Power of ‘And’ — Making decisions without tradeoffs

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By Manish Shah
When faced with a strategic decision, companies prefer one option over another. They choose discipline at the expense of flexibility. They focus on customers and ignore their employees. They choose to pair down costs and take their eyes off of quality.

Take Dell Computer for example. They epitomized operational excellence and became the number one PC manufacturer in 2001. However, by focusing exclusively on efficiency, they ignored innovation and eventually this caught up with them. HP, who was constantly reinventing itself, overtook Dell in PC sales.

On the other hand, J&J does a great job of managing two divergent priorities—centralized control and decentralized decision-making. J&J’s CEO William Weldon leads the company firm from its New Brunswick, New Jersey headquarters, but gives complete autonomy to the heads of its 250 operating companies. The combination of centralized control with decentralized decision-making has worked wonders for J&J. Between 2002 and 2009, J&J’s sales have doubled to $62 billion and profits have in-creased by $6 billion.

According to Barry Johnson, the author of Polarity Management, the hallmark of an effective leader is the ability to look at complex issues, identify the opposites in tension and then capitalize on that tension. Johnson calls these interdependent opposites polarities. He has developed a tool called the Polarity Map to identify the strengths and weaknesses of polarities. Here’s a map representing two polarities — focus on innovation and focus on core products.

After developing a Polarity Map, a leader should incorporate the positives of both polarities. Stressing just one polarity, like Dell did, is detrimental to the future of the organization.

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