One way of looking at the life cycle of businesses is that we’re all doomed in the end. Yes we champion those firms that have spectacularly reimagined themselves to escape the slow death-grip of obsolescence. But these examples have always been the exceptions rather than the rule.
Look at the FTSE 100 of leading listed British companies from 30 odd years ago. ICI, GEC, English China Clays, the Rank Organisation – it’s full of ghosts.
What separates the survivors from the ones that faded, crashed or burned? We hear words like agility a lot. Reinvention. Creativity. Entrepreneurialism. Purpose. But perhaps what’s needed above all is the old-fashioned virtue of courage.
Entrepreneurialism cannot thrive without embracing the risk of failure as the price of success. Genuine creativity is impossible if you think the same way you’ve always thought, or the same way everyone else still thinks.
Agility requires cutting the cord of certainty and accepting that you don’t know what your strategy will be in two years’ time, let alone five. And if you decide to reinvent yourself, particularly around a purpose, that often involves surrendering business in the short term in the hope that it will pay off in the long term.
Courage is the thread that binds them. Put simply, momentous things tend to be scary, and that requires you to act in the face of fear.
To explore the topic further, MT spoke with Jonah Sachs, the co-founder and CEO of Free Range Studios. In his day job, Sachs advises companies on telling their story. In the course of this work, he began to notice a pattern: that truly successful individuals and businesses all seemed to have defied conventional wisdom at some point or another.
This idea developed into a book, Unsafe Thinking: How To Be Nimble And Bold When You Need It The Most.
‘It’s not really true that the greatest innovators don’t feel fear, they just deal with it differently than most of us,’ Sachs explains. ‘In a way it all comes down to courage... if we never do anything that makes us nervous, there’s a pretty good chance that we’re stuck in the safety zone.’
This, he explains, is where you keep doing what you’ve always done, even as the world changes around you. Of course, there are often good reasons to be afraid of breaking the mould.
Sachs points to the example of Helena Foulkes, a then vice-president at US pharmacy giant CVS, who argued that it was hypocritical for a company that defined its purpose as promoting the health and wellbeing of its employees to continue to sell tobacco. As the company shifted $2bn worth of tobacco a year, however, this raised a few objections.
‘Everyone assumed $2bn was too much to take off the books. Nobody would give up $2bn to do the right thing, but she argued that you could make more money by not selling tobacco, that by building the brand value you’d actually increase the value of the stock,’ says Sachs.
‘She risked embarrassing people who were sticking to the status quo above her, but she brokered it internally, she told that story and she got it done. They made her head of retail just before she executed, so she lost that money off her P&L, but they made $11bn of new revenue as a result*.’
Challenging received wisdom is clearly not easy, especially when that involves standing up to your superiors, or looking stupid in front of your peers. But the greatest benefits of courage are, Sachs argues, to be found in challenging yourself.
The ‘unsafe thinking’ he talks about in his book goes beyond ‘stepping outside your comfort zone’ or simply taking risks, important though these undeniably are, because it requires you to change how you think as well as how you act.
‘People look at the title of my book and say "you mean like Donald Trump? He broke every rule of politics and broke through." But it really is more about being self-reflective and confronting yourself rather than confronting everyone else,’ says Sachs.
There are other virtues
It's hard to deny the power of courage, but it's equally clear that on its own, it's not enough. Indeed, courage without wisdom could be called foolhardiness.
Sachs gives another example that’s telling in this regard. Michael Faye and Paul Niehaus were Harvard grad students who began to question the prevailing theory of foreign poverty aid: give a man a fish and you’ll feed him for a day, teach a man to fish and you’ll feed him for life.
‘When they tried to raise money for these ideas, they were told they were crazy – you can’t give people $1,000 no questions asked... so they went out and raised $50,000 of friends and family money, gave these grants away and published the results in an academic journal.’
Rather than risk their reputation with red-faced arguments in favour of what their peers saw as craziness, they patiently – and wisely – acquired the data and let it speak for itself. Now Faye and Nieuhaus run a charity based on the direct giving principle, Give Directly.
Similarly, while you undoubtedly need the courage to question your own deeply held views, you’re unlikely to do so without humility.
For example, if you think of yourself as an expert on a particular subject, it becomes harder to admit that you don’t know or that you were wrong before, because your ego gets in the way. And because you can’t be wrong, you can only see what you want to see.
From that point, failure is only an imaginary weapon of mass destruction away.
In this one key respect, humility and not courage is the mother of the business virtues, because without humility, there can be no growth. It’s the foundation of deliberate self-improvement, which itself is the way to become wiser and more courageous.
For example, while allowing your intuition to inform your decision making, you’ll recognise that it’s far from infallible – even in your case – and seek independent data to test it.
Or you’ll acknowledge that the anxiety of high risk situations will push even your hardy brain into poor decision making, and therefore take a step back to prevent what Daniel Kahneman called fast thinking from taking over.
Or you’ll take yourself out of a fixed mindset by seeking knowledge and skills in areas where you're just a beginner, thereby also keeping your ego in check.
Virtues vs skills
All this talk of virtues may sound a little abstract, in a 15th Century Europe kind of way. Most will still see success as a function of skills and strategy, and it’s true that these can’t be ignored. But when it comes down to it, we’re people, not portfolios of talents.
Working on ourselves as people – and on whether we react to challenging situations with courage, humility or wisdom – really can’t be a bad thing. Even if it is a little scary.
*Fortune reported in 2015 that CVS’s pharmacy benefits manager, which processed prescriptions for health insurers and large employers, had achieved $11bn of additional bookings that it attributed to the tobacco decision.
Image credit: Baranov E/Shutterstock