Adapted from Pacing for Growth; Why Intelligent Drives Long-Term Success, out in Feb. 2017
It’s difficult to know what the “right” amount of restraint is for a business. Sometimes, leaders lead with too little restraint, sometimes with too much. What’s clear is that it’s really, really hard to get it just right.
One reason it’s so hard is because we are leading organizations, and an organization is a complex combination of many interconnected systems. An organization is like the human body, which is an amazing structure of different, interconnected systems. Take the respiratory and circulatory systems, for example. The respiratory system brings air into the body and removes carbon dioxide.
The circulatory system picks up oxygen in the lungs and works like a transportation system moving blood filled with oxygen throughout the body and then taking waste in the form of carbon dioxide back to the lungs to be exhaled.
These two systems have to collaborate and have clear touchstones. One interfaces with the external environment and the other is an internal system. If the air quality is very poor, both suffer. If the body is sick, they are both impacted. If the body is very healthy and strong, they work better, together.
Endurance training systematically increases the capacity of our complex body to withstand the stress of training without breaking down. Just as bodies are impacted by the external environment and the health of the body itself, organizations also are impacted by external forces like government regulations, new technologies, competitor activity, and consumer preferences as well as the overall culture and health of the organization.
A company that anticipates external changes and effectively adapts is more likely to survive over the long term. This is why endurance training is an excellent parallel for how to increase a company’s growth capacity. Leaders who act like endurance athletes can systematically increase the capacity of their organization to execute their day-to-day business as they build capacity for the future—without damaging people and the business itself.
Make Tough Choices with Intelligent Restraint
Growth Leaders face many situations with seemingly conflicting objectives. For example, they need to explore new opportunities and at the same time, they need to exploit their existing assets such as manufacturing facilities, retail outlets, or ships. They need to drive sales and at the same time they need to grow profits. These are all paradoxes of growth.
The idea of managing paradoxes, polarities, and tensions isn’t a new one. Academics call this ability “ambidextrous leadership,” and recently Michael Tushman and his colleagues wrote about it as “Both/And Leadership.”
Paradox management helps to manage complexity. Intelligent Restraint helps us manage the complexity that growth brings. Whereas part 1 of this book gives us a way of looking at how to increase limits of growth, part 2 describes three practical rules of thumb that help leaders make important trade-offs needed for enduring growth. These trade-offs help us make better decisions and release capacity for growth.