Close the Gap: Become a Legally Savvy Leader

We’re now ready to talk about how you can close the gap between the law pillar and the strategy pillar in a way that creates competitive advantage. And the key message in closing the gap is the importance of your becoming legally savvy. What does the word savvy mean? Basically means you have a practical understanding of how business and law really work. And this is very important for business success and for the success in your own personal career. Now becoming legally savvy is important regardless of where you are in a business.

You could be the CEO, you could be the only person involved in the business if you’re an entrepreneur, or you could work for a large organization at a lower level and still have a need to be legally savvy according to a recent survey. 80% of corporate employees make a decision annually that has significant legal implications. And most of these decisions are made without consulting the legal department. So what legally savvy requires Is for you to have a basic understanding of the Law Pillar and legal risk management. So that you know first of all, when to consult an attorney.

For most of the legal issues that arise on a day to day basis, you’re not going to be able to consult an attorney. You can’t have an attorney sitting at your elbow every time a legal question arises. It’s too expensive, it’s too time consuming so you have to decide which issues are important enough to consult the attorney. Second when you talk with an attorney you have to be legally savvy enough to understand the attorney’s advice. Third, you have to be legally savvy in evaluating the advice and making a decision. And this is very important because sometimes the lawyer will give you one piece of advice, but somebody else within the company will give you another piece of advice.

Let’s say that you receive a call one morning from a reporter saying, look, one of your products has just seriously injured a customer and we want your comments, we’re doing an article on this injury. So you go to your lawyer, what should I say to the reporter? Many lawyers traditionally have said say nothing to reporters. Nowadays, they’ll usually say, talk to the reporter, but don’t do anything that would cause us to increase our liability. You go to your PR person, the PR person is going to say talk to the reporter, definitely control the story. Be honest, be candid. So sometimes you’ll have conflicting advice and it’s up to you, the person in the middle, to make that decision.

And then finally, you need to be legally savvy to implement your decision in a legally responsible way. Being legally savvy also requires you sometimes to take what I’m calling a trip to the balcony. That means climbing the balcony and taking a big picture perspective of the three pillars. And more specifically, this often requires reframing risk management, which is the Law Pillar, as value creation, which is the Strategy Pillar. Often, in our daily lives, we view life through very narrow frames. And this is good in one way. It helps us navigate through a world that is complex and uncertain.

But on the other hand, because of the narrow frame, we often miss opportunities to come up with better decisions, it’s sort of like looking in the rear view mirror of your car. You can see certain cars approaching but there is also a blind spot that you might miss. And so if you can reframe your legal decisions, your risk management decisions as being more strategic, then you have chance to bring the two pillars together. A key element in reframing is to consider the interests of the most important stakeholders. Your customers, your employees, investors, of course and government. And you’ll find, one benefit of reframing is, that it creates a foundation for ethical decision making.

So your mantra for business success and career success should be understand, protect, and create. First of all, understand the Law Pillar. Become legally savvy. Protect your company through legal risk management that’s the Law Pillar. But finally, create value by closing the gap between the Strategy and Law Pillars.

And so you can return to this fundamental diagram or instead of having the gap between strategy and law, you now have the overlap with competitive advantage in the center. In the next segment, we’re going to talk specifically about how the course is organized and how it relates to the three pillars.