Mike Lehr's Blog

We often overlook the downside of processes in our businesses because we enjoy how they allow us to scale and reduce labor costs. However, they often become the infrastructure that retards flexibility and adaptability as people’s self-interest and comfort zones become wedded to the processes.

The November 2010 issue of the Harvard Business Review, which focused on leadership lessons from the military, Boris Groysberg, Andrew Hill and Toby Johnson wrote about the tradeoffs between process and flexibility. Their article, “The Different Ways Military Experience Prepares Managers for Leadership,” discussed the tradeoffs that each of the four branches of the U.S. Military made and how they influenced leadership styles.

Their research showed that CEO’s who had military experience in the Navy and Air Force tended to “take a process-driven approach to management; personnel are expected to follow standard procedures without any deviation.” This allowed them to excel “in highly regulated industries and, perhaps surprisingly, in innovative sectors.”

Conversely, those with an Army and Marine Corps experience tended to “embrace flexibility and empower people to act on their vision.” They were able to excel “in small firms, where they are better able to communicate a clear direction and identify capable subordinates to execute accordingly.”

Throughout the article, the authors contrasted the process orientation of the Navy and Air Force with the adaptive one of the Army and Marine Corps, the important point being that there is a tradeoff between the two. Even though they justified why each branch had the orientation it did, they still contrasted the two orientations as a trade-off. In simple terms, it’s hard to have both.

Therefore, when we rush toward processes to create standardized, consistent and repeatable outcomes, we need to leave room for adaptation. After all, life never duplicates itself in exactly the same way.

In a previous post, I discussed the rebirth of Freud and the idea that most (if not all) of our decisions are driven unconsciously. Personification is a way we can influence others’ decision-making on this level.

Revisiting The Economist article “Retail Therapy” in its December 17, 2011 edition, it says about Ernest Dichter, who revolutionized marketing in the 1960’s:

Dichter understood that every product has an image, even a “soul”, and is bought not merely for the purpose it serves but for the values it seems to embody . . . Dichter’s message to advertisers was: figure out the personality of a product, and you will understand how to market it.

Personification is giving something a personality. For instance, my wife has a name for her car. People do the same with boats. Advertising often links products to celebrities; they become the “face of the product”, and thus its personality.

Translating to business, we encourage change if we can give change a personality. Sometimes it’s as simple as putting the face of the Owner, President or CEO on the change by saying, “It’s George’s initiative.” We can do this formally or informally; we can do this with projects, ideas and plans: “This is Mary’s project, Matt’s idea, Kathy’s plan.”

We can also reference other types of people to the change such as “The Herculean Effort,” “The Superman Plan,” and “The Rocky Project.” Any person will help as long as the connection to the person is a positive one. For example, if people don’t like Mary, her name will likely hurt the change.

When it comes to change management, we often neglect to tap into the techniques that work in advertising, merchandising and marketing. Personification is just one of those techniques.

One can read endlessly about leadership. However, if plays play on a stage, if baseball plays on a diamond, movies on a screen and chess on a board, where does leadership play? It plays in the mind of every member of the group.

Yes, we often see leaderships as having a good vision, strategy, idea or something tangibly similar. In reality though, these aren’t any good if leaders can’t inspire members around these things. By putting leadership on this emotional plane, it becomes subjective; a leader to one could be the Pied Piper to another.

Additionally, leadership comes from the word lead. Lead implies movement from one place to another. This is a change, so leadership is about change. Thus, by combining emotions and change, we arrive at a the conclusion that:

Leadership is an affect – felt by members and personified by one individual – which induces change.

We can see this more clearly in business if we ask: Are employees’ hearts into following their leader? After all, inspiration is a far better motivator for change than compliance. For example, if a leader can personify some of these feelings into an affect, that leader could be a powerful change agent:
 

Since groups are an abstraction, leaders become the “faces” groups, the vehicle through which members can give their feelings a human form. Leaders become the manifestation of their members’ feelings.

The practical outcome of this is that leadership changes from a project- or action-oriented endeavor to a relational one. This means people are more important than vision and relationships are more important than processes. Thus, leadership transform from something mechanical to something human . . . and possibly divine.

Previously I had indicated that placebo management could impact performance. I recently read

Michael Specter’s article, “The Power of Nothing,” in the December 12, 2011 issue of The New Yorker. He shared Ted Kaptchuk’s work on the Placebo Effect at the Harvard Medical School. I found this passage extremely apropos for placebo management:

. . . although placebos had no impact on the chemical markers that indicate whether a patient is responding to therapy, patients nonetheless reported feeling better. Kaptchuk concluded that objective data should not be the only criterion for doctors to consider.

Translated to the business world, we cannot just evaluate our effectiveness with people only on objective considerations. For instance, when a manager explains a business plan to an employee, the value isn’t just in the manager’s explanation and the employee’s understanding. There is additional intangible value in the time the manager spent with the employee. The manager could have enhanced this value by taking the employee to breakfast or lunch for the discussion.

As we saw there are two aspects to an interaction: thinking and feelings (see diagram to right). In this example, the manager’s explanation represents the thinking; the time and place represent the feeling. A different outcome would occur if the manager simply gave the plan for the employee’s reading.

In using this managerial approach, keep five things in mind:

1. Objective information and criteria don’t tell the whole story
2. People react differently
3. Expectations of you and the other person matter
4. Feelings matter more than #1
5. Different users have different results

Relationship building strategies and techniques maximize the placebo effect. It helps to have a strategy for improving your relationship with each of your employees. Implementing initiatives and effecting change will be easier and more effective.

Other links in this series: Placebo Management: Impacting Employees’ Beliefs

There is no place that the revisiting of our unconscious urges are taken more seriously than in retailing. The Economist article “Retail Therapy” appearing in the December 17, 2011 edition gives a great historical accounting of the rise and fall . . . and rise again of the application of Freud in business which Ernest Dichter is noted for introducing. As the article asserts:

Every week seems to yield a new discovery about how bad people are at making decisions. Humans, it turns out, are impressionable, emotional and irrational.

Increasingly, researchers are finding Dichter’s assessment that “most people have no idea why they buy things” to be correct.

Of course, “Sigmund Freud argued that people are governed by irrational, unconscious urges over a century ago.” However, as we saw earlier, it took science almost a hundred years to acknowledge that the subconscious existed. Meanwhile, “businesses were recognizing the limits of quantitative studies . . . which offered little genuine insight into how customers behaved.” Said more directly, you can’t rely on customers to tell you what they might buy.

The failures of online dating showed this truth as well as research into people’s internet surfing habits. The Atlantic’s article, “Learning to Love the (Shallow, Divisive, Unreliable) New Media,” which appeared in its April 2011 demonstrated that it’s “not what [people] say they want, nor what they ‘should’ want, but what they choose when they have a chance.”

If this applies to purchases, it also applies to all decisions. Names can affect decisions about scientific grants, and information that judges know is wrong can affect their decisions. So, if people don’t behave and choose as they said they would, we have no one to blame but ourselves for not looking deeper into the real emotions powering us.

Linda Hill and Kent Lineback write in their April 5, 2011 HBR Blog Network post, “Why Does Criticism Seem More Effective than Praise?”:

A lot of evidence suggests that positive reinforcement — identifying and building on strengths — will produce better results than a relentless focus on faults.

However, as post’s title suggests, this isn’t always apparent. They do briefly talk about focus on the long term. Related to this perspective, the challenge I find in strategically using compliments is primarily our expectations; we expect a compliment to work immediately. Criticisms and other negative reinforcements do much better here but over the long run they don’t do much to develop a strong working relationship.

Thus, in order to make complimenting work, here are six expectations I find very important to effect change:

1. Focus on the long-term
2. Apply regularly
3. Appreciate the importance of personalizing compliments
4. Be patient
5. Reward positive change with additional complimenting
6. Employ other relationship building techniques

Yes, this means complimenting is a long-term proposition, but we can integrate compliments into our daily work routines. The difficult part is disciplining us to follow through and adhere to a complimentary regimen.

Once we achieve this part, we can take complimenting to a more strategic level in which we consciously plan the employment of compliments. This comes about by knowing what we want to:

• Achieve with every person we manage
• Say to the person if we have a moment to interact

Thus, in our minds we visualize the interactions we might have with our people and determine how to position the right compliments to effect the desired change. The process is no different than that used in thinking about the numbers we reviewed, the plans we will right or the resources we need to maximize.

Many companies are finalizing their 2012 strategies by planning their roll out to their employees. To this effort, Nilofer Merchant’s March 22, 2011 post on the HBR Blog Network, “Culture Trumps Strategy, Every Time,” is very apropos and relates to my “Best Decision as Myth” post: we often spend more time trying to make the best decision than we do trying to ensure we can implement it. A vital aspect of that implementation is a healthy company culture.

Taking Merchant’s themes further, an important part of a healthy company culture is the relationship between management and employees. That is more than just having a great vision, definable roles and enforcing accountability. It’s about doing the sublime relational techniques that mean so much even though they don’t seem to serve a direct business purpose. For instance, it’s important for managers to spell their people’s names correctly. Yes, unfortunately, this isn’t an automatic.

I’ve called this placebo management. If there is scientific evidence supporting the positive effect of placebos in medicine, they can work in business too. While managers are taught around the world in business schools about the more concrete aspects of visions, goals, compensation, information and credentials in developing relationships, they rarely learn the more intuitive aspects of relationships. Consequently, they never learn how to change the message without changing anything about it. Conversely, they don’t learn that even the best message can be ruined by a lousy messenger.

The holiday season is approaching and many companies and teams get together in celebration and camaraderie. It’s often a time to develop business relationships on a more human level. Good interpersonal relationships we develop with employees ensure a company culture that can implement strategy. Let’s make every month the holiday season in this regard.

Intrinsic rewards are important aspects of creating a cooperative work culture. However, such rewards are difficult to understand and teach. Moreover, many, many people just don’t believe they are that powerful. Yochai Benkler in his article “The Unselfish Gene” of the July-August 2011 issue of the Harvard Business Review endorses the importance of intrinsic rewards in cooperative cultures.

Essentially, as we saw in the second post of this series, most people enjoy being cooperative, enjoy helping others; but, this enjoyment will dissipate if we ignore, discount or unreinforce it. Using effective, intrinsic, morale building techniques and compliments while working to minimize selfish extrinsic motivations such as money will ensure this won’t happen.

Since intrinsic rewards by nature are less tangible, it’s often difficult for managers and leaders to understand and appreciate the internal motivations of others, especially if they by nature don’t receive tremendous enjoyment from helping others. Nevertheless, here are a few tips for encouraging a cooperative workforce:

• Thank employees when they help others (letting them know it’s important to you)
• Demonstrate how they have helped you or others (it’s not always apparent to them)
• Recognize that they naturally enjoy helping others (reinforcing their internal motivation for helping others)
• Show how their job helps others to do theirs when performed well (creating a personal connection between their job and others)
• Hire and promote people who enjoy helping others (the desire to help others is a function of personality)
• Believe that people enjoy helping people (we cannot promote cooperation if we don’t believe it’s a motivation)

These tips will be uncomfortable at first but regularly applied they will produce positive effects over the long run. Thus, they require relentlessness, discipline and almost a fanatical belief in the power of cooperation.

Other links 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

One of the paradoxes of best practices is that they promote unimaginativeness because if everyone followed best practices the differentiation among competing firms would drastically narrow.

In its raw form, BP is copying. Companies do not transform markets or shoot ahead of the competition by copying. If they do, they need to enhance the original. A better practice than the best practice will achieve this especially if every other company in that space is following the best practice. As a result, BP’s encourage “inside the box thinking” resulting in a workforce based upon complying with the BP rather than thinking about making the best better.

This occurs because to find a “best practice” people only need to dredge the internet or current research material. If they don’t want to do this, they only need to find an unimaginative expert who has already done this for them. However, bettering a best practice requires much thought and inspiration. That’s why in many law firms there are research assistants assigned with this task so attorneys have more time to think about the uniqueness of their cases.

Of course, many unimaginative people offer this defense: “Let’s not reinvent the wheel.” What they don’t realize is that since 1790 the United States Patent Office has approved over 30,000 patents for wheels. This number doesn’t include many specialty wheels in toys and machines such as the wheels on toy cars or the pulleys in machines like transmissions. It also doesn’t include the Ferris Wheel.

BP’s encourage employees to do exactly that: not reinvent the wheel. They don’t encourage them to think about improvements to make the wheel better or for other purposes. BP’s say, “Someone else has already solved the problem.” Thus, the best practice of inside-the-box thinking is to adopt a best practice.

Additional recommended reading: the post “The Downside of Best Practices” by Mike Wyatt

In the October 2011 issue of The Atlantic, I ran across Richard Florida’s article, “Where the Skills Are” and found myself rethinking the idea of a diverse workforce. The idea has two paradoxical forces playing on it:

1. Diversity improves a company’s adaptability, creativity and innovation
2. Employers tend to hire employees who are like them

For the moment, let’s imagine that employers can hire a diverse workforce. The next challenge is managing it. It’s difficult because personality conflicts are side-effects of diversity. Since everyone’s a people person until people are the problem, managers are more apt to “get rid of the problem” rather than incorporate it. Consequently, employers will not only tend to hire those “who fit in” but also dispose of those “who don’t.” This moves them ever faster toward a homogenous workforce lacking adaptability and innovation.

Even though Richard’s article focused on talented individuals adept at connecting with diverse people, there are applications from a managerial perspective. It will take a very talented person to manage diversity. That’s because personality conflicts manifest themselves in many ways as differences in approaches, organization, ideas, behaviors and others. A manager will need to be able to see through this, account for his own biases, creatively solve it, and have the discipline to pursue the solution. We do not solve personality conflicts overnight.

Moreover, the need for such managerial talent is only going to increase as technology continues to take over the more routine and predictable tasks of various jobs and as the marketplace becomes more dynamic. The need for diversity not only in demographics but also in personality is only going to increase too.