Book Extract: Think like an owner

Leaders should not look for excuses to explain why they can't act like an owner. They should embrace the challenge and encourage their teams to do the same

WHAT YOU REALLY NEED TO LEAD: THE POWER OF THINKING AND ACTING LIKE AN OWNER
Author: Robert Steven Kaplan
Publisher: Harvard Business Publishing
ISBN: 9781633690554
Price: Rs 895

It sounds simple: "Think like an owner." In fact, it is hard to do. It requires you to put yourself in the shoes of the decision maker. You may realize that you prefer not to be in those shoes. There's too much pressure; there are too many considerations; there are too many constituencies. With all the complexity, constant change, and myriad of issues in the modern world, it may be easier to rationalize more narrow thinking: Dammit, it's not my job!

Yes, it is your job, if you want to be a leader. If it frustrates you, or makes you agonize, or even creates a heightened level of stress for you, then you need to get used to experiencing those feelings. The more you practice this, the better you'll get at doing it.

I would urge you to begin to believe and internalise the view that thinking like an owner is central to your effectiveness in your job. It means getting to conviction. "Conviction" is meant to describe a threshold level beyond which you feel a high level of confidence about what you truly believe should be done.

Many leaders spend their lives striving to get to conviction about what they would do in a particular situation. The reality is that, much of the time, they may not have a strong point of view. They keep gathering information, agonising, and assessing until they reach a threshold level of confidence.

On the other hand, some leaders need to be wary of getting to conviction too quickly, or having such a strong initial point of view that they fail to take into account key considerations that are crucial to making a good decision. Each of us has blind spots, may be prone to ideological points of view, or may be unaware of our own subtle biases. As a result, we each need to also take sufficient time to gather information, consider alternative arguments, agonize, and make sure we are arriving at a balanced judgment.

The point is that the process of searching for conviction can be very challenging. The contextual factors and considerations are changing all the time; competitors take significant actions; products get commoditized, and so on. In addition, different people looking at the same situation may come to different points of view about what should be done. To cope with all these factors, leaders need to perform analysis, seek advice and input from others, debate alternatives, and generally ruminate. Much of the time, this process may feel like a grind.

While you're going through this grind, you don't need to know exactly what to do; you don't always need to have the answers. However, as a leader, you do need to be constantly striving to get to a level of conviction on key issues. How do you do this? You and your team need to focus your efforts on taking the necessary steps that will help get you to a sound judgment.

With practice, you will learn to understand yourself better and increasingly learn what conviction feels life. As you search for it, you will get better at gearing your efforts to work in a way that will help you get to that feeling. Leaders don't look for excuses for why they can't act like an owner. Instead, they embrace the challenge of ownership and encourage their teams to do the same. It helps if, as subordinates, they were regularly encouraged and empowered by their bosses to put themselves in the shoes of decision makers. "Superb professionals define their jobs broadly," one of my former bosses regularly said to me. "They are always thinking several levels up."

This may explain why many business schools, including Harvard, teach using the case method. This approach certainly can be used to teach analytical techniques, but, for me, it is primarily an exercise in learning to get to conviction. After you've studied all the facts of the case on your own, and after you've debated those facts in study groups before class and again in class, what do you believe? What would you do if you were in the shoes of the protagonist?

The case method attempts to simulate what leaders go through every day. Decision makers are confronted with a blizzard of facts: usually incomplete, often contradictory, and certainly confusing. With help from colleagues, they have to sort things out. Through the case method, students learn to put themselves in the shoes of the decision maker, imagine what that might feel like, and then work to figure out what they believe.

This mind-set is invaluable in the workplace. It forces you to use your broad range of skills. It guides you as to what additional analysis and work needs to be done to figure out a particular business challenge.

Reprinted by permission of Harvard Business Review Press. Excerpted from What You Really Need to Lead: The Power of Thinking and Acting Like an Owner. Copyright 2015 Robert Steven Kaplan. All rights reserved.