Markets, March? It’s All Madness. Here’s How to Come Out a Champ

Every year, March Madness brings back a chance to learn. Turns out it’s the same lesson every year: Styles makes fights. What it means is this: When two forces meet — forces with very different assets, ideas, and ways of operating — anything is possible and, more profound, nothing can be counted on. No doubt, the lesson permeates college basketball’s end-of-season tournament because every year teams that have never played each other in the regular season and know scant little about each other, suddenly meet. Teams can watch film and strategize, but it’s impossible to accurately estimate how they’ll respond to a completely foreign style until they actually meet it. That’s when styles make fights. And who wins? Be it in college basketball or business, it’s the leader and the team ready to adapt.

The styles-make-fights lesson suggests that, no matter what your balance sheet as a team suggests, any force can beat any other force when the conditions change. The lesson is vital to business leaders because, as in sports, organizations have a predictable tendency to rely disproportionately on stats and strategy and to conclude that meatier means mightier. Case in point, all too often, a company’s current market share, its cash position, the superiority of its technology, or even simply its years of having been on top are in and of themselves considered sufficient to assume it will continue to beat the competition. The college basketball equivalent is assuming that the school with the most trips historically to the Final Four or the biggest war chest for recruiting players and coaches alike is the shoo-in. If this were true, we wouldn’t talk about Cinderella stories or blue-blood upsets, or call the whole thing madness.

In business, basketball, and, in truth anywhere, styles make fights because advantage is always tightly linked to circumstances and accurate assumptions. When conditions change, so do assumptions. Everything built on outdated ones comes into question. If you conclude otherwise, consider yourself lucky if all you get is a fight.

The fact is, we don’t like to change our assumptions, so much so that businesses and their leaders too often fail to even question their assumptions, including the core assumptions about what makes them who they are. Yet, the landscape is littered with those who chose not to check their style as the playing field changed. Kodak (if you even recall that name) was complacently sure that because photography had always been dominated by film and print, digital imaging wasn’t worth worrying about. Computer giants like IBM confidently assumed that coding and depth of computing knowledge were what defined their customers and the marketplace until companies like Apple and Microsoft used user interfaces and desktops to cause Big Blue’s dominance to fade. Remember how taxi companies laughed at the audacity of rideshare upstarts and the Ubers of the world taking market share? And once upon a time, hospitality goliaths felt offense at the mere suggestion that a couple of guys renting out their couch could one day make it the Airbnb world we know today.

Bottom line? What is advantage or disadvantage changes. Always, and all the more so in the volatile, uncertain, and complex environment that dominates the new abnormal that is our market madness, and not just in a single month.

What then is a business leader to do? The same thing the best college basketball coaches do: Pursue strategies and styles built on the assumption of constant adaptation — constant adaptation, not over months or years, but between the first half and the second. In other words, on the fly and perpetually. We don’t like to admit it, but business leaders, like many college basketball fan bases, even coaches, too frequently come to rely on specific assets and precise and situation-specific tactics. They mislabel such things as ‘strategy’ when they are just support pieces, ones disproportionately linked to the prevailing circumstances. What frees leaders and their companies from this trap is clear: clarity around and active use of shared purpose — that and good questions. Indeed, a culture of inquiry.

To be clear, purpose isn’t magic. Purpose — if it’s used, and refined, and everyone knows their role in it, is simply a compass. At its best, it’s also a unifier. For its part, inquiry is what enables a team to know when purpose is being met, or not, or when circumstances may change its ability to be met. They surface the signals of changing circumstances. Questions tune teams in to threats, but also in to where new advantage can be gained. The two forces together allow for things like necessary experimentation and fast failing. More, they allow an embrace of what is, rather than hanging on to what was. When active shared purpose and inquiry dominate, style actually becomes secondary. Readiness rules the day. And the fight? Trust me, you’ll adapt and raise your odds of harnessing its force.