Having the right idea

BOOK REVIEW/Opposable Mind By Roger Martin Harvard Business Press:This book argues that business leaders need to adopt an 'integrative' rather than a 'this or that' approach, which would allow them to embrace contradictions and make more nuanced decisions, writes Richard Evans

The modern world is an ever-changing mass of contradictions. Reconciling them is fundamental to success, whether in business or in life. As F Scott Fitzgerald wrote: "The ability to hold two opposing ideas in mind at the same time and still retain the ability to function is the sign of a first-rate intelligence."

His comment is cited by Roger Martin, author of The Opposable Mind. Unfortunately, most business people follow a "this or that", "either/or" approach that oversimplifies the complexities of the real world. What they require instead, argues Martin, is to learn new "integrative" thought processes that would allow them to embrace contradictions and attain more nuanced decisions and business strategies.

Martin is dean of the University of Toronto's Rotman business school and a former director of Monitor Company, the consulting firm. In this book, he draws on discussions with some 50 global leaders - including the Four Seasons hotel mogul Isadore Sharp, Procter & Gamble chief executive AG Lafley and billionaire software entrepreneur Bob Young - to demonstrate that their success is based on an ability to reconcile contradictions and integrate profoundly differing views.

Take Sharp, creator of one of the most respected and luxurious hotel brands. When he started out, the industry was dominated by two business models: large hotels whose economies of scale allowed them to provide business travellers with extra services, and small hotels that offered intimacy but few services.

Hotel business logic said you could not offer 24-hour secretarial help, fancy communications and stylish dining, entertainment and meeting facilities unless you had revenue from at least 1,000 rooms. But Sharp realised that many business travellers wanted both intimacy and service, and would pay for it. He fused elements of two contradictory business models to create a new strategy.

Such are the powers of integrative thinking. "The first difference between integrative thinkers and conventional thinkers is that integrative thinkers take a broader view of what is salient," writes Martin.

Lafley's leadership of Procter & Gamble offers another example of taking a creative mental leap by using "the opposable mind".

When Lafley took the helm of the troubled consumer products group in 2000, it was losing market share to cheaper generic and own-store brands, profits were falling and it had just issued two consecutive quarterly profit warnings. Senior management was split into two camps: those who wanted to slash costs and compete on price, and those who wanted to pump money into new innovative products.

Seemingly forced to choose between price or quality, Lafley improved innovation by outsourcing half of all development to smaller companies and laboratories while also cutting the cost of centralised research and development.

"We weren't going to win if it was an 'or'," he told the author. "Everybody can do 'or'; everybody can do trade-offs. But you're not going to win if you're in a trade-off game."

A refusal to compromise or to accept mediocrity is a sign of the integrative thinker and leader. This also accounts for the success of Young, the billionaire entrepreneur who turned a tiny company called Red Hat into the leading purveyor of open-source Linux software.

Young succeeded, where others said it was not possible, by improving product, service and consulting quality so much that large organisations decided it was worth entrusting their IT operations to Linux freeware instead of to "safe" but more expensive suppliers such as Microsoft and Oracle.

What distinguishes successful, fast-adapting leaders is an idiosyncratic "stance", or set of ideas, that drives their vision of the business. For Lafley it was the realisation that he was good at synthesising information from his experts and comfortable with taking risks.

Young describes his stance thus: "Wait, reserve judgment and build data over time. I learnt early on not to do anything I didn't understand."

Less successful in the book is where Martin attempts, perhaps because of his business school background, to teach "generative reasoning" or to provide readers with specific conceptual tools and a knowledge system for integrative thinking.

Even without such instruction, the book's case studies are compelling enough, and the thesis that fresh thought processes are required to deal with the world's contradictions and complexities rings true.