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Know What You Don’t Know

I hope you enter the new year with enthusiasm, a sense of purpose, a willingness to go outside your comfort zone to grow and learn, and a feeling of real gratitude for the opportunity to be part of the HBS community. Amidst these feelings of optimism and confidence though, there is another thought that might over the years do you and those you work and partner with as much good as any set of “climb any mountain” or similarly confident underlying feelings. That thought is the wisdom and humility to know what you do not know and have the skill, initiative and moral courage to take the right actions at the right times to turn this realization into a strength. Let me use two examples to illustrate the point.

The first is almost certainly well known to you- the implementation of the Affordable Care Act (ACA). By the way, while imperfect I happen to think the ACA has many positive characteristics and will eventually be seen as a step forward if the current implementation challenges can be overcome. The gaps in implementation are by now well documented- no one actually in charge, insufficient resources brought to bear, unrealistic schedules, insufficient attention to many and diverse warning signs from knowledgeable and supportive outsiders, insufficient tough minded external reviews at appropriate points, insufficient scale and complexity stress tests and the list goes on. Why did this happen? The reasons are many and complex, but in my judgment, they start with the lack of awareness around the central truth that a group of people were responsible for a very important initiative for which they individually and collectively had little to no real experience. Moreover, this lack of experience was multifaceted and deep to include at least technological, project management, industry understanding and consumer behavior knowledge gaps. The steps taken in the past three months start to address these gaps by putting a knowledgeable person in charge, owning the failings, bringing better resources to bear, tracking activity at a granular and frequent basis,
better schedules and accountability for schedule and hence a more engaged and tough minded CEO approach at the top.

So if the ACA is an example of violating the know what you do not know precept, what does good look like? The oil industry is an important, complex, exciting and highly operationally intensive business. Operating huge refineries, sailing tankers though pirate infested water, and drilling from and erecting offshore platforms in the water miles deep is not for the faint of heart. The industry and the world received a massive and tragic wake-up call in 2010 when a rig operated by one of the biggest and most experienced oil companies exploded resulting in severe loss of life and untold environmental damage. The industry rushed to help a comrade in arms and the people most affected. What they found was a situation shockingly lacking in almost all aspects of design, training and operations. The other major oil companies could have just said upon assessing their colleagues’ problem and comparing it to themselves that they were fine. One of the major oil firms had the best safety record in the industry, had never had a major incident, made safety and operational effectiveness part of the culture at every level, walked the talk- you name it. The CEO had been in his job a few years, and the head of exploration and production for almost a decade. The CEO had a wide range of experience, but he came up more on the business than operational side. He trusted and respected his team. But he also knew that what was good enough operationally in the past was likely not good enough going forward. He also knew that he should reach outside his normal range of advisors and hear from people who were the best in the world at operating complex devices in hostile ocean environments independently and for long periods with crews that needed to be nearly self-sufficient. He concluded he needed to be more personally involved, challenge the status quo, design mechanisms to provide him with independent and timely reports on operational status in the field, and upgrade training everywhere. No one is declaring victory here and there are years of work yet to be done. But the point is that a leader saw a mission critical area, knew the internal resources and processes while good were not alone able to meet the future need, and he through personal involvement and willingness to change helped make the company better. This leadership team knew they needed help and had the courage and initiative to reach out and really listen.

Confidence is great. Confidence, insight and humility combined are powerful.

February 4, 2014
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