As distasteful as the level of polarization has become in the political arena, it seems to be metastasizing to other areas of our lives as well. The dismal performance of stocks at the end of last year followed by equally spectacular performance in the latest quarter serves as a nice illustration of the increasing presence of extreme opposites.

Often, polarization occurs along ideological or philosophical lines. Increasingly, however, polarization is also occurring along the dimension of fantasy versus reality. While there are always elements of complacency and exuberance at the end of a business cycle that cause future views to become untethered from reality, the depth and breadth of opposite extremes are deeper and more fundamental today.



One area where extreme differences are becoming quite visible is in corporate leadership. This probably shouldn't be too surprising since running a large company is a quasi-political exercise anyway. On one extreme is the approach of pursuing brutal efficiency. On the other is the approach of creating a spectacular new vision for the future.

The formula for success for the efficiency approach is to provide products faster, cheaper and more reliably. Walmart exemplified this approach in the retail business by leveraging economies of scale to drive down purchasing and distribution costs and by aggressively deploying information and automation systems to improve logistics. More recently Amazon has applied the principles of efficiency to the online realm and Kraft Heinz (KHC) developed the zero-based budgeting (ZBB) methodology (which has become a de facto standard) for keeping costs down in the food industry.

The formula for creating a spectacular new vision tends to focus much more on innovation and growth opportunities and not so much (or at all) on costs or profits. The key challenge in these cases is to overcome lack of imagination. Not surprisingly, the approach is incorporated by many tech and biotech firms.