Achieving Long-Term Performance in a Short-Term World
In a world that is evolving in so many ways, faster than ever before, CEOs, C-Suite leaders, and boards of medical device and diagnostics companies often find themselves in a challenging position. On the one hand, rapid changes in digital technology and societal expectations for healthcare delivery have resulted in unprecedented opportunities to innovate and transform for game-changing growth. On the other hand, investors and shareholders often demand consistent short-term returns, frequently quarterly.
Many top leaders know about best practices and fundamental principles of leading to their companies’ aspirational purpose, vision, and mission. However, despite this, they share with us that there can still be a gap between this aspiration and the reality of the sometimes “strange” responses that employees, partners, and other stakeholders may have to moving in a different direction to create long-term value. These dynamics can include persistent conflicts across the company and its partners, mysteriously low morale, and an attachment to short-term goals and metrics that are diametrically opposed to their stated long-term purpose, vision, and mission.
From our work with clients in the life sciences and related technology sectors, we’ve seen that this emphasis on short-term results often starts as a top “leadership team dynamic”. Ongoing shifts in the balance of power and accountability between boards, management, investors, and other stakeholders can create new complexity and reinforce the orbit of the status quo.
For instance, the new CEO of a successful advanced technology company reached out to us because his business was at a turning point. He explained that although the company was a leader in their industry, significant changes in their primary market had put the CEO and board’s ambitious growth targets at risk. They believed that the company could create a stronger diversified position and meet its growth objectives with a bold new vision and long-term strategy that expanded its innovative technology into medical diagnostic markets.
But there was a problem. The CEO explained that the success of the new vision hinged upon senior leadership working together in new ways and redirecting resources to bring the new strategy to life. However, these executives could not agree on the path forward despite multiple data-driven strategy meetings. Typical comments included, “We can’t risk diverting resources away from our key customers for an unproven market,” and “We’ve tried new applications before, and it didn’t work.” The clock was ticking, and the window of opportunity was closing.
Perhaps you have seen these types of conflicts yourself. Yet, despite short-term pressures and demands, it’s still possible to lead your organization in a way that fosters long-term performance while also responding to the needs of today.
A Critical Principal for Re-envisioning Your Company’s Future
We’ve seen that the leaders who are able to successfully advance their bold visions and ignite game-changing growth keep a critical principle in mind as they re-envision the future: the greater the ambiguity, the greater the need to embrace paradoxical realities.
This especially applies to three particular leadership paradoxes that can naturally emerge in the ambiguity of long-term game-changing growth where success is not assured. We call these the Growth Igniters Paradoxes.
On one side of each paradox is the appeal of the rationally conceived new vision, strategies, and objectives that promise substantial rewards. On the other side are complex human dynamics issues rooted in neurobiology. In essence, stakeholders often feel ambivalent about putting what has worked up to date at risk for unproven, albeit attractive, promises.
As everyone is under pressure to move at warp speed in a highly complex environment, it’s natural for even the savviest leadership team to address some issues on one side of the paradox while leaving some challenges on the other side of the paradox unresolved. This imbalance can lead to hit-and-miss outcomes that leave a company vulnerable to disruption from competitors with new business models and technology or other rapid changes in the business environment.
Embracing Three Growth Igniters Paradoxes
We’ve found that three particular Growth Igniters Paradoxes tend to occur together like a knot that is hard to untie. Understanding the unique contribution of each paradox can help you untangle the knot. This expansive mindset can help you advance your vision while also creating realistic expectations for supporting short-term objectives.
The Visionary’s Paradox: The bolder the vision, the stronger the pushback
Many leaders agree that a compelling purpose and vision can be a great asset in focusing energy and resources toward innovative objectives. But consider that visionaries come to their big ideas from a personal space filled with their values, biases, knowledge, and experiences. There may be a mismatch when they try to engage other stakeholders who have their own biases, values, knowledge, and experiences.
Rather than regarding stakeholder pushback as a problem, you can use it to your advantage. In uncharted territory, dramatically different perspectives may contain “nuggets of gold” about emerging trends that can signal unseen challenges or new windows of opportunity.
In the example above, we helped the leadership team create new conversations that embraced the value of their different viewpoints and focused on the big picture. Instead of competing, they started to discover innovative solutions that incorporated elements of their different perspectives.
Understanding others’ viewpoints, and why they have them, is just one component of untangling the paradoxical knot. Another component of advancing a bold vision is jointly committing to a new path forward that is clouded with ambiguity. This is where the next Growth Igniters Paradox comes into play.
The Success Paradox: The stronger the push toward new paths to growth, the stronger the pull of the status quo
As many leaders in the medical devices and diagnostics industry know, pressure for short-term growth and profitability can be a powerful force for avoiding the risks of committing to unproven opportunities for long-term growth. While it’s essential to present a strong rationale and supporting data, it may not be enough to overcome stakeholders’ ambivalence about moving into uncharted territory. So, how can you advance your bold vision when the pull of the status quo is so strong?
The answer lies — in part — in the neuroscience underlying cognitive biases and the power of emotion on influencing others. For instance, Tali Sharot, a neuroscientist who has done extensive research on influence, cites a study that suggests that over-relying upon facts, figures, and data alone to make a case for change can lead people to dig further into their established positions. However, when people are able to build on the numbers and jointly shape the narrative, they can create a shared emotional ground and a greater sense of individual agency. Having greater ownership of the story increases the likelihood of wholehearted commitment to moving in a new direction despite the uncertainty of the outcome.
In the example above, we helped the leaders jointly build upon their diverse perspectives to individually and collectively reframe their narrative of the vision and transformation from one of threat to one of significant opportunity for themselves and their stakeholders. This enabled them to enthusiastically commit to the new vision and strategy.
Yet, beyond embracing the ambivalence that can naturally occur in the face of ambiguity, we’ve found that there’s one more issue that’s essential to address for successfully bringing a game-changing, long-term vision and strategy to life. This is where the next component of the Growth Igniters Paradoxes comes into play.
The Momentum Paradox: The organization that accelerates momentum for growth creates friction
Even when everyone commits to a new direction for innovation, transformation, and growth, the orbit of the status quo can mysteriously persist. On the one hand, growing in new directions, whether through organic growth, M&A, or partnerships, can add a level of talent and organizational capability that enables your company to dramatically accelerate momentum for growth.
On the other hand, game-changing strategies for long-term growth often include transforming roles for employees and external partners, adding new staff and partnering relationships, implementing new technologies, including various forms of automation and digital transformation, and more. These changes in business models, technologies, roles, functions, people, and working modes can create new complexity and upheavals in a company’s culture as people, politics, responsibilities, and accountabilities change. These issues are often not openly discussed and become toxic “elephants in the room”.
In the example, as the leaders felt more comfortable with each other and jointly committed to entering a new market, despite the risks, they were finally ready to openly face their elephant in the room. To bring their new strategy to life, they were going to need to work together in new ways — as a C-Suite team — and redirect resources to support the transformation. As we helped them create new conversations about these issues, they were surprised and relieved that they were able to successfully discuss and resolve their underlying conflicts and concerns. They were then able to focus on prioritizing the necessary “go big or go home” decisions that moved them forward on their growth journey. The outcomes exceeded their initial expectations.
Lead for tomorrow starting today
Despite short-term pressures and demands, it’s still possible to lead your medical device and diagnostics company in a way that fosters long-term performance.
Embracing the conflicting realities of the three Growth Igniters Paradoxes can help you and your team stay focused on the big picture while delivering near-term results. Doing this on an ongoing basis can enable you to not only stay relevant to current customers and other stakeholders. It can help you break free of the constraints of your status quo and create game-changing long-term value for tomorrow starting today.
Article source: MDDI