In his book ‘Good to Great’, the author Jim Collins says that productive change begins when you confront the brutal facts.

Every good-to-great company embraced what we came to call the "Stockdale Paradox".

It means, you must maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties, and at the same time, you must have the discipline to confront the most brutal facts of your current reality, whatever they might be.

The term gets the name after Admiral Jim Stockdale, who was the highest-ranking United States military officer in the “Hanoi Hilton” prisoner-of-war camp during the height of the Vietnam War.

Tortured over twenty times during his eight-year imprisonment from 1965 to 1973, Stockdale lived out the war without any prisoner’s rights, no set release date, and no certainty as to whether he would even survive to see his family again. …

Stockdale had said this to the author, “I never lost faith in the end of the story. I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.”

Every good-to-great company faced significant adversity along the way to greatness, of one sort of another—Gillette and the takeover battles, Nucor and imports, Wells Fargo and deregulation, Pitney Bowes losing its monopoly, Abbott Labs and a huge product recall, Kroger and the need to replace nearly 100 percent of its stores, and so forth.

In every case, the management team responded with a powerful psychological duality.

On the one hand, they 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. We came to call this duality the Stockdale Paradox.