Our goal was simple: Make Canadians proud. And in the end, the Vancouver Olympics accomplished just that – with our athletes “owning the podium” more times than in any other previous Winter Games, a spectacular array of facilities and special events, and a renewed sense of patriotism that will endure well beyond 14 days of sports.
However, the planning and execution behind that goal and its achievement were anything but simple. Consider the challenges of launching a start-up company with an operating budget of $1.6 billion, hiring more than 1500 employees and building a village in the midst of an economic downturn. Think about the logistics of recruiting 10,000 volunteers and then training and housing them. Picture the behind-the-scenes work of staging three Super Bowls everyday for 15 days. Then imagine doing all this with three billion people around the world watching your every move.
As a member of the Vancouver Organizing Committee (VANOC), I participated in one of the most complex business undertakings in my career. Nevertheless, as Dean of Ivey School of Business, I have witnessed how this same complexity has become the rule, rather than exception, that characterizes the leadership challenge facing most businesses today.
Organizations, industries and economies worldwide are increasingly inter-dependent, with decisions and actions in one area reverberating across companies and borders. Who could have imagined a decade ago, that the toxic lending practices in one country would infect financial institutions and markets worldwide? Who could have anticipated the great potential of four generations and multiple ethnic cultures working together – each bringing such diverse attitudes, expectations and new opportunities? Who could have predicted the rise of social networking across the globe, where virtually everyone today can voice an opinion and broadcast it to the world?
We live and work in an atmosphere of complexity that will soon rival my experience with the Vancouver Olympics. Business today is like the game of chess, where moving a pawn often displaces another playing piece, which inevitably has additional consequences, if not right away, then certainly later on in the game. That is why I believe that people at all levels of an organization need to understand the impact of their actions, and not only in the here and now. They must also understand how what they do affects the big picture. They must appreciate the influence of their actions across and outside the organization.
How can business leaders show their managers and employees to be mindful not only of the immediate effects of their decisions and actions, but equally alert to how what they do can ripple through the organization and the eco-system in which it operates? With so many moving parts, companies must effectively manage complexity, minimizing its risks and leveraging its opportunities.
This is a huge issue for most companies, as articulated by many of the business leaders participating in the on-going study Ivey is now conducting about the events that led to the recent worldwide financial crisis. In a series of meetings in New York, Hong Kong, London, U.K., Toronto, Calgary and Montreal, members of Ivey faculty and hundreds of business executives discussed the causes and effects of the crisis, its implications for leadership and the challenges it presents for educators. Often, these discussions turned to complexity and its inherent risks.
Today, risk management is usually the sole responsibility of a single department. Just as frequently, the exploration of the new opportunities so enriched by complexity is confined within marketing or product development groups. Many of the executives we spoke to agree that this is not good enough anymore. Each employee should understand risk and ways to mitigate it. Each employee should appreciate their capacity to generate new ideas. Moreover, each employee should know how his or her piece fits into the puzzle.
That’s why complexity is at the core of Ivey’s case learning approach. In working through a case study, students assimilate and discuss a huge amount of information about an organization and its issues, often with conflicting details and several potential outcomes. Then students must make a decision and defend that decision – even if the information behind that decision seems insufficient or ambiguous.
For example, one of Ivey’s newest cases is about Westjet and its fleet of aircraft. Currently, Westjet’s fleet is comprised entirely of 737s, which presents many advantages in terms of purchasing and maintenance efficiencies. However, 737s are not the optimal aircraft for every route. So should Westjet expand its fleet beyond 737s? What are the operational issues and system implications of such a decision? How will it affect the culture of Westjet, the company’s brand and its positioning in the market? There are no black-and-white answers. To date, the company has yet to make a decision.
The complexity of today’s business environment is not for the faint of heart. Even the best leader cannot avoid all the problems or capture all of the best opportunities. Nevertheless, a cross-enterprise leader can mitigate most risks, while envisioning the strategies needed to build and sustain profitability and growth.
Cross-enterprise leaders understand how events, decisions and actions affect the “enterprise,” or the rich set of interdependencies both within the organization and between the organization and the environment in which it operates. They see the synergies and can anticipate the conflicts. They know how to analyze, synthesize and decide, while dealing with uncertainty and its embedded risks and new possibilities.
In short, Cross-Enterprise Leadership is about understanding complexity, managing it and using it to your organization’s advantage. As many of the executives I have spoken to would agree, the business world needs that calibre of leadership now.