Former ge chairman and CEO Jack Welch once said that the most important rule in business is the “reality principle.” This is the ability to see the world as it really is, rather than the way that you wish it would be. It is the ability to be perfectly honest with yourself in any situation, no matter how much ego you have invested in being right. When Jack Welch would come into a problem-solving meeting, the first question he would ask was, “What’s the reality?”
This should be your question as well. What’s the reality? Go through every area of your business and personal life and ask that question. “Is there anything that I am doing that I would not get into again today if I had to do it over, knowing what I now know?”
Sooner or later, the reality will catch up with you. It is not something that you can avoid. Times have changed and the situation that you are in is no longer tenable. It is over. Finished. You will have to move on. The only question is, How long will you wait and how high a price will you pay before you admit the reality?
Happily enough, when you finally admit that, knowing what you now know, you wouldn’t get into this situation again, and decide to end it, you will have the two reactions that all people experience. First, you will feel a tremendous sense of relief and even exhilaration. You will be happy, because a burden of stress and frustration has been taken off your shoulders and out of your mind. Second, you will ask yourself, “Why didn’t I do this a long time ago?”
No Growth Situation
One of my clients started and built a reasonably successful company. But at a certain point, business leveled off in sales and was not able to grow any further. This lack of growth generated a good deal of frustration and unhappiness for my friend, and for many other people in the company. No matter what they did, they couldn’t seem to keep up with or get ahead of their competition.
Of course, they blamed their problems on a variety of factors, such as competition, the current economy, changes in technology, ineffective advertising, product and service problems and defects, and so on.
The transformation in their business came when the president finally realized that it was his best friend, who had been with the company since the beginning, who was the real problem and roadblock to any future success. He had made a valuable contribution when the company was small and growing but was totally overwhelmed by the complexities of running a larger organization.
When my client replaced his friend (which was a stressful and expensive management decision), the logjam in the company was broken. The company brought in new people who were much more competent and capable and who were experienced at sales, marketing, financing, and positioning against competition. Within twelve months, the company’s sales and profits had doubled, and they continue to grow to this day.
Courage Is the Key
It takes tremendous courage for you to stand back and look honestly and objectively at your life and work. You often have to admit that you made a mistake, or that a decision you made earlier has turned out to be the wrong decision, based on the situation as it is today.
Mark McCormack, a billionaire executive who built the biggest sports marketing company in the world, wrote in his book, What They Don’t Teach You at Harvard Business School, that there were three statements that an effective executive had to learn to use early and often if he wanted to succeed in a fast-changing, turbulent marketplace.
First, you have to learn to say the words, “I was wrong.” According to the American Management Association, 70 percent of management decisions will turn out to be wrong in the fullness of time. They will be a little bit wrong, a lot wrong, or complete disasters. As soon as you realize that you have made a mistake of any kind, be prepared to admit that you were wrong and minimize the damage as much as possible.
The second statement you must learn to use early and often is, “I made a mistake.”
It’s been said that “every large problem was once a small problem and could have been solved easily at that time.” It is amazing how many mistakes are allowed to become larger and larger, like a prairie fire, when they could have been solved quickly at an earlier stage by someone having the ego strength to simply admit, “I made a mistake.”
Develop Mental Flexibility
The third statement you must learn to say is, “I changed my mind.”
Many people, as a result of childhood experiences, grew up with the idea that it is a sign of weakness to change their minds or to reverse a decision that they have made. But this is not the case. In a time of rapid change, it is a mark of courage, character, and competence to realize that the situation has changed and that you must change your thinking as well if you are going to survive and thrive.
In my company, I continually remind people that it is all right to make a mistake. One new piece of information from the marketplace can completely invalidate the very best thinking that you have done up to this point. You could develop a complete strategic plan on Friday and get a new piece of information on Monday that forces you to throw it away and start over.
ACTION EXERCISES
1. Ask yourself, “Am I seeing the situation as it really is, or as I hope it would be?” Be completely honest with yourself. Sooner or later, you will have to face the reality.
2. Become comfortable saying the magic words, “I was wrong. I made a mistake. I changed my mind.”