Asked several years ago to describe the most important argument taking place at Walmart, then-CEO Lee Scott immediately replied, “The size of our stores.” The world’s largest retailer was debating just how small its footprints and formats could be while still serving customer needs and its own brand equity promise. That conversation, Scott said, provoked a lot of new thinking and analysis.
The most important argument at a fast-growing Web 2.0 services provider revolved around its“freemium” offer. Should the firm aggressively test multiple ways to hybridize its free and fee services? Or would prizing and positioning simplicity above all make the most sense? For a prestigious publisher, the essential — and vociferous — disagreement cut to its entrepreneurial core: Should its popular conferences reinforce the firm’s “countercultural” vibe? Or should they comfortably embrace the world’s biggest, richest, and most established firms, as well?
All firms have strategies and cultures. But sometimes the quickest and surest way to gain valuable insight into their fundamentals is by asking, “What’s the most important argument your organization is having right now?”
The more polite or politically correct might prefer “strategic conversation” over “argument.” But I’ve found the more aggressive framing most helpful in identifying the disagreements that matter most. Of course, there’s frequently more than one “most important argument.” And arguments about which arguments are most important are — sorry — important, as well. (If people insist there are no “most important arguments,” the organization clearly has even bigger unresolved issues.)
The real organizational and cultural insights — and payoffs — come not just from careful listening but recognizing that, as always, actions speak louder than words. What role is leadership playing here? How is the CEO listening to, leading, or facilitating the argument? Is disagreement viewed as dissent? Or is it treated as an opportunity to push for greater clarity and analytical rigor?
Sentiment is as important as situational awareness. Some arguments stir organizational emotions in ways others do not. Similarly, some disagreements energize the enterprise just as surely as others drain the life out of people. Having the same most important argument for years tends to be a very bad sign.
Responses to most important arguments typically fall into one of three rough interrelated categories: strategy, values, or people. Strategic arguments tend to be the most straightforward: Do we compete in this space or not? Are we going to be a leader or not? On the other hand, values arguments are understandably more complex: Does attempting to serve a new customer base compromise who we (think) we are? Do we want to make ourselves even more data-and-analytics-driven in our decision making? Does our intense customer focus risk violating their privacy? Values arguments, even more than strategic disagreements, tend to engage a greater portion of the firm. Healthy arguments around conflicting values demand smart facilitative leaders and leadership at all levels.
Intriguingly, the worst most important arguments I hear usually revolve around people. The CEO or a particularly intrapreneurial business unit leader exhibits behaviors or makes comments that polarize. What did the CEO mean by that? Can you believe the company lets that manager get away with that? What might be called gossip in some organizations mutates into strategic or values arguments. Values and strategic arguments are played out through people and personalities. Corporate characters are alternately heroes, knaves, wizards, and fools. There’s often a fine line between strong and powerful leaders and personality cults. If you think the most important arguments going on in your organization revolve around particular individuals and their unusual mix of style and substance, watch out.
But that affirms one of the great virtues of the question: Are you having the kind of most important argument you want your organization to have? Are you having the right kind of arguments in general? Are your arguments illuminating the path forward or providing the organizations with even better rationalizations and excuses for inaction?
And if you’re not having the right kind of important arguments, then just how much is consensus and alignment really worth?
MICHAEL SCHRAGE
Michael Schrage, a research fellow at MIT Sloan School’s Center for Digital Business, is the author of Serious Play, Who Do You Want Your Customers to Become?, and The Innovator's Hypothesis (forthcoming).
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