RESULT IS NOT CAUSE, IS CONSEQUENCE
Result is the word of the hour in our corporate world. Against it, no argument is sustained, and no other vision is established.
In the exercise of my activities as an executive assessment consultant, the above fatalistic thought haunts me whenever I interview a “results oriented” executive. Do not get me wrong, as an entrepreneur, results mean life or death for my company and my partners. But results seem to have become an idolatry in the board room, and as any idolatry, it leads to folly, near hypocrisy and misappropriation. Result has its place of honor, but it is not cause, it has no intrinsic value.
I will dive deeper. Sometime ago I reviewed a resume for an external candidate assessment: “… responsible for 12% revenue growth for the past two years, and 19% EBITDA growth over the same period.” To begin with, what matters is not the absolute number, but the one relative to previous results and to the current situation of the company, the general market and competitors. How much did the economy grow in the same period, how much did its competitors? What market factors have helped or hindered this outcome? What internal factors contributed or constrained even better results?
Things are always relative, as Einstein would say. After two long hours of scrutiny, here are the facts. The general economy had grown 10% above inflation in the period, the executive decreased wages generating 3% EBITDA increase, cut a whole layer of senior managers, was financing his working capital with excruciating reductions of suppliers’ payment deadlines and cut all investments of the company. Smart, our results abundant executive is also an unsustainable results executive, what I call a grasshopper, executives who harvest in the short term, and destroy a company in the long run.
What I would actually expect to hear in our interview would be something like: “… my short-term strategy was simple, I needed to feed the board with quick results. I knew the economy was going well, I took advantage of labor changing regimes and needed cash badly to pay off debts, so I gave priority to shareholders and creditors. But I also negotiated a provision for a number of future investments and mostly established a new pact of excellence with my team, which led to a profound profile change and qualification. The culture of this company was of command and control and what I needed was a team that thought and solved problems autonomously. My long-term plans are … ”
It is not a matter of form, but of content. In the idealized response above (which was far from what the executive gave me), I expected to see some things as ego balance, that is, not so much a narcissistic subject, not so much an unrealistic altruist; good judgment, and sincerity, and most importantly, a complete and plausible story of why and how he arrived at those outcomes and what those outcomes meant to stakeholders over time. Context, reason, vision.
More than “what”, it is necessary to have the why and the how. In analyzing why and how, we can see the priorities, the line of reasoning, the diagnosis and the action plan for that particular situation, not just a cheap formula. Result is not cause, it is the consequence of controllable and uncontrollable actions and relationships
- Market situation
- Personal experience
- Available resources
- Luck
- Competency – how do you what you do to change the internal and external systems (incentives, processes, approval range, culture)
- Behavior – how people perceive and draw inspiration from what you do
The first four factors are not controllable, so do not waste time with them, just enjoy the good winds and sail wisely. However, the last two are the key to success, once they can be learned and developed.
Competence, that is, the ability to apply talents and experiences to produce observable results, is far more important from the point of view of recruiting than the executive’s own resume. The resume provides necessary but not sufficient information. In it we observed education and career path, experiences, companies that taught him good business practices. But, as I always say to business owners who want to hire business executives with great financial aggressiveness: “when hiring so-and-so, you want the result of a successful company, but you reject the culture of cannibalization where this result is possible and do not want to split your equity surplus with him. “Obviously, this is an illusion that leads to recurring recruiting errors. What the executive actually brings are the competencies and personal behaviors, the rest remains in the other company’s general ledger.
Competency learning can be driven by training, but weld by practice. Some people have the ability to learn by extrapolation and speculation (they can retain and apply concepts absorbed in the academy) others are experimentalists and skeptics. Therefore, the training should be sponsored with caution by the company, and it is necessary for the company to make the diagnosis about the executive before investing. The second way to develop competence is through practice, that is, by embracing current responsibilities and standing out at work, volunteering for interdepartmental projects, benchmarking, finding latent opportunities for organizational change, taking every opportunity to try new ones positions and challenges.
Finally, the behavior factor remains. As one manager of my friend said: “We hired the subject for the curriculum, we dismissed him for his behavior.” My eleven-year experience corroborates what she says. More than competence, behavior tends to be greatly underestimated in selection processes. However, there is a great deal of controversy over whether we can develop our behavior (whether it is creating from scratch or correcting something that is wrong), or whether it is intrinsic and immutable. I am a disciple of the philosophy that certain traits are intrinsic and immutable, but that some people mature over time. The process of psychological maturation is real and brings spectacular results, however, this path is not for everyone. Those who can not expand their consciousness and gain self-knowledge go into stagnation and live up to the saying: old dog does not learn new tricks. But those who venture to value their sides Dr. Jekyll (the physician) and to welcome their sides Mr. Hyde (the mostro), are the ones who attain maturity, that is, the fullness of their capacities and temperance over their shadows This path can be traced by various approaches such as coaching, mentoring, biographical analysis, analytical psychology or therapy.
But not everything is perfect. While learning and exercising behavior and competence is the best chance of success for an executive in the long run, success is also the biggest constraint to development. Why do I need to change if everything has always worked out? Well, in these cases, let us listen to the wisdom voice of the beaches of Rio: “Nothing that was was will be again the way it was once. Everything passes, everything will always pass … ”
Result is not cause, it is the consequence of many controllable and uncontrollable factors. Knowing how to distinguish between these factors is crucial in a successful selection process, as well as in the development of a professional. Investing in competence and behavior makes you a better human being and this creates meaning for the company, the community, your family and the next generations. The rest is only result.