Harvard Professor James Heskett makes a relevant observation in a HBS Working Knowledge blog post[1] where he makes the point that leaders in organizations may have the tendency be in denial when it comes to recognizing bad news. Drawing upon the work of Richard Tedlow, denial is defined as “seeing but not seeing“.
This is a critical point. Many of the organizations that I studied during the recession of the 1990s were blind to the changes emerging in the post-recessionary environment. There were two broad reasons for this. Firstly, building on the point that Heskett makes, leaders don’t want to see bad news, particularly if it presents a view of the world that the strategies that leaders have crafted over the years can’t now cope with. Secondly, the systems that have been built to help organizations see the outside world may be defective, assuming mere incremental, evolutionary change in the outside environment.
Recessions always bring a wave of creative destruction with them. In a perverse way, this wave is the silver-lining. If this apparently negative wave is recognized embraced, it is a great source of innovation. If its existence is denied, it could swamp you.
Embracing, not denying, the negative is therefore a critical part of recession recovery management.
Looking at the bad news face on could well help you craft tomorrow’s strategy.
Reference
[1] Heskett, J Is Denial Endemic to Management? HBS Working Knowledge May 05, 2010.