Oriental philosophy brought dualism to our attention with the concepts of Yin and Yang, independent forces that, although opposing, complement each other and reach an equilibrium that turns into harmony.
Management, as a human activity, involves plenty of such tensions between forces, which are not necessarily opposing. In a recent consulting session that I guided for a group of high-level executives from different industries, they were able to easily identify more than twenty of such tensions they frequently face. Some of those in the list were tensions between short-term and long-term strategy, between the search for profits and the speed of growth, between the desire to innovate and the willingness for risk-taking, between focusing in a single business and diversifying into several businesses, between fostering flexibility and creativity in decision-making processes and maintaining traditional methodologies, between what they want to keep and what they need to change in their organizational culture, between choosing an insider or an outside candidate to fill a key position, between cutting costs and modifying product quality, and between economic or emotional compensation.
Two of those tensions were particularly controversial and promoted the debate. First, the tension between short-term and long-term strategy, widely acknowledged as one of the most common in Board of Directors´ meetings, in executive committees, or in strategy sessions. Some cultures tend to favor short-term results as in the case of Latin American countries, and factors such as the way in which traditional compensation packages for senior executives are designed as well as the type of ownership, for example being listed in a stock exchange, worsen such condition. A clear corporate strategy is a basic guide to ensure that today’s actions will be coherent with the future envisioned by the organization, but given the current dynamics and the speed of change in the business environment, it is not unusual to find that the paths we designed for the long-term suddenly cease to be obvious or even reasonable. And then new tensions appear between what’s urgent and what’s important, between what’s temporary and structural, between something unplanned that requires immediate attention and the original plan, in summary, between strategic discipline and flexibility.
A second tension, very common in corporate management, is the one between the search for profits and the speed of growth. Although not always incompatible, growth often implies risks, costs, and complexity, all of which represent a threat to profitability. Diversification and innovation, for example, are paths to growth that are not free of obstacles and create uncertainty regarding their outcome. However, companies need to grow for multiple reasons such as strengthening their market share, obtaining economies of scale, gaining access to new technologies, diversifying risks, and investing cash surpluses. It is therefore wise to think that profitable growth is actually not a single goal, it includes two goals that might be in tension: growing and being profitable.
These tensions that come and go, that vary in intensity, that sometimes announce change, and that are admittedly part of management, have even become the object of research and were named “dialogic pairs” by modern academics, which means pairs that discuss in contrast with the traditional view of pairs that oppose. This approach is a clear reference to the challenge we face as executives of trying to understand the complementary nature of elements in a pair and of finding, for each organization and its strategy, the adequate balance between them given their inevitable presence. From a practical point of view, seeing such tensions as a range of possibilities between two poles that allows us to find the adequate intermediate point depending on the strategy, instead of as a dilemma that forces us to choose one of the poles, is the most reasonable path. For the same tension, there is a different answer in every single company. Therefore, finding yourself at ease in such a tension-filled activity becomes a very valuable management skill. This whole reflection reminds us, by the way, that managing is a mix of art and science at its highest levels, which explains, for example, why experience plays a major role in identifying the most convenient balance for each of those tensions.
Heraclitus, a Greek philosopher, invited us to see the world from the acceptance of unending change, like a continuous process of tension and transformation, to which nothing escapes, that ultimately leads to harmony. And he left us a thought of hope that invites us to persevere in the search for multiple balances between forces, which tensions give birth to the mistakenly called management dilemmas: “Invisible harmony is greater than visible harmony.”