Dealing with dilemmas in business

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“The internal administration of each line of thought seems to be impeccable, but their diplomatic relations with one another seem to be internecine.” Gilbert Ryle in Dilemmas

Dilemmas are propositions in apparent conflict.  We think of them as irreconcilable solutions to a single problem.  We experience dilemmas with discomfort – we are caught “between a rock and a hard place”.  Some examples of dilemmas in business include: enterprise vs. prudence; short-term vs. long-term; centralisation vs. decentralisation; investment vs. cost-cutting; innovation vs. standard procedures (best practices); economic value vs. social value (i.e. the ‘business of business’ is profit vs. social benefit).

Dilemmas often cause intense and lengthy debate, discord, competition for resources, organisational impasse and missed opportunities – the result being corporate inertia.  Effective directors and executives identify dilemmas, understand their nature and, somewhat paradoxically, reconcile them.  Their companies realise economic benefit and some become icons in society. 

Gilbert Ryle was concerned about the body – mind and other dilemmas that have troubled philosophers.  Over half a century ago, he suggested that dilemmas are fallacious: they are not rival solutions to the same problem; they are possible solutions to different problems.  Consider the innovation – standardisation dilemma: innovation is a way of solving the problem of having new products to sell, while standard procedures ensure consistent quality of products; logically, innovation and standard procedures are not at odds with each other.  Nevertheless, they are real issues that can create conflict in business.  For example, they compete for resources; innovations induce variation, while standard procedures reduce variation; people who innovate usually are quite different from those who prefer to implement standard procedures.  Companies need innovation and standardisation, but they also need to eliminate their internecine tendencies. These are the challenge and an opportunity for creative thinking.

Carlos Ghosn, who famously turned around Nissan, rose to this challenge, saw the opportunity and realised benefit for Nissan.  He actively sought out differences between people in the conviction that their differences create business opportunities: “seeing issues from someone else’s perspective can be very instructive.”  Ghosn suggests conditions for realising benefit from differences or apparently opposing views: recognition of and respect for the differences, together with a keen interest to learn from the differences and to create business advantage.  He admits that the processes involved are difficult; but he contends they are worth the effort because of the potential for benefit and advantage.  Therefore, he created and supported cross-functional and cross-cultural teams in the turnaround of Nissan.

Charles Hampden-Turner and Fons Trompenaars have considered dilemmas in the context of different cultures.  To them, people from different cultures tend to lean towards one horn in a set of dilemmas and, consequently, they appear to be in conflict.  Like Ghosn, they view dilemmas as opportunities.  Their steps towards business benefit from dilemmas are similar to those of Ghosn. They have developed formal processes for reconciling culture-related dilemmas and for the development of reconciling actions that, when implemented in the company, realise benefit.

Their novel contribution is to view the apparently conflicting lines, not as polar solutions, but as two axes between which there is a space for new thinking and novel opportunities.  Their latest thinking is a step ahead of the more common search for win-win solutions, i.e. accepting both lines of thinking. They try to add value to each line of thought through the other, thus creating new thinking and new opportunities.  Their reconciliation of the innovation – standardisation dilemma is illustrated below.  

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Of course, this is two steps ahead of compromise, i.e., a lose-lose solution.

Rosabeth Moss Kanter studied 350 companies on five continents (Transforming Giants – the large companies that make the world a better place”; Harvard Business Review; January 2008).  She concluded that they:

  • “Standardize and innovate, endeavouring to prevent consistency from becoming stifling conformity.
  • Globalize and localize, deriving benefits from the intersections.
  • Foster a common universal culture, but also respect for individual differences, seeking inclusion and diversity.
  • Maintain control by letting go of it, trusting people educated in the shared values to do the right thing.
  • Produce both business value and societal value”.

Clearly, these “transforming giants” successfully dealt with dilemmas.  Some sought ‘through and through’ creative reconciliation. With regard to the example of the standardisation and innovation dilemma, she wrote that “standardization does not mean that no enhancements can be made … people versed in universal standards are often most innovative when they apply those standards to local situations … it is critical that the standards be open-ended and aspirational, not constraining or restrictive”.  This is in consistent with the reconciliation approach proposed by Trompenaars and Hampden-Turner.

The challenges for directors and executives are to avoid being impaled by the horns of business dilemmas but to harness the opportunities they bring.  This approach requires a departure from taking polar positions and debate on false dichotomies. It also requires a willingness to consider the ‘excluded middle’ … the creative space between the horns that provides opportunity to overcome compromise and gain more than win-win.

Success usually means finding innovation out of the creative tension (i.e. energy) that emanates from differences, particularly different mindsets. It requires what Sumantra Ghoshal referred to as creative dialogue that occurs in a healthy climate for conversation.

Roger Stewart

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