There is a problem here however with these two scenarios. This is how the situation is perceived by its members. If they see things very differently depending on how it impacts them personally which can lead to real problems.

Suppose the entity saw a great opportunity if they bet on a new way forward though risky, but if they lost that bet then the whole organization may fail. If the entity was doing well, making a risky bet would be unwise. If the entity was doing poorly however, a good leader would explain the reality of their situation, try to reduce the risk, and then make the wager. But if the group believes that the entity was at risk when they weren’t this could lead to disaster.

Here is an example. Company A has two lines of business, Line I has most of the employees but it has become obsolete. Line II is its future, but will require all available funds and lead to the demise of Line I. If your livelihood in tied to Line I and although you could be retrained for Line II, you would have to start at the bottom and is not what you want. A good leader determines what’s in the best interests of the entity, if it were in trouble or not and make the proper choice in that context.

This can be applied to elected positions as well. Let’s say people are doing poorly as their “Line I” plant left town and is now made offshore at a much lower cost. A good leader does not give false hope of bringing Line I jobs back, but retrains its people for “Line II” jobs, provides subsidies to those left behind, or finds some other creative solution.

Some three decades ago the mantra was to go paperless. This was to be the office of the future. I remember working at a high tech company then, when the order went out to go paperless only to find out that the information that everyone was supposed to be on top of was not being actively monitored. With computer files at ones fingertips it seemed like a waste of time, paper, and money to print things out when they could be brought up on one’s screen at any time in a much more efficient manner. Actually the transition from paper to electronic document management has not solved the problem to quickly find the documents needed.

Fast forward to today. Many people are not reviewing what is not printed out for their inspection in hard copy. To get everyone’s attention they need to be on the preverbal same page. I recently experienced this at a meeting with one of my clients. We were going over delinquent accounts receivable payments, but not everyone was seeing the problem in the same way. Some people were focusing on a problem client they were responsible for, another person was working with the bank to increase the line of credit, did not know the dynamic growth of A/R and another was focused on something else entirely. The problem stemmed from the fact that there was no aged accounts receivable report printed out for their inspection at our weekly meeting so everyone could see the same A/R document with notes. They could discuss what was happening: who was in each of the 10-30, 31-60, 61-90 and 90+ DSO categories. Nor was there any prior report to compare to and see whose A/R was rising, who was slipping from one category to the next and what action was being taken from the comments section. We went from everyone operating independently to working efficiently together at each meeting, discussing red flags, monitoring their progress, prioritizing their actions, bringing down their DSO and living within their LOC.

To see all articles in this series please go to http://optimal-mgt.com/blog.