How Leaders Can Stop "Seeing Ghosts" And Overcome Invisible Threats and Opportunities in Business

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Before COVID, I? played in a weekly chess tournament in San Francisco. Each Monday we would all show up and play a rated classical (long time control) game. I’d take an Uber from my home in Alameda to the ferry station, then take a 20 minute ferry ride to downtown San Francisco, and then walk for 20 mins to get to the Mechanic’s Chess Club.

I LOVED this Monday evening routine, and I was doing well in my group.

One day I showed up to my weekly game to play against an opponent who was rated around 1600, which is relatively strong for amateur players like me. We played for around 6 hours and ultimately I ended up losing the game. I reviewed the game with my coach afterwards and he said, “you were completely winning, why didn’t you just push your pawn down the board and promote to a queen?”

I didn’t have a good response, during the game I imagined all sorts of threats by my opponent, which were actually not threats at all. One of the things chess players struggle with is this concept of “seeing ghosts,” that is seeing threats that aren’t really there. We get so into our own thoughts that we convince ourselves that something bad is going to happen when in reality our position is completely fine and in fact winning.

This concept strikingly mirrors challenges faced by leaders in business. They too, often perceive threats or opportunities that aren’t there.

"Seeing ghosts" in leadership often manifests as overestimating competitors' capabilities, underestimating internal problems, or misjudging market opportunities. For example, Blockbuster's failure to recognize the threat posed by Netflix's streaming model is a classic case of a leadership oversight. Similarly, Nokia's underestimation of the smartphone market's potential is another such 'ghost'.

Why does this happen and what can leaders to do avoid seeing ghosts?

First let’s take a look at a few more examples:

• Kodak misjudging the impact of digital photography despite inventing the first digital camera which led to its eventual downfall.
• Xerox which created the first GUI (Graphical User Interface) and the concept of the mouse but which then saw ghosts when it came to market threats and competition which allowed Apple and Microsoft to dominate the space.
• Blockbuster which had the chance to buy Netflix but chose not to because they viewed it as a minor threat to it’s business. This misjudgment let to eventual bankruptcy. I recently had the former CEO of Blockbuster as a guest on my podcast as well (the episode is coming out soon and we talk about this in more detail).
• Borders bookstores, once a major retailer, saw e-commerce and digital books as minor trends, failing to invest significantly in an online presence or e-book technology. This misjudgment led to Borders being overtaken by competitors like Amazon, who embraced and led the shift to online retail and e-books.

There are many other examples like this. The question is, how can leaders avoid seeing ghosts in the future? There are a few strategies.

Think like a futurist

Since all of you reading up to this point are paid subscribers I won’t repeat what I wrote in a post a few weeks which you can see below.

The #1 Skill For Leaders To Master And How to Master It With Frameworks, Examples, And Action Items

The whole point of this article is to show that instead of thinking in a linear way, leaders need to think like chess players where they look at different scenarios and possibilities. The post above has a full detailed breakdown with examples and a framework you can use.

Create teams focused on diversity of thought

When you surround yourself by people who think like you and believe in the same things that you believe in, you tend to see lots of ghosts. Why? Because everyone is looking at the problem or the opportunity from the same angle. This concept, often termed as cognitive diversity, refers to the inclusion of people with different ways of thinking, problem-solving, and decision-making. Research has consistently shown that such teams are better equipped for innovation and problem-solving. A study by Cloverpop found that diverse teams make better business decisions up to 87% of the time, and decisions made and executed by diverse teams delivered 60% better results.

Google is a good example of this, which attributes its innovative edge to diverse teams. Another example is IBM, which has long championed diversity of thought in its teams. This approach has been instrumental in driving its transformation over the years, keeping the company at the forefront of technological innovation.

Research by Harvard Business Review points out that teams with a diversity of perspectives are less prone to groupthink and more likely to consider a wider range of strategies and solutions. This is essential when it comes to navigating complex and uncertain business environments like the one we are in now. Diversity of thought isn’t just a nice to have, it’s a business imperative.

Challenge leaders and the status quo

Questioning and critical thinking should not just be things that are accepted but actively encouraged by leaders. This keeps leaders in check and helps avoid complacency and it also empowers employees to be more active and engaged in the work they do.

Challenging the status quo stimulates a culture of continuous improvement and innovation. When employees feel empowered to question existing ways of doing things and propose new ideas, it leads to a environment where creative solutions and strategies can emerge. This culture helps in identifying and addressing potential 'ghosts' - whether they are overblown threats or missed opportunities.

A study by the Center for Talent Innovation found that companies with "speak up" cultures are more likely to innovate and capture new markets. Tesla is a good example of this where Elon Musk's openness to challenge has led to groundbreaking innovations in electric vehicles and space technology. Musk's leadership style encourages his team to constantly question existing practices and push boundaries, driving the company's success.

Another example of this is Microsoft which under Satya Nadella's leadership has transformed its culture to one that values learning over knowing-it-all. Nadella encourages his employees to challenge ideas, including his own, fostering a more inclusive and diverse thinking environment. I actually had Deb Cupp, the President of Microsoft North America, on my podcast a while ago and she told me that she encourages people to challenge her and she also challenges Satya.

This shift has been pivotal in Microsoft's rejuvenation as a leading technology company.

Identify patterns

Chess grandmasters excel in recognizing patterns on the board. This skill helps them anticipate their opponent's potential strategies, foresee threats, and capitalize on opportunities. Checkmates for example can usually follow a specific set of patterns, so much so that there are names for various types of checkmates such as Anastasia's Mate. When you recognize a matting patterns you can either avoid it if you’re on defense or capitalize on it if you are on offense.

Jeff Bezos and the rise of Amazon is a good example of this. As a result of his pattern recognition which started out in book sales, he was able to create one of the world’s largest organizations. In Jeff’s case he kept paying attention to changes in consumer demands in expectations across various industries ranging from healthcare to grocery shopping to cloud computing and how technology specifically can impact these various industries. This led to things like Amazon Prime, AWS, the acquisition of Whole Foods, and many other investments.

In the 1990’s Jeff saw that internet usage was skyrocketing and that there was a massive potential for e-commerce. Later, Jeff spotted that consumers were becoming more comfortable with online shopping. Then, he observed that consumers wanted fast and reliable shipping and returns. Jeff took that same pattern recognition and applied it to AWS where he saw that businesses were struggling with scalable and efficient cloud computing solutions.

Everything Amazon touches is based on their collective ability to spot patterns in consumer behavior and then infusing technology to develop solutions based on that behavior.

As a leader, if you want to stop seeing ghosts then it will be crucial for you to think in terms of scenarios instead of linear paths, create teams where people don’t think like you, encourage people to challenge you and the status quo, and be able to take a step back to identify patterns that in your business and industry.

Being able to discern between a ghost or a real opportunity or threat can be the difference between massive success or colossal failure. Being able to spot ghosts isn’t just a strategic advantage, it’s becoming more of a necessity in an increasingly complex and fast-paced world.

If you're a Chief Human Resources or Chief People Officer, then you can request to join a brand new community I put together called Future Of Work Leaders which focuses on the future of work and employee experience. Join leaders from Tractor Supply, Johnson & Johnson, Lego, Dow, Northrop Grumman and many others. We come together virtually each month and once a year in-person to tackle big themes that go beyond traditional HR.