Given the volatile and uncertain environment, many leaders struggle to step back and gain perspective. They tend to lose focus on the big picture. Near sightedness or leadership myopia sets in. The pressure from investors for short term results, our personal need for instant gratification, our greater comfort with more task-oriented things or incentives that reward near term performance risk making short-sightedness the norm.
The reality is that many of us suffer from occasional bouts of myopia. However, an overly focus on the short term to the detriment of the long term, can have severe consequences for organisations.
So, this week, my message focuses on leadership myopia – the different forms it takes, and how we can combat it.
To start with, why is this near-sightedness common among business leaders? The early years of a management career are likely to be project and process oriented. Hitting short-term targets wins you accolades, bonuses and promotions. Over time, this kind of success can create tunnel vision – your entire attention is taken up by completing the next task, meeting the next deadline, scoring the next number. As you climb the leadership ladder, however, your view must extend beyond the immediate and look at the big picture – defining a profitable, sustainable long term strategy for the organisation.
Another type of myopia is getting trapped in one “ism”, one doctrine, one way of thinking – be it a management philosophy or a financial model. While it’s great to have convictions and beliefs, it’s never a good idea to get stuck in a mental rut and close out all other perspectives; this can lead businesses into disaster in a rapidly changing landscape. Leaders who pride themselves on always being right hear what they want to hear and surround themselves with yes-people, leading to a very limited view. When things go wrong, they dig in their heels and close ranks, instead of opening up to get objective inputs and fresh opinions.
Then there’s the narrowness of vision created by power and authority – thinking that “people should just do what I want because I’m the one in charge”. Myopic leaders don’t bother to secure consensus or explain the reasoning behind their decisions. Instead of connecting with team members at a human level and inspiring them to give their best, they simply give orders and assign tasks. No wonder people who work with such leaders display low levels of engagement and find it difficult to align with the organisation’s goals.
Firms that appeared to make short-term expense adjustments to inflate earnings when they issued equity ended up losing profits in the long run, causing their market value to drop by more than 20% four years out.
Clearly, myopic management takes a serious toll on the organisation’s value and success. As leaders, what can we do to curb myopia and develop a big-picture, longer-term attitude? Here are five recommendations:
1. Test yourself
The first question is – do you have a myopia problem? Your instinctive answer will be “no”, but remember that those with tunnel vision are often the last to see it. In the LinkedIn article, Are you a short-sighted leader?, Michael Conforme recommends the following 10 questions for leaders to gauge possible short-sightedness:
- Do you have a clear vision for the next 3-5 years?
- Has the strategic plan been shared across the organization?
- Do you monitor the market for long-range threats and opportunities?
- Does your business planning process look beyond a 12-month horizon?
- Is there a long-term C-level succession plan in place?
- Has your organization set quantitative objectives for the next 5 years?
- Do you know what ‘skills gaps’ need to be addressed within the organization?
- Is your finger on the pulse of competitors and their future plans?
- Do you spend at least one day a week thinking about the big picture?
- Is this sort of self-diagnosis and self-critique something you regularly perform?
I’m sure most of us have a mixed bag of answers to the above, which tells us that we have at least some degree of myopia in our leadership.
2. Create a conversation
Leadership must make it a point to foster dialogue on relevant issues. Without a culture of employee engagement and frank discussion around major steps or changes, we cannot expect to create the kind of alignment and motivation needed for true, lasting growth. In Overcoming Leadership Myopia, Howard Behar and Michael Lee Stallard elaborate:
Leaders from the top down need to embrace the importance of conversation and be patient to develop a consensus on issues that are important to employees at large. Conversation and consensus are the only way to develop the strategic alignment and employee engagement necessary to achieve sustainable superior performance. When issues are pushed through to get “buy-in” rather than communicated with an open mind to find the very best solutions, those individuals whose ideas have not truly been considered start to feel like outsiders and many become indifferent or work to sabotage the organization’s efforts.
3. Broaden your perspective
Resist the temptation of getting locked into one framework by actively making an effort to grow and get out of your comfort zone. You can make this happen in a number of ways, from reading and networking to more formalised structures like coaching programmes and creating a personal board of directors to keep you grounded and open-minded. You could also find a mentor who knows where you’re coming from and can give you a reality check when required.
4. Be humble
In this context, humility refers to the willingness to admit you might be wrong and to consider opinions that diverge from your own. It also includes the ability to not just focus on tasks and targets, but to connect with team members at a human level. Provide reasons for your decisions and make the effort to take people along with you – that’s when they’ll give you their respect, their loyalty and also their best work. In short, don’t let your ego rule the day.
5. Broaden evaluation norms
From a company perspective, we must think about how we can curb myopia driven by a lopsided focus on short-term financial performance. Many incentive schemes reward the wrong behaviour. Management consultant and Canada’s ambassador to China, Dominic Barton had advocated in a HBR article several years back that companies should consider three changes:
- Link compensation to the fundamental drivers of long-term value, such as innovation and efficiency, not just to share price.
- Extend the time frame for executive evaluations—for example, using rolling three-year performance evaluations, or requiring five-year plans and tracking performance relative to plan. This would, of course, require an effective board that is engaged in strategy formation.
- Create real downside risk for executives, perhaps by requiring them to put some skin in the game.