Cultivate a Mind-Set of Abundance

Many smart leaders make decisions as if they were playing a zero-sum game: if you win, someone else loses. For them, it’s all about beating the competition. Unlike smart leaders who operate with a mind-set of scarcity, wise leaders operate with a mind-set of abundance.

Wise leaders first appropriately frame the decision to be made and then are open to collaboration with the competition, if that is an appropriate choice to increase the size of the market.³⁰ When the goal is to create a larger market, the killer instinct is less central. Leaders don’t collaborate out of pure altruism, of course, but out of enlightened self-interest, in the sense that serving the common good indirectly benefits everyone. “Profit as a singular goal is a fairly shallow aspiration, and it’s not enduring,” says Howard Schultz, CEO of Starbucks. “I’ve always said that you can’t create long-term value for the shareholder unless you create long-term value for the employees and the communities you serve.”³¹

To cultivate a mind-set of abundance, start identifying where you struggle with a scarcity mind-set. You can create your own logic—a rationale or process—and follow it with discipline for an extended period until that logic gets internalized and reduces your anxiety.

To begin, pick one resource—say, money or time—that you worry you might run out of. Expand the time frame from immediate to medium term or long term, and see whether you feel more relaxed about opportunities and abundance. Over the next thirty days, visualize that you actually do have a lot more of that resource—say, money—than what you may ever need. With that belief, for the next thirty days, donate some money—as little as two dollars every day. Each day, identify a charity or person for whom even two dollars a day would make a difference, and give it to that charity or person.

Remember that your job is to develop a new decision logic, so let go of short-term worries and concerns about scarcity just for that moment. Instead, consciously and appreciatively visualize what the people you are giving the money to could buy with your donation and, if they buy food, how they feel after eating that breakfast. You might even feel that you should increase your charity from two to five dollars sometimes and follow that instinct: your decision logic is slowly adjusting to a new abundance mind-set. Slowly your worry about scarcity will be eclipsed by an increased feeling of abundance. In October 2012, we met a shuttle driver named Norma working for Hotel VQ in Denver who has been practicing this exercise for twenty years. Every day, she prepares some sandwiches, buys some fruit, and keeps it all in a cooler next to her while she is driving the shuttle. She offers this food to homeless people she encounters throughout the day. In addition, she offers one dollar to every homeless person she encounters during the day. On average, each day, she gives away about ten dollars out of the tips she received that day. We were blown away by her generosity and her abundant mind-set.

After the thirty-day experiment, the chances are that you will become more committed to act out of an abundance mind-set. Discuss your experience with others, possibly sharing it on websites like HelpOthers.org. You will notice your changed mind-set based on the comments others will make of your abundance mind-set. Similarly, when you are working with lack of time, pay attention to consciously “stop” (rather than end) each activity before you “start” another activity, and pay special attention to how mindfully you “change” or transition from one to another.

Respond Mindfully to Events

Leaders are always forced to multitask and respond quickly to circumstances. Yet rather than responding creatively or thoughtfully, they sometimes react in a knee-jerk fashion out of fear or anger. We see many leaders make decisions in autopilot mode without contextual awareness, let alone self-awareness. By cultivating mindfulness, they can make decisions deliberately and consciously rather than reactively or emotionally. You will be able to choose the most appropriate response.

Brain research shows that when you are faced with adversity, your body releases chemicals that induce fear or anger. It takes your body ninety seconds to process these chemicals; in this interval, you have a choice of waiting or reacting.³² If you wait and the chemicals recede, you will be more grounded. If you don’t wait, you will go into firefighting mode and make rash decisions.

Brain researchers have also found that if people develop anticipatory anxiety—that is, they worry about confronting something in the future that scared them in the past—that anxiety disrupts their prefrontal cortex and can create bias in their decision making by increasing amygdala activation, which induces fear.³³ Hence it’s critical for leaders to be mindful of their feelings and respond appropriately when those feelings arise.

In 2011 Carlos Ghosn, the CEO of the Renault-Nissan Alliance, a strategic partnership between French carmaker Renault and Japanese automaker Nissan, had to confront five crises simultaneously, including the devastating earthquake and tsunami in Japan (which caused the meltdown of a nuclear power plant in Fukushima) and flooding in Thailand, all of which hit the company’s supply chain hard. Ghosn responded swiftly but mindfully to these events—in particular, by giving increased authority and decision-making powers to people in factories that suffered the worst damage.³⁴ Ghosn also gave more autonomy to R&D engineers and product experts to make hundreds of small changes to numerous car models in order to use parts that were readily available and circumvent supply chain problems. The plant with the most damage was the engine plant in Iwaki, Japan, where Nissan had been producing more than one thousand engines per day. The plant sustained large cracks in the foundation, its roofing was ripped apart, and other major structural problems. The plant was immediately closed, and many people feared that it would remain so permanently. However, Ghosn traveled to the plant, which was perilously close to the Fukushima radiation zone, and insisted that the team in Iwaki had “fighting spirit.” Within several months, the plant had not only reopened but had returned to full production. The catastrophe also had unintended opportunities. In particular, Ghosn’s decision to empower people in the field ended up helping the company identify next-generation star performers who rose to the occasion of leadership. Even as he dealt with multiple crises, Ghosn always acted with equanimity, a quality that denotes total openness to all experiences without judgment.³⁵

Decide with Ethical Clarity

When making decisions, smart leaders, especially those operating in the red zone, tend to exhibit ideological rigidity. They ensure that all their decisions are always aligned with their ideological principles regardless of the context in which they make decisions. That’s why their decisions can be clouded by a polarized viewpoint.

Wise leaders aren’t likely to be attached to any ideology. Rather, they base their decisions on values they believe in, which inform their evaluation of right and wrong. Yet this ethical clarity doesn’t make wise leaders rigid: they are pragmatic enough to adapt their decisions when the external context changes. They demonstrate what is called ethical pragmatism, in that they start with the assumption that their moral criteria used to conduct an inquiry into the future are valid for now and might be improved on in the future. Ethical pragmatism is different from moral relativism, in that it aims toward a moral objective and converges toward it in time.

In a rapidly changing environment, ethical pragmatism can be a huge asset for decision makers. Adam Werbach is a leader who eschewed ideological rigidity in favor of ethical pragmatism. Werbach was always a committed environmentalist. At age thirteen, he convinced his parents to let him open a checking account so he could join Greenpeace. At twenty-three, he was president of the Sierra Club and wrote a book, Act Now, Apologize Later, in which he described Walmart as a “new breed of toxin that could wreak havoc on a town.” But in 2006, Werbach did something that many thought was unimaginable: he agreed to be a consultant to Walmart to help transform the company into a corporate role model of sustainability. Werbach’s decision was motivated by a shift in his perspective: he realized that he could be more effective in changing the system from inside rather than fighting it from outside. “Our goal is to have Wall Street look at Wal-Mart’s green performance, and say, ‘Wow, do more of that,” he explained.³⁶ This attitude didn’t go down well with Werbach’s friends and colleagues, who thought he had sold out his green credentials and principles.

Werbach’s change of heart was rooted in the recognition that Walmart’s interest in sustainability was genuine and that the organization truly wanted to integrate sustainable practices into its business model. He also saw this as an opportunity to take environmentalism mainstream, in this case, with the world’s largest retailer and its 127 million weekly customers.

Over several years, Werbach worked closely with Walmart to roll out the Personal Sustainability Project (PSP), a voluntary program aimed at making sustainability personal for the company’s 1.3 million employees. Each PSP participant developed a plan for making an aspect of his or her life sustainable by either changing small habits, like signing up for electronic bank statements, or making radical lifestyle changes, such as stopping smoking. The underlying concept of PSP is to make participants feel that they are personally gaining something with their actions. “For too long, environmentalists have been telling people they need to sacrifice. But the great modern challenge is how to be happy. This is the missing link,” Werbach figures.³⁷ If the 1.3 million Walmart employees feel happier by embracing sustainability in their daily lives, then they are more inclined to spread the message to customers.

PSP has been quite successful: over 40 percent of the participants are staying committed to it. In this case, we see that Werbach has eschewed ideological rigidity in favor of pragmatism, but he has not abandoned his personal ethics and beliefs. While working with Walmart within the system, he continues to be an active campaigner for sustainability and corporate responsibility when it comes to the environment. He didn’t sell himself out; he shifted his perspective and demonstrated ethical pragmatism, or doing the right thing for the greater good.

Use Logic, Instinct, Intuition, and Emotion to Decide

Many smart leaders make decisions by relying heavily on externally derived logic (not the unique decision logic that they have evolved over time). They might not, for example, approve a new R&D project unless marketing can demonstrate enough commercial value for the potential product. Or they may decide to acquire a company because analysts recommend it and the potential synergies appear convincing on paper. But when uncertainty is present, wise leaders bring their entire being—their body, mind, and soul—into the decision-making process by integrating logic with three other qualities: instinct, intuition, and emotion.

Factor in the Larger Context

The world is an interconnected place, and therefore decisions must be connected to a context beyond the immediate and obvious business context. “Our world has become a global system of systems,” notes IBM’s former CEO, Sam Palmisano.⁴⁴ Most leaders, however, do not think holistically and inclusively. They have been trained to make decisions that optimize a subsystem or one whole system at best. Now they increasingly need to demonstrate systems thinking and make decisions in a more holistic and integrated manner.

Alan Mulally is a wise leader who consistently has encouraged members of his organization to cultivate and practice systems thinking. As we have noted, he served as general manager in charge of developing Boeing’s 777 passenger plane. Given the immensity of the 777 project, the development of the plane was divided in smaller chunks, with dedicated teams put in charge of designing and building various parts and subsystems (e.g., wings, engines, entertainment system). Mulally’s job was to coordinate these multiple teams and integrate their efforts.

Traditionally Boeing teams had tended to operate in silos and collaborated little, which had led to project delays and higher costs, and Mulally sought to change that. In every project review meeting, he began by reminding all teams that they had to factor in the larger context when making decisions. Mulally used to say that building the best plane means it is optimized at the system level as well as at the customer level. You cannot have the best engines on the plane and put together a great entertainment system and seats but not pay sufficient attention to the doors of the plane which would make the plane unusable. Similarly, building the best plane for one airline might not be a very different experience from building it for another one. Your product decisions will be optimal only when you simultaneously pay attention to customer, competition, cost, quality, and design, Mulally told his team managers at Boeing. He took the same decision logic into Ford and led Ford back to profitability and success.⁴⁵

A key advantage of thinking holistically is the ability to anticipate competition from unexpected sources and make preemptive decisions. For example, Canon and Nikon did not anticipate that cell phone makers Apple and Nokia would move into their territory with camera-equipped cell phones. Even a few years ago, Apple and Nokia didn’t appear to be potential competitors for Canon and Nikon. The leaders of these companies failed to think holistically and inclusively and did not anticipate that new competitors from nontraditional industries would enter their market and attract what they had viewed as their customers.

As a wise leader, Sam Palmisano anticipated big shifts in the marketplace and decided to shift his company’s business model before competition disrupted it. In 2004, he boldly decided to sell IBM’s PC business to Chinese computer manufacturer Lenovo even though IBM’s PC unit was performing relatively well at that point. Palmisano’s decision was based on his holistic thinking: he could foresee that the PC business was rapidly becoming commoditized and that the real profits were to be made in the software and services businesses.⁴⁶ Nearly a decade later, Palmisano’s foresight seems to have proven right: IBM has established a stronghold in the software and services business. In contrast, HP, IBM’s rival, is struggling, burdened by a hardware business that is rapidly getting commoditized and one that HP’s successive leaders have been unwilling to let go of.⁴⁷