PREFACE

Perhaps you remember the first time you heard about the prisoner's dilemma. Someone told you the details: Two prisoners, accomplices in a robbery, are stuck in solitary confinement. The police, short on evidence, try to tempt each of them to rat the other out. If both comply, they will both get two years in jail. If both deny the crime, they will both get one year. If only one denies and the other rats, the rat will go free and the denier will get three years.

So what should they do? If you're like us, when you first heard of the dilemma, you thought you could solve it, and yet round and round you went and in short order you realized you couldn't. Fact is, there is no right answer because you get different answers based on your view of things like loyalty, cooperation, rationality, and retribution. What's right just depends.¹ Still, you probably remember your consternation as you twisted your brain into knots considering the alternatives.

You might be surprised, but we encounter this same kind of consternation all the time when we teach executive leaders in large and small organizations. As part of Pivot Leadership, we work with top executives around the world, and are often called when leaders are debating an important new decision. They're all looking for the right solution, but enough factors come into play that they're tying their brains into knots coming up with it. The knots are a signal: There is no correct solution.

So then we do our job: We point out they're not facing a simple problem with a fixed solution that everyone can agree on. They're facing a paradox, usually a problem complicated not by just a single set of contradictory forces but by many. It's hard for them to see this because of the problem's complexity and their immersion in the details. The problem has many solutions, and although the stakeholders probably can't all agree on one, if they can accommodate some healthy dissent, they can come to a consensus decision on the right way to act.

When we point this out, we hear a big sigh of relief—so big that it's often audible around the room.

You might be puzzled. How could some of the world's top leaders—often from the biggest and most profitable companies on the planet—have trouble seeing the distinction between simple problems and paradoxes? It turns out that the distinction is hard to detect until you're trained to do so. Second, how could those people value our revelation so much? The answer is that we helped them unfreeze a paralyzed decision-making process. People could then manage problem solving in a new way and act more swiftly, intelligently, and confidently.

Our coaching has elicited this sigh of relief so many times that we decided we had to write a book about it—or rather, about what causes people's misunderstanding of paradoxes and how to overcome paradoxes once they're recognized. Indeed, although we have been consulting with top companies for decades, the problem of paradox paralysis comes up more often with every passing year. Especially in the last five years, we have seen paradox-related consternation grow quickly, and we decided the time was right to put a book in your hands.

A lot of the insights in this book come from our work as strategy consultants and teachers of executives, which we have collectively pursued for more than thirty years. Our clients have included leaders at firms like GlaxoSmithKline, Deutsche Post DHL, AbbVie, Nike, Colgate-Palmolive, BlackRock, Thomson Reuters, Becton Dickinson, Ericsson, Johnson & Johnson, Aetna, National Australia Bank (NAB), the private equity firm KKR, Avon Products, Time Warner, Boehringer-Ingelheim, Citigroup, and Illinois Tool Works (ITW). In the typical situation, we get a call from a CEO for advice on how to transform a company or its leaders to meet a new strategic challenge, and one thing leads to another. Inevitably, the conversation turns to the significant paradoxes that are confronting the organization and how to manage them. Often these conversations result in efforts to drive an understanding of paradoxes more deeply into the organization. In one case, we consulted with a CEO, and after we pointed out the nature of paradox management, he wanted us to train his top 150 leaders in our approach.

Many other insights in our book come from our research. Specifically, we launched an effort a year prior to writing that we called The Pivot Paradox Project. We interviewed a hundred CEOs and top leaders from a wide range of companies about the paradoxes they face. These leaders included Frank Appel, CEO of Deutsche Post DHL; John Veihmeyer, CEO of KPMG; Henry Kravis, co-CEO of KKR; Ian Cook, CEO of Colgate-Palmolive; Cameron Clyne, CEO of NAB; Alex Gorsky, chairman and CEO of Johnson & Johnson; Bill Weldon, formerly Chairman and CEO of Johnson & Johnson; Larry Fink, chairman and CEO of BlackRock; Andrea Jung, former Chairman & CEO of Avon Products; Andrew Thornburgh, CEO of Bank of New Zealand, and Scott Santi, CEO of ITW. The research provided us with insightful stories and perspectives on paradoxes that exist in organizations today.

One of the valuable lessons from the project was that paradoxes come in many forms, and they occur everywhere. In fact, we found that much of our advice applied to people in their personal lives as well as their leadership roles. If people solved some of the more universal personal paradoxes—for example, the conflict between making money and finding meaning or to achieve the right balance between work and family—they developed the skills and perspective to deal with them better as leaders in their organization. We hope that as you read the book, although we speak directly to you on the job, you will see that we're also addressing you as an individual facing paradoxes at home, in the community, and as a citizen.

Many clients and friends contributed to our understanding of paradox in organizations and are an important part of this book: Ken Meyers, Nicole Cipa, Mary Lauria, Tim Richmond, Kristin Weirick, Monique Matheison, Mike Tarbell David Ayre, Kim Lafferty, Carolynn Cameron, Rolf-Dirc Roitzheim, Joan Lavin, Kevin Wilde, Mary Lauria, Peter Fasolo, Arturo Poire, Selina Milstam, Andrew Kilshaw, Annie Brown, Dan Johnston, Kristy Matthews, Kim Lafferty, Roger Cude, Vicki Lostetter, Jeff Smith, Mark Wiedman, Fabian Carcia, Daniel Marsili, and Angela Titzrath.

We couldn't have completed the research for the book, or articulated the insights, or gotten it written without the support of many people. At Pivot Leadership, our team included Ryan Fisher, Stacey Philpot, Albertina Vaughn, , Ron Meeks, Kathleen Olsen, Antoine Tirard, Julie Aiken, Julie Roberts, Anesu Mandisodza, Brenda Fogelman, and Michaelene Kyrala. Bruce Wexler assisted with an early copy of the manuscript, and Bill Birchard as editor and coach was superb in guiding this book to its destination.

We especially want to thank the many people whose stories provided details and background for the book. Some of them we name; others, for reasons of privacy, we do not, and we have disguised them by changing identifying facts. Still others provided only background for the book—we couldn't fit everyone's story into its pages and had to make hard decisions of what to (and not to) include. All these stories come from our research or recent consulting work, and for that reason we do not note any of them at the end of the book. In any case, we want to thank all the people who allowed us to interview them. Their stories, all true, are what make it possible to convey this crucial yet subtle element of leadership practice so clearly.

We also want to thank our wonderful editors and support team at Jossey-Bass, whose patience and belief in this project sustained us through multiple rewrites: John Maas, Susan Williams, Clancy Drake, and always Cedric Crocker.

Finally, we want to thank you as a reader. Presumably you are a leader or would-be leader in some capacity. It is the response of people like you, upon publication of this book and our previous ones, who inspire us to do the hard work of authorship. We see much consternation in our line of work, and our most earnest hope is to release people from that prison of indecision that comes from wrestling with paradoxical problems without having the tools to manage them. With this book, we hope to help many take that first step in mastering a new leadership practice.

February 2014

David L. Dotlich Portland, Oregon

Peter C. Cairo New York, New York

Cade Cowan Atlanta, Georgia