The Illusion of Taking Charge

The Illusion of Taking Charge

Being “proactive” is in vogue. Managers frequently proclaim the need for taking charge in facing difficult problems. What is typically meant by this is that we should face up to difficult issues, stop waiting for someone else to do something, and solve problems before they grow into crises. In particular, being proactive is frequently seen as an antidote to being “reactive”—waiting until a situation gets out of hand before taking a step. But is taking aggressive action against an external enemy really synonymous with being proactive?

Once, a management team in a leading property and liability insurance company with whom we were working got bitten by the proactiveness bug. The head of the team, a talented vice president for claims, was about to give a speech proclaiming that the company wasn’t going to get pushed around anymore by lawyers litigating more and more claims settlements. The firm would beef up its own legal staff so that it could take more cases through to trial by verdict, instead of settling them out of court.

Then we and some members of the team began to look more systemically at the probable effects of the idea: the likely fraction of cases that might be won in court, the likely size of cases lost, the monthly direct and overhead costs regardless of who won or lost, and how long cases would probably stay in litigation. Interestingly, the team’s scenarios pointed to increasing total costs because, given the quality of investigation done initially on most claims, the firm simply could not win enough of its cases to offset the costs of increased litigation. The vice president tore up his speech.

All too often, proactiveness is reactiveness in disguise. Whether in business or politics, if we simply become more aggressive fighting the “enemy out there,” we are reacting—regardless of what we call it. True proactiveness comes from seeing how we contribute to our own problems. It is a product of our way of thinking, not our emotional state.