Mike Lehr's Blog

How many times have we heard, “Nothing breeds success like success?” In a study of the orbital launch vehicle industry by Peter M. Madsen and Vinit Desai the finding was that “organizations learn more effectively from failures than successes.” Their paper was published in the June 2010 edition of the Academy of Management Journal and reported by The Economist online in August.

While it seems logical that we can learn from our mistakes, what’s less clear is whether we learn more from our failures than our successes. However, from an intuitive perspective which accounts for the intense effect our emotions can have on our decision making, the fear of pain is much greater than the joy of gain. This is not only an anticipatory phenomenon but a historical one. In other words, we also learn more from feeling pain than from feeling gain. Moreover, Madsen and Desai found that the lesson learned through failure stayed with the organization longer than the one learned through success.

How do you maximize learning without having to experience a critical or fatal failure? Of the conclusions, one, which applies to intuitive approaches, is “greater flexibility towards meeting set goals.” This would allow employees to learn from smaller failures. They found that organizations which were “too tightly” focused on deadlines and profit margins gave their employees legitimate, implicit approval to discount, ignore or rationalize smaller failures containing valuable lessons.

Therefore, the next time everything goes according to plan, realize that something went wrong. Most likely it will be the failure to learn.

Glass Half Full? Half Empty?

One of my favorite metaphors to use as a “challenging assumptions exercise” is the “Is your glass half full or half empty” one. The basic assumption is that the choice is one of attitude: if your attitude is positive you will choose “half full,” if negative “half empty.” One of the reasons why I like it is that it can create quite a stir in folks when they see the answer is not quite so clear cut. This is important because viewing problems from an alternate perspective can trigger negative emotional responses that retard problem solving.

For instance, we can disrupt this popular metaphor by asking: Who is more likely to go out and get more water? The answer is the one who views his glass half empty. As we saw with bonus plans, the fear of loss is much more powerful than the joy of gain. Therefore, those who feel that they’ve already lost half their water supply are more likely to secure more water than those who feel they still have half remaining.

I experienced a real life example of this when I was taking a new national sales manager around to the troops. We visited the office of a sales representative who was out. The manager looked around and pointed to a picture of the representative’s four children and wife and said, “I love to see that. It means he’ll be real hungry to sell and support his family.”

This is also why crises are the most effective ways to encourage change. Consequently, if you were a water salesperson, you would be more likely to make a sale if you could get the customer to see his glass as half empty rather than half full.

Since intuition is rooted in emotions and thus subjective, intuitive approaches allow us to see a single, objective situation as many. We see this most clearly when we tap two distinct, opposing emotions such as the fear of loss versus the joy of gain. The first is generally stronger in people than the second.

In the January 16, 2010 edition of The Economist an article titled “Designing Rewards – Carrots Dressed as Sticks” reported on a paper by Tanjim Hossain of the University of Toronto and John List of the University of Chicago outlining how they made a bonus plan more effective without changing one thing about the plan (i.e. more money, shorter time frame). Rather, they simply changed the wording of the letter outlining the plan’s details.

To one group, they communicated it in the traditional way: hit this target by the end of the week and earn the bonus. However, to another group they said that employees had “provisionally” earned the bonus but would lose it if they did not hit their targets; thus, pitting the “joy of gain” against the “fear of loss.”

Cognitively, objectivity says no difference exists. However, Hossain and List found that the second approach (fear of losing the provisional bonus) was much more motivational than the traditional approach (joy of gaining the bonus). Moreover, the motivational difference persisted over time even after employees understood the bonus better.

In effect, by tapping into the way people intuit different emotions (fear and joy) a single bonus plan becomes two distinct ones. That is the multiplying effect of an intuitive approach.