There is a difference between making progress and creating value.
I think that organizations and their leaders and employees are often more focused on making progress than they are on creating value.
Let me use a metaphor to articulate the difference between making progress and creating value.
Making Progress vs Creating Value
For this metaphor:
- The hot air balloon and the people holding onto the ropes represent the organization
- The riders in the balloon represent the organization’s various stakeholders, including customers, employees, stakeholders, the community, etc.
- The ropes represent fears that the organization and its leaders and employees have that keep the organization anchored to the ground
In this metaphor, the organization can make progress by holding onto the ropes walking the hot air balloon to a destination.
But, does that add much value to the stakeholders?
No, they probably could have walked to the destination themselves.
The best way to add value to the stakeholders is to let them soar high into the air on the way to getting to their new destination.
But, this requires that the organization cut the ropes that are connecting them to the ground.
Why Organizations Are Reluctant to Cut the Ropes
Taking this metaphor literally, there are a variety of justifiable reasons why an organization may not want to cut the ropes. These include:
- If we cut the ropes, the balloon might get blown in a direction we don’t want to go
- If we cut the ropes and something bad happens, people could get seriously injured
- If we cut the ropes, we can’t be certain about how quickly we will be able to make progress
- If we cut the ropes, we have less control of the balloon
Altogether, a good case could be made to not cut the ropes. Ultimately, not cutting the ropes allows the organization to be in greater control of making progress (which is what shareholders are often calling for).
But, not cutting the ropes also means that very little value gets created.
The Four (Justifiable) Fears That Limit Value Creation
In my work with executive teams and organizations, I have observed that there are four (justifiable) fears that:
- Help the organization feel like they are in greater control of making progress
- Hinder their ability to create value for their stakeholders (something they need to do to grow their business)
They are the:
- Fear of looking bad – If we look bad, our reputation will be damaged
- Fear of being wrong – If we have to admit we were wrong, we won’t be respected
- Fear of having problems – If we have problems, we can’t make progress
- Fear of not being valued – If we are not valued or recognized, we are of no worth
All off these fears are justifiable. Who wants to:
- Look bad
- Be wrong
- Have problems
- Not be valued?
But, we need to recognize these fears for what they are. They are self-protecting fears that may help us make progress, but will greatly hinder us from adding value.
What Value Creators Understand
Organizations focused on adding and creating value are able to cut these fears. Specifically, they understand:
- We need to possess the desire to learn and grow (which means we have to be willing to look bad at times)
- We need to possess the desire to find truth and think optimally (which means we have to be willing to be wrong at times)
- We need to possess the desire to reach goals (which means we have to be willing to have problems at times)
- We need to possess the desire to lift others (which means we have to be willing to not be recognized or valued at times)
What Value Creators Do Differently
Value creators do two things that are rather uncommon in organizations.
First, they are sensitive to the four justifiable fears and are proactive in rooting them out in the organization.
Second, they provide a safe environment so that their leaders and employees do not feel (1) undue pressure to look good, be right, and avoid problems, and (2) unvalued.
Some amazing examples of leaders and organizations that have done these two things are:
- Alan Mulally at Ford (American Icon)
- Satya Nadella at Microsoft (Hit Refresh)
- Ed Catmull at Pixar and Disney Animation (Creativity, Inc.)
(Hyperlinks are to books about these leaders and organizations that demonstrate this. They are among the best business/leadership books I have read.)
Getting Rid of These (Justifiable) Fears in Your Organization
If you want to:
- Awaken to the degree to which these fears are in your organization, and
- Cut the ropes so that your organization and its leaders and employees can be better value creators…
Please let me know. I would love to work with your organization, executive team, and/or leaders.
If you want to learn more about my process, you can download this white paper: Vertical Leadership Development.