The Leader's Dilemma

The world is random. You can predict trends and even certain events. But it's harder to predict when exactly something will happen. And what the exact consequences will be. For example, everybody knows that there's going to be a major earthquake in California. Or that the earth is heating up almost catastrophically. Or that the baby-boomer generation is getting older and a major health-care crisis looms large. But it's harder to predict the exact consequences (will the Sahara become greener as a result of redistribution of rain patterns?)

Leaders in government and corporations make bets based on their perspective or point of view. If the bet pans out and these leaders turn out to be right, they are lauded as heroes. If the bet fails, they are demonized and treated poorly. For example, President George Bush made a bet that there were weapons of mass destruction in Iraq. If these weapons had been found, and if a major plot to attack the United States had been averted (preferably in the nick of time and with a lot of drama!), he would have exited office as a hero to most people in the world. Unfortunately, that did not happen.

Now let's look at how people generally think. If a leader displays certainty and confidence, people follow him / her. There's sufficient research in evolutionary biology to support the claim that the chest-thumping, testosterone-pumping, over-communicating, tall, handsome and aggressive individual is the one who will be treated as a leader. So for a leader to successfully gain the trust of his followers needs to be mildy deluded. He needs to believe with certainty that his point of view is correct. That he is lucky. That he will prevail in the long run. And most arm-chair reviews of successful leaders is plagued by the problem of survivor-bias. We tend to look at only those leaders who are visible to us as a result of the fact that they survived. What caused their survival (most likely randomness) is over-looked and too much importance is given to the perceived causes behind their survival and success (such as how hard they can work, or how charismatic they are.)

There is also another idea known as preferential attachment. This basically means that the more successful you become the more successful you tend to become. For example, if you are a Warren Buffet, you will see more deals being offered to you at a sweeter-than-market price just because of your position.

So the enlighted leader has a dilemma (or two or three). He needs to:
1. Pick a point of view with full knowledge that the point of view may be wrong.
2. Work his tail off knowing that all of his efforts may come to nought.
3. Motivate his team members to also work their tails off (or risk their lives) knowing that he may be leading them down the path to disaster.
4. He needs to project confidence and certainty with the knowledge that he is faking it!

So how do you reconcile this dilemma? What should a good leader do to lead effectively?

Well, if you look at great leaders they tend to instinctively grasp the uncertain nature of the world. For example, many of the leaders featured in the book Good to Great by Jim Collins attribute their success to luck.

When great leaders encounter randomness, they do not get paralyzed by fear. They don't get stuck in analysis-paralysis mode. They pick a direction and begin moving in that direction knowing that the next step will be revealed to them at the appropriate time. They also realize that, the next step may be a U-Turn. So they have the humility to turn back if the need arises.

Many of the sages and saints tend to surrender to the randomness. They become like dry leaves on the jungle floor, going where the wind takes them. Great leaders do not subscribe to this point of view. They focus on a target and attempt to influence the wind to take them toward their goal (much like expert sailors.)

So if you are a leader the advice is simple. Analyze as much as you can, then pick a direction and keep moving. If you find out you are wrong, don't hesitate to admit your mistake and change directions. It's possible that your admission of failure will get you heavily penalized. But that is better than compounding your mistakes by pursuing actions direction that has been proven to be wrong. Ignore sunk costs and cut your losses.