Strategic Discipline Blog

The rant went something similar to this, “Seventeen people? You want to bankrupt the company? Seventeen people?  No Way! Seventeen people? Microsoft would never expose itself to financial ruin!  Seventeen people?  Microsoft should have enough cash on hand to go a year – an entire year! without a penny of revenues.”

This is how Steve Ballmer recalls his announcement to Bill Gates about the calculations on growth that Microsoft would need to get started. He was about to abandon his studies at Stanford Graduate School to join his friend adventure to start Microsoft. 

Significant?

Do you ever react this way?  Do you have a high sensitivity to the market place?  Do you find yourself going down a dark hole at times that involves catastrophe and challenges that could happen yet are unlikely to if you continue to follow the disciplined path you are on?  If so you probably have the make-up for Great by Choice’s Third Core Behavior: Productive Paranoia.

If you have this behavior, congratulations you’re in good company.  Andy Grove of Intel “looks for the black cloud in the silver lining.”  Kevin Sharer of Amgen puts a portrait General George A Custer in his office to remind himself that overconfidence leads to doom.

Great By Choice describes productive paranoia: 10Xers maintain hyper vigilance, staying highly attuned to threats and changes in their environment, even when—especially when—all’s going well. They assume conditions will turn against them, at perhaps the worst possible moment. They channel their fear and worry into action, preparing, developing contingency plans, building buffers, and maintaining large margins of safety.

10Xer’s differ from their less successful comparison company leaders in how they maintain hyper vigilance in good times as well as bad.  Even in calm, clear, positive conditions, 10Xer’s constantly consider the possibility that events could turn against them at any moment.  Indeed they believe that conditions will – absolutely, with 100% certainty – turn against them without warning, at some unpredictable point in time, at some highly inconvenient moment.  And they better be prepared...

The distinguishing behavior characteristic that makes Productive Paranoia so impactful: 10Xer’s distinguish themselves not by paranoia per se, but by how they take effective action as a result. Paranoid behavior can be enormously practical when fear is channeled into extensive preparation, calm, and clearheaded action. They avoid unnecessary risks that would expose them to calamity through deliberate, methodical, and systematic preparation always asking, “What if?  What if?  What if?”

Another distinguishing behavior characteristic for these leaders.  They seek to accomplish a great objective, a goal, a company, a noble ambition to change the world, or a desire to be useful in the extreme.  They’re not worried about protecting what they have, rather it’s to create or build something truly great, bigger than themselves.  That’s Level Five Ambition.

What if you don’t have productive paranoia?  What if you view the world optimistically and walk around in the fresh fragrance of Pollyanna each day?

You may wish to consider having someone close to you that offers this third core behavior.  In my case I’m fortunate to have my CFO and spouse as my not so subconscious Productive Paranoid.

Hardly a purchase or decision I make for the company doesn’t come under her scrutiny.  Major purchases are always discussed prior, with a review of financial obligations and exactly what the benefit of this purchase will bring.

Most importantly in my Number One Priority for the past 16 months she has been a beacon of productive paranoia.  I would not be where I am without your hyper vigilance on everything that I contact, the food I eat, the activities I do, my bathroom habits, prescriptions, medications, tiredness, and skin fluctuations get her immediate and thorough screening.  She’s a miracle worker, keeping me aware of issues that I am or could be facing, the detriments to drug medications, symptoms from drugs, what might be causing my issues, constantly navigating the Internet to find out more and ensure I stay healthy.  She is in constant fear for my health and suffering a setback.  God Bless her!

The benefit? I’m much more aware of being cautious to challenges and obstacles.  Would it be better to have this behavior within you?  Unequivocally YES! You can imagine the conflict this could create internally, however I don’t believe wide-eyed optimism and the productive paranoid can co-exist within the same person.  I would believe they are two separate behaviors.  A psychologist/psychiatrist can correct me on this.

The trouble with having your productive paranoid behavior residing in someone else is failing consistently to tap into it.  Plus the additional conflict and time it requires to sort decisions out.  As a Pollyanna optimist I confess to occasionally making decisions without consulting my productive paranoid partner.  You can imagine how frequently I’m reminded of those poor decisions!

The key here is to recognize the value of this quality.  If you don’t have this Core Behavior recognize the need for someone to keep this in front of you. 

The best leaders have Productive Paranoid behavior.  As Bill Gates noted, “I consider fear on a regular basis.  Fear should be your guide, but it should be latent”

As someone who’d seen his personal fortune drop $300 million in 4 days from June 17-20, 1991 when a memo filled with his “nightmare” scenarios found its way to the San Jose Mercury News. He should know.

At the time the memo was shared, Microsoft was on the verge of becoming the most dominant software product ever.  Still Gates said he always lived in fear, always felt vulnerable, and continues to do so.  A year after the nightmare he shared, “If I really believed this stuff about our invincibility, I suppose I would take more vacations.”

The productive paranoid embraces the myriad of possible dangers, placing themselves in a superior position to overcome danger.

Hope you’ve found this review of Great By Choice, the Core Behaviors and key principles helpful.  I plan to explore SMaC more in blogs ahead.  The Heath Brothers, writers of Switch: How to Change Things When Change Is Hard and Made to Stick: Why Some Ideas Survive and Others Die have published a new book on Decision Making: Decisive: How to Make Better Choices in Life and Work.  We’ve explored this topic before, including the four factors that make decisions difficult. 

I’ll have some personal and professional observations on decision making in my next blog before delving into the Heath Brothers nuggets from the book.