Book review: Practical Wisdom by Barry Schwartz and Kenneth Sharpe

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A few days ago I finished reading Barry Schwartz and Kenneth Sharpe’s new book Practical Wisdom: The Right Way to Do the Right Thing. I love reading and the thought process that comes with the process of reading. As a result I tend to recommend a lot of books. However, usually my recommendations are not universal but specific. Once in a while I come across a book that I think everybody must read. Practical Wisdom is at the top of that list.

The authors have a few basic claims. We need more wisdom in our lives. Not the wisdom of sages or scholars but practical everyday wisdom that will help us live better lives and make better decisions. Wisdom is the act of performing a particular social practice well—being a good friend or parent or doctor or soldier or citizen or statesman—and that means figuring out the right way to do the right thing in a particular circumstance, with a particular person, at a particular time.

Wisdom, however, is not about intelligence or intellectual capacity. Because we are all born to be wise. The problem is this wisdom needs to be nurtured, cultivated and encouraged. It requires mentioned, coaching, modeling and time to develop. We, as a society, are doing just the opposite of that. We are waging a war against wisdom. Because of different societal process our society has turned more and more to rules, incentives and standardization. As the authors put it:

The assumption behind carefully constructed rules and procedures, with close oversight, is that even if people do want to do the right thing, they need to be told what that is. And the assumption underlying incentives is that people will not be motivated to do the right thing unless they have an incentive to do so. Rules and incentives. Sticks and carrots. What else is there?

While these tools are sometimes useful, they are usually effective only in the short-term and have unintended consequences. They are unable to provide for the changing complex needs of the environment in which people operate in, and thus, lead to unwanted results:

Rules and incentives may improve the behavior of those who don’t care, though they won’t make them wiser. But in focusing on the people who don’t care—the targets of our rules and incentives—we miss those who do care. We miss those who want to do the right things but lack the practical wisdom to do them well. Rules and incentives won’t teach these people the moral skill and will they need. Even worse, rules can kill skill and incentives can kill will.

Rules are aids, allies, guides, and checks. But too much reliance on rules can squeeze out the judgment that is necessary to do our work well. When general principles morph into detailed instructions, formulas, unbending commands—wisdom substitutes—the important nuances of context are squeezed out. Better to minimize the number of rules, give up trying to cover every particular circumstance, and instead do more training to encourage skill at practical reasoning and intuition.

More than that, this reliance on rules and incentives is eroding our ability to develop wisdom and makes people who go into professions like medicine, law and education with a desire to influence and do good, hate their jobs or act in ways that are contrary to what they wanted to do when they decided to join the profession.

The challenge is to find a way to enable people to earn their livelihoods and create a viable organization without having payoffs completely control what people do—without having payoffs demoralize both the people and the practices in which they engage.

The book is a wonderfully written call to stop treating people like cogs. A call to stop measuring things just because we can and then leading our lives according to these measurements. It is an attempt to point out that there is more about being alive and working, than just thinking about outcomes, money and bottom line measurable results. It try to challenge the assumption of “one right way” and “top-down” control that is like a cancer in our societies. It is an attempt to point out to the Obliquity of our business and work. It is a praise to human judgment and ability to do good. It describes the world I want to live in and the kind of work life I want to lead. It is the book I wish I could have written. Read it. Today.

Elad

Internal motivation, conversations, incentives and Equifinality

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A few unconnected sources connected in my mind in the last few days and made me think about an issue I attempt tackling from time to time – incentives. First off, we have a post by Paul Hebert commenting on the description of a research done by Pittsburgh’s Carnegie Mellon University Professor Denise Rousseau. On its face, Hebert says, the research suggests that providing rewards increases performance, even if they are unwarranted. However, Hebert doesn’t think so:

Providing “i-deals” – as they are referred to in the research – means the manager actually had to sit down and talk to the employee about what they valued and what they wanted.  In other words, they had a conversation, were interested in the output from the employee and considered their needs and desires in the process of defining work tasks.  The prime mover of performance isn’t the reward – it’s the conversation, the interest, the validation that what the employee does actually has impact on the company. Here’s the real test. Take the same amount of time spent figuring out the “i-deal” and spend it talking about the job, the impact, the way the employee does it, the roadblocks and the successes. In other words – talk about anything one-on-one with poorer performers and don’t offer any “i-deals.” I’m 100% certain you will get increased performance.

Take that idea connects wonderfully with what Ross Smith writes on the Management Exchange:

Does a paycheck, salary bonus, raise, or promotion put more work in to work? Well, it sure seems like lavish raises, exotic vacations, those coveted employee-of-the-month parking spots, and massive bonuses would make work more fun, doesn’t it? The research suggests otherwise: rewards, or worse, the threat of punishment actually make work less enjoyable and perhaps even reduce productivity. These extrinsic elements can make work feel like work.

People who are offered rewards tend to “…choose easier tasks, are less efficient in using the information available to solve novel problems, and tend to be answer oriented and more illogical in their problem solving strategies. They seem to work harder and produce activity, but the activity is of a lower quality, contains more errors, and is more stereotyped and less creative than the work of comparable non-rewarded subjects working on the same problem.”

Finally, look at some of the wonderful insight Barry Schwartz and Kenneth Sharpe provide in Practical Wisdom: The Right Way to Do the Right Thing:

There are two problems with incentives. First, they are often too blunt an instrument to get us what we need. In situations that call for scalpels, incentives are sledgehammers. Second, when incentives are introduced into a situation, they can undermine other, better motives to do the right thing. Different kinds of motives can compete, and financial or other material incentives often win the competition. The result, as we’ll see, is that such financial incentives can lead to demoralization—in two senses. First, they take the moral dimension out of our practices; second, they risk demoralizing the practitioners themselves.

In many situations, for many activities, no incentives are smart enough. Teachers like Deborah Ball and Mrs. Dewey spend their day figuring out how much time to spend with each student and how to tailor what they teach to each student’s particular strengths and weaknesses. They are continually balancing conflicting aims—to treat all students equally, to give the struggling students more time, to energize and inspire the gifted students. Along comes the incentive to bring up the school’s test scores, and all the nuance and subtlety of Mrs. Dewey’s moment-by-moment decisions go out the window. And what “smarter” incentive is going to replace judgment in making sensitive choices in a complex and changing context like a classroom?

And all of this made me think about incentives. In a way, the idea of incentivizing employee behavior means, to a certain degree, that the creator of the incentives knows what is the right behavior. Management, if you will, has the rule book that says how one needs to behave in every situation and thus is able to “reward” for compliance. And for those of you that this reminds something it should. This arrogant “management knows all” approach is the foundation of Frederick Winslow Taylor’s Scientific Management.

In western culture the search for one truth is as old as philosophy. This thinking has penetrated into our business culture. However, there isn’t one truth that can explain the complexity of this world and the diversity of the people. It is time to recognize that ideas like Equifinality, differences and redundancies are valid business tools that can be used to reach business goals, just as much as the “one truth” idea. And while one answer/one way/standardization/rule book/Scientific Management mentality has its upside in some environments, I think we are starting to find out that it has major flaws and that it might not work in our own world today.

Incentives are will and continue to be an important part in people’s behavior and decision-making. They will also continue to be an important tool for business and management. But their reign as “supreme all knowing leaders” of workplace motivation needs to change. Our goal as managers is not to find the right incentives. Our goal is to create an environment where we do not need incentives at all. As Hebert says, one way to start on that path is by having actual conversations with employees.

Elad

Capitalism, unions, equality, the fallacy of the average and mediocrity

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A short caveat: while this post is not totally unrelated to my regular line of writing, it does somewhat detaches from my usual subject matter and is focused more on personal doubts, questions and thoughts and less on practical implications.

 

I see myself a capitalist. I believe in its basic premises. And while my views have become less extreme in the last few years and I do think there is a need to rethink and change some of the basic practical behaviors we derive from the concept, it is still a part of how I define my world views.

Within this framework I have always wondered about the idea of work unions. On a very shallow level it seems incompatible with the some of the ideas I used to think capitalism represented, so in my younger years I immediately thought of unions as something wrong. However, over the years I understood the importance of mechanisms that will put some balance into the capitalist system so it will not undo itself. Having said that, maybe because of my biased viewpoint, wherever I looked I saw unions resisting change and progress, upholding stupid rules (see this Gates talk on TED for some examples) and keeping the interests of the top quartile of employees instead of those who actually need protection. This has always bothered me.

Lately, because of current political and economic issues in Israel, I have been thinking about this issue quite a bit. This week, while listening to a freakeconomics podcast about the negotiations between the NFL league and the players union (negotiations, many of the players themselves are not privy to) I came to a realization that what troubles me about unions is something that has been troubling me about other fields as well. The misuse of the idea of equality. I have written before (see also here):

Equality is an important concept in many aspects of life, especially in the legal field, I know so well, as a former lawyer. But in real life, because equality is intertwined into our thinking DNA it is used in ways that many times hinders excellence. All men are not born equal. Whoever tells you that is lying. All man should deserve an equal opportunity to excel, to be happy and to use their comparative advantage. That is the truth. And there is a big difference between the two.

In western societies, equality is part of the ethos. People fought for the right of equality for ages and it is so commonplace and understood (even if not completely practiced) we regard it as a given right. The quotation “All men are created equal” is arguably the best-known phrase in any of America’s political documents. And if all men are created equal, they should be treated as equal in the workplace as well. And they think as themselves as equal. And this creates problems. Because we are not equal. We are unique. Special. With different talents, skills, perspectives, life experiences, likes and dislikes. And that means that treating us as if we are the same is wrong.

In the case of unions, the idea of equality means that unions can act like all workers are equal. If they are equal, they can talk about the average worker. It is a classic case of the fallacy of the average. Because of everybody is equal and we are taking care of the average worker we are losing the individuality. And that is the fastest way to mediocrity.

In Practical Wisdom: The Right Way to Do the Right Thing, Barry Schwartz and Kenneth Sharpe write:

That’s what Aristotle meant when he said that practical wisdom as opposed to a universal rule was necessary because of the priority of the particular. A wise person knows how to do the right thing, in the right way, with this person, in this situation. To be wise, we need cognitive and perceptual machinery that picks up on similarities without being blind to differences.

I am not an expert on the issue of unions, their history and their contribution to society. I am also not against the idea that workers should be protected to some degree and have a right to be represented. I do resent the fact that some unions focus their attention on keeping the status quo and base their thinking on a misconception of equality that leads to a discussion of averages. In general, the work of any leader, political, business, union or other, is to balance similarities and differences. I am not sure that many of the union leaders or those that sit with them to the table of negotiations are actively thinking of this balance. What will happen if both sides of a labor dispute (or even better, prior to the dispute) will start doing just that? Isn’t it worth a try?

Elad

Telos

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I am reading Barry Schwartz’s new book Practical Wisdom: The Right Way to Do the Right Thing. I am sure I am going to mention it a lot here on the blog. Here is a first taste:

Acting wisely demands that we be guided by the proper aims or goals of a particular activity. Aristotle’s word for the purpose or aim of a practice was telos. The telos of teaching is to educate students; the telos of doctoring is to promote health and relieve suffering; the telos of lawyering is to pursue justice. Every profession—from banking to social work—has a telos, and those who excel are those who are able to locate and pursue it. So a good practitioner is motivated to aim at the telos of her practice. But it takes wisdom—practical wisdom—to translate the very general aims of a practice into concrete action.

If purpose is indeed an all encompassing concept that every aspiring manager should master then this idea of telos probably lies in the middle of it. While, as Schwartz says, it is only the beginning of translating that general aim into concrete action, it is a good place to start. A place I am not sure we reach for enough.

How many of you have stopped in the last week\month\year and asked – “why am I doing this”?

When was the last time you started a meeting by asking: “So, does anybody have thoughts about why we are here? Why are we doing it? What is the purpose of our work?”

In the management world talks about vision, goals and desired outcomes are ubiquitous. Talks about what lies underneath them are scarce.

I know on which side of the equation I would like to be.

What about you?

Elad

Re-learning about purpose

If there is a lesson I am happy to re-learn many times it is the important of purpose in numerous organizational contexts. Its importance for employees’ happiness, for long-term organizational success and for alignment of strategy never ceases to amaze me. In the last few days, I encountered a number of reminders for its importance.

In the fascinating TED talk above Barry Schwartz gives many examples for the importance of practical wisdom. One of them is other the story of Judge Russell:

Judge Russell created the Veterans’ Court. It was a court only for veterans who had broken the law. And he had created it exactly because mandatory sentencing laws were taking the judgment out of judging. No one wanted non-violent offenders — and especially non-violent offenders who were veterans to boot — to be thrown into prison. They wanted to do something about what we all know, namely the revolving door of the criminal justice system. And what the Veterans’ Court did, was it treated each criminal as an individual, tried to get inside their problems, tried to fashion responses to their crimes that helped them to rehabilitate themselves, and didn’t forget about them once the judgment was made. Stayed with them, followed up on them, made sure that they were sticking to whatever plan had been jointly developed to get them over the hump.

This reminded me of something I wrote almost two years ago:

I don’t remember where exactly I read it. I think it was in one of Marcus Buckingham’s books. Anyway, the writer described an interview with a manager of the prison authority in England. That manager told the interviewer about the ways in which that organization became much more effective. Now, when you think of a prison, you would probably think about things in the lines of tightening security. But the most important activity that was described had to do with the way the prison authority measured its effectiveness. Instead of measuring how many people got out or escaped, which was the traditional way to measure the effectiveness of prisons, the manager changed the way that organization measured it success. They started measuring how many people who got out of prison legitimately, returned to prison. The manager said that he realized that the objective of a prison is to make sure prisoners who return to society don’t go back to the life of crime. In how many other places in life do we still measure the wrong thing because of habit or because of the available data?

I think the two stories are connected. Later in the talk Schwartz explains that none of the Vets that appeared before the special court have re-lapsed. None. 108 success stories. When you think about it through the lenses of the right measurement you understand how profound an achievement it is.

And this made even more sense when I read this paragraph from Mihaly Csikszentmihalyi’s Good Business: Leadership, Flow, and the Making of Meaning:

Much of what modern workers are required to do on the job is dictated by demands that make sense at some higher organizational level, but are obscure to the worker. Why do we need to fill out these forms? What is the purpose of this rule? What is the outcome of this process? And often even if the worker understands what she is doing, it is not clear to her why. Yet without well-defined goals, both long-term and moment by moment, it is difficult to enjoy what one is doing.

Do I really need to spell out the connection? I don’t think so. It is obvious. I wish it was also more common.

Elad

Environment of learning

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A couple of days ago, the Freaknomoics blog wrote about TED quoting Anya Kamenetz saying that:

TED is in the process of creating something brand new. I would go so far as to argue that it’s creating a new Harvard — the first new top-prestige education brand in more than 100 years.

More interesting was the quote by college professor and TED-lecturer, Barry Schwartz:

Well, people who come to TED are open to being changed by their interactions and conversations. They’re in an environment where they’re going to learn something new every five minutes. You could create something like that on a college campus, but generally that doesn’t happen.

As lately I have been grappling with the issue of learning behaviors and how you encourage them in team settings in order to support innovation, I find this comment fascinating. The answer to the question of how you create an environment where people are receptive and actually expect to learn is a million dollar question for organizations that are focused on radical innovation as part of their strategy. And frankly, that is true for most companies today.

Work used to be a place where you come in, punch your card, don’t ask questions and do what you already know. The more time passes, the more the jobs that answer this description disappear. Instead, we have jobs where you have to constantly learn and more importantly, be open to other disciplines, perspectives and assumptions about how to do things. But when you come with the attitude of the former to a workplace that employees the later, bad things are going to happen. Thus, companies need to find ways to create the “Magic of TED” in their own back yard and to make people ready to be changed by their interactions and conversations. Not an easy task. How do you think companies can accomplish this challenge?

Elad

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Omission and commission

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In his book, The Paradox of Choice: Why More Is Less, Barry Schwartz talks about the difference in the regret we experience when thinking about two different situations in our past. The first situation is an action that did not turn out well (acts of commission) – for example, asking somebody out and getting a negative response. The second is a situation of inaction (omission) – for example, not even asking somebody out on a date. This is what Schwartz writes:

When asked about what they regret most in the last six months, people tend to identify action that didn’t meet expectations. But when asked about what they regret most when they look back on their live as a whole. People tend to identify failures to act. In the short run, we regret a bad educational choice, whereas in the long run, we regret a missed educational opportunity. In the short run, we regret broken romance, whereas in the long run, we regret a missed romantic opportunity. So it seems that we don’t close the psychological door on the decision we’ve made, and as time passes, what we’ve failed to do looms larger and larger.

And I ask you this: What kind of behaviors are you omitting because of this fear of short-term regret? Speaking up in the next meeting? Confronting you peer or boss?  Trying that new strategy or tactic? Making a different choice? Sitting in a different chair? Taking up a new managerial skill or process?

We all know that failure and risk are important. We all hate failure and risk just as equally as we know they are important. But if we also know that we will regret not trying even more in the long run, isn’t it worth a try? Isn’t it time we starting committing?

Elad