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> Japan, Libya, and Why Leaders Should be Paranoid
> 2011-03-21T13:46:06Z
>
> By Rosabeth Moss Kanter
>
> There is no silver lining in the gray cloud surrounding the Japanese
> nuclear plant, or, for that matter, in the bomb trails above Libya.
> If you're in Northern California, reports of elevated radiation
> levels in Sacramento is unsettling, to say the least, especially if
> you're part of the Silicon Valley entrepreneurial revival and just
> want to move ahead with your social network business.
>
> It's hard enough to get good ideas off the ground without having to
> worry about the sky. Last year's spring surprise was volcanic ash
> hovering over Europe. This year brings disruptions from earthquakes
> in Japan and rebellions in the Middle East.
>
> Do you think the world is out to get you? Go ahead, be a little
> paranoid. That's my management tip for today.
>
> Andy Grove, Intel's legendary former CEO, famously touted the
> virtues of paranoia as a leadership asset — running scared about
> imagined enemies or competitors. He didn't mean the kind of paranoia
> that provokes a dictator like Libya's Gaddafi into censoring
> communications, suppressing dissent, and killing protestors. He
> meant the kind of concern about threats that propels a search for
> excellence — how to keep getting better and better so that
> competitors can't touch you.
>
> A few Middle Eastern rulers are trying this tack, changing ministers
> and investing in things that people want before internal dissent
> gets out of hand — in essence, upgrading their product before losing
> market position. It can be productive to think that "they" are out
> to get you, and there are enemies (or competitors) lurking in every
> corner, if it motivates higher performance — excellence so strong
> that it compels loyalty and commitment and reduces complaints. That
> has been Singapore's secret of success. Feeling vulnerable as a
> small city-state, Singapore's leaders set high standards, benchmark
> against the best in the world, seek innovation, and invest in ideas
> of the future
>
> Positive paranoia is also the secret of some great Japanese
> companies. Komatsu, a globally prominent construction equipment
> manufacturer, drove excellence by fearing Caterpillar, the U.S.
> giant. Beating Caterpillar was the goal and "encircle Cat" the
> theme. A Komatsu executive with whom I had dinner in Tokyo recently
> said that both companies improved because of the rivalry, with each
> looking over its shoulder at the other to ensure being ahead with
> the highest standards.
>
> Unfortunately for the Japanese people, and potentially the Pacific
> Rim, Tokyo Electric Power failed the paranoia test, showing far too
> little paranoia about nuclear accident risks in an earthquake-prone
> country. The company failed to benchmark world excellence in its
> nuclear plants, according to news reports, and invest in the best
> measures. Officials chose lower-cost expedience over excellence.
>
> Why do too many so-called leaders think they can get by with
> assuming the status quo and doing the minimum, rather than striving
> for excellence even when they think they can get away without it?
> Putting off actions until disaster strikes makes it too late. This
> is how a losing streak begins in any system. A slow accretion of
> neglected repairs, postponed upgrades, or reductions in training and
> education weaken the organization, or nation until decline becomes
> inevitable. The opposite is also true. A gradual accumulation of
> innovations, however small, prepares any system to respond rapidly
> to crises or demands for change. Indeed, fearing that "they're out
> to shut us down" and taking actions to prevent that is the best
> guarantee of continuing to flourish. Winning streaks are
> characterized by confidence but also by running scared that great
> performance cannot be repeated unless there is redoubled effort.
>
> More paranoia and less complacency could be useful in any sector. In
> health care, for example, the thought that "they're out to sue us"
> compels physicians to practice defensive medicine, ordering
> sometimes unnecessary tests — but not unnecessary if the tests
> detect problems. Perhaps that paranoid thought with a performance-
> enhancement twist could compel more hospital leaders to insist on
> checklists for surgery and other processes, to avoid preventable
> harm and operate with excellence.
>
> The positive paranoia mantra: Imagine the worst, and create the
> best. That's a good lesson for leaders under any circumstances.
>
>
> Copyright © 2010 Harvard Business School Publishing. All rights
> reserved. Harvard Business Publishing is an affiliate of Harvard
> Business School.
>