Mike Lehr's Blog

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

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

Businesses spend much money on developing their visions, strategies and processes; however, they spend relatively little on culture, which trumps all of the others. Megan McArdle discusses her observations of General Motors and others in “Why Companies Fail,” appearing in the March 2012 issue of The Atlantic.

When we talk about vision, strategy and process, they are very much head concepts as opposed to heart ones. For example, they don’t concern themselves much with the relationships that employees have between one another or even the relationships that the management team has with employees. The simplest relational techniques are rarely connected to these heady concepts when, in fact, it’s relationships that drive the cohesion and morale of any organization.

Unless we touch our employees on their emotional foundation, vision, strategy and process will fall far short of their intended success. This perspective transforms leadership into more of an emotional function from a rational one.  This perspective also helps us understand why common business tools such as incentives and processes can retard our efforts to build relationships and effect change.

Using a farming analogy, it doesn’t matter what vision, strategy and processes we use; if the soil isn’t good, we will struggle. In business, the soil is the relationship between the management team and employees. It forms the foundation of a company’s culture. If that team can’t develop effect relationships or isn’t motivated to even use simple relationship building techniques, then how can we expect it to implement great visions, strategies and processes?

Related post: Great Strategy? Don’t Neglect Culture

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.

Part of what makes intuition so powerful is the assumption that we are born with personalities, talents and knowledge. Life then becomes the challenge to express them.

For example, we are born knowing about the “opposite sex.” It’s only later in life we arrive at an understanding of it and the ability to verbalize it. However, this contradicts the more popularized view of humans being born a “blank slate.” The article, “Transporter of Delight”, in the October 15, 2011 edition of The Economist, severely undercuts this notion by beginning:

“The idea that the human personality is a blank slate, to be written upon only by experience, prevailed for most of the second half of the 20th century. Over the past two decades, however, that notion has been undermined.”

The article cites research concluding, “personality is the single biggest determinant” of happiness with “a third of the variation in people’s happiness [being] heritable.” For example, extroverts tend to feel happier than introverts do. Thus, what I wrote regarding free will (more) and “who we are” being quite different from “who we think we are” is really about us being substantially more than “the sum of our experiences” and more than “a product of our environment.” There are opportunities for us when we realize we weren’t born slaves to our conditions, environments, societies and cultures.

Yet, this poses some thought provoking questions such as, “What happens to us when our nature is in conflict with our culture, our society or our upbringing?” Also, “What happens when we try to express ourselves in the midst of such conflict?” In such situations, we can easily see how God or Nature created us to alter the status quo, to change things . . . to encourage growth where stagnation exists. Growth cannot occur without change.

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

If you examine the two opposing sides in the Star Wars Epic, The Empire (Bad Guys) and The Rebels (Good Guys), there are two major contrasts:

1. There are no women on the bad side.
2. The good side has diverse characters, the bad side doesn’t

Upon contemplation, Point #1 is easy to see. Point #2 is a little harder, but essentially the Empire’s army consists of robotic droids who all look alike in white, shock-troop armor. Conversely, the Rebels are a collection of species, some humanoid, most alien and some even animalistic. Moreover, whereas the Empire’s forces are all dressed alike, the Rebels are not. Similar themes exist in Lord of the Rings.

What does this mean? Very simply, we tend to see evil as being a life of conformity without feminine qualities. In business, this movie helps us to see the emotional forces aligned against standardization and processing. It might also help us to understand why women are making such advancements: perhaps as an offset to these negative forces. Finally, it shows our inherent emotional propensity for diversity including in personality.

Women are closely associated with diversity; as they’ve been the first ingredient of diversity in many business settings. Heck, their wardrobe alone adds immense diversity to them. What would happen if two women actors arrived in the same dress for the Academy Awards: chaos, confusion, anxiety? What if two men came in the same black tuxedo, would anyone even notice?

Movies tend to tap into our deep, unseen, collective emotional currents. Consumer research shows there is often a different between “what people buy” and “what people say they will buy.” Thus, while we wring every cost saving from standardization and processing, perhaps on a deeper emotional level we feel “The Bad Guys” are winning.

For many of us, we feel good when we help others. What we are even learning is that many of us, especially women, will tend to feel what others feel. Thus, we not only feel good about helping others, but we feel their happiness from our help.

In the July-August 2011 issue of the Harvard Business Review Yochai Benkler’s cites in his article “The Unselfish Gene” the work of neurophysiologist, Giacomo Rizzolatti, who originally “found that our brains mirror not only pain and motor movements but pure emotions as well.”

It’s important to emphasize empathy as an emotion, not merely an understanding as I also indicated in the difference between emotional intelligence and intuition. It’s one thing to see someone smiling and know they are happy and quite another to feel they are happy because if someone can feel good about the happiness of another person, he is more likely to cooperate.

What Rizzolatti’s research, advanced by Tania Singer’s use of brain scans, indicates is that people can actually feel what others feel in the emotional areas of their brains not just the rational ones. Moreover, the intensity of empathy will vary by person with some not feeling much at all.

This has tremendous implications for leadership development because it shows the importance of sensitivity in team intelligence. Whereas Part II of this series dealt with context, this post implies a cooperative business culture is also a function of personalities: some people will just feel better about cooperating than others will. Thus, this implies that highly sensitive people, who also tend to be very empathetic, might be better leaders and employees in a cooperative environment.

Thus, cooperation is not only about creating the right environment but also about having the right personalities, personalities that are empathetic.

Other posts in this series:

• Cooperation vs. Self-interest: Which Reigns Supreme?
• Cooperation vs. Self-interest (Pt 2): Context – The Great Influencer

As we saw with pigeonholing and tasting food, context influences us greatly. This extends to people’s inclinations to collaborate. In support of this, the July-August 2011 issue of the Harvard Business Review has Yochai Benkler’s citing in his article “The Unselfish Gene” the work of Lee Ross from Stanford University. He found people being more inclined to collaborate if the context of the effort promotes it.

That’s why leadership that manages, operates and communicates with the implied assumption that employees are essentially motivated by “What’s in it for me” will tend to foster a less collaborative culture than leadership doing the same against a backdrop of collaboration. From an everyday perspective, this means the culture that heavily relies upon extrinsic rewards such as money, awards and perks for individual performances will tend to be less collaborative than the one relying upon intrinsic rewards such as the enjoyment of working with and helping others. Mastering morale builders that don’t cost a cent go a long way in helping here.

This doesn’t mean we eliminate monetary rewards for individuals, but it does mean we focus more on the culture we are promoting in our businesses; culture is context. However, the promotion of that culture must be real. If employees sense a divorce between words and actuality, then the context for collaboration falls, thus causing most employees to resort to self-interested behavior.

Using intrinsic rewards to buttress a collaborative context is involved. In addition to mastering morale builders, it means mastering compliments. Understanding and appreciating the different kinds will help us see how intrinsic rewards differ from extrinsic ones. It’s only by mastering these on an interpersonal level will we be able to extend it throughout our companies and organizations.

Other posts in this series:

• Cooperation vs. Self-interest: Which Reigns Supreme?