4 Ways Leaders Can Solve and Manage the Toughest Paradoxes

Most problems that leaders of growing mid-market businesses face today are not simple or straightforward. They are messy, complex and usually have more than one right answer. Common paradoxical problems include the conflicting needs of investment vs. profit, short- vs. long-term goals, racing to maintain profitability while waging the war for talent, etc. We’ve all seen how these challenges play out. Because they never end, they create frustration for the leader who wants to solve them once and for all.

At its most basic level, nearly every business challenge can be classified into two groups—puzzles and paradoxes. Puzzles are problems with clear and defined answers, such as, “Should we buy the new SAP system?” Paradoxes, on the other hand, are defined by two or more competing alternatives that will never be fully resolved. While puzzles can be tricky, paradoxes are always complex and multifaceted. Most leaders approach paradoxes as if they were puzzles with little or no success. That’s how they get stuck.

Here are four ways to solve and manage your toughest paradoxes:

1. Get Clear on Your Purpose. We often hear about purpose from large enterprises, such as Johnson & Johnson’s Credo or Google’s “Do No Evil,” and they serve as guiding lights for the organization. But, CEOs of small to mid-sized companies have less room to make mistakes and fewer places to hide when there are bumps in the road. By taking the time to clearly define your organizational purpose—who you serve and why—and making sure everyone understands it, the CEO of a smaller organization can engage everyone and position the company to scale in an advantageous, purpose-driven way.

Once you have defined your purpose, use it as a guide, or perspective, to frame the paradoxical challenge you are facing. By doing this, you give the paradox a new lens through which to evaluate the problem. Consider Patagonia’s mission statement and its inherent paradox: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” That prompted Patagonia to take seemingly counter-intuitive actions. On one Black Friday, when other retailers promoted low prices and high consumption, Patagonia urged customers to “not buy from us what you don’t need or can’t really use. Everything we make—everything anyone makes—costs the planet more than it gives back.” By staying true to their purpose, Patagonia won the hearts and minds of both new and loyal customers.

2. Use Your Purpose to Shape Your Strategy. Typically, CEOs feel as though they should have a highly polished and analytical strategic plan that is endorsed by consultants or their executive team. But today, once those plans are completed, they are often already outdated. Although we have all been told that strategic planning is the cornerstone of effective leadership, it is less important in today’s fast-changing environment. This is particularly true in the mid-market because organizations must stay nimble to quickly capitalize on new opportunities, shifts in customer needs and changing technologies. Using purpose as a North Star to guide decision-making can enable you to challenge your own strategy often and revise your strategy quickly as the forces around you shift and change.

3. Flex Your Company’s “Paradox Muscle.” Everything about the way organizations run is designed for people to solve puzzles, including functional groups, reporting lines, quarterly progress metrics, performance reviews, and so on. When we are climbing up the ladder as managers and directors, that model works well. But when you become a CEO, your to-do list is comprised almost exclusively of paradoxes, which have a natural tendency to drift upward. Problem that arrive at your desk are those that no one under you has been able to solve. The trick is to help your leaders manage the paradoxes themselves and reward them accordingly.

4. Keep Your Strengths in Check. By taking stock of your “derailers”—your personality strengths that go awry when you’re stressed—you can learn to limit their impact on others. These can be as obvious as when confidence becomes arrogance or as subtle as the blind need to achieve perfection or being excessively cautious. The key is to recognize which of your derailers show up most often under pressure and to be honest with yourself about how you’re reacting before it affects your entire team.

Managing paradoxes is a team effort. If you can train your leadership team to better manage paradoxes before they reach your desk, you will be able to focus on what you do best: moving the business forward.

David Dotlich is Chairman and CEO of Pivot Leadership, and author of the book “The Unfinished Leader: Balancing Contradictory Answers to Unsolvable Problems.”