In my first post of the New Year, I kicked off 2016  by posing the question, What's Going To Be Different In 2016Before you can figure out where you want to get to, you have to understand exactly where you are now.  The Stockdale Paradox is all about confronting the reality of your current business position. The Stockdale Paradox

Let me starting off by explaining what The Stockdale Paradox is, and how it applies to business. And then I'll share 4 actions that'll help you to set your business on solid foundations in 2016.

I first came across Admiral James Stockdale in the book. Good to Great, by Jim Collins.  Collins and his team were trying to understand the common traits of the “great” companies who had their outperformed their “good” competitors over a 15-year period or more.  One of the common factors of the truly great companies was what Collins called The Stockdale Paradox.

The Stockdale Paradox is named after Admiral James Stockdale , the highest ranked US officer to be held prisoner during the Vietnam War. Stockdale was tortured and beaten during this 7 year ordeal and no reason to believe he would ever be released, let alone see his wife again.  But through his imprisonment, he kept his faith.

I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.”

Here is the paradox:  While Stockdale had unbelievable faith that things would work out, he said that it was always the most optimistic of his fellow POW’s who failed to make it out alive.  “They were the ones who said, ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go.  Then they’d say, ‘We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.”

What were the optimists missing?  According to Stockdale, they failed to confront the brutal reality of their situation.  They preferred the ostrich approach, sticking their heads in the sand and hoping for the difficulties to go away.

Stockdale however approached this awful situation with a very different mind-set.  He accepted the reality of his situation, and rather than bury his head in the sand, he stepped up and did everything he could to lift the morale and prolong the lives of other prisoners.  He created a tapping code the prisoners could use to communicate with each other.  He developed a milestone system to help all of the prisoners deal with the torture they had to endure.

Interesting. But what’s this got to do with business?

Well, Collins and his team observed a similar mind-set in the good-to-great companies and named it the Stockdale Paradox:

 You must retain faith that you will prevail in the end, regardless of the difficulties AND AT THE SAME TIME you must confront the most brutal facts of your current reality, whatever they might be.”

The key is in addressing both parts.

We have to believe that we will find solutions to the problems that we encounter on the business roller coaster. BUT we cannot afford to bury our heads in the sand and over-look problems. Think of the great brands like Kodak who buried their head s in the sand about changes in technology and the marketplace, and then went under.

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If we want a successful business, not only do we need to remain optimistic at all times, but we must also be brutally honest about the state of our business. And then take action to address any shortcomings and changes to the market.

How can you apply the Stockdale Paradox to your business?

  • If you haven’t done so already, take an hour (best done at your local café over a cup of tea and slice of cake in my experience!) to go through my 9 Questions To Ask As Part Of Your Annual Review. This will give you a high level view of your year.
  • Carry out a SWOT analysis. This is a simple but effective tool, designed to help you assess the strengths, weaknesses, opportunities and threats faced by your business.
  • Then carry out a PEST analysis. PEST is an acronym for Political, Economic, Social and Technological factors and is used to assess the external market.
  • Finally use the Porter's Five Forces Model to review the competitive strength of your business relative to the market.

None of these exercises should take you very long to do. But they will help you to work out which areas of your business require attention right now, and what are your highest priority areas for action.

If you’ve been used to sticking your head in the sand, the Stockdale Paradox can be a difficult principle to embrace. But the willingness to confront the reality of your business - and then take action - will help you to make 2016 a breakthrough year.

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Join the Conversation

Question: Have you stuck your head in the sand when it comes to business? I love hearing from you. Please let me know in the comments box below.

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About Denyse

Prior to becoming a business consultant and coach, I gained 25 years’ experience in business, including 8 years as a former CEO. This experience is backed up by training at Cranfield School of Management, the UK’s leading business school. With experience in business planning, financial management, risk management, building strategic partnerships, product development, marketing (including PR) plus leading and developing staff teams of up to 150 people, there’s very little I haven’t had to deal with or experienced.

You can find out more about working with me HERE. Or alternatively email me on denyse@denysewhillier.com to arrange an informal chat over coffee. There’s no hard sell. Just solid advice and a straightforward, honest assessment of whether 1:1 business coaching or business consultancy would be a good fit for your business, the results you can expect and how to get started.