Choosing risks and winning aspirations ; the Race to the Pole

[An excerpt from the book “Risky Strategy” to be published in 2016]

We see an intriguing relationship between “winning” and “risk” in the race to the South Pole in 1910, between the English Robert Falcon Scott and the Norwegian Roald Admundsen.  For both explorers, winning was in part at least about being the first to reach the South Pole, one of the last unexplored areas on Earth.  For both, this undoubtedly involved a high level of personal risk, to themselves and their chosen teams. But this is where the similarities end.

Admundsen reached the Pole first, and returned to their ship with a team completely in tact. Scott by contrast arrived at the Pole weeks later;  he and his entire team failed to return alive.

What else was different?  Firstly, their specified goals were different. Admundsen had a single goal: to be the first to reach the South Pole.  It was probably the best example of a clearly defined and focused winning aspiration – easy to confirm or measure success.  Scott had two goals: to get to the Pole first, like Admundsen, and to gather scientific information about the Antarctic.  As a result of this, they each took different types of risks.

For Scott with his dual goals, in a situation where time was a critical factor,he delayed on his return trip to collect geological samples, which also added weight to his sledges.  Admundsen, on the other hand, took a different kind of risk, which was consistent with his winning goal. While Scott chose a route from McMurdo Sound, which had already been partly explored by Ernest Shackleton in 2007,  Admundsen chose an unchartered route, from the Bay of Whales, which was on the edge of the Great Ice Barrier, where explorers had feared that the ice could fracture and send you floating away.  But Admundsen chose this because it was 60 miles closer to the Pole. In addition, because Scott has assumed Admundsen would choose the same route as him, he assumed that he was ahead of him, as there were no signs of Admundsen’s tracks.  With this assumption, he had no compelling driver to go faster.

However, in this amazing story, even though the single-minded winning goal that Admundsen led to certain risks, he compensated for this by reducing risk in other ways. He had investigated the records of other explorers who had been in the area, and noted that the ice had remained unchanged for decades.  So this gave him more confidence in his choice of routes.

Admundsen had also researched the best type of transport to use extensively by spending time with the Inuit Eskimos in the Arctic.  He used dogs which were very well suited to the extreme conditions. Scott, on the other hand, for most of the journey used a combination of ponies, motor sledges and man-hauling. The motor sledges were untested and quickly broke down. The ponies although they could haul heavier loads than dogs were also ill suited – they had no natural vegetation to feed on, sweated through their hides which led heavy ice to form and caused them to sink more deeply into the snow – they all had to be put down.  This left man-hauling for most of the journey, recommended by Shackleton to be the best and most noble approach. But a noble but ill-conceived approach didn’t get the job done.

What this famous piece of history tells us about winning and risk, is that while a winning aspiration creates the need and appetite for risk, leaders need to be choiceful about which risks they take, which ones they work hard to avoid.

 

For such a time as this – students seek new “capitalism”

I was struck by Paul Polman’s comments in this interview that students that he visits around the world are seeing the need to “evolve capitalism and create a more equitable and sustainable form of growth. They get it, they really get this need for change!”   http://www.theleadershipvanguard.com/#/paul-polman/

Last week, I ran two sessions on “Risks in the global supply chain” with undergraduates at Hult Business School – representing a fairly balanced mix of students from Europe, The Americas, Asia and Africa.  We talked about global strategy making, referring to my book, “Risky Strategy” –  there was some interest. I then introduced a case study based on the research we had just completed on modern slavery in the global supply chain, in which we had talked to a number of the UK’s top retailers. The engagement levels increased dramatically.

The class discussions battled with the challenges presented by a capitalist system that requires retailers to compete in the interests of the consumers,  and the need for those same retailers to collaborate to truly be able to tackle this pernicious issue of slavery.  Has the mantra the “customer is king” in reality been translated to mean the “worker is slave”?  Is this particularly the case because the “customer” in value terms is primarily from the wealthy developed nations, and the “worker” predominantly from the poorer developing nations?

Is this a time for business leaders like Polman to challenge these basic assumptions?  Its risky… yes and ..?   Is this a time for business to become part of the solution rather than part of the problem.  The students seem to think so!

 

 

Opportunity for business to take the right risk

As I put the finishing touches to a book which explores risk taking in strategy making,  our Ashridge / Hult report on how business can tackle the ills of modern slavery has just been published.

We talked to the biggest retailers in the UK and the majority believe there is an issue of slavery in their global supply chains.  Now UK legislation is a catalyst to do something about it.  But to really address the issue requires a big change of mindset – and the risk that goes with that.

Small Risky Strategy coverHere is a synopsis of my book on risk and strategy, which concludes with the question: For such
a time as this,  is business part of the solution or part of the problem?

This is a story that brings together and dismantles the well-used, and often abused, business terms “strategy” and “risk” in an exploration of what happens when the two concepts collide. The story suggests that strategy is inherently risky, and that leaders and their organisations need strength of character in order to take the right risks in making strategic decisions. It explores the different ways in which leaders work with risk, and introduces us to formal analytical “elephants” and informal intuitive “tigers”. I look at risk as variability and as crisis – and how this flows through to financial and reputational risk. I look at illusions and mind games that can throw us off the scent. I draw on the philosophy of winning, from business, military and sport perspectives. I consider how leaders select the right variables, and combine analysis with intuition to take smart risks. I look at how they innovate, and how they mitigate the risks of innovation. I think about what makes organisations better at dealing with risk, and what helps us as leaders to feel safer with it. This journey draws from my experience as a lifelong business strategist, and from recent research I have been part of at Ashridge , looking at leadership and risk, and more specifically at the way organisations are currently addressing the confirmed existence of modern slavery in their global supply chains. The story concludes by questioning whether now is a time for business leaders to be proactive as the solution to, and not the cause of, such social issues, whether they need to re-think what is meant by winning, and what implications this might have for taking the right risk in strategic decisions.