Japan, Libya, and Why Leaders Should be Paranoid
There is no silver lining in the gray cloud surrounding the Japanese nuclear plant, or, for that matter, in the bomb trails above Libya. If you're in Northern California, reports of elevated radiation levels in Sacramento is unsettling, to say the least, especially if you're part of the Silicon Valley entrepreneurial revival and just want to move ahead with your social network business.
It's hard enough to get good ideas off the ground without having to worry about the sky. Last year's spring surprise was volcanic ash hovering over Europe. This year brings disruptions from earthquakes in Japan and rebellions in the Middle East.
Do you think the world is out to get you? Go ahead, be a little paranoid. That's my management tip for today.
Andy Grove, Intel's legendary former CEO, famously touted the virtues of paranoia as a leadership asset — running scared about imagined enemies or competitors. He didn't mean the kind of paranoia that provokes a dictator like Libya's Gaddafi into censoring communications, suppressing dissent, and killing protestors. He meant the kind of concern about threats that propels a search for excellence — how to keep getting better and better so that competitors can't touch you.
A few Middle Eastern rulers are trying this tack, changing ministers and investing in things that people want before internal dissent gets out of hand — in essence, upgrading their product before losing market position. It can be productive to think that "they" are out to get you, and there are enemies (or competitors) lurking in every corner, if it motivates higher performance — excellence so strong that it compels loyalty and commitment and reduces complaints. That has been Singapore's secret of success. Feeling vulnerable as a small city-state, Singapore's leaders set high standards, benchmark against the best in the world, seek innovation, and invest in ideas of the future
Positive paranoia is also the secret of some great Japanese companies. Komatsu, a globally prominent construction equipment manufacturer, drove excellence by fearing Caterpillar, the U.S. giant. Beating Caterpillar was the goal and "encircle Cat" the theme. A Komatsu executive with whom I had dinner in Tokyo recently said that both companies improved because of the rivalry, with each looking over its shoulder at the other to ensure being ahead with the highest standards.
Unfortunately for the Japanese people, and potentially the Pacific Rim, Tokyo Electric Power failed the paranoia test, showing far too little paranoia about nuclear accident risks in an earthquake-prone country. The company failed to benchmark world excellence in its nuclear plants, according to news reports, and invest in the best measures. Officials chose lower-cost expedience over excellence.
Why do too many so-called leaders think they can get by with assuming the status quo and doing the minimum, rather than striving for excellence even when they think they can get away without it? Putting off actions until disaster strikes makes it too late. This is how a losing streak begins in any system. A slow accretion of neglected repairs, postponed upgrades, or reductions in training and education weaken the organization, or nation until decline becomes inevitable. The opposite is also true. A gradual accumulation of innovations, however small, prepares any system to respond rapidly to crises or demands for change. Indeed, fearing that "they're out to shut us down" and taking actions to prevent that is the best guarantee of continuing to flourish. Winning streaks are characterized by confidence but also by running scared that great performance cannot be repeated unless there is redoubled effort.
More paranoia and less complacency could be useful in any sector. In health care, for example, the thought that "they're out to sue us" compels physicians to practice defensive medicine, ordering sometimes unnecessary tests — but not unnecessary if the tests detect problems. Perhaps that paranoid thought with a performance-enhancement twist could compel more hospital leaders to insist on checklists for surgery and other processes, to avoid preventable harm and operate with excellence.
The positive paranoia mantra: Imagine the worst, and create the best. That's a good lesson for leaders under any circumstances.