- IMD Business School
News Stories · Leadership - Strategy

How do organizations deal with tough leadership dilemmas?

Professor Bala Chakravarthy shares his insights at a Senior Executive Roundtable held at IMD, Singapore
March 2016

When leaders find themselves having to deliver on two goals simultaneously, where the pursuit of one seems to hurt the other, they face a dilemma; like when striving for short and long term performance, or chasing both innovation and productivity, or investing at home to protect the core business while simultaneously investing abroad to drive future growth.

Professor Chakravarthy points out that managing dilemmas is harder than making decisions, no matter how complex the latter may be. Unlike a decision where there is a singular purpose to be served; a dilemma requires trading off between two competing goals. There is regret no matter which goal is under served.

“The easiest way to manage a dilemma is to drop or weaken a goal,” Professor Chakravarthy said. “But if the twin goals are important to the long term success of an enterprise top management must persist with them and have within its ranks a champion for each.”

Top management must also ensure that there is good progress against each of the goals, even as it subtly moves the relative importance of one goal over the other based on the changing context of the firm’s business.

Some of the other prerequisites for successfully managing a dilemma include:

  • Metrics and rewards for progress against both goals. Often the control system used in the firm is biased towards just one of the goals served, e.g. financial performance over environmental performance.
  • Front line managers who are passionate about the twin goals being served and are on the constant look out for new innovative solutions that can help achieve both simultaneously, e.g. improving financial performance through energy conservation.
  • Mid-level executives who provide hands on coaching to the front line managers as they struggle to strike the right balance between the twin goals. It is difficult to codify ex ante what the right approach is to achieve this balance. A lot of judgment is called for. That can only be provided through the close engagement of mid-level executives in the process.

Professor Chakravarthy recently facilitated a Senior Executive Roundtable at IMD, Singapore.

Learn about the new session of High Performance Leadership (HPL) taking place in Singapore this April.

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