to 10 in each of those six capability areas (1 means no capability and 10 means industry leading capability) and flip-charted the results. That’s an easy and quick exercise that often produces interesting insights into potential conflicts and barriers to success.

We also unpacked the three performance categories often associated with talent in a knowledge-intensive business: KNOWLEDGE, SKILL and WILL.

• In the claims service business, KNOWLEDGE involves understanding the law, regulations, contracts and policy forms, as well as understanding what customers want and knowing how to deliver it within necessary margins of compliance, speed, service and accuracy.

• SKILL usually refers to doing, not knowing. Employing best practices, interpreting complicated coverage situations, correctly calculating a business income loss or reinsurance penalty, investigating, evaluating, negotiating, resolution, recovery, communicating with stakeholders, etc.

• WILL refers to the commitment, desire, discipline, or motivation to do something and do it well.

Finally, I urged them to accomplish four things in their meeting:

• Create strategic clarity. Agree on what business they are in, and what business they want to be in, and articulate what they need to know and be able to do in order to be successful.
• Complete a stakeholder needs analysis and develop a shared view of who their stakeholders are (potentially anyone with a vested interest in how well they operate their business) and what those stakeholders need in order to be successful and content.
• Take another look at the capability self-assessment summary (the flipchart) and do an honest and critical assessment of their capabilities, particularly their talent. Do they really have the talent and the ability to meet stakeholder needs better, faster and cheaper than their competitors? If not, where are the capability gaps and how will they close them?
• Carefully consider the WILL component of talent within the framework of change and business evolution. Determine what steps to take to influence attitudes and motivation and move their management team, and their company, from compliance to commitment.

I enjoyed seeing my colleagues again, and meeting their management team, and I heard later that their meeting went well. A few days after that meeting I came across this quote I used in an earlier article, attributed to German writer and politician Johann Wolfgang von Goethe (and also, variously, to Leonardo Da Vinci and Bruce Lee):

Knowing is not enough; we must apply. Being willing is not enough; we must do.

In the talent context, it sounds like whoever said this believed in execution. Knowledge and will alone were not enough—he considered skill, the ability to do the necessary things well, to be the critical component of talent. I see it a bit differently, believing that success in almost any human undertaking requires all three elements of talent (knowledge, skill and will.) To me, skill is derivative, developed through the combination of knowledge (understanding what needs to be done, when and how) and will (practicing and perfecting) but I suppose that’s one of the reasons why people find the talent topic so fascinating.

For a thoughtful look at talent management in the 21^st century, check out this Harvard Business Review article from professor Peter Capelli. And for an interesting overview of how taking a strategic approach to talent management can help power innovation, growth and market advantage, take a look at this Talent To Win whitepaper from PwC.


Dean K. Harring, CPCU, CIC is a retired insurance executive who now enjoys his time as an advisor, board member, educator and watercolor artist.  He can be reached at dean.harring@gmail.com or through LinkedIn or Twitter or Harring Watercolors

Confident Idiots

Have you ever noticed that anybody driving slower than you is an idiot, and anyone going faster than you is a maniac?

Every time comedian George Carlin posed that question in a performance, the audience roared because they knew they were all absolutely guilty of being at least that judgmental when comparing the driving skills of others to their own. Studies have shown that most drivers believe they are more skillful and more careful than the average driver on the road, but what's really fascinating is how that self-serving bias and illusion of superiority extends to many other areas. In his article We Are All Confident Idiots, Psychology professor David Dunning describes it this way:

A whole battery of studies conducted by myself and others have confirmed that people who don't know much about a given set of cognitive, technical or social skills tend to grossly overestimate their prowess and performance, whether it's grammar, emotional intelligence, logical reasoning, firearm care and safety, debating, or financial knowledge.

Surprising? Hardly. You and I have known and worked with a formidable collection of confident idiots, and we've probably played the role ourselves on more than one occasion. We just didn't realize we were doing it.

Professor Dunning is an expert in metacognition, the processes by which humans evaluate and regulate their knowledge, reasoning, and learning. He and his colleague Justin Kruger first described what is now known as the Dunning-Kruger effect in a 1999 paper entitled Unskilled and Unaware of It: How Difficulties in Recognizing One's Own Incompetence Lead to Inflated Self-Assessments. From the paper's introduction:

People tend to hold overly favorable views of their abilities in many social and intellectual domains. The authors suggest that this overestimation occurs, in part, because people who are unskilled in these domains suffer a dual burden: Not only do these people reach erroneous conclusions and make unfortunate choices, but their incompetence robs them of the metacognitive ability to realize it.

Dunning calls this "unrecognized ignorance". As he explains in the We Are All Confident Idiots article:

For poor performers to recognize their ineptitude would require them to possess the very expertise they lack. To know how skilled or unskilled you are at using the rules of grammar, for instance, you must have a good working knowledge of those rules, an impossibility among the incompetent. Poor performers—and we are all poor performers at some things—fail to see the flaws in their thinking or the answers they lack.

While the notion that "we don't know what we don't know" seems reasonable and familiar, the scary part is that even though we might be incompetent to deal with a particular situation, we're not troubled because we are blissfully unaware of our incompetence. Even scarier, we usually feel pretty confident about our chances for dealing with the situation effectively. Dunning again:

What’s curious is that, in many cases, incompetence does not leave people disoriented, perplexed, or cautious. Instead, the incompetent are often blessed with an inappropriate confidence, buoyed by something that feels to them like knowledge.

Blessed with inappropriate confidence? As much as we admire and react favorably to confidence and self-assurance, most of us wouldn't rely upon someone to do something important for us if we knew the person was confident, but not competent. Or would we?

Overconfidence is very common. According to a TED Talk by University College (London) professor Tomas Chamorro-Premuzic, who has studied the relationship between confidence and competence for over 10 years in 40 different countries, the distribution looks like this:



To make matters worse, in most parts of the world people equate confidence with competence, so they assume people who are confident are also competent, allowing confidence to mask incompetence. In the HBR Ideacast The Dangers of Confidence , Dr. Chamorro-Premuzic drew the distinction:

In reality however, there is a very big difference between confidence and competence. Competent people are generally confident, but confident people are generally not competent. They are just good at hiding their incompetence and their insecurities...

Yet success "correlates just as closely with confidence as it does with competence" according to The Confidence Gap by Katty Kay and Claire Shipman. And men tend to be more confident than women. A few bullet point takeaways from the article:

• Having talent isn’t merely about being competent; confidence is a part of that talent. You have to have it to excel.
• Confidence is... the factor that turns thoughts into judgments about what we are capable of, and that then transforms those judgments into action.
• In studies, men overestimate their abilities and performance, and women underestimate both.
• ... there is a particular crisis for women—a vast confidence gap that separates the sexes.

So if talent (the ability to do something well) requires both confidence and competence, what do you call confidence without competence? Dr. Shahid Qureshi calls it arrogance. Professor Chamorro-Premuzic is in the same camp. In Why Confidence Is Overrated he describes the consequence of appointing leaders on the basis of confidence rather than competence:

...if we keep rewarding those who think highly of themselves, simply because they think highly of themselves, then we will always end up with incompetent charlatans in positions of power and influence.

So why is it that we keep bumping into incompetent charlatans and confident idiots in leadership positions? It's our fault! We like and admire people who are self-assured and confident, and we're not that troubled if they happen to be incompetent. Professor Chamorro-Premuzic in the HBR Ideacast, on why we find confident people so compelling:

I think there are two main reasons. So the first one is that confident people tend to be more charismatic, extroverted, and socially skilled– which in most cultures are highly desirable features. The second one is that in virtually every culture, and especially the Western world, we tend to equate confidence with competence. So we automatically assume that confident people are also more able-skilled or talented.

What can we do about it? Chamorro-Premuzic in Why Confidence is Overrated:

When we hear people making claims about their talents, let's not assume that they are true, even if they are being honest (as a consequence of being self-deceived). Most talented people don't brag about themselves, and most of the self-promoters in the world are simply impostors.

You might be wondering whether talent plays any role in all this. I like to think that while your confidence may help you land a big job, sooner or later you need to perform and deliver in order to keep that job, so it's your talent (ability and results) that will ultimately determine your success. That may be the way it works on American Idol, but of course it doesn't always work out that way in business. Just think of all of the incompetent and feckless executives you've known who succeeded in holding on to key positions for far too long simply because they had a talent for dodging accountability--creating diversions, making excuses, and shifting blame and responsibility to others.

Confident idiots.  I can just imagine Mark Twain scratching his head and marveling at their success as he scrawled this line: "To succeed in life, you need two things: ignorance and confidence."

Dean K. Harring, CPCU is a retired Chief Claims Officer who advises on property-casualty insurance claims and operations.  He can be reached at dean.harring@suite200solutions.com or through LinkedIn