I have the opportunity to talk with dozens of company and organizational leaders every week. Lately I’ve been noticing a theme of denial that I haven’t seen the likes of before. People are tending to tout and rely on strengths that no longer serve them like they used to, while at the same time, completely underestimating the costs of their weaknesses.

“Individually and organizationally, we know the value of our strengths much more than we know the costs of our weaknesses.”

Here are just two examples from conversations I’ve had in the last few weeks.

On more than one occasion I listened as several business leaders boasted that their Senior VP’s of Sales “know the market and clients better than anyone.” Then, without me saying a thing they went on to either play down or ignore the fact that their market has changed significantly and now requires a new sales approach, which their SVP of Sales doesn’t seem to be providing.

I’ve also heard three cases where owners or CEOs will tell me that some members of their Leadership Teams aren’t working well together, and in the same breath emphasize that dysfunction at that high level isn’t really that big of a problem and for the most part the team is functioning quite well. Believe it or not, all three continued to downplay the potential scope of the problem in an effort to convince themselves that a simple solution was probably in order. Obviously, the hidden cost of this weakness can be very expensive due to the high level source of the dysfunction in the organization. Additionally the cost risk of the wrong solution is also quite high due to potential collateral damage resulting from employee loyalties and relationships that could become affected. The fact is this is usually a very challenging problem to find the right fix for because it often involves long-term employees who provide high value to the organization that the owner or CEO doesn’t want to negatively effect.

In strong or even predictable economic times, knowing and going with our traditional strengths can either negate or minimize the costs of our weaknesses. But in unpredictable and leaner economies—like the one we’re all currently facing, the costs of our weaknesses can be devastating no matter how much our strengths used to see us through. In fact, that dangerous combination of pride and denial has actually been deadly to many companies of late.

The new reality of our challenging and changing economy has shown us that no organization or industry is necessarily immune. We’ve watched industries like the mighty American automotive industry and the traditionally unbreakable record industry experience drastic change more quickly than most of us could have ever predicted—certainly more quickly than the leaders of those industries could adapt to. We’re currently witnessing other traditional powerhouses, like textbook publishers and broadcast television, struggle as they attempt to muscle their usual approach to the market while their industries face unstoppable, transformative change. The fact is that without urgent and drastic changes in their approaches, their future is bleak at best.

It takes a wise organization to heed the words of Lord Byron: “We enter each age as a novice.” The fact is that the strange waters of this new economy have never been navigated before—by any of us. While we all may be quite familiar with how to keep our respective businesses afloat in the past, we have to recognize that we are now doing so in the unchartered waters of an unprecedented and stormy economy. Whatever strengths we think got us to where we are need to be revalued in the context of this new economy. Similarly, whatever weaknesses we think we might have need to be re-examined as we also look for how changing dynamics may have created new weaknesses or even turned strengths to weaknesses.

This exercise is just as critical as it is difficult. Objectivity is nearly impossible for any of us individually or organizationally. I can’t tell you how many times I’ve heard the leaders of organizations portend that they are being brutally honest and candid about their strengths and weaknesses, only to hear them downplay the costs of their weaknesses as they “humbly” go on about their strengths.

Here’s the deal. If your company is feeling the effects of this new economy in different and more challenging ways than you did before, you can most likely benefit from a value/cost revaluation. The elements of a value/cost revaluation are:

1) A candid and fresh evaluation of the market, the organization, the leadership, the products and services. This will most likely require an objective third party who—believe it or not—doesn’t have to know your company or your industry. (In fact, if they are experts steeped in the history of your industry, they probably can’t qualify as objective.)
2) A candid conversation about the findings (both the strengths and the weaknesses) with members of the leadership team, starting with the top person.
3) A carefully laid out plan that has more to do with the future of the economy and the industry than with the heritage and past approaches of the organization. (As I say, we need to respect the past but embrace the future.)
4) An analysis of what the new organization needs to look like, behave like, communicate like and focus on in order to succeed in the new economy.
5) A plan to execute and communicate the new approach throughout the organization and, if necessary, to the market.

I am not being negative when I say quite emphatically that the old economy isn’t coming back. In fact, there is tons of money to be made in this new economy, even if this economy has not proved itself to be as strong or predictable as what we were used to.

Once again, it’s time to find the opportunity in the face of change. In order to profit from potential opportunities, executives and senior management leaders need to find the courage to reexamine the weaknesses and revalue the strengths of their organizations in the context of the new economy. Because--whether strategic, tactical, behavioral or mythical-- our weaknesses are usually much more detrimental to the pace and progression toward our goals than we think.

Finding an objective advisor to provide a thorough value/cost revaluation, companies can address the changing economy with objectivity and honesty, which opens the door for company-wide shifts in perceptions, and encourages behavior which can lead to more profitable outcomes.

© 2011 Joe Caruso, Caruso Leadership Institute. For more information, visit www.carusoleadership.com.

Author's Bio: 

Author, Keynote Speaker, and Business Consultant Joe Caruso works with CEO’s, Admirals, and leadership teams on the essence of change for success. He has proven to be a high-powered advisor in many different industries and is in demand as a featured keynote speaker, business advisor and consultant with numerous prestigious organizations, especially fast-growing companies and turnarounds. Joe's popular book, The Power of Losing Control, is about to be released an an eBook. Visit www.carusoleadership.com/products to learn more.