Strategy, Risk, and the
The City of Chicago, along with the State of Illinois and the Federal Aviation Administration in the United States, are developing plans to radically redesign and expand the runway complex at O'Hare Airport. The cost estimates are staggering -- $6 billion by the city's own count - and involve the potential demolition of entire neighborhoods and municipalities. For this effort and cost, O'Hare will gain new runways configured in such a way as to allow smoother operations in extremely bad winter weather. Airlines would stand to save $140 million each year in weather-related costs, and passengers would gain easier travels. Or at least that's the theoretical upside.
This case of proposed public works has an aspect that makes for an interesting leadership dilemma once one factors it into the story: American Airlines and United Airlines, the dominant carriers at O'Hare, with more than 70% of passenger traffic, are both in serious financial straits. American is losing $5 million per day and United is already in a highly publicized bankruptcy with liquidation as a possible outcome.
City officials are quick to point out the strategic value of moving ahead at O'Hare and not letting the momentary status of two airlines affect their plans. This introduces the leadership dilemma: push for expansion now and look visionary in a few years when airlines are in better financial shape and Chicago has retained its pre-eminence as an aviation hub, or push now and look stupid or worse when American and/or United folds and O'Hare becomes a ghost town when other carriers refuse to place a hub there because of their own money woes.
But, aren't all brilliant moves of strategy vulnerable on the same grounds? Isn't there always a risk in being visionary? The hospitals that thirty years ago fled their historic inner city addresses for the wide-open suburban spaces are now literally adjacent to their core clientele. What if the area had grown to the south and not west? How visionary would the community's health care leaders look?
The fact is that big leaps into a void seem like brilliant moves of strategy when the outcome pleases, but also seem like acts of monumental stupidity when things go sour. The leadership issue is about how to know when to risk, even when we can never know the outcome ahead of time. The followership issue is about the same thing.
Yet, despite the uncertainty, someone has to take a risk or little would ever get done. This brings us up against a difficult truism: life at work is inherently risky. There are potential downsides to all choices, with perhaps the steepest downside accruing when making no choice at all. Living comfortably with this truth is a prerequisite for translating strategic thinking into action.
"There is a tide in the affairs of men, which taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat. And we must take the current when it serves, or lose our ventures." - William Shakespeare - The Tragedy of Julius Caesar
"This the world of white water where we have to change to survive; where we have to develop to thrive; and, paradoxically, where the very act of change increases the risk that we won't survive." - Randall White, Phillip Hodgson and Stuart Crainer - The Future of Leadership: A White Water Revolution
Taking the tide at the height of a flood flies in the face of prudent caution. Just when every survival instinct might call for grabbing fast to something solid, Shakespeare would have us sail onto a moving current.
White, Hodgson, and Crainer capture the essence of pursuing a vision. What we have to understand is that survival is always uncertain; that no path (or current) offers the degree of security we might desire, but that movement - change - offers the best odds. Not "taking the current" is itself imprudent. And forever must it be so, absent fully functional crystal balls for foretelling future events.
So, which current shall we take? What visions are worth it? Which ones are simply quixotic? Again quoting from Shakespeare, "Ay, there's the rub." Simplistic as it sounds, this is where there is no substitute for an internal philosophical and moral compass in the form of knowing what really matters to you.
From a short-term perspective, a multi-billion dollar rebuilding of O'Hare Airport is foolhardy amid such chaotic circumstances. As a long-term strategic move, it makes tremendous sense to take the plunge. Which course to take depends on what matters most, for neither is without cost and risk. The touchstone of values opens the route away from paralysis about strategy.
Implications for Other Organizations
It would be easy but shortsighted to say that the above is about aviation and politics and has little in common with educational institutions, health care enterprises, or other industries. Every organization of any type will eventually face dilemmas over program and capital. Schools that avoid revising their curricula doom themselves to someday playing catch-up to more proactive ones. More than a few boards find themselves wrestling with problems created by an earlier board's reluctance to make a capital purchase. The issues closely parallel those at O'Hare.
This is not to blindly advocate relentless expansion of facilities or programmatic change for its own sake. Nor would we presume to know what resolution of Chicago's dilemma would ultimately serve the common good. Nonetheless, we do suggest to organizations facing similar, but hopefully less public, choices that they consider a set of heuristics for decision making based on the following questions:
These are not easy or superficial questions in the life of an organization. Nonetheless, our experience is that a thorough and honest discussion of the above questions can provide a board or administrative team with the basis for rational decision-making in the face of substantial uncertainty and risk.
Marc T. Frankel, Ph.D., is a Senior Consultant with Triangle Associates in St. Louis, Missouri. Along with others in the firm, Marc consults on leadership development, strategic planning, and change management to organizations in higher education, independent education, and the health professions. He can be reached via e-mail at firstname.lastname@example.org, or through the firm's web site http://www.ta-stl.com .