When former Ford CEO Jacques Nasser took over the company, he was so determined to be a change agent that he sunk over a billion dollars into an endeavor that ultimately failed.
His goal? To “put the Internet on wheels” by enabling drivers to use Internet portals. He set out to achieve this at all costs, adding voice-activated navigation, LCD videos and other high-tech features into ordinary vehicles. He joined expensive ventures with Yahoo and other tech companies. This led to skyrocketing costs that rose far above what the average consumer was willing to pay. Soon, Ford had the lowest per-car profits among the Big Three, according to the Harbour Report.
Nasser’s obsession with innovation came at the expense of efficiency. All leaders must make tradeoffs between conflicting priorities at times. Here’s a closer look at the three most common clashes and how to overcome them.
Agile leadership, or flexible leadership, describes the balanced approach leaders must take to choose between conflicting priorities. The Flexible Leadership Model outlines three main areas competing for a leader’s attention: people, processes and innovation. Focusing too heavily on one of these areas can have negative consequences for another, but at times, it’s necessary. The best leaders understand which area deserves the highest priority at any given time and are able to maintain a balance between all three.
Clashes Between Processes and Innovation
As we saw in Ford’s case, focusing too heavily on innovation can keep organizations from maintaining efficient and cost-effective processes. Here are three other instances when leaders often have to strike a balance between these two priorities:
- When a major change requires significant investment, reducing efficiency and reliability for a period of time
- When developing and launching a new product increases costs.
- When too much emphasis on efficiency and cost reduction make a company less willing to invest in new technologies
Leaders must consider the organization’s strategic objectives to decide which area should take precedence at any given time. Processes are most important when price is the most important competitive advantage, but it may take a backseat to innovation when new products and services are constantly being introduced, making it more important to differentiate yours.
Clashes Between Processes and People
Having safe and efficient ways of working is good for everyone, but there are times when your process negatively impacts your people (or vice versa.) Here are a few examples:
- High levels of compensation increase employee satisfaction, but they also increase costs
- Increased rules and standard operating procedures improve reliability but can undermine employee satisfaction
- Downsizing and outsourcing reduce costs but can hurt morale
The best leaders are able to strike a balance between behaviors that support efficiency and reliability (such as attention to detail and managing accountability) and behaviors that support people (such as consulting and team-building.)
Clashes Between Innovation and People
Innovation is important for a company’s future success, but just as too much focus on trying new things can eat away at profits, it can also put added stress on people.
Here are a few examples:
- When the cost of new technology takes away from compensation and bonuses.
- When managing change leaves less time for employee development
- When attempts to keep employees happy impedes progress
Jacques Nasser is hardly the only CEO who has fallen short in his attempts to prioritize one area over another. For instance, other CEOs have focused too much on process improvements, prioritizing low prices above all else and doing significant harm to employee retention or innovation. Agile leaders understand how to juggle often conflicting priorities, ensuring all three areas are thriving even if one may take greater precedence for a period of time.
Fortunately, agile leadership is a skill that can be developed. To learn more about how to improve leadership agility through the behaviors, systems and structures within your organization, read a preview of my book, Flexible Leadership: Creating Value By Balancing Multiple Challenges and Choices.