The cause of business failure? Ambiguity

A quick glance at the wins and losses of global business in the last decade could reinforce the perspective that small, resourceful, nimble start-ups have led to the demise of the corporate behemoth. But is that really true? On closer inspection, perhaps this isn’t a question of ‘does size matter?’ And more a question of ‘is everybody clear?’.

Brands like Apple, Nike, Patagonia or are big. Really big. The common thread? They are all crystal clear and aligned on what they do, why they do it and who they do it for. Furthermore, they embed that clarity into every aspect of their business ecosystem. Those that haven’t – like Blackberry, Polaroid and Blockbuster – have suffered a crisis of identity leading to a profound lack of direction. Ultimately, they have slipped into the grey zone – and died.

At Grey Lemon we are called in to help companies address an array of issues: a stall on sales, a clog in the talent pipeline, or some knotty conversations to have around succession planning. But, when we start working with them, our detailed Check and Challenge process uncovers the same problem every time. The root cause of most ailments? Chronic ambiguity.

Chronic ambiguity

Vagueness has a destabilising effect on companies. The impact of how individuals respond to uncertainty has been explored in detail by psychologists. A landmark study by UCL in 2016 unearthed a curious fact about human nature. We are more stressed when a bad thing might happen, than when we are certain that it will happen. In the experiment, subjects became more anxious when the chance of receiving an electric shock was 50:50 versus when they knew the zap was 100% certain.

Consider this effect on an organisational level. The result of chronic ambiguity is a gradual decline of things like employee engagement, accountability, and satisfaction. It gets worse: when your people aren’t clear on what the overarching ambition of the company is, they can’t act with autonomy or imagination. Your most talented team members get frustrated and go somewhere better, the less motivated ones stick around and prevaricate in the shadows.

Clarity is King

If clarity is the secret sauce to a lasting business, then how do we get more of it? The answer is to address the root cause of ambiguity. Frequently, the problem descends like a fog from above – if founders or CEOs aren’t explicit on why the company exists and what it sets out to do, then managers are forced to fill in the gaps. This is where dissonance occurs. When the C-suite offer fuzzy direction to managers, everyone except the most gifted pass this confusion down to teams. Anyone who manages anyone should be aware of this: it’s your job to absorb the complex – and turn it into the comprehensible.

Propagating a culture of clarity will be the most vital imperative for leaders in the coming decade. The big company can eat the small, and the fast might outpace the slow. But crucially, the clear will always beat the ambiguous.

You know your business.

We help you see it through fresh eyes.


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