As our economy continues to struggle to recover from the recession, there is a general sense that things will not return to business as usual. Many business leaders are being forced to look in new directions for growth.

Here are some interesting examples of leaders who passed new opportunities:

    • In 1876, Western Union decided that telephones would never replace telegram messages.
    • In 1971, AT&T turned down the opportunity to run the Internet as a monopoly.
    • In 1980, Ma Bell concluded that cell phones would never replace landlines.

As leaders, you have to make tough calls every day.  People expect you to have answers to the major challenges facing the organization.  Yet in quiet moments of reflection, you know that you cannot be certain of the answers that you so boldly and publicly pronounce.

What gives?  Two authors argue that the essence of leadership is to actually publicly admit that you don’t know the answers.  This seems counterintuitive to what we believe is the accepted paradigm of leadership.  Would we feel comfortable if our president told the world that he’s not entirely certain that his economic game plan is going to work?

Authors Robert DeKoch, president of the Boldt Co., and Dr. Philip Clampitt, professor at the University of Wisconsin-Green Bay, argue in their most recent book, “Transforming Leaders into Progress Makers ,” that an honest leader, who in all candors admits he does not know the answers, has significant advantage in actually solving major problems.

The reality about the world we live in is that there are very few things that are certain. Other than the basic laws of physics, such as gravity, we are all taking calculated guesses every day.

The leaders of the companies in the examples above clearly were unwilling to admit they did not know the answers and therefore passed on major opportunities for their companies.

The authors point out that leaders who resist new ideas because they claim “that dog won’t hunt” or use other deprecating language are circling the wagons. They resist change and do so at their peril, because they suppress creativity and thereby cost their companies important opportunities to offer new products or services.

Those leaders who candidly admit that they do not know the answers find that their management teams are more willing to participate in exploring solutions because they feel empowered to help solve the problem. They get a psychological boost from actually participating in the creative process to solve problems when there is no known solution.

Here are some pointers the authors and others suggest that help facilitate the creative process:

  • Bring together employees with diverse viewpoints; and possibly invite outsiders who have a different perspective on your industry.
  • Insist that that there be a spirit of inquiry where everyone is encouraged to ask penetrating questions.
  • Encourage conflict and disagreement while respecting every member of the team.
  • Explore scenario planning with numerous options never getting stuck on one until all have been tested.
  • Examine what your competitors are doing and consider whether you could do it better.
  • Lastly, tap the wealth of information available today to stimulate the creative process. Subscribe to Entrepreneur Magazine, Inc. Magazine or Fortune Magazine for Small Businesses, as they feature some of the brightest and best entrepreneurs who are innovating and changing the marketplace every day of their lives.

One thing we know for certain is that having a large R&D budget does not ensure market success, or we would not have Google or Facebook today. Both companies, now with market caps into the billions and users into the multimillions, were started