We are drawn to the stories of effective leaders in action. Their
decisiveness invigorates us. The events that unfold from their bold
moves, often culminating in successful outcomes, make for gripping
narratives. Perhaps most important, we turn to accounts of their deeds
for lessons that we can apply in our own careers. Books like
Jack: Straight from the Gut and
Execution: The Discipline of Getting Things Done
are compelling in part because they implicitly promise that we can
achieve the success of a Jack Welch or a Larry Bossidy—if only we learn
to emulate his actions.
But this focus on
what a leader does is misplaced. That’s
because moves that work in one context often make little sense in
another, even at the same company or within the experience of a single
leader. Recall that Jack Welch, early in his career at General Electric,
insisted that each of GE’s businesses be number one or number two in
market share in its industry; years later he insisted that those same
businesses define their markets so that their share was no greater than
10%, thereby forcing managers to look for opportunities beyond the
confines of a narrowly conceived market. Trying to learn from what Jack
Welch did invites confusion and incoherence, because he pursued—wisely, I
might add—diametrically opposed courses at different points in his
career and in GE’s history.
So where do we look for lessons? A more productive, though more difficult, approach is to focus on
how a leader thinks—that is, to examine the antecedent of doing, or the ways in which leaders’ cognitive processes produce their actions.
I have spent the past 15 years, first as a management consultant and
now as the dean of a business school, studying leaders with exemplary
records. Over the past six years, I have interviewed more than 50 such
leaders, some for as long as eight hours, and found that most of them
share a somewhat unusual trait: They have the predisposition and the
capacity to hold in their heads two opposing ideas at once. And then,
without panicking or simply settling for one alternative or the other,
they’re able to creatively resolve the tension between those two ideas
by generating a new one that contains elements of the others but is
superior to both. This process of consideration and synthesis can be
termed integrative thinking. It is this discipline—not superior strategy
or faultless execution—that is a defining characteristic of most
exceptional businesses and the people who run them.
I don’t claim that this is a new idea. More than 60 years ago, F.
Scott Fitzgerald saw “the ability to hold two opposing ideas in mind at
the same time and still retain the ability to function” as the sign of a
truly intelligent individual. And certainly not every good leader
exhibits this capability, nor is it the sole source of success for those
who do. But it is clear to me that integrative thinking tremendously
improves people’s odds.
This insight is easy to miss, though, since the management
conversation in recent years has tilted away from thinking and toward
doing (witness the popularity of books like
Execution). Also,
many great integrative thinkers aren’t even aware of their particular
capability and thus don’t consciously exercise it. Take Jack Welch, who
is among the executives I have interviewed: He is clearly a consummate
integrative thinker—but you’d never know it from reading his books.
Indeed, my aim in this article is to deconstruct and describe a
capability that seems to come naturally to many successful leaders. To
illustrate the concept, I’ll concentrate on an executive I talked with
at length: Bob Young, the colorful cofounder and former CEO of Red Hat,
the dominant distributor of Linux open-source software. The assumption
underlying my examination of his and others’ integrative thinking is
this: It isn’t just an ability you’re born with—it’s something you can
hone.
ooks.
Opposable Thumb, Opposable Mind
In the mid-1990s, Red Hat faced what seemed like two alternative
paths to growth. At the time, the company sold packaged versions of
Linux open-source software, mainly to computer geeks, periodically
bundling together new versions that included the latest upgrades from
countless independent developers. As Red Hat looked to grow beyond its
$1 million in annual sales, it could have chosen one of the two basic
business models in the software industry.
One was the classic proprietary-software model, employed by big
players such as Microsoft, Oracle, and SAP, which sold customers
operating software but not the source code. These companies invested
heavily in research and development, guarded their intellectual property
jealously, charged high prices, and enjoyed wide profit margins because
their customers, lacking access to the source code, were essentially
locked into purchasing regular upgrades.
The alternative, employed by numerous small companies, including Red
Hat itself, was the so-called free-software model, in which suppliers
sold CD-ROMs with both the software and the source code. The software
products weren’t in fact free, but prices were modest—$15 for a packaged
version of the Linux operating system versus more than $200 for
Microsoft Windows. Suppliers made money each time they assembled a new
version from the many free updates by independent developers; but profit
margins were narrow and revenue was uncertain. Corporate customers,
looking for standardization and predictability, were wary not only of
the unfamiliar software but also of its small and idiosyncratic
suppliers.
Bob Young—a self-deprecating eccentric in an industry full of
eccentrics, who signaled his affiliation with his company by regularly
sporting red socks and a red hat—didn’t like either of these models. The
high-margin proprietary model ran counter to the whole philosophy of
Linux and the open-source movement, even if there had been a way to
create proprietary versions of the software. “Buying proprietary
software is like buying a car with the hood welded shut,” Young told me.
“If something goes wrong, you can’t even try to fix it.” But the
free-software model meant scraping a slim profit from the packaging and
distribution of a freely available commodity in a fringe market, which
might have offered reasonable returns in the short term but wasn’t
likely to deliver sustained profitable growth.
Young likes to say that he’s not “one of the smart guys” in the
industry, that he’s a salesman in a world of technical geniuses.
Nonetheless, he managed to synthesize two seemingly irreconcilable
business models, placing Red Hat on a path to tremendous success. His
response to his strategic dilemma was to combine the free-software
model’s low product price with the proprietary model’s profitable
service component, in the process creating something new: a corporate
market for the Linux operating system. As is often the case with
integrative thinking, Young included some twists on both models that
made the synthesis work.
Although inspired by the proprietary model, Red Hat’s service
offering was quite different. “If you ran into a bug that caused your
systems to crash,” Young said of the service you’d buy from the big
proprietary shops, “you would call up the manufacturer and say, ‘My
systems are crashing.’ And he’d say, ‘Oh, dear,’ while he really meant,
‘Oh, good.’ He’d send an engineer over at several hundred dollars an
hour to fix his software, which was broken when he delivered it to you,
and he’d call that customer service.” Red Hat, by contrast, helped
companies manage the upgrades and improvements available almost daily
through Linux’s open-source platform.
Young also made a crucial change to what had been the somewhat
misleadingly dubbed free-software model: He actually gave the software
away, repackaging it as a free download on the Internet rather than as
an inexpensive but cumbersome CD-ROM. This allowed Red Hat to break away
from the multitude of small Linux packagers by acquiring the scale and
market leadership to generate faith among cautious corporate customers
in what would become Red Hat’s central offering—service, not software.
In 1999, Red Hat went public, and Young became a billionaire on the
first day of trading. By 2000, Linux had captured 25% of the server
operating system market, and Red Hat held more than 50% of the global
market for Linux systems. Unlike the vast majority of dot-com era
start-ups, Red Hat has continued to grow.
What enabled Young to resolve the apparent choice between two
unattractive models? It was his use of an innate but underdeveloped
human characteristic, something we might call—in a metaphor that echoes
another human trait—the opposable mind.
Human beings are distinguished from nearly every other creature by a
physical feature: the opposable thumb. Thanks to the tension that we can
create by opposing the thumb and fingers, we can do marvelous
things—write, thread a needle, guide a catheter through an artery.
Although evolution provided human beings with this potential advantage,
it would have gone to waste if our species had not exercised it in ever
more sophisticated ways. When we engage in something like writing, we
train the muscles involved and the brain that controls them. Without
exploring the possibilities of opposition, we wouldn’t have developed
either its physical properties or the cognition that accompanies and
animates it.
Analogously, we were born with opposable minds, which allow us to
hold two conflicting ideas in constructive, almost dialectic tension. We
can use that tension to think our way toward new, superior ideas. Were
we able to hold only one thought or idea in our heads at a time, we
wouldn’t have access to the insights that the opposable mind can
produce.
Unfortunately, because people don’t exercise this capability much,
great integrative thinkers are fairly rare. Why is this potentially
powerful but generally latent tool used so infrequently and to less than
full advantage? Because putting it to work makes us anxious. Most of us
avoid complexity and ambiguity and seek out the comfort of simplicity
and clarity. To cope with the dizzying complexity of the world around
us, we simplify where we can. We crave the certainty of choosing between
well-defined alternatives and the closure that comes when a decision
has been made.
For those reasons, we often don’t know what to do with fundamentally
opposing and seemingly incommensurable models. Our first impulse is
usually to determine which of the two models is “right” and, by the
process of elimination, which is “wrong.” We may even take sides and try
to prove that our chosen model is better than the other one. But in
rejecting one model out of hand, we miss out on all the value that we
could have realized by considering the opposing two at the same time and
finding in the tension clues to a superior model. By forcing a choice
between the two, we disengage the opposable mind before it can seek a
creative resolution.
We often don’t know what to do with fundamentally opposing models.
Our first impulse is usually to determine which is “right” and, by the
process of elimination, which is “wrong.”
This nearly universal personal trait is writ large in most
organizations. When a colleague admonishes us to “quit complicating the
issue,” it’s not just an impatient reminder to get on with the damn
job—it’s also a plea to keep the complexity at a comfortable level.
To take advantage of our opposable minds, we must resist our natural
leaning toward simplicity and certainty. Bob Young recognized from the
beginning that he wasn’t bound to choose one of the two prevailing
software business models. He saw the unpleasant trade-offs he’d have to
make if he chose between the two as a signal to rethink the problem from
the ground up. And he didn’t rest until he found a new model that grew
out of the tension between them.
Basically, Young refused to settle for an “either-or” choice. That
phrase has come up time and again in my interviews with successful
leaders. When asked whether he thought strategy or execution was more
important, Jack Welch responded: “I don’t think it’s an ‘either-or.’”
Similarly, Procter & Gamble CEO A.G. Lafley—when asked how he came
up with a turnaround plan that drew on both cost cutting and investment
in innovation—said: “We weren’t going to win if it were an ‘or.’
Everybody can do ‘or.’”
The Four Stages of Decision Making
So what does the process of integrative thinking look like? How do
integrative thinkers consider their options in a way that leads to new
possibilities and not merely back to the same inadequate alternatives?
They work through four related but distinct stages. The steps themselves
aren’t particular to integrative thinking: Everyone goes through them
while thinking through a decision. What’s distinctive about integrative
thinkers is how they approach the steps. (See the exhibit “Conventional
Versus Integrative Thinking.”)
