By Gavin Best, Director of Interim Management at Veredus
Leaders and managers arguably face greater challenges now than ever before. We are all operating in what has been coined a VUCA (volatile, uncertain, complex and ambiguous) environment. It’s almost impossible to know which direction a business will take in the near, let alone the more distant future or what external influencers will change corporate strategy.
It’s understandable, then, that many turn to their peers for guidance and best practice examples when making potentially difficult decisions. But is this really the right approach?
The ‘herd mentality’
This concept is something many key commentators – such as Pierre Dussauge, Professor of Strategy at HEC Paris – refer to as the ‘herd-mentality’. Put simply, this is the idea that people in senior positions accept conventional wisdom in the belief that if everyone else at the same level is doing the same thing, then it must be the right approach.
However, I’m sure many of you reading this might be thinking that this is absurd; after all, as an executive you will always make an informed decision that takes account of all influencing factors. I would like to point out, though, that this herd-mentality is in fact ingrained not just at the top, but right across the human race.
Indeed, historical research has demonstrated that we are all more inclined to follow our peer group. Just take the infamous experiment by psychologist Stanley Milgram at Yale university in which a group of individuals passively accepted the need to administer what, in appearance, was a dangerous electric shock to a fellow participant. While the individual was an actor, the rest of the group were unaware of this at the time. Despite the victim’s clear distress, each participant followed the lead of the others throughout the experiment.
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Clearly, then, we all have it within us to simply follow the pack, perhaps without even being aware. However, in the business environment this can be dangerous, after all, if one of us fails, we could see a domino effect occur in those around us. Perhaps the best example of this is the global financial crisis. One could certainly argue that one of the causes of this crash was that too many senior bankers followed the lead of others down what seems like incomprehensible paths in hindsight. As a result, when one of them failed, the others followed suit with catastrophic consequences for us all.
So how can leaders move away from this herd mentality and ensure they not only avoid the mistakes of their peers, but also foster an environment of innovation?
Stepping away from the crowd
Perhaps the first point to make is that literally stepping away from the crowd can be hugely beneficial. Surrounding yourself with like-minded people on a daily basis will only serve to increase your herd mentality, not to mention limit innovative thinking. Consider who you network with, for example. Do you mostly attend events with those who operate in your field perhaps? And how often do you branch out to meet people from beyond your sector?
Gaining insight and knowledge from leaders outside of your comfort zone can help to highlight any potential flaws in your plans and can be valuable when looking for creative solutions. In fact, this idea of utilising experiences from across various sectors has driven the rise in executives being hired without the industry-relevant knowledge many would expect. Just look at Dave Lewis, for example, who was the first ‘outsider’ to be brought in to help troubled supermarket, Tesco.
Use your resources
Making the most of company-wide knowledge at all levels can also be useful. As a case in point, a graduate who is new to the world of work is likely to have a fresh perspective on the business and how it operates. This ‘outsider’ view can really help to identify both opportunities and potential barriers in corporate strategies.
For anyone who has been so heavily involved in business operations – even if it is across multiple companies – it can be easy to slip into a relatively narrow-minded framework whereby it is difficult to see the ‘bigger picture’. Utilising the viewpoint of those who are perhaps removed from in-depth corporate plans can really refresh an executive’s approach.
I would argue that the best leaders today are those who spend more time gathering insight from beyond their usual peer groups in order to move beyond this herd mentality. For those who remain stuck in this approach, the risks to the business could be huge.