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Challenges of leading a business

25 June 2021
Leading a successful business is challenging. Sound decision-making requires that leaders are able to make a realistic assessment of their organization, of their team and of their own performance. Without a careful and realistic assessment of their situation, strategic decisions risk being biased and may lead to expensive sometimes detrimental consequences. Leaders therefore need the ability to critically ‘look-back’ while simultaneously ‘look-forward’. Research by Marilieke Engbers and the VU MBA Faculty shows that this is not easy.

What does the research show?

In this research on how the unsaid shapes decision-making in boards, 119 interviews with 17 boards were conducted. It uncovered that board members silently experience many serious strategic and moral dilemmas. More specifically, this dissertation found that that board members who consider their governance paradigm objective and are considered paradigm-attached enact a spiral of unsaid when they try to manage silent conflicts through informal decision-making. When a hot situation is enacted due to the spiral of unsaid, it is managed through scapegoating and ostracizing the board members with the least dominant minority paradigm. Consequently, this research shows they need out of the box thinking, reflexive thinking and deliberation to overcome these dilemmas. They need to be able to challenge their thinking before deciding, while also considering the legal and moral constraints of these decisions.

Fortunately, these skills can be learned: First, reflexive leadership skills require recognizing governance patterns. For example, archetypical dilemmas or tensions team members face (i.e. voicing opinion), even when others disagree or complying to rules that do not seem logical or collaborating or working independently will help (future) leaders recognize the boundaries of the eco-system they operate in. Moreover, insight concerning how different individual governance paradigms shape opinions, open and silent conflicts and strategic decision-making, help recognize how defensive routines in the boardroom risk enacting devastating organizational, societal and individual outcomes.

Empathy is key

Second, reflexive skills require empathizing with others. Through exploring the perspectives and competing stakes and values of different stakeholders, (future) leaders learn to empathize and consequently how to effectively engage with them.

The power of self-reflection to address adversity

Third, reflexive skills require turning the gaze to one-self. Through actively and consciously exploring the effects of what (future) leaders said and not said themselves, when, how and why, they can uncover their own defensive routines and their unintended effects on stakeholders and strategic decision-making. Then, they can practice and find ways to respond to challenging situations and increase their resilience when faced with challenging situations.

Marilieke Engbers (1969) completed her PhD at the School of Business and Economics at the VU University Amsterdam. She combines her lectures on strategy realization for the VU Finance and Control Program with consulting work for Reconsulting on board effectiveness, self-evaluations, strategy and leadership.
Read more about her research on the preconscious and the unsaid in boardrooms
Article How does the Unsaid shape Decision-making in the Boardroom? (Science, Business and Society, 2021)

For more information about the MBA programmes and available scholarships, please email Aki Voudigaris, Senior MBA Recruiter (d.voudigaris@vu.nl), or book an individual call through this link.