If you’ve been hanging around Zen for a while, you may have heard me mention one of my favorite business concepts, the Stockdale Paradox. It’s something that I’ve been thinking a lot about over the last several weeks (I’ll define it in a moment if you’re not familiar with it), because I’ve heard a lot of people saying things along the lines of “if we can just get through the next few months to 2021,” or “I can’t wait for this year to be over!” as if the pandemic or the economic crisis or in the case of the US, our elections, will solve all of the current issues that we’re facing.

Wouldn’t it be great if we could flip a switch and everything would suddenly be resolved?

I suspect we all know better, and fortunately, I’m not hearing those things from the business and firm leaders I know. When I advise caution, people will often lament that I’m trying to take away their hope. But it’s not that I’m advising pessimism, which I’m not, but a different kind of optimism. And therein lies the Stockdale Paradox.

A few years ago, I said:

To many firms, so much change and uncertainty may feel like a bit of a crisis, while others see it as more of an opportunity. Regardless of how you see it, it’s certainly a time of upheaval.”

If only I had known!

And while I would guess that more of us would identify this as a time of crisis, it remains a time of opportunity as well. In Jim Collins’ book, Good to Great, which is where I first learned of the Stockdale Paradox, he and his fellow researchers examined companies that had been through significant adversity. The difference between those companies who became great, and those companies who didn’t is what Collins refers to as the “Stockdale Paradox.”

Before we jump into that, a note about the good to great companies – Collins points out throughout the book that these companies become great due to a variety of consistent factors, which he outlines in the book, and despite external ones. So in case your first impulse is to think that a firm can only become truly great when the industry is doing well, the evidence points out that it’s often in spite of industry challenges – which means that as overwhelming as COVID may seem, it’s also the time for some truly great legal innovation to rear its head.

What is the Stockdale Paradox then? It’s a psychological duality:

On one hand, [companies] stoically accepted the brutal facts of reality. On the other hand, they maintained an unwavering faith in the endgame, and a commitment to prevail as a great company despite the brutal facts.”

This isn’t about optimism though, cautions Collins. He delves into the paradox’s namesake, Admiral Jim Stockdale, the highest ranking US military officer to be imprisoned in the “Hanoi Hilton” prisoner-of-war camp in Vietnam during the Vietnamese war. Meeting with Stockdale himself, Collins learned that it wasn’t the optimists who survived their time and torture there – it was those who understood what they were facing, but believed they would eventually get out. Stockdale said:

’This is a very important lesson. You must never confuse faith that you will prevail in the end – which you can never afford to lose – with the discipline to confront the most brutal facts of your current reality, whatever they might be.’”

It seems a bit extreme to compare what Admiral Stockdale went through during Vietnam to what companies and firms face in every day business, but his words can teach us a valuable lesson, particularly during the time of COVID, when we are facing much more serious decisions than we ordinarily would be.

The parallels here are obvious – the firms that are doing well at the moment are not those who had short-term plans, but those who had flexible planning. Those firms who understood that the reality that we are facing is dire, but that if we pull together, constantly evaluate and re-evaluate our strategy, goals and tactics, while relentlessly communicating transparently with our partners and staff, we will come through this together. We may not be able to say that the successful overcoming of these challenges will happen in 2020, or even 2021, but we know that they will happen and that confidence quells fear and anxiety in our teams and our clients.

We have the faith that we will prevail in the end, as Stockdale said of his own terrible situation – we can’t predict WHEN it will happen, just THAT it will happen – and rather than staying with that blind faith, we use that to confront the brutal facts of the situation we’re currently faced with (be it COVID, economic crisis, riots, fires, etc.) and we deal with them effectively and transparently.

The firms that understand this paradox will ultimately prevail – they believe they can be great, despite the current circumstances, and so they will be. These discussions and ideas are uncomfortable. They require us to grow, to stretch, to look at the ugly things about our firms that we sweep to the side when things aren’t so challenging, and to confront the ideas that what we currently focus on may not be what we should focus on in the future. It’s hard. And it’s not for the weak.

But if we challenge ourselves, in these challenging times, we can become great too.