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Companies are increasingly recognizing that today’s turbulent times require nothing short of continual reinvention. Weathering today’s storm isn’t enough. Companies need to develop repeatable processes that regularly renew their firms before the next crisis hits. This kind of renewal must begin with the leaders themselves.

For generations, the United States had a culture that supported entrepreneurialism and the creation of new growth businesses. Silicon Valley was the embodiment of this culture. Today, individuals and the companies that house them must develop this ability.

Companies need to build a “dual core” culture that excels at building new growth businesses while harnessing the full potential of existing businesses. It’s a tough challenge. Consider the seemingly paradoxical demands this challenge places on leaders’ plates

  • I must focus on running operations with laser-like precision without stifling creativity.
  • I am valued today for my big, existing businesses, but today’s small businesses are critical for long-term success.
  • Attention to detail and focus on numbers has allowed me to progress in my career, but too much detail- or number-orientation can crowd out innovation.
  • I must leverage current capabilities to win in today’s markets, and forget many of these capabilities to win in tomorrow’s markets.

These challenges call into mind the old words of F. Scott Fitzgerald: “The test of a first-rate intelligence is the ability to hold two opposed ideas in the same mind at the same time, and still retain the ability to function.”

Passing Fitzgerald’s test requires that leaders manage two different “gut instincts” at the same time, one more operational and one more entrepreneurial. Few leaders – Apple’s Steve Jobs comes to mind – do this well, and even then one side of the gut usually dominates. Importantly, individual leaders who can personally pass Fitzgerald’s test often can’t crisply articulate how they do so, which inhibits their ability to develop and select the next generation of leaders.

The good news? Researchers, such as Harvard’s Robert Kegan in his book In Over Our Heads, have mapped out the stages of inner development that one must traverse to be an effective multi-selved leader. The bad news? Kegan’s research shows what we instinctively know – only a tiny fraction of adults, even the leaders of global firms, reach a self-development stage where they can confidently confront paradox.

It seems counterintuitive that achievement-oriented managers haven’t naturally achieved personal development levels that allow them to master these kinds of challenges. The problem isn’t a lack of basic intelligence, desire, or capacity. Rather, managers haven’t developed the ability to grapple with paradox because they haven’t needed to.

Modern capitalism has been on a spectacular run since the World War II. Today’s leaders operate global diversified businesses on an enormous scale. The ability to handle paradox has marginal incremental utility to these challenges. In fact, natural selection would weed out managers who possess balanced skills in favor of those whose skills are uniquely attuned to the needs of the time.

Hyper-competitive markets with shrinking windows of competitive advantage mean that leaders have to develop these skills, and fast.

There’s no silver bullet to address this challenge, but the following three tips can help leaders begin the necessary process of personal reinvention.

1. Personalized development

Work with a human resources executive to develop a personalized development program. This isn’t your father’s HR program—including psychological, philosophical, or even spiritual elements in training can help leaders improve their ability to grapple with paradox. Consider using tools such as Kegan’s “Seven Languages of Transformation” to help accelerate your and your team’s ability to change.

2. Expose yourself to new experiences and challenges

Start a “nights and weekend” activity rife with ambiguity. University of Southern California Professor Morgan McCall describes how a manager’s capabilities come from attending “schools of experience.” Helping a family member with a small business, launching a volunteer program at work, or spearheading an activity in the community can be ways to gain exposure to new sets of challenges.

3. Expose yourself to new inputs

Consciously complicate your life by brushing up against other disciplines. It’s a long-held view that innovation often occurs when different disciplines intersect. Going to trade shows in unrelated industries, trading jobs for a week with a colleague at a non-competitive company, or even reading an unusual magazine can expose leaders to new ways of thinking.

Albert Einstein once defined insanity as doing the same thing and expecting different results. Einstein would surely raise his eyebrows at companies that ask mono-focused, execution-minded leaders to spearhead corporate reinvention efforts. Leaders need to start the process of personal reinvention soon, or suffer the inevitable consequences.

Scott D. Anthony is President of Innosight LLC, an innovation consulting and investing firm with offices in Baltimore, Boston, Singapore, and India, and the author of The Silver Lining: An Innovation Playbook for Uncertain Times (Harvard Business Press, June 2009).

Michael Putz is Director of Business Development and Strategy for Cisco Systems. He focuses on the leadership challenges of disruptive innovation and sustainable growth.

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