Mike Lehr's Blog

How we position things greatly influences the outcome. In the April 7, 2012 edition of The Economist the article, “Dressing Up,” uncovers that women’s sizes have inflated by four sizes since the 1970’s. Unlike men’s sizing which is based on inches, women’s sizing is purely arbitrary and often varies by brand. Thus, depending on the size, a pair of women’s pants might have increased as much as four inches at the waist and three inches at the hips since then.

The generally accepted assumption for allowing this size inflation is that if consumers feel good about themselves they are likely to buy, thus why the fashion industry calls it “vanity sizing.” However, even though it seems like a topic to take lightly or with which to have fun, vanity sizing plays in all aspects of statistics. That is why it’s important to challenge definitions and assumptions in order to understand and solve problems.

For instance, the article “Botox and Beancounting” of the The Economist’s April 27, 2011 edition, discusses how official U.S. economic statistics might be overinflating its performance relative to Western European economies. Ironically, the article’s title makes an appropriate analogy to vanity sizing.

U.S. unemployment figures present another excellent example. They not only conflict with one another on occasions but they are difficult to figure. Additionally, their accounting changed in the 1980′s, making them appear lower than before.

Thus, while it’s commonly said that “numbers don’t lie,” that’s true; however, an ignoramus isn’t lying either if he believes his own ignorance. If we’re ignorant to numbers’ origination, we are more likely to accept them if they tell us our glass is half full rather than half empty, thus reinforcing our own perceptions . . . also known as “vanity believing.”

Wayne Curtis’ article, “The Secret Ingredient,” which appeared in the April 2012 edition of The Atlantic discusses liquor companies’ claims about centuries-old, secret recipes. His point is that marketing drives the myths and stories behind these recipes more than the actual ingredients of the spirits do. For example, citing chemist T.A. Breaux, Curtis says there are no significant production secrets behind vodka, the best-selling spirit globally. Yet, he concludes:

. . . a healthy measure of mythology actually makes for a better-tasting product. Never mind the mouth or nose as the chief receptors of flavor. Sometimes, imagination and suggestion trump all.

There are many ways for us to change the taste of food without changing anything about the food; however, stories impact us well beyond taste. Look at how emphatic politicians are about their personal stories especially focus on rising from humble beginnings or overcoming severe challenges, thus working to wrap their story inside the classical hero myth.

Stories influence the intuitive aspect of interpersonal interactions, tapping directly into people’s feelings by way of presentation. The way we present something, including people, dramatically influences people’s perceptions of it. Since stories can change the way we view people, they can change how we interpret what those people say.

Therefore, when it comes to Placebo Management, stories become a form of interpersonal branding. If they can affect something as tangible as the taste of spirits, consider what they can do for intangibles such as our personalities. Consider the story built around IKEA and its founder, Ingvar Kamprad; it’s a motivational force for employees and consumers alike.

So, with this in mind, what stories do you promote about yourself, your company and others to change people’s taste about their talents and efforts?

Other posts in this series:

• Placebo Management: Impacting Employees’ Beliefs
• Placebo Management (Pt 2): Tapping Emotions

We often don’t learn the value of listening techniques in building relationships. Consequently, people might not realize we are listening; this needs to occur in relationship building.

Reflection phrases our assessment of the other person’s emotions and feelings in a nonjudgmental way. It’s similar to summarization but with a focus on emotions, how others are feeling. This puts us in a better position to assess how others are interpreting our message while letting others know we are in tune with their feelings. Reflection is extremely helpful in venting as part of a conflict management.

Examples of reflection include:

• “You seem very pleased with the assignment.”
• “It’s obvious that you enjoy working with Bob.”
• “It appears that something about this project displeases you.”
• “I can tell that this subject upsets you.”
• “It looks like you’re very happy with the results.”

From a relational perspective, reflection conveys the feeling that we are:

• In tune on a deeper, human level
• Appreciating their feelings
• Finding their emotions important and worthy of discussion
• Grasping the seriousness or importance of the conversation’s subject matter
• Aware of their emotional state

The effect of reflection is to:

• Lower emotional barriers preventing a positive conversation
• Establish an emotional connection
• Encourage additional conversation on a more open, truthful level

Reflection is the most difficult of the relationship techniques because emotions are fuzzy, making them difficult to assess and verbalize. As with summarization, it’s used less frequently, but covers a lot of ground.  It does a great job of uncovering underlying emotions because even if we’re wrong, others will likely correct us by stating their true feelings.

Since emotions often determine people’s interpretations, reflection is a very important technique in an integrated, holistic package of relationship building ones.

Other posts in this series:

• Relationship Building Technique #1: Open-ended Questions
• Relationship Building Technique #2: Closed Questions
• Relationship Building Technique #3: Pause
• Relationship Building Technique #4: Acknowledgement
• Relationship Building Technique #5: Encouragement
• Relationship Building Technique #6: Synchronization
• Relationship Building Technique #7: Summarization

We often hear about the jealousies women have for other women who they feel are attractive. While it’s easy to discount this as pettiness, there are business implications when it comes to appraising and hiring talent.

For example, the March 31, 2012 edition of The Economist reports in its article, “Don’t Hate Me Because I’m Beautiful,” that it’s better for attractive men to submit photos with their resumes but not women. The reason was that “human resources departments tend to be staffed mostly by women,” especially when it comes to resumes’ initial screenings. Bradley Ruffle of Ben-Gurion University and Ze’ev Shtudiner of Ariel University Centre conducted the study.

As I wrote above, it’s easy to view from a petty perspective. However, let’s frame it from a perspective of power. For instance, would a man hire another man who he felt was more powerful (i.e. more talented than he was)? More specifically, would a male manager hire another man who could take his job or the promotion he was expecting to receive in the near future?

Thus, if we look at beauty as power, couldn’t the women in this study be feeling threatened from a power perspective? This is even more possible if we review how beauty’s subliminal influence deliver many advantages to attractive people in the marketplace. As a result, rather than see the rejection of attractive women by other women as something superfluous, it’s now a natural defense mechanism.

Again, the purpose of this series is to explore the tangible, pragmatic influences beauty has on us in everyday business life. It’s not just a personal sideshow in that life. Beauty, and its superficial sister, attractiveness, trigger deep, natural forces within us that influence our decisions.

Other posts in this series:

• Beauty as Power
• Beauty as Power (Part II): Attraction vs. Beauty
• Beauty as Power (Part III): Appreciation
• Beauty as Power (Pt. IV): Subliminal Influence

Imagine soil so toxic that nothing will grow. No matter how good our seeds, our farming techniques and the weather are; nothing will grow. The same thing happens when we try to promote great ideas in a bad relational environment: they fail.

That’s why relationships are more important than vision, culture more important than strategy. Vision and strategy can’t grow in toxic relational and cultural soil. This analogy also frames leadership as an affect influencing the hearts and minds of members, requiring the ability to tap both aspects of an interpersonal relationship: emotional and rational.

While this analogy’s point seems obvious, we are biased toward reason; thus, when problems arise, we tend to believe presenting new ideas, educating on the facts or reasoning better will solve them. It’s not unusual for me to have to restate this analogy several times in order to get people to focus on plans containing tactics to improve relationships or to manage conflict. In other words, our tendency is to just find better seeds, use better farming techniques or hope for better weather rather than address the soil.

This happens because no matter how good our ideas are, people will tend to decide that they’re bad if they don’t like or trust us. Our facts won’t change things either because people tend to believe perceptions over facts. People will naturally find reasons to discount our logic and facts.

When we combine all of this with the fact that a diverse workforce improves business, there is great stress on traditional management styles typically unsuited to nurturing the right positive feelings that can dramatically improve performance. By framing problems with this analogy, I increase my success in introducing relational solutions, which are often seen as too “fuzzy” or “soft.” Perhaps it will help you too.

We sometimes hear, “Nice guys finish last.” However, in genetics altruism creates a dilemma because it exists – and not just in humans. The question is why. Even Darwin considered it a challenge to his theory of natural selection. Why would any creature help another at a steep personal cost?

The article, “Kin and Kind,” written by Jonah Lehrer in the March 5, 2012 edition of The New Yorker, investigates altruism and its role in evolution. Whether its bats, bees, birds, ants or humans, the presence of altruism in these species suggests that kindness can’t be a losing strategy. In fact, insects displaying an extreme form of altruism called “eusociality” tend to dominate the insect world over their self-interested brethren.

E.O.Wilson, a main proponent of altruism as a positive contributor in evolution summarizes it this way:

Selfishness beats altruism within groups. Altruistic groups beat selfish groups.

If we look at the Napoleonic era and the rise of the nation state, we find that the demise of mercenary (self-interested) armies began when citizen (altruistic) armies, cemented by patriotic and nationalistic emotions arrived on the scene. However, the reason why we don’t see more altruism in nature and our everyday lives is that a cohesive group must exist first. Again, context matters; encouraging self-interest will yield a self-interested culture, encouraging altruism will yield an altruistic one.

Of course, this prompts the question: Can a company built upon self-interested incentives triumph over a company with a cohesive, altruistic culture? Evolution suggests it won’t. Of course, that doesn’t mean a few self-interested people inside the altruistic cultures won’t try to take advantage of the others. Perhaps they are there to really test how cohesive and altruistic the company is?

Nevertheless, it seems that evolution could really be on the side of the nice guys.

Other posts in this series:

• Cooperation vs. Competition on the Business-to-Business Level
• Cooperation vs. Self-interest: Which Reigns Supreme?
• Cooperation vs. Self-interest (Pt 2): Context – The Great Influencer
• Cooperation vs. Self-interest (Pt 3): Empathy
• Cooperation vs. Self-interest (Pt 4): Intrinsic Rewards
• Cooperation vs. Self-interest (Pt 5): Humans vs. Apes
• Cooperation vs. Self-interest (Pt 6): Incentives & Rats

We often don’t learn the value of listening techniques in building relationships. Consequently, people might not realize we are listening; this needs to occur in relationship building.

Summarization rephrases the information or key points of the person in a condensed version. The technique verifies what we heard, demonstrates listening, allows focusing of the conversation, and defines parameters for additional discussions.  It also allows the other person – once we summarize – to alter, modify or restate so we can correct misunderstandings early.

Typically, summarization will rephrase the point of a sentence, paragraph or entire discussion. The focus is on subject matter not feelings and emotions, such as:

• Information
• Ideas
• Facts
• Opinions
• Logic
• Instructions

Of all the relationship-building techniques, it will tend to be the most lengthy and involved; however, if too long, its effectiveness diminishes. Often it’s followed by a closed question such as, “Did I understand you correctly?”

Some examples of summarization include:

• “Just to make sure I heard you right, Jack, you’d like us to find a way to secure a steady supply of our old product from this vendor, to negotiate a price based upon our minimum usage, and to find someone else to produce our new product.”
• “To make sure I’m on the same page, let me summarize what I heard. You want to send Sue and Tom out west and to promote Sally to run the plant. Also, you want to find a recruiter to help us to fill Sally’s job and to find us a good service person to manage our top customer.”
• “It seems that what you’re saying is that you want us to start over.”

From a relational perspective, summarization conveys the feeling that you are:

• Understanding and valuing what the person is saying
• Paying attention to detail and quality
• Someone in whom the person can have confidence

The effect of summarization is to create:

• A common understanding of what was said
• Opportunities for correcting any misunderstandings upfront
• Confidence in your abilities in the eyes of the other person
• Confirmation that you know what was said or needs to be done

Summarization, is really a result of the other relationship techniques. It’s used less frequently, but when it is it covers a lot of ground – often the entire conversation.  Summarization heads off many problems before they damage relationships. It has helped me much in my career.

Other posts in this series:

• Relationship Building Technique #1: Open-ended Questions
• Relationship Building Technique #2: Closed Questions
• Relationship Building Technique #3: Pause
• Relationship Building Technique #4: Acknowledgement
• Relationship Building Technique #5: Encouragement
• Relationship Building Technique #6: Synchronization

In this post I want to show how informal organizational power and its role in leadership can produce different kinds of leadership. My inspiration is from a Chinese concept of rulers that is over two thousand years old, and I first read in connection to the I Ching. From it, I produced two forms of leadership: Organizational Leadership (OGL) and De Facto Leadership (DFL). When any group identifies its leader, the critical question is:

Are the members’ hearts into following the leader?

The answer is the same difference between a loveless marriage and a loving one. That’s why I express OGL as a hollowed circle to be filled and DFL as a solid circle to be embraced (figure). A loving marriage is love (blue) embraced by the formal structure of marriage (red). Leadership is best when the formal organizational structure is given to leaders that people want to follow, thus producing Aligned Leadership (ALL).

OGL is the hierarchy using titles such as manager and executive to convey positions of authority and rules of responsibility. OGL is more akin to management. DFL is dependent upon the person’s qualities; people follow them regardless of what the rules say. This is how some can be leaders without being managers.

A scene from Braveheart expresses very well the difference between DFL and OGL. In it, the lead Scottish noble, Robert the Bruce, is trying to convince the commoner warrior, William Wallace, that he needs the noble’s support. The latter responds with, “Men follow courage not titles.”

OGL, DFL and ALL reinforce the idea that leadership is an affect that requires tapping into emotions and integrating both aspects of an interpersonal relationship. This helps people to see what they want to see in their leaders, thus encouraging them to follow.

Other posts in this series:

• Leadership vs. Management: The Difference
• Leadership vs. Management: The Difference (Part II)
• Leadership vs. Management: The Difference (Part III)
• Leadership vs. Management: The Difference (Part IV)
• Leadership vs. Management: The Difference (Part V)

The research behind behavioral economics is full of emotional solutions to everyday problems. By tapping into the emotional biases behind our decisions, we can expand the range of limited solutions offered by rational thought models. The exploring of emotional solutions has gone big time as the article, “Nudge Nudge, Think Think” explains in the March 24, 2012 edition of The Economist by focusing on the amount of investments governments are making in this area.

Said simply, “How we phrase things matter.” I’ve written how this can change the taste of food and even change the reactions to a bonus plan. As the article explains, nudging “shows it is possible to steer people towards better decisions by presenting choices in different ways.”

For example:

• People were three times more likely to pay an outstanding vehicular tax when the letter was simplified and included a picture of the automobile.
• Boys did better than girls did when a technical drawing class was called “geometry,” and girls did equally well or better when it was called “drawing.”
• People were more inclined to use less energy when their consumption was compared to their neighbors.

Not only does this help us solve problems, it also helps us avoid them by being aware of what we say so we don’t sabotage our well-intentioned plans. Choosing the right words for a personality can go a long way in helping us to effect the change we desire by tapping the right emotions.

For example, my wife won a bet at a party by talking a friend’s six-year-old daughter into selecting a vegetable over chocolate to eat. Understanding and appreciating the power behind words’ connotations helps us immensely here, and Roget’s Thesaurus is invaluable in our efforts.

Remember, people eat escargot not snails.

In the March 26, 2012 edition of The New Yorker, I ran across the article, “The More the Merrier”, which sited the work of Zeynep Ton, a professor at the MIT Sloan School of Management, that looked at four low-price retailers: Costco, Trader Joe’s, Quik Trip and Mercadona. The article cited these findings:

These companies have much higher labor costs than their competitors. They pay their employees more; they have more full-time workers and more salespeople on the floor; and they invest more in training them. . . . What’s more surprising is that they are more profitable than most of their competitors and have more sales per employee and per square foot.

In my previous post, “Business Profitability Paradox”, I expressed that a business that maximizes its profits every minute will eventually go out of business because no investments are made (which hurt profitability). The article cites the demise of retailers such as Circuit City and Home Depot when they cut labor costs (to maximize profits short term) only to see the first go out of business and the second to be a shadow of its former self.

Thus, when employers start demanding a good ROI (return on investment), I often ask, “Over what time period?” In this case, training and a good business culture don’t happen overnight; however, the costs do. Many times, as with Circuit City and Home Depot, profits rise immediately with the right cost cuts. However, the revenues it hurts don’t fall off until later.

Now, it’s easy to discount Ton’s study as solely a retail phenomenon, but the investment principles hold true beyond just labor.

Therefore, over what period do you want a good ROI? That answer will determine the type of investments you are willing to make.
 
Original post: Business Profitability Paradox

Related post by Zeynep Ton: Retailers Should Invest More in Employees