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.

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

It’s generally easier to understand what positive and negative reinforcements are than it is to understand their advantages and disadvantages. Tradeoffs exist. Generally, in terms of getting action positive reinforcements are better over the long run, negative over the short run. The table below explains:

Now, it’s important for us to understand and appreciate how these work together. After all, managers are likely to use both, not just one or the other. Therefore, here are two important ratios to remember:

Results Ratio: It generally takes five (5) positive reinforcements to do the work of one (1) negative one.

5:1

Relationship Ratio: It generally takes ten (10) positive reinforcements to overcome the negative feelings of one (1) negative one.

10:1

For instance, one could hold a gun to someone’s head and change his behavior very quickly, but the relational damage is immense. We don’t want to become overdrawn on our relational accounts because overreliance on negative reinforcements will reduce the effect of positive reinforcements. This will necessitate greater use of negative reinforcements and produce a synergistic spiral downward resulting in a compliant, uninspired workforce.

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.

So, the boss walks in and harshly reprimands an employee. Unknowingly, she probably just shot his productivity down for the day. A while ago I worked with a company in which it was fairly common practice for the owner to come in late Monday morning and severely reprimand his employees. I witnessed what that did to their productivity for the week.

What we often don’t realize is how much words, phrasing and general conversation can affect people. In the November/December 2011 issue of Scientific American Mind, Tori Rodriguez in her article, “What Just Happened?”, cites several studies including ones in which:

• “. . . people who were unconsciously exposed to images of fast-food logos became more impatient . . .”
• “ . . . when participants recalled an illness-related memory, their pain tolerance decreased.”
• Participants were “unknowingly primed toward goal pursuit” simply by reading something “that included words such as ‘success’ and ‘achieve.’”

While Rodriguez recommends that we become more aware of this “priming” as she calls it by recalling what we “saw, heard and thought about in the past few minutes,” we can also raise our awareness concerning how we negatively influence people accidentally. Moreover, we could use this priming for good. For instance, simply wishing people luck can improve their productivity and performance.

That means we need to beware of that “constructive criticism” we offer. If it really is that constructive and helpful, we should position it as advice, assistance or simply help. Consider too, if we never compliment an employee. It’s as though we never watered a plant.

Next time you want to motivate someone, it might be as simple as talking about something positive, enjoyable and yes, even humorous.

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.

When I’ve written about the illusion of free will, I’ve focused on the advancement of technology and research methodologies to uncover subconscious thought patterns. However, these advancements are also discovering a connection between chemical reactions and some of our emotions.

In the September 24, 2011 issue of The Economist, the article, “Rogue Hormones,” reports on the research of John Coates, a  neuroscientist from Cambridge University. His research of derivative traders showed that when they “are on a winning streak their testosterone levels surge, sparking such euphoria that they underestimate risk.” This biochemical process produces extremely “powerful emotions” encouraging traders to “go crazy.”

This helps to explain why we often learn more from our failures than our successes and why success can deliver us to a state of hubris, an exalted arrogance that can corrupt our decision-making processes. Such biochemical processes help explain why such exuberance can infect many people to think and act similarly without communicating with each other while each is believing he is responding of his own free will. Thus, such events as financial bubbles and housing bubbles can occur on a broad scale.

A way to mitigate this effect is to diversify your workforce to include many types of personalities in decision-making positions. For instance, the article concluded that hiring women, who generally have about 10% as much testosterone as men, could help offset “irrational exuberance.” Experience can also help especially if it contains crises brought about by excessive risk taking. Moreover, even from strictly a gender perspective, not all men will experience the same increases in testosterone levels from success making them prone to erroneous risk assessments.

Of course, it’s not easy to manage a diverse workforce.

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?