I’m hardly the first to notice this remarkable capacity of the human mind. Sixty years ago, F. Scott Fitzgerald saw “the ability to hold two opposing ideas in mind at the same time and still retain the ability to function” as the sign of “a first-rate intelligence.” That last phrase is telling. In Fitzgerald’s view, only people who have the highest levels of native intelligence have the capacity to use their opposable minds to create new models.
Fitzgerald, I think, is too quick to suggest that the opposable mind is exclusive to geniuses. It’s true that all the people I hold up as examples in this book possess first-rate intelligence, and, just as crucially, the temperaments to put opposing ideas into play without being paralyzed by fear and anxiety. But my view is closer to that of another student of the opposable mind, Thomas C. Chamberlin. A scholar (he was president of the University of Wisconsin from 1887 to 1892) and naturalist, Chamberlin in 1890 proposed the idea of “multiple working hypotheses” as an improvement over the most commonly employed scientific method of the time, the “working hypothesis,” by which the scientist tests the validity of a single explanatory concept through trial and error and experimentation. In an article published in Science—then as now one of the world’s most prestigious peer-reviewed scientific journals—Chamberlin wrote:
In following a single hypothesis, the mind is presumably led to a single explanatory conception. But an adequate explanation often involves the co-ordination of several agencies, which enter into the combined result in varying proportions. The true explanation is therefore necessarily complex. Such complex explanations of phenomena are specially encouraged by the method of multiple hypotheses, and constitute one of its chief merits.6
Interviews with more than fifty great managerial leaders have led me to concur with Chamberlin and Fitzgerald: thinkers who exploit opposing ideas to construct a new solution enjoy a built-in advantage over thinkers who can consider only one model at a time.
The ability to use the opposable mind is an advantage at any time, in any era. But the opposable mind may be more than an advantage in today’s world. In this information-saturated age, where each new bit of data complicates a picture that is already staggeringly complex, integrative thinking may be a necessity if we are ever to find our way past the multiple binds in which we find ourselves. Certainly the business world seems ripe for a new approach to problem solving.
In business, we often look at decisions as a series of either-or propositions, of trade-offs. We can either have steady growth or we can pioneer adventurous new ways of designing, building, and selling things. We can either keep costs down, or we can invest in better stores and service. Either we can serve our shareholders, or we can serve our communities. But what if there was a way to satisfy both customers and shareholders without sacrificing the needs and interests of either party? What if we could find a way to meet demands for growth and still be a responsible steward of the environment? To pursue innovation while maintaining the continuity that large organizations need to function effectively?
Integrative thinking shows us a way past the binary limits of either–or. It shows us that there’s a way to integrate the advantages of one solution without canceling out the advantages of an alternative solution. Integrative thinking affords us, in the words of the poet Wallace Stevens, “the choice not between, but of.”7
There’s no reason to think that integrative thinking can be brought to bear only on the problems of business. In chapter 4, I discuss how Martha Graham used integrative thinking to rescue the art of the dance from sterile classicism and bring it to the center of the twentieth century’s artistic revolution. Integrative thinking has also produced innovations in politics and policy. After World War II, U.S. diplomat George F. Kennan used his opposable mind to find a solution to the seemingly impossible problem of the Soviet Union. Faced with the expansionist ambitions of Joseph Stalin, the United States appeared to have to choose between all-out war—unthinkable in the nuclear age—and acquiescence to Soviet empire building. But Kennan rejected both unacceptable alternatives and instead devised the U.S. policy of containment. Resisting Stalin’s expansionist tendencies with a mixture of culture, diplomacy, economic pressure, military deterrence, and proxy forces, the containment doctrine steered the United States and the West between the poles of war and surrender and contributed significantly to the Soviet Union’s eventual collapse. With its rejection of static, binary end-states in favor of complex, dynamic systems, containment has all the hallmarks of a product of integrative thinking.
The examples of Graham and Kennan suggest that integrative thinking can point us toward solutions not yet imagined to such profound problems as terrorism, global warming, and gross economic inequality. This book isn’t the place to tackle those problems. But in describing how some of the best minds in business used integrative thinking to find profitable and innovative resolutions to seemingly irresolvable conflicts, perhaps this book can suggest new ways to approach some of today’s—and tomorrow’s—most pressing dilemmas.
All the Comforts of Home
Integrative thinking is what enabled Isadore Sharp to found and build the largest and most successful chain of luxury hotels in the world, Four Seasons Hotels and Resorts Ltd., whose brand is synonymous in guests’ minds with the ultimate in luxury service. Sharp’s first lodging property, a smallish roadside motel outside the core of downtown Toronto, was anything but the model for a present-day Four Seasons. Neither was one of his next projects, a large convention hotel in the heart of downtown Toronto. The two properties represented the two dominant models prevailing at the time in the worldwide hotel business.
Sharp found himself increasingly frustrated by the business propositions underlying both prevailing models. He loved the intimacy and comfort of his small motel, but with only one hundred twenty-five rooms, it didn’t generate enough revenue to cover the cost of the workout facilities, meeting rooms, restaurants, and other amenities that business travelers valued. By the same token, he loved that his big convention hotel could provide its guests with every amenity they could desire. But with sixteen hundred rooms, it couldn’t offer the personal touches that made his motel such an agreeable place to stay.
The two types of lodging stood in fundamental and apparently irreconcilable conflict. Guests could choose the small motel’s intimacy and comfort or the large hotel’s location and range of amenities, but no hotel could offer the best of both worlds. So just about everyone in the lodging business chose one type or another and accepted the drawbacks that came with their choice. But not Issy Sharp. Rather than choose one model or the other, each with its attendant shortcomings, Sharp used his opposable mind to create a new model, a hotel with the intimacy of his original motor inn and the amenities of a large convention hotel.
Solving the Pricing Paradox at P&G
When Procter & Gamble CEO A.G. Lafley took the helm in June of 2000, the venerable consumer products maker was floundering. Its growth had slowed almost to a standstill, and two consecutive quarterly profit warnings had finished the tenure of his predecessor. Seven of its top ten brands were suffering market-share declines. The company was spending more and more on research and development but introducing fewer and fewer innovations. It had lost touch with the consumer.
Much of the well-meaning advice people both inside and outside P&G offered Lafley proceeded from the assumption that the company’s costs were out of control. This school of thought saw store brands and other low-cost alternatives as P&G’s primary competitive threat, and low prices as P&G’s logical competitive response. Drastic cost cuts were necessary to make the low prices sustainable. Lafley didn’t necessarily disagree.
An opposing school of thought, meanwhile, held that P&G had stopped innovating. The only route to success, to this way of thinking, was to use innovation to differentiate P&G from its cut-price competitors, charge premium prices, and restore profitability. Lafley saw the sense of that argument as well. His easiest course would have been to tell employees, r
etailers, and consumers that P&G had opted for one alternative or the other: low costs and aggressively low pricing or intensive innovation investment, sharp brand differentiation, and premium pricing.
Like Lee-Chin, Lafley chose neither—and both. He concluded that P&G needed to pare costs and become more price-competitive. But he also concluded that P&G needed to emphasize the innovation that would make the company’s brands clearly superior to the competition’s. Over the next several years, Lafley eliminated layers of management, cut the size of functional units at the corporate level, outsourced where outsiders were more cost-effective, promoted inspiring young managers, stressed the importance of capability-building, and instilled through the organization a relentless focus on generating cash and cutting costs. At the same time, he tirelessly communicated his passion for delighting customers and delivering superior value to them. For the first time in P&G’s history, design became a point of emphasis, and Lafley pioneered a new approach to innovation that strengthened the company’s brands, enabling P&G to charge more for products than it had ever charged before. Before long, P&G was selling soaps, detergents, and toiletries at prices attractive in relation to those of store brands and discount offerings. At the same time, the company was introducing premium products like Olay Regenerist skin cream, which cost an unheard-of $25 for a three-ounce bottle.
What kind of mind could weave together a unified strategy from two such different lines of thought? An innocuous-sounding comment from Lafley furnishes an important clue. “I’m not an either-or kind of guy,” he told me once. The results of thinking in terms of “and” rather than “or” have been breathtaking. Lafley has led P&G to consistently strong organic revenue growth, double-digit profit growth, and a doubling of the company’s stock price within four years. In doing so, Lafley has established himself as one of the finest CEOs of his era.8
The Software Synthesis
In 1995, when Red Hat Inc. was posting sales of a mere $14 million, it didn’t look like a company destined to grow into the world’s dominant provider of Linux software, with annual revenue of $400 million, making cofounder Bob Young a billionaire in the process. In those days, the choices available to software entrepreneurs like Young seemed limited to two dominant business models. Companies such as Microsoft and Oracle typified the classic proprietary software model. They invested heavily in research and development, guarded their intellectual property jealously, and charged high prices. They enjoyed wide profit margins because their customers, lacking access to the source code necessary to change or upgrade the software, were essentially locked into purchasing regular upgrades.
The alternative model was the so-called free software model—a misnomer, in that the software was cheap but not free. Suppliers of free software sold shrink-wrapped CD-ROMs that included both software and source code. Prices were modest—$15 for a copy of Slackware in the early days of Linux, versus $200 for Microsoft Windows—but suppliers made money each time a new version was released. Volume was high, profit margins were thin, and revenue was uncertain, in part because the proliferation of small, idiosyncratic players scared away corporate customers who were looking for standardization and predictability.
Young deemed both models unsatisfactory. He found the high-margin, proprietary model distasteful because he was ideologically committed to the open software movement and its flagship, Linux. Linux and open software were predicated on the source code being freely available to all, giving Linux customers a degree of control over their software that the existing proprietary operating system suppliers were not willing to offer. But the orthodox free-software model placed unacceptable constraints on Red Hat’s growth, market penetration, and profitability. If Red Hat simply followed the established model, it would be just one of many sellers of Linux-based operating systems and far from the biggest of a diverse lot. It would be locked into competing against a wide variety of developers, all of them producing a commodity product in a fringe market.
Faced with two existing options, neither of them terribly appealing, Young incorporated aspects of each: as a loyal soldier in the open-source movement, he decided that Red Hat’s software would continue to be free. But like the proprietary software giants, Red Hat would profit by establishing an ongoing service relationship with its customers. Young reengineered Red Hat’s software to make it available as a free download over the Internet. That one move, which sowed panic among his colleagues when he proposed it, vaulted it ahead of all its Linux rivals and established it as the only Linux provider of sufficient scale to gain the trust of big corporations. That corporate support established Red Hat’s dominance and assured its financial strength.9
Doing or Thinking?
In this book, I analyze the process of integrative thinking, break it down into its constituent elements, and discuss the capacities and skills that people must develop to practice integrative thinking and exploit the full potential of the opposable mind. But before embarking on that exploration, it might be helpful to offer a working definition of integrative thinking:
The ability to face constructively the tension of opposing ideas and, instead of choosing one at the expense of the other, generate a creative resolution of the tension in the form of a new idea that contains elements of the opposing ideas but is superior to each.
This thinking discipline was the most common feature I found among the numerous leaders I interviewed. But apart from the skillful and advanced use of the opposable mind, this group was remarkably diverse: they were older and younger; more overtly cerebral and more plainspoken; more aggressive and more laid-back; more gregarious and more reserved.
With so many differences among them, it would be presumptuous, at the very least, for me to claim to have found the one thing that guarantees leadership success. I am certain that a variety of capabilities contribute to business success. Intelligence, drive, and good health all play a part. So does getting the right break at the right time. But if nothing else, integrative thinking improves the odds of success, without foreclosing other actions and disciplines that other business thinkers rely on to solve problems.
My emphasis on thinking is not necessarily widely shared by business theorists and practitioners. In recent years, the dominant question addressed for the would-be leader is “What should I do?” rather than “What should I think?” To this way of thinking, the dot-com bust was largely a failure of grandiose strategies, and the collapse of the dot-coms tilted the conversation away from thinking to doing. The bias toward action is easily discerned in the three of the most influential business leadership books of recent years: Execution:The Discipline of Getting Things Done by Honeywell CEO Larry Bossidy and consultant Ram Charan; Good to Great:Why Some Companies Make the Leap . . . and Others Don’t by professor-turned-guru Jim Collins; and Jack: Straight from the Gut by Jack Welch, the former super-CEO of GE General Electric Company.10
In Execution, Bossidy and Charan argue that “Execution is the great unaddressed issue in the business world today” and speak dismissively of executives who prefer to think about strategy. Bossidy and Charan itemize and specify all the things that executives must do to meet their definition of execution. The list gets pretty long: “The heart of execution lies in the three core processes: the people process, the strategy process, and the operations process . . . These processes are where the things that matter about execution need to be decided.”11 The rest of the book is dedicated to detailing what executives should do to execute within the three core processes, illustrated with the stories of impeccable execution by notable CEOs such as Dick Brown of EDS and Henry Schacht of Lucent Technologies.
In Good to Great, Collins seeks to explain how companies can go from being merely good to sustainably great. While doing that, he introduces the now-popular idea of “Level 5 Leadership,” which is the kind of leadership found at companies that sustain greatness. Level 5 leaders, Collins argues, show a combination of determination and self-effacement. They relentlessly give credit to those around them inst
ead of taking it themselves. They get the right people in the organization, give them jobs suited to their capabilities, and set aggressive goals. The book provides an extensive recipe for what one must do to be a Level 5 leader.
Welch’s book takes the reader on a journey through his career, with the primary focus on what he did to reach the top of GE and what he did once he got there.
All three books stress action over strategy and describe the mindset that produces effective action. For Bossidy and Charan, the leaders’ minds must be focused on execution and following through, to the exclusion of almost everything else. Collins’s ideal mindset combines fierce will with personal humility. The mind-set that Welch advocates is consumed with aiming high and settling for nothing less than winning.
I would never dispute the importance of doing: thinking without doing is of little value or consequence. However, even on their own terms, it is difficult to come away from those three best sellers with a compelling and practical prescription for what the would-be leader ought to do.
Following the logic of Bossidy and Charan is a challenge. Despite scoffing at leaders who focus on strategy rather than execution, they end up conceding that strategy is integral to execution. Because they cannot maintain a meaningful distinction between strategy and execution, the thing they call “execution” quickly morphs into a laundry list of everything a leader must do: strategy plus operations plus people management. Their theory is also undermined by the fate of the executives they chose as exemplars of superior execution. Shortly after the publication of the book, Brown and Schacht both were fired for dreadful performance.
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