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I have written several paragraphs regarding the leader’s indispensable abilities that centred upon problem-solving, be it related to systems or people. I believe in the importance of problem-solving abilities, although I also believe that it is just a step toward true value creation – for which eventually a leader is appointed. The brief introduction of the different dimensions, necessary attitudes of problem-solving justified its complexity; but in real life a leader is not appreciated much if /s/he is a problem-solver only.

Dealing with problems is an asset of maintaining an organization in its current state (exceptions are few but radical). If we simplify an organization’s realm there are external and there are internal issues. Both issues can be positive and negative. Accordingly, there are positive internal things – strengths of an organisation, there are negative internal things – weaknesses of an organisation. Also, there are positive things outside of the organization – opportunities of an organisation, and finally there are negative things outside of the organization – threats of an organisation. These are the elements of the well-known SWOT analysis.

In itself as a tool, the SWOT analysis is not too useful. It is too broad to be used, because it just gives us a huge list. However, its implications are all the more interesting. What should we do after listing the points of the SWOT? In general, weaknesses have to be dealt with, strengths have to be preserved, opportunities have to be used and again threats have to be prepared for – we have to deal with it.

First, problem-solving mostly focuses on weaknesses and threats, and mostly on weaknesses. The latter is a pre-emptive motive. There are only two dimensions that are dealt with out of the four dimensions. A successful leader concentrates on the other two dimensions as well. What is more, the preference – of course depending on the given situation and the greatness of a problem – should be shifted to grabbing opportunities and/or innovating. Preservation is a slow decline. Why? Because the environment is changing rapidly, each of us have to be better and better and this will create a more valuable organisation as well.

The main question after having identified the importance of development (which is done preferably according to the commonly accepted strategy) the main question is: how? How can one identify the opportunities and create value by implementing those innovations, changes? I have been thinking about this for a while. I came up with five things that are necessary, but note this is only a theory, based on my experience:

First, ample amount of information has to be gathered. One has to ceaselessly look for events, data, happenings that may affect the organisation directly or indirectly. This has to be met with a skill to be able to analyse the data. Data has to be seen with the eye of a so-called strategic thinker. These are abilities that are required for solving problems as well. In addition to these, the leader has to be innovative and daring by nature, which is a question of attitude. If someone does not have the willingness to make changes, to grab opportunities than all of the above is helpful to solve problems. Last, gathering more and more experience helps to see the world differently, to see threats as opportunities, to learn how to implement. Experience should be relevant and irrelevant as well, the former helps the implementation, and the latter helps creative elements to take place. These all together create more and more opportunities that an organisation can implement and thereby add value by the help of the leader.

I have just read an undeniably timely article by Jeanie Daniel Duck¹ with the title “Leading in Emotional Times”. I immediately thought that there was no greater time in these days then now, to mention what she has written in the article. She states, and I could not agree more with her, that in times of tumultuous times there has to be a leader with crystal-clear purpose with the energy to provide change. However, these are all insufficient without the emotional part, without the personal touch. She mentions six important factors that help leaders:

Be highly Visible.  These hard times require the leader to be approachable. It helps reassuring.

Provide Relevant Information. Everybody knows about the problem, tell them about what you know and what you don’t know. Tell them about your scenarios, nobody expects you to know everything.

Ask for Help and Share the Credit. Two things: in difficult times, it pays off to be wise and ask for opinions — the rules have changed. On the hand, “making space for others to contribute and be recognized has enormous payoffs²”.

Be Human. Jeanie Daniel Duck’s first sentence is of great importance: “People want to think their leader is in control and in charge, “but they won’t go the extra mile for someone who is all logic and no emotion³”. Talk individually, be authentic, humane and there must be connection, too.

Offer Hope and a Renewed Sense of Purpose. People need to have something to fight for. They want to see what is the purpose, they want to see a better tomorrow.

Encourage People to Get Excited. I tend to say that passion and excitement are really important: they are great part of the change. You need them. But you need as much energy and effort from their part as possible. 

These all provide a chance for change to occur. Of course this does not mean that you do not need to have a concise strategy, and other skills. But emotions are the fuels of humans which you have to take into account. If people are not motivated they will have no fuels and as cars they will fail to start and fail to go. If they are motivated by the abovementioned six things you are on a good way to do the best!

1. Jeanie Daniel Duck, 2002, Leading in Emotion Times, appeared in: The Boston Consulting Group on Strategy, edited by Carl W. Stern and Michael S. Deimler, John Wiley & Sons, Inc., Hoboken, New Jersey, p. 345-347 [↩]
2. op. cit. p. 346 [↩]
3. ibid. [↩]

Dear Visitor,

Recently I have submitted several posts, since I have more time to focus on my blog whenever my time allows to do so. A year has passed since the publication of my first post about the intelligencia and since then I only submitted posts that are relevant to management. This is a natural consequence of the very fact that I dealt with these management issues heavily for the past year. There are some posts, however, in which the “inderdisciplinary” approach can be traced. Hope you enjoy the reading, thank you for the feedbacks that I received in many e-mails!

A few days ago I was wondering about a great article that a read by Luc de Brabandere that was adapted from his book, The Forgotten Half of Change: Achieving Greater Creativity Through Changes in Perception. It really provokes the thought that change without change in perception means that the job is just half-done. Perhaps, it just made me think because I spent a lot of time at high school thinking about the very question: “In order to know how things really are one must understand the filters through which one perceives the world”. I do not really remember what I answered to this in a form of essay for Theory of Knowledge subject. Would it matter? Not really. All it mattered is the feeling that you cannot help: you live in a “subjective reality”.

It is not sufficient to change an organisation by making structural changes, by altering the mission, by applying new strategy. It is quite good if you have found a niche in a market and you have a clear and consise plan how to exploit it. Good. But not good enough. If you really want to fulfill the new strategy, if you want to lead them there as a business leader, you have to change perceptions as well. I have written in my post “Leadership and paradigm shifts” about understanding others’ way of perceiving things and to be ready to change your own paradigm if it is necessary to do so. In change management, I wholeheartedly think that it is crucial to understand paradigms, understand the assumptions, the underlying factors that motivate your people to a great extent. As much as possible. Period. If only then when you deeply understand what people think about the firm can you make the next step: altering the assumptions.

Why do you have to understand the paradigms within the firm? I believe that for two fundamental reasons. Both will be quite straightforward. First, it is much easier to change something that you are aware of. There might be assumptions and values that need different approach, more rational or more emotional, you have to tackle it differently in order to achieve results. You need to understand your people and their way of thinking. The second reason is that the extent of change differs by case from case. If you would like to add a new service to the portfolio it may or it may not require a great change. Depends on the nature of service as well as your people’s paradigms. However, if you would like to make a non-innovative-focused company into an innovative one — there is sure a lot to do.

How? The most important thing is to communicate with people. As many as possible. Listen to them, understand them. You can be astonished by what people say. It is useful in general, because it provides you a great opportunity to learn. Ask questions that help you to understand their paradigms and their image of the firm. Try to see your company through their glasses. His or her reality maybe slightly different from your reality. But both of you have to accomplish the same goal that you propose.

Excitement. Energy. Passion. Drive. Thoughts. Actions. Challenges. Trust. I love these words. Whenever I was in the admission council, even as a president, in the BME Management Association of Students (MSZK) I never failed to ask or check whether the candidates are passionate, energetic, driven, excited about being part of a unique association, such as the MSZK. I needed talented and passionate people in my organisation who I could trust. I was so glad whenever I saw this combination in the candidates’ eyes.

Several years ago, I was mostly known as an analytic, profession-minded person. Indeed, I was. However, I was always passionate about my job at MSZK. It was then, when I became a leader of a team, when I felt that great excitement. Currently, I am so passionate about MSZK that I regularly give advice to them as the member and founder of the MSZK Advisory Board.

In addition, I am passionate about Rich World Real Estate as well, my family business. I do my job, think about the strategy, competition, analyse, suggest, question, argue, “counter-argue”, and have fun with my family. There is a high degree of trust when it comes to task completions. Okay, let us deal with the business part now: so,is it a profitable and successful company? Yes! Why is that?

I came to realise that Rich World Real Estate is a place where I can feel that excitement, energy, passion. I am surrounded by talented people who are – by the way – my family members. We think together, we can argue together, we are responsible for everything together. There is a sense of urgency to do the best. Everybody expects you without words to bring the most out of yourself, but it is done without any formal framework. The atmosphere motivates you.

Real Estate Agencies in Hungary, especially in Budapest, the capital, are in fierce competition with each other. Supply of properties for sale (especially because of the financial crisis) is very high, the demand is quite low. This means that the competition is high. One of the key factors for success is trust in this industry. The clients want to spend their money as well as possible. Stakes are high, because of the great amount of money involved when purchasing a real estate. Enough said.

If trust is inherent in your company – as in our case – it is much easier to communicate it to your clients. We have a mission, too. It is a real mission, we live by it and the firm is operated by means of it. The mission implies the same thing: Trust before everything. We trust each other, the clients trust us. Now, let us get back to emotions.

You might say that it is a coincidence in case of Rich World Real Estate that trust is among our “family strengths”, as well as other “doing-a-good-business” facilitators such as being surrounded by passionate and talented people. I believe that if you have those emotions, trust and passion with talent – most business will operate fairly well. These are the most important values in our family that gives us advantage in the market and I believe that these are the values that give an immense huge impact – irrespective of the industry. Excitement. Energy. Passion. Drive. Thoughts. Actions. Challenges. Trust. I love these words. Your business partners, clients will love them, too.

Strategic management requires the practisioner to think strategically. No matter how many books, methods, frameworks, best-practises you have read and memorised, it will not make you a good strategist unless you know how to think as a strategist does. However, if you make strategic decisions on a regular basis, reading a lot on the issue facilitates to achieve better results. On one hand, as most people perceive it, strategic thinking is really just an ability to think “ahead”, it is a long-term thinking. I agree to the extent that it meant to be long-range, but that is just the tip of the iceberg. Now, consider the components of strategic thinking — as I see.

If you are a chief strategy officer/manager/director, CEO (whatever) you must be aware of the mission, the values, the vision of the corporation. You are aware what will be the result — and you are responsible for answering the question and then acting accordingly: how will the company be able to reach the goal given those inherent elements? You have to have the vision of the future inside your head as clear as possible. However, this is actually “long-term” thinking, I just expanded it by clearly stating the underlying things.

In order to reach the wished future you must act accordingly in the present. This is where the second skill comes to good use. There are numerous really complex problems to be solved in the present and these problems have to be solved somehow. However, it is not enough to deal with the problem, it is also necessary to deal with the right problem and for that the skill “identifying the critical issue” is needed. This is fairly similar to the process of identifying “key factors for success”, that is, finding those factors that make the most successful business premises in a given industry successful. These skills are crucial for a strategic thinker. There are two methods that may help the identification of critical issues: 5 Whys, Ishikawa Diagramm. If the critical issue is identified we can then, and only then, start to analyise the problem, dividing it into subissues by asking yes-es and no-s. This can be fostered by creating so-called mindmaps. This leads us from analytical problem to lateral thinking as drawing mindmaps usually involves creative elements, too. Identifying key factors for success needs two steps according to Kenichi Ohmae¹: “first is to dissect the market as imaginatively as possible to identify its key segments; the second is to discover what distinguishes winner companies from losers, and then to analyze the differences between them”.

Furthermore, I think that a strategist must have a really rational and well-grounded thinking. Even if you identified the problem you must be aware of your own capabilities and have to be realistic when it comes to giving an answer to certain situations. Many times, you know what the best solution might be. Nonetheless, you cannot do it for other reasons. You must be risk aversive when it comes to deciding on strategically important issues, because a lot depends on such decisions.

Last, but not least, I deem one thing to be particularly important, because even if you are capable of having rational approach, ability to identify the key factors for success and have super-analytic mind — still, it is useless if you do not possess some lateral thinking as well. Without lateral thinking you may have some edge, but the ability to create new value by for example “connecting the unconnected”, that is, doing something that is creative / innovative gives you the real edge. Having a great balance on all these is the most difficult think in my opinion — but all of these can be developed by practise over time.

1. Kenichi OHMAE, 1982; The mind of the strategist, United States of America, McGraw-Hill, Inc., p. 42 [↩]

I first encountered the term “paradigm shift” when I read the “Structure of Scientific Revolutions” by Thomas S. Kuhn. This book was written almost fifty years ago and strange as it may sound, it caused a shift of the paradigm about the shift of paradigms within the realm of science. Paradigms are solutions to the “puzzles” of the world – as Kuhn puts it. A paradigm is a world view that almost all scientists hold to be true (self-evident). Paradigm shifts take place when such anomalies occur that cannot be explained by that well-known solution. Then new theories emerge that can explain the anomalies. That is not the end of the story in Kuhn’s book – I suggest that you read it; it really is a fascinating and intellectually challenging book.

A new dimension of looking at a manager is to look at a manager’s way of thinking as a paradigm. The manager have assumptions of how to solve the problem, what works the best, how to manage certain type of people. There are many situations when the assumptions of the methods fail to function well — or worse. Do not get me wrong. It is of great importance for a manager to get things done fast, and he or she has to be really persuasive and focused with great energy involved. However, if things do not work out well, those alarms in your head should go off and you should stop for a while.

A manager has to be open for paradigm shifts and this is not an easy thing to do – I know by experience. The difficulty emerges from the fact managerial skills require skills that in a way strengthen the “inflexibility” of managers. It is not always well-grounded, but certainly, there are situations where showing flexibility would cause the loss of integrity of the manager. In addition to that those that seem strong and decisive are more likely to find themselves in a managerial position than those without these traits.

How flexible is your thinking? How many successful shifts can you make from one paradigm into another? Asking many “why”-s is not enough, it will just uncover some problems. The best solutions have to come from various experience from your life. Why? Because your brain is an associating machine – and this comes handy when ever complex situations present themselves. It does not matter whether you learned something while swimming, skating, driving, writing or reading poetry, analysing philosophy etc. If you can apply it to creating an excellent solution, you have it all.

I do not want to suggest that the “values” are similar, and here is the point. Some activities are much more helpful for managers. For example, I truly believe that my interest in philosophy (analytic) and in sociology of knowledge (strong programme). The former intensified my rational approach as a leader, the latter helped me to understand and accept different point of views much more easily taking the “human-factor” into consideration. The president-to-be of BME Management Association of Students (MSZK) is a really talented and was a celebrated sportswoman. She was the member of the Hungarian National team for the World Synchronized Skating Championships 2004 and 8 times gold, 7 times silver and 2 times bronze medallist on the Hungarian Synchronized Skating National Championships. She has a huge experience in teamwork and dealing with people as well as other great memories that help her in an indirect way.

I used the simple terms problems and solutions just to simplify the complex situations a manager or leader has to deal with. There are human interactions, expectations, the leader’s impeccable integrity, the lobbying potential, emotional difficulties, cultural changes etc. that will instantly act as “how can I do this?” question-arising factors. The six thinking hats concept for example forces the effects of paradigm shifts to take place (in a quite interesting way).

My point is that an executive should gain their experience not just when they are in a position of leader or manager, but also when they are doing some other activities. This needs attention and acute awareness of the happenings. If we focus more on the world throughout our activities and learn and experience other ways of thinking it will surely pay out. And after all, it will cease to be a conscious activity, ideas will just emerge and they will be memorised.

By gaining ever more details of the “world”, application and use of different happenings when in a executive position will result in more creative solutions, and the avoidance of numerous problems – based on my own experience. It works in situations when you have two positions (like me in Rich World Real Estate having the position of strategy director and in MSZK having the position of president). What is more, two different positions intensity the speed and quantity of making paradigm shift. Before applying this to your life, I suggest that you read my previous article entitled “Solving problems as a leader”.

Thank you!

This article is dedicated to the president-to-be of the BME Management Association of Students (MSZK).

It might sound immodestly to present myself as a leader, even so presenting an article with title “solving problems as a leader”. This thought might emerge from two facts. First, I am only 24 years old. Second, I have been in leadership position for just a year in MSZK and in strategy director position in Rich World Real Estate (family business), which is not the position of CEO, as important as it might be. The rightfulness of such thoughts is unquestionable, therefore.

However, when I asked the president-to-be what I should write about in my blog, what would help her the most in her forthcoming presidency she said after a short while: how to solve problems. No, I do not think that I would be a great expert on this issue, but sure enough this skill is amongst my strength and in this article I am bound to explore why and how could I be successful in solving problems. This article is not intended to be a perfect piece, it is rather a loosely structured brainstorming on the issue.

To my mind, the very first thing to do is to identify the problems. Problems are self-evident for those only, who are fully aware of the aim, the values, the mission, the vision and the strategy of the organisation. The next step is to “fully live by” those aims, values, vision, strategic issues. The leader should understand themselves deeply, their attitude and their values, so that the contradictions — if there are any — are minimalised between the organisation and the leader. So, there is the mixture, which has to be a well-founded basis. I hope, that it is easy to notice that I deem problems to be relative on many occasions.

Now, we have reached the position of seeing many problems of different nature. I will not go into details regarding my view on how the problems should be classified, but rather I will focus on one very important thing. The emotion-based problems are different from other problems. Stating the obvious? I do not think so. The first thing we should do in my opinion is to check unceasingly whether the problem in question is emotion-based or not. If it is based on deep emotions, then a different approach is necessary to be applied. Understanding the motivational principles behind people’s acts is of great difficulty. One must pay undivided attention to one’s problems. For that the leader needs to have a reputation for being highly aware of the abilities and needs of the people.

As in the case of many things in leadership, especially time-management, the order of solving problems depends on the creation of priorities. Priorities should be created on the basis of the effect of solving a problem. A leader should not overwhelm themselves with tiny problems, because their value is in dealing with the particularly important problems. This should always be kept in mind. Why have you been chosen to be the leader of the organisation? The answer should be: because you are able to solve complex, very important situations and you are the best to do it, or you are among the best.

Gather ample relevant information if it is possible. How much? It is the function of importance and time available. Every problem is different from another, it takes practise to estimate the amount of information that you need. It is crucial to mention “relevance” in this context: focusing on the relevance of the information can save you a lot of time. As a rule of thumb, ask the experts first, but as a zero point on your to-do-list: use your brains beforehand, try to solve the puzzle. If it is a person-related emotional problem and there is a “high relevance” — do it yourself, solve it immediately. It is much easier to keep people motivated when the people see that they are cared about.

Always define the problem. Is it really the problem you are dealing with? Or it is just a symptom of a problem. It is of great importance to be able to distinguish between the two. “Houston, we have got a problem” “Okay, what is the problem exactly?”. It helps to ask some “why”-s (as many as possible), and try to localise the problem accordingly. At the first “don’t know” the interesting things emerge.

Solving problems can be done by means of brainstorming if no solution emerges at first. I have read about other techniques that concentrate on creativity, out of which I deem the “six thinking hats” (also known by “de Bono hats” after Edward de Bono) to be particularly helpful. However, optimisation of time and effort is required according to the priorities set beforehand. Many solutions emerge, but choosing between them requires good rational thinking and well-founded way of thinking, firm values as well as beliefs based on the good-old principle of being aware of the aim of the organisation as well as being aware of themselves as a single human being. More words would be an excessive repetition.

A last piece of advice. A leader has to solve those kind of problems that are hard to decide upon. Many times, the interest of an organisation implies making hard decisions. It would be “very easy” to be a populist leader — in the long run, however, this populist leader fail. If decisions are made on a well-predicted basis, (provided by the leader’s well-founded values and aims mixed with the well-founded values and aims of the organisation) hard decisions are well understood by the other members of the organisation, because they will feel that they are equally and well-foundedly treated the same way. As a positive side-effect, the leader will be acknowledged for the decisions that they make and acknowledgement is an invaluable asset in leadership.

To sum it up, a leader should have an internally consistent system of beliefs and values on which they can put their trust. In addition, it is important to identify the problem, whether it is emotional-based or not. Then, the leader should be able to prioritise in order to maximise their efficiency. Problems should always be well-defined and if needed, creative tools might be used such as brainstorming and six thinking hats. The leader is a leader because they can reach the organisations’ goals better than others by taking into account the people is as well. Difficulties emerge, but the consistent system helps the leader to gain acknowledgement and respect.

Dear Visitor,

As may have seen it, the GregRichBlog.com has not had any new posts for some time, yet. This is due to the very fact that the student association, where I used to be vice-president has today elected me to be the president. Due to the very limited time I have available, I will do the management part of blogging; do not expect any original work by me to be published in the months to come. However, I still keep looking for people with thoughts to enrich our thoughts.

Cheers,

Gazdag Gergely

Karl Mannheim is known by those with higher interest in the field of sociology as the father of the sociology of knowledge. In his, perhaps most well-known book, Ideology and utopia, however, he also expresses his thoughts concerning the intelligentsia.

Mannheim describes the intelligentsia as a group which is “unceasingly sensitive to the dynamic nature of society and to its wholeness¹ ”. He argues that their role is to help the society to develop. For that it is necessary for this group to have an emphatic basis and critical knowledge. The emphatic basis is necessary so that they could sense all the groups’ intentions if they are in conflict with each other. The emphatic basis came into being as a result of a modern change in the society, which is the increased vertical mobility. He argues in his book that

“Vertical mobility is the decisive factor in making persons uncertain and sceptical of their traditional view of the world. (…) In a society organized along the lines of closed casts or ranks the comparative absence of vertical mobility served either to isolate from each other the divergent world-views or if, for example, they experienced a common religion, according to their different contexts of life, they interpreted it in a different way. (…) It is with this clashing of modes of thought, each of which has the same claims to representational validity, that for the first time there is rendered possible the emergence of the question which is so fateful, but also so fundamental in the history of thought, namely, how it is possible that identical human thought-processes concerned with the same world produce divergent conceptions of that world.”²

The critical knowledge refers to value pluralism by means of which they can analyse a given social problem and thereby able to have a more objective view. Mannheim sees the intellectuals as the bearers of the social and political synthesis that possess inadequate education:
“Although they are too differentiated to be regarded as a single class, there is, however, one unifying sociological bond between all groups of intellectuals, namely, education, which binds them together in a striking way. Participation in a common educational heritage progressively tends to suppress differences of birth, status, profession, and wealth, and to unite the individual educated people on the basis of the education they have received.³ “

If we combine the conception of vertical mobility with the critical knowledge then another train of thought regarding the properties of the intellectuals as a group emerges. If the vertical mobility increases the intelligentsia may have members from an ever-wider social stratum. Being that as it may, the “unattached” intellectuals are able to foster the social development:

“Although situated between classes it does not form a middle class. Not, of course, that it is suspended in a vacuum into which social interests do not penetrate; on the contrary, it subsumes in itself all those interests with which social life is permeated. With the increase in the number and variety of the classes and strata from which the individual groups of the intellectuals are recruited, there comes greater multiformity and contrast in the tendencies operating on the intellectual level which ties them to one another. The individual, then, more or less takes a part in the mass of mutually conflicting tendencies. (…) The intellectuals, besides undoubtedly bearing the imprint of their specific class affinity, are also determined in their outlook by this intellectual medium which contains all those contradictory points of view. This ability to attach themselves to classes to which they originally did not belong, was possible for intellectuals because they could adapt themselves to any viewpoint and because they and they alone were in a position to choose their affiliation (…)⁴”

Having read this summary of Mannheim’s thoughts which was written down by him almost 80 years ago I cannot help thinking that things have changed. For example, we talk about multi-generation intellectuals, which in itself, is not in accordance with the “increased vertical mobility” train of thought and its consequences. Attending to university and receiving education will not create in itself intellectuals in the Mannheimian sense, will it?

So, what do you think, dear reader?

1. Karl Mannheim, 1936, Ideology and Utopia, Orlando, Florida, Harcourt Inc., p. 154 [↩]
2. Karl Mannheim, 1936, Ideology and Utopia, Orlando, Florida, Harcourt Inc., p. 7-8-9 [↩]
3. Karl Mannheim, 1936, Ideology and Utopia, Orlando, Florida, Harcourt Inc., p. 155 [↩]
4. Karl Mannheim, 1936, Ideology and Utopia, Orlando, Florida, Harcourt Inc., p. 157 [↩]