Embrace the revolution – overcome the Illusion of control

Photo by Steven Snodgrass

[tweetmeme]

In the last few days I have read a lot about heuristics. For those of you who still haven’t been exposed to this intriguing concept, here is a short definition from Wikipedia:

[A]n adjective for experience-based techniques that help in problem solving, learning and discovery. A heuristic method is particularly used to rapidly come to a solution that is hoped to be close to the best possible answer, or ‘optimal solution’. Heuristics are “rules of thumb“, educated guesses, intuitive judgments or simply common sense. A heuristic is a general way of solving a problem

We all use heuristics every day. We have to. If we had to think about every decision and process every input fully, we would be totally overwhelmed. So we use these intuitive rules to make quick decisions. From estimating distances according to how well we see the object to estimating numbers instead of doing complex calculation. From deciding we like someone because he reminds us of someone else we like to taking business risks because of over optimism in our abilities. And many times, these are great mechanisms (we sometimes want people to take risks… because this is how progress is created, so it is good to be a little over optimistic, for example). However, as the research of behavioral economics has taught us heuristics are not always a smart way to make decisions.

In his book, Judgment in Managerial Decision Making, Max Bazerman writes about one heuristic that sometimes goes wrong, The Illusion of Control:

People falsely believe that they can control uncontrollable events …, and they overestimate the extent to which their actions can guarantee a certain outcome… Evidence suggest that experienced dice players believe that “soft” throws are more likely to result in lower number being rolled…

Two other researchers, Dan Lovallo and Daniel Kahneman, in an article in Harvard Business review, wrote the following paragraph:

Managers are also prone to the illusion that they are in control. Sometimes, in fact, they will explicitly deny the role of chance in the outcome of their plans. They see risk as a challenge to be met by the exercise of skill, and they believe results are determined purely by their own actions and those of their organizations. In their idealized self-image, these executives are not gamblers but prudent and determined agents, who are in control of both people and events.

Yes, you read it right. Managers have an illusion that they are in control of people. That their actions, more than anything else, will determine the success of the people around them. That if people will only do as they said, everything will be all right. That everybody around them is a cog to be used just in the right way. And why shouldn’t they have this illusion. For so many years, it worked. Bill Drayton and Valeria Budinich reminds us of how it used to work in a post on the Harvard Business review blog:

Fifty years ago, Detroit was the symbol of American ingenuity and prosperity. Henry Ford and his small group of managers did all the thinking and told everyone else what to do. This command-and-control approach works in a relatively static world where most tasks are repetitive — such as building cars on an assembly line. It does not work in today’s fast-paced, change-is-the-name-of-the-game world; and it will not work tomorrow.

Like every heuristic, The Illusion of Control is rooted in truth. But also like every heuristic, there comes a time when it becomes detrimental and instead of helping people make decision, it actually limits them and forces them to make mistakes and err in judgment. As Drayton and Budinich so accurately point out, the historic validity of the illusion led to the creation of mechanisms of control and to the creation of conventional wisdoms about how people should be managed, conventional wisdoms that are built on Tayloristic assumptions that people are just parts in a big machine of productivity.

We are in a time of revolution. The mangers who will be able to overcome their heuristic towards control and understand that today, the power in every aspect of business lies in letting go of control and not in trying to sustain things as they are, will embrace the indirect power that comes with an environment with no rules, no mechanisms of control and that gives employees autonomy and purpose. It is not going to be easy, but this is one heuristic, that I believe managers can overcome.

Elad

Embrace the revolution – overcome the Illusion of control

Photo by Steven Snodgrass

[tweetmeme]

In the last few days I have been reading a lot about heuristics. For those of you who still haven’t been exposed to this intriguing concept, here is a short definition from Wikipedia:

[A]n adjective for experience-based techniques that help in problem solving, learning and discovery. A heuristic method is particularly used to rapidly come to a solution that is hoped to be close to the best possible answer, or ‘optimal solution’. Heuristics are “rules of thumb“, educated guesses, intuitive judgments or simply common sense. A heuristic is a general way of solving a problem

We all use heuristics every day. We have to. If we had to think about every decision and process every input fully, we would be totally overwhelmed. So we use these intuitive rules to make quick decisions. From estimating distances according to how well we see the object to estimating numbers instead of doing complex calculation. From deciding we like someone because he reminds us of someone else we like to taking business risks because of over optimism in our abilities. And many times, these are great mechanisms (we sometimes want people to take risks… because how progress is made, so it is good to be a little over optimistic, for example). However, as the research of behavioral economics has taught us heuristics are not always a smart way to make decisions.

In his book, Judgment in Managerial Decision Making, Max Bazerman writes about one heuristic that sometimes goes wrong, The Illusion of Control:

People falsely believe that they can control uncontrollable events …, and they overestimate the extent to which their actions can guarantee a certain outcome… Evidence suggest that experienced dice players believe that “soft” throws are more likely to result in lower number being rolled…

Two other researchers, , in an article in Harvard Business review, wrote the following paragraph:

Managers are also prone to the illusion that they are in control. Sometimes, in fact, they will explicitly deny the role of chance in the outcome of their plans. They see risk as a challenge to be met by the exercise of skill, and they believe results are determined purely by their own actions and those of their organizations. In their idealized self-image, these executives are not gamblers but prudent and determined agents, who are in control of both people and events.

Yes, you read it right. Managers have an illusion that they are in control of people. That their actions, more than anything else, will determine the success of the people around them. That if people will only do as they said, everything will be all right. That everybody around them is a cog to be used just in the right way. And why shouldn’t they have this illusion. For so many years, it worked. Bill Drayton and Valeria Budinich reminds us of how it used to work in a post on the Harvard Business review blog:

Fifty years ago, Detroit was the symbol of American ingenuity and prosperity. Henry Ford and his small group of managers did all the thinking and told everyone else what to do. This command-and-control approach works in a relatively static world where most tasks are repetitive — such as building cars on an assembly line. It does not work in today’s fast-paced, change-is-the-name-of-the-game world; and it will not work tomorrow.

Like every heuristic, The Illusion of Control is rooted in truth. But also like every heuristic, there comes a time when it becomes detrimental and instead of helping people make decision, it actually limits them and forces them to make mistakes and err in judgment. As Drayton and Budinich so accurately point out, the historic validity of the illusion led to the creation of mechanisms of control and to the creation of conventional wisdoms about how people should be managed, conventional wisdoms that are built on Tayloristic assumptions that people are just parts in a big machine of productivity.

We are in a time of revolution. The mangers who will be able to overcome their heuristic towards control and understand that today, the power in every aspect of business lies in letting go of control and not in trying to sustain things as they are, will embrace the indirect power that comes with an environment with no rules, no mechanisms of control and that gives employees autonomy and purpose. It is not going to be easy, but this is one heuristic, that I believe managers can overcome.

Elad

Bazerman Judgment in Managerial Decision Making<img src=”http://www.assoc-amazon.com/e/ir?t=thecompaadvan-20&l=as2&o=1&a=0470049456&#8243; width=”1″ height=”1″ border=”0″ alt=”” style=”border:none !important; margin:0px !important;” />

http://www.typepad.com/services/trackback/6a00d83451b31569e20120a73d1f5f970b

http://blogs.hbr.org/cgi-bin/mt/mt-tb.cgi/5531

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2 Responses to “Embrace the revolution – overcome the Illusion of control”

  1. Why saying you are motivating someone else is wrong « The Comparative Advantage Says:

    […] is a use of language that implies a wrong relationship. It assumes dominance. It assumes control. But it is an illusion. I don’t think you can motivate someone else. People don’t have a button you can push in order […]

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