Compass

Compasses are critical navigation tools and powerful metaphors. We use them at MacDuff to remind us to work hard at getting our life values straight, prioritized and reflected in our personal as well as business decisions.

We identity a person's single most important value as "true north". During our life and business journeys we can fully explore possibilities, take risks, wander and always find our way home. The benefit of true north thinking is it keeps things simple, direct and focused on what is important.

My true north is ethics-based behavior. (Sometimes my compass points to magnetic north and I go off course just in case there's a question.) From a business standpoint, for me, ethics driven decisions keep decisions less cluttered with extraneous nonsense, simplify clear communication in high stress environments and help create self-directed teams whose members respect each other. In other words, this sets a leadership tone that builds and reinforces camaraderie, builds a strong company and a strong brand.

Ironically, this behavior based "north" plays a role in strategic planning, or more specifically in the flaws inherent in strategic planning. In a very thoughtful article written in 2003 by Charles Roxburgh for McKinsey Quartlerly http://tinyurl.com/npvgov Roxburgh looks at why so many terrific executives and owners implement non-workable strategies. The answer is the wiring of the human brain:

  • Overconfidence - intuitively obvious what this is
  • Mental accounting - we value the sources of money differently (ours, theirs, government's banks') thus discount or put a premium value on risks
  • Status Quo bias - doing what we are doing because it is comfortable
  • Anchoring - the tendency to judge future outcomes based on most resent results
  • Sunk cost thinking - the belief that if we keep doing what we have been doing unsuccessfully longer we will eventually get the results we want.

Down the road I will talk about ways to defeat these biases. In the meantime, read the reference article. If your time permits, please share how you define your true north.

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