Why do so many business strategies fail? Because we’re addicted to patterns and biases, explains Chris Nichols, who believes mindfulness provides an answer.
Life is full of 80:20 splits. In the 1970s, Jon Kabat-Zin was working at UMass Medical Centre. He researched what proportion of the patients had their suffering resolved. Discussion with clinicians led to the conclusion that the figure was about 20 per cent: eight out of ten left still suffering. When I heard these figures I was reminded of some other similarly startling proportions.
McKinsey, the global management consultancy, estimated that 75 per cent of mergers “fail” in terms of delivering the value promised.
In terms of business more generally, strategies don’t work most of the time – with about 8 out of 10 companies failing to hit their stated growth target.
I wonder, can this 80:20 split be just coincidence? Or is there something more significant going on here? Apparently I’m not the only one to notice. IBM is “turning increasingly to mergers and acquisitions in the hope of reviving growth”. And if you were thinking of spending $20 billion on deals, you might want to find a way to improve on the customary 70-80 per cent fail rate. IMB’s way of tackling the challenge is to turn to systems. They’ve drawn on their analysis of all of their deals so far and the experience of their M&A teams, to create M&A Pro, “a computer algorithm that could spot the big risks” and strip out “human error”.
WHERE’S THE SOLUTION?
I’m all for new thinking, but I wonder if IBM may be looking at the wrong kind of solution. I think the place to look is not to an algorithm, it’s in how we think and pay attention. I suspect that IBM needs what Jon Kabat-Zin focused on: a more mindful way of approaching things.
My own work on decision-making in conditions of complexity and uncertainty has shown how leaders and teams in stressful situations often collapse our world view into false certainties. We tend not to see the world as it is, but in terms of the patterns we want or expect. I spent 25 years doing strategy and M&A in boardrooms and I know that sometimes it becomes impossible to see what’s wrong with a deal or a strategy because everyone involved is totally hooked. You just think about it badly, and get attached to biases, as my colleagues Andrew Campbell and Jo Whitehead discovered in their book Think Again!
Mindfulness training may well be one of the ways to change this – directly addressing this 80;20 problem. Mindfulness is about paying better quality attention and the research is really quite compelling. Neuroscientist Richard Davidson worked with a group of Buddhist monks measuring their brain activity while meditating. The results were described as “extreme”. The monks showed higher levels of gamma activity than had been seen in any study before. These patterns occur when the brain is involved in effortful synthesis and recognition. Usually these moments are brief, but in the monks these states continued for several minutes at a time. “It was like a continuous a-ha moment” reported the team: mental training had enabled the monks to remain in heightened and enduring brain states associated with perception, pattern recognition and problem solving at will.
Building our capacity to cope with complex mental and emotional challenges without falling so readily into traps seems like a winner to me. So much of our company strategy is driven by our unquestioned patterns: addictions to growth, unseen but powerful mental framings that determine our perceptions.
If we are to make significant steps towards delivering the Paris agreements, we are going to need effective strategies that transform the ways we do business and the ways we think about success. The mental models we take for granted won’t do the job. But without disciplined attention to improving our capacity to focus on things beyond our commonplace patterns, we are in all likelihood hooked into a world where we stand an 80 per cent chance of failing.
IBM’s M&A Pro may well direct attention to areas of risk, but it won’t remove “human error” until we do the hard work of developing our psychological, perceptual and ethical muscle. This is the real work of mindfulness: to experience more of what is and to pay much better quality attention to what is going on, in ourselves, in groups, in the world. Mindfulness training isn’t a quick fix. But it only takes eight weeks of daily practice to start to see a real difference, and this is a difference we need in our companies and in our boardrooms. Even a small step is a step forward towards better quality conversations, better thinking and more appropriate action – and that holds out the prospect of significantly improving our 20 per cent chance of creating sustainable and ethical outcomes if we genuinely want them.
About Chris Nichols
Chris Nichols is a founder of the strategic provocateur hub www.gameshift.co.uk and of the Ashridge MSc in Sustainability & Responsibility.
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