Over the part few years I have been running in-house business games with a number of major enterprises who form executive teams for a global enterprise for a three year period over a single (intensive) day. So far 15 teams, of different levels of seniority, have fully completed the game. Based on their performance I believe I have uncovered 5 very important differences between top performers and the rest in the areas of leadership and decision-making.
Finding 1: Top Performers avoided the “Presumption of change is good” trap.
Evidence for Finding 1: The business game starts with each team inheriting a business from the previous executive team. 95% of the participants showed no curiosity regarding how good the previous leadership team were.
It is amazing that almost all new leaders focus on what they need to change but not what they need to preserve. What to change is only part of the challenge and for whatever reason (ego, identity, peer pressure …) showing a lack of respect for the previous team’s achievements seems to be a good predictor of sub-optimal performance.
Finding 2: Top Performers suspended assumptions, thoroughly reviewed all available instructions and background research and sought out expert opinion.
Evidence for Finding 2: Senior teams or functional experts generally did worse in the game than expected and junior teams/non-functional experts generally did better than expected.
As people become more experienced and competent they often become more fixed on their “Golden Rules” (“this always works” or “never do this”). Whilst Golden Rules are generally a good and necessary thing they can also close people down to a fresh examination of the facts available to them. In many cases the evidence which was available would have directly challenged these golden rules if it had been properly and objectively evaluated.
Finding 3: Top Performers were rigorous about evidence-based decision-making.
Evidence for Finding 3: 90% of the teams made at least one critical decision which was based purely on hunches or past prejudices rather than any actual evidence.
Evidence-based decision making is the discipline of supporting every key decision with a reference to one or more sources of written evidence of an objective nature. Ideally this evidence should be representative and quantitative but it can also be purely anecdotal provided it can be verified by a third party.
Finding 4: Top Performers made explicit and difficult choices/tradeoffs on their priorities.
Evidence for Finding 4: Team performance was assessed against a balanced scorecard of 5 key indicators covering revenue, profits, market share, customer growth and organisational maturity. In no case did any single team ever perform better than all the other teams on all 5 of these indicators.
For example, in the game to build market share you may need to focus investment on new customers but to build revenue you may need to focus on existing customers who spend more. In benign market conditions you might not need to make a conscious choice between these two however in difficult trading conditions it may simply not be possible to achieve both and you have to make a choice. Top performing teams always seemed to have a clear hierarchy of priorities – “this first, then this second then this third” – which guided their actions at critical points.
Finding 5: Top Performers displayed “coherence” of strategy and action.
Evidence for Finding 5: Over 85% of the teams accidently took actions which were inconsistent with the strategies they had developed at the start of the game. When this was pointed out they almost always responded that they did not wish to change their strategies.
A key question in determining whether you really have a “strategy” is what did you decide NOT to do. If you cannot answer this question then you probably don’t have a strategy and are navigating reactively in response to changing circumstances. This usually leads to “mission drift” and consequent under performance.
