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Are You in Denial?

denial1They say that denial is a river in Egypt. Maybe so, but I contend that denial is also running rampant in the conference rooms and corridors of most of today’s companies.

I’m not talking about the stuff you need to see a psychiatrist for. I’m referring to something far more subtle and insidious, a kind of denial that strikes at the very heart of how business leaders and managers go about managing their people and their organizations.

Everyone talks about change these days. But if you look around, it’s easy to see that many companies (and the executives who lead them) have yet to acknowledge just how profoundly our business world is changing. Consequently, they have yet to come to terms with how relentless change is affecting the way they need to lead and manage their organizations. And this is where so many companies get into trouble.

When market conditions change dramatically, as they have in the past year or two, business leaders need to adapt quickly. They also need to help their people adapt.
Otherwise their companies get stuck in “same-old, same-old” mode, and soon lose touch with their customers and their markets. Granted, many of the recent business failures can be attributed to the economy imploding at such a rapid clip. But the fact remains that too many business leaders never even saw it coming even though the signs were everywhere.

What does denial in conference rooms look like? Symptoms include:

  • Blaming all your woes on the economy.
  • Not looking beyond the narrow boundaries of your industry to keep abreast of new trends and developments.
  • Believing that “everyone else may be in a global economy, but we’re still a regional business.”
  • Expecting that your next big competitive threat will come from within your industry.
  • Automatically discounting new technologies, such as social media, because you don’t think they apply to your business.
  • Taking for granted that you still know what customers want and need when you haven’t checked with them in a year or more.
  • Assuming your employees are glad to just have a job so they are working hard on the right things.

Most of all, denial involves thinking that most of what you know about your business is still true and believing that what made you successful so far will continue to make you successful in the near future.

I hate to kick someone when they’re down, but General Motors represents the classic example of corporate denial. In the face of overwhelming evidence that their customers, markets and environment were permanently changing, they continued to crank out the same old tired products, using a business model nearly 100 years old. Any changes and innovations they did make were done slowly and grudgingly, and always with an eye toward recapturing past glories rather than blazing a new trail for the future. The wonder is not that they went into bankruptcy but that it took them so long to get there.

Here’s the real problem with corporate denial — it is both an attitude and a behavior. Which means that solving the problem requires more than just pulling your head out of the sand and taking an occasional look at what is going on in the world around you. In order to make lasting changes in behavior, one must first change the attitudes and beliefs that drive behavior. And from what I have seen, many business leaders are either unwilling or unable to commit the time and effort into adjusting their attitudes and beliefs. Or maybe they just don’t know how.

The cure for corporate denial is actually fairly simple (notice I said simple, not easy). Cutting through denial requires challenging your attitudes, beliefs, and assumptions on a regular basis. Getting together once a year with your management team for a cursory competitive analysis will no longer cut it. Challenging everything you think you know about your business must become a way of life.

Overcoming denial also requires a focus not just on strategic planning, but on strategic agility. Today’s companies need to become quick, agile, and able to respond immediately to changing market conditions and customer expectations. This may require a profound shift in how you think and how you go about managing your organization, which is not easy. But — and trust me on this one — the alternative is much worse.

So I have two questions for you. Are you in denial? And if so, what do you intend to do about it?

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