Seth Godin articulates this beautifully when he says, “In order to succeed, humans need to build a comfort zone that matches their safety zone.” As Seth describes, our comfort zone is based on what has worked for us in the past. When we’re in our comfort zone, we temporarily avoid a sense of uncertainty and the accompanying anxiety. However, that sense of comfort may actually be disconnected from the real zone of safety around us, leaving us at risk and creating a false sense of security.
In business, we often fall into the same trap. We believe we are serving the best interests of the company with product roadmaps that track to known customer demands, new hires that have spent considerable time in our industries, and efficiency-centric employee performance measures. Economists call this the principle-agent problem. The agent (manager) is entrusted by principles (investors) to run the business. Unlike the manager, the investor is often diversified across many companies and so would like the manager to take intelligent risks that may result in substantial wins for the business. The manager, however, derives most or all of his income from the company and may prefer operating the business in a more predictable way that achieves just enough.
So how can we create business environments that are driven more by intelligent risks based on customer empathy than by the false sense of security that comes with merely repeating what has worked in the past? The answer is to build business processes to leverage uncertainty rather than avoid it. Let provide two examples to illustrate.
These are habits we see in businesses that, intentionally or not, seek to avoid healthy uncertainty and risk:
- Product development roadmaps drove by competitors
- A lack of frequent touchpoints to identify and solve unexpected variances to plans
- A lack of transparency and communication between layers of management and associates
- A buyer/supplier approach to relationships between managers are direct reports
- Motivational systems based on authority and fear
While such workplaces may sometimes succeed in driving predictable, if unextraordinary results, they are hardly built to draw out the customer and employee insights that can lead to exponential growth.
By contrast, these are habits business can employ to embrace uncertainty and build stronger, more valuable relationships with customers and employees:
- Product roadmaps developed using frameworks such as “Jobs to be Done” which focus on unmet needs and goals rather than features currently in the market
- Organizational management systems such as Open Book Management which foster organizational transparency and individual empowerment and investment
- Cross-functional alignment of goals from the executive team to each employee using methods like the Entrepreneurial Operating System
- Motivational systems built on empathy, trust, and shared success
While drawing on empathy to build stronger businesses and products seems intuitive, in many ways it cuts against the grain of routine management practices designed, over decades, to avoid the perception of risk. Those entrepreneurs and businesses willing to design their business systems to embrace and leverage risk have an opportunity to uncover valuable insights that can lead to extraordinary performance.