Perceptions

Photo by Nina Matthews Photography

Dan Ariely writes (and talks) about an interesting phenomena:

… [a] locksmith was penalized for getting better at his profession. He was tipped better when he was an apprentice and it took him longer to pick a lock, even though he would oftentimes break the lock! Now that it takes him only a moment, his customers complain that he is overcharging and they don’t tip him. What this tells is that consumers don’t value goods and services solely by their utility, benefit from the service, but also a sense of fairness relating to how much effort was exerted.

How are employees viewing your actions as a manager? Does the time spent with them equates to how good a manger they think you are? Do what your employees think about you and feel towards you is what you think they do? Is it what it should be “rationally”?

I hate to admit it as much as anybody else. But just like in other areas (e.g. marketing) sometimes managing the perceptions is just as important as doing the actual work.

Elad

 

 

Perceptions

Photo by Nina Matthews Photography

Dan Ariely writes (and talks) about an interesting phenomena:

… [a] locksmith was penalized for getting better at his profession. He was tipped better when he was an apprentice and it took him longer to pick a lock, even though he would oftentimes break the lock! Now that it takes him only a moment, his customers complain that he is overcharging and they don’t tip him. What this tells is that consumers don’t value goods and services solely by their utility, benefit from the service, but also a sense of fairness relating to how much effort was exerted.

How are employees viewing your actions as a manager? Does the time spent with them equates to how good a manger they think you are? Do what your employees think about you and feel towards you is what you think they do? Is it what it should be “rationally”?

I hate to admit it as much as anybody else. But just like in other areas (e.g. marketing) sometimes managing the perceptions is just as important as doing the actual work.

Elad

Dan Ariely, Perceptions, Managing people, irrationality

The probability of a desired outcome

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Dan Ariely writes a fascinating blog post about outcomes in management:

If you practice kicking a soccer ball with your eyes closed, it takes only a few tries to become quite good at predicting where the ball will end up. But when “random noise” is added to the situation—a dog chases the ball, a stiff breeze blows through, a neighbor passes by and kicks the ball—the results become quite unpredictable.

If you had to evaluate the kicker’s performance, would you punish him for not predicting that Fluffy would run off with the ball? Would you switch kickers in an attempt to find someone better able to predict Fluffy’s involvement?

That would be absurd. And yet it’s exactly how we reward and punish managers. Managers attempt to make sense of the environment and predict what will result from their decisions.

It reminded me of something I wrote not a while back:

But judging results does not mean that we should ignore efforts or processes. In a football game, just like in real life, people have to make many decisions under pressure. Sometimes the outcomes of those decisions are positive and sometime they are not. But even if the outcome is negative it does not necessarily mean that decision was wrong. It just means it led to an unwanted outcome. And vice versa. Good decisions could lead to bad outcomes.

When you think about it, big parts of management are attempts to decrease variance. To make sure the same desired outcomes happen again and again. But as Nassim Taleb will tell you (in The Black Swan), it is all a game of probability. You can never make sure the result will be the same every time. What you can do is try and make the process as tight as possible in order to increase the probability of a desired outcome. This is true for manufacturing and programs like six-sigma and it is true for new product development and innovation.

I agree with Ariely completely. There is a need to change our focus on outcomes and put more focus on the right processes. And this doesn’t have to start with board of directors. Every manager can start this change. Ask yourself – how am I evaluating my employees? Is my feedback and recognition based solely on outcomes or does it take into account the process as well? Do I start a learning discussion by focusing on what the final outcome was or do I start by asking how did we get to that outcome?

Like many biases, our bias toward outcomes is, like Ariely says, understandable. But it does not mean it is something we can’t manage or change. By asking the right questions and focusing managerial effort and concentration on process and decisions we can easily increase the probability of a right outcome.

Elad

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When should a manager force employees to do things they don’t want to do?

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Dan Ariely wrote an interesting post about the Chilean pension system that mandates savings by all citizens. Not surprisingly, Ariely calls the post: “Want People to Save? Force Them”. This connects with an earlier post by Ariely (which I also wrote about) that discussed an experiment which showed  that by limiting the list of questions people could use to engage in a conversation, deeper and more meaningful conversations were brought to life.

These two posts got me thinking. In this blog I write a lot about rules in management and about how managers should let go of the mechanisms of control. I generally believe that the basic concepts Dan Pink presents in his book, Drive, of Autonomy, Mastery and Purpose are three of the most important tools managers have in their disposal.

At the same time, I do believe that sometimes, managers should force some processes on their employees. Just like people are bad at saving and need to be made to save, because in the longer-term it is better for them, there are things employees would not do and need a manager to force them. Engaging in more meaningful conversations is a great example. And if we can do that by designing the rules of the meeting differently (for example), this is an important tool that managers should use.

This is a very difficult conclusion for me as it goes against many of my personal beliefs about liberty and the importance of choice (more on this unrelated subject – see here). But I do believe that great leaders and managers know how to walk the line between allowing autonomy and forcing people to engage in some important paternalistic processes. I don’t have a complete list of these instances, but I am planning to start thinking more and more about this subject.

Any ideas? In what issues do you think managers should force employees to do things for their own long-term benefits?

Elad

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The bad equilibrium of office conversations

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Dan Ariely reports, both on HBR.org and on his blog, on a fascinating experiment that I think has many implications to managing people. The setting they chose for their example was online dating and first dates. The idea was that during first dates or first encounters online, the two people usually are carful and don’t want to rock the boat. So they limit their questions and conversation to boring stuff like the weather or the food. These if of course not a conversation that is in their best interest, because although it means not offending the other side, the couple does not actually learn much about each other and might waste time and effort going into a relationship that is not right for either of them. This is what economists call bad equilibrium.

In order to change that, the experiment took willing participants and gave them a list of pre-approved questions that were anything but small talk – questions ranging from “whether you have STDs?” to “Have you ever broken someone’s heart?” to my favorite ice breaker: “How do you feel about abortion?” (which always reminds me of that Seinfeld episode). What they found out was that these questions actually prompted livelier, deeper more meaningful conversation.  As Ariely summarizes it:

By forcing people to step out of their comfort zone, risk tipping the relationship equilibria, we might ultimately gain more than if we just fall back on those tropes that are safe for everyone, and useful to no one.

Usually when people talk about stepping out of the comfort zone, they talk about new skills or behaviors that people need to acquire. While I am not sure I completely agree that in terms of skills we should push people so hard to go out of their comfort zone, there is no denying that there is opportunity for learning in these kinds of situations. However, you will never find people talking about deliberately pushing people out the comfort zone in emotional relationship oriented situation. But this is exactly the kind of behaviors we need to see more from managers.

Think about all those undiscussables that were just under the surface in your your last meeting. Or how weekly gathering of your team looks like. Do you feel like everybody is just being careful not to rock the boat? But isn’t rocking the boat, to a certain degree what these gatherings are really about? Do we really need to put everybody together in the same room so they can talk about the things everybody already know? Isn’t facing the issues, talking about them and finding shared ways to deal with them is the point of all of these meetings.

This experiment is a great example of the fact that managers should sometimes take a stand and make their people go through uncomfortable processes in order to stimulate discussions that open issues into the air. I am aware that it is a challenge to find the right process and right questions to ask. But the only way to find them is to experiment. Will it be awkward? Yes. Will you make mistakes and cross the bar and maybe insult people? Probably yes. But in the long term, it is worth the effort.

How can you change the bad equilibrium so you’re the important thing are discussed?

Elad

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Preconceived ideas about management

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As very often happens, Paul Hebert, the Managing Director for i2i and writer of Incentive Intelligence, writes something that resonates deeply with my held beliefs. In two related posts, one on his blog and one in Fistful of Talent, he touches upon the issue of the meaning of the word “management” and how it is perceived, especially in comparison to the word “supervisor”. Here is the gist:

… I checked the online dictionary to compare the definition of supervise and the definition of manage. The interesting thing? The root of supervise is all about “vision” – overseeing, watching. The root of manage is about controlling, training … After viewing these definitions, I believe we’ve got too much management and not enough supervision.

Managing = External Locus of Control

When “managing” projects to you “tell” people what to do, when to do it by and how to do it?  Most would say sure because  – “I’m the manager and my butt is on the line if we don’t deliver.”

Supervising = Internal Locus of Control

Supervising however means watching – overseeing and correcting when something goes awry.  In this case the real locus of control is with the individual with the supervisor allowing them to do their work, their way (obviously with some constraints such as time/cost.)

I have written before about the fact that I believe that language matters, especially in the world of management.  I have puzzled about the different definitions of the word manger. I tried to explain why I think management and leadership are different things and that opposite to what some think, it is not true that you manage resources and lead people. I am also part (although humble) of an attempt to reinvent management as management 2.0.  God knows, I am an advocate of losing control and stopping with management by rules.

But the more I think about it, the more I am convinced that we don’t only have a problem with our habits, our ingrained assumptions and our language and usage of words. The words themselves – leader, manager, and supervisor – have lost their original meaning and are full of the preconceived ideas that stand behind them. I think Hans Rosling opening statements (which I shortened) for his amazing TED talk, are appropriate:

About 10 years ago, I took on the task to teach global development to Swedish undergraduate students … And I started in our medical university, Karolinska Institute, an undergraduate course called Global Health … I thought, these students coming to us actually have the highest grade you can get in Swedish college systems — so maybe they know everything I’m going to teach them about. So I did a pre-test when they came. And one of the questions from which I learnt a lot was this one: “Which country has the highest child mortality of these five pairs?”

And I put them together, so that in each pair of country, one has twice the child mortality of the other. And this means that it’s much bigger a difference than the uncertainty of the data. I won’t put you at a test here, but it’s Turkey, which is highest there, Poland, Russia, Pakistan and South Africa. And these were the results of the Swedish students. I did it so I got the confidence interval, which is pretty narrow, and I got happy, of course: a 1.8 right answer out of five possible. That means that there was a place for a professor of international health and for my course.

But one late night, when I was compiling the report I really realized my discovery. I have shown that Swedish top students know statistically significantly less about the world than the chimpanzees. (Laughter) Because the chimpanzee would score half right if I gave them two bananas with Sri Lanka and Turkey. They would be right half of the cases.

But the students are not there. The problem for me was not ignorance: it was preconceived ideas.

Our problem today is not ignorance as much as the fact that the words, loaded with preconceived ideas, represent ideologies. In his book, Predictably Irrational: The Hidden Forces That Shape Our Decisions, author Dan Ariely Writes:

“Once we take ownership of an Idea – Whether it’s about politics or sports – what do we do? We love it perhaps more than we should. We prize it more than it is worth. And most frequently, we have trouble letting go of it because we can’t stand the idea of its loss. What are we left with then? An ideology – rigid and unyielding”.

And as we know so well from politics, once the discussion is about ideology, everybody tends to forget the original question. And in our struggle with words like management, supervision and leadership, loaded with preconceived ideas as they are, we forget what we are trying to achieve. As someone wrote in a Linkedin discussion I am taking part of:

To convince managers to change from obsolete 1.0 to 2.0 is like to convince Luis XIV to change to republic – I’m afraid a revolution is necessary!

I debated with myself how to finish this post, because I try to keep the blog focused on practical suggestions and specific issues to consider. And I have no bottom line for this post. I guess, just raising the issue is part of the solution! Any thoughts/ideas?

Elad

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What can we learn from “Pay for grades”

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In addition to my fascination with management of people I am almost as equally fascinated by education. I find many similarities between the subjects (as I mentioned in the past – see here and here) as both subjects remain a mystery although they have been practiced in a professional rigorous way for more than a century. That is why I particularly enjoyed reading the article from Time Magazine titled: Pay for Grades: Should Kids Be Bribed to Do Well in School?.

While the article raises a controversial issue about paying kids to make them learn which I must admit I am not too happy about, I admire the fact that the researchers actually went out and tried this approach in real life setting. As the article suggests, you learn some amazing things when you do that, some of them unexpected. The fact that we have moral reservation about issues should not stop us from exploring them, when we are already facing a system that is failing (for a different perspective on the last issue see Dan Ariely’s take).

However, in this blog, I want to point out two interesting quotes from the article that I think have just as much relevance to the management world as to the education world. Here is the first one:

We tend to assume that kids (and adults) know how to achieve success. If they don’t get there, it’s for lack of effort — or talent. Sometimes that’s true. But a lot of the time, people are just flying blind. John List, an economist at the University of Chicago, has noticed the disconnect in his own education experiments. He explains the problem to me this way: “I could ask you to solve a third-order linear partial differential equation,” he says. “A what?” I ask. “A third-order linear partial differential equation,” he says. “I could offer you a million dollars to solve it. And you can’t do it.” (He’s right. I can’t.) For some kids, doing better on a geometry test is like solving a third-order linear partial differential equation, no matter the incentive.

We have a tendency to focus on results and outcomes. And that is usually a good thing. Just by measuring outcomes, we can sometimes create a sense of positive competition that drives these results. Sometimes it is simple – because people know what to do, they just need a little nudge of fun to drive them to excel. However, when things go wrong and we don’t see the desired outcomes we tend to be fixed on the outcomes. And then we assume things.

“These workers are not motivated. They are not working hard. They are slackers. After all I have done for them and all I offer them; they still don’t give me the results I want.”

All that is well and good, but it is not very helpful. Assumptions don’t take us anywhere and in case of relationships, they are wrong most of the time. As the article points out you can offer these kids a lot of money, but you probably won’t see results. This is what Paul Herbert calls Energized Incompetence:

Take five people who never have played basketball, put them on the court and tell them if they win the game they receive $1 million dollars each. I’m sure you’ll get a lot of activity. Heck, it would be real fun to just watch the mayhem. But the chances of success are slim and none … Motivation isn’t just creating energy – it’s creating directed energy.

In Switch: How to Change Things When Change Is Hard, the writers claim that one of the most effective ways to create change is to explain what are the critical steps needed in order to create that change. It is not enough to say what the change is but we need to chip out the behavioral steps that will lead to the new results. Because sometimes people can’t find the way. And this connects directly to the second quote from the article:

Kids may respond better to rewards for specific actions because there is less risk of failure. They can control their attendance; they cannot necessarily control their test scores. The key, then, may be to teach kids to control more overall — to encourage them to act as if they can indeed control everything, and reward that effort above and beyond the actual outcome.

The funny thing is, that when you give people access to steps that they were missing, they find new exciting ways to accomplish the goal in a better way than you could have imagined. It is a delicate balance between allowing autonomy and offering support.

What are you asking you employees to do? Are these things under their control? Are your rewards directed to results or to the right behaviors?

Elad

Small decisions, fake sun-glasses and celebrating contradictions

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I have always been fascinated with small decisions and how one such decision can lead to a spiral that ends in enormous unwanted results in the future. Last semester, while still down at AGSM MBA, I took a business ethics class and noticed that in a lot of the cases we talked about, the current ethical dilemma was rooted in a small and sometimes insignificant decision in the past.

Then I read this post describing a very intriguing experiment:

…[The] psychologists Francesca Gino, Michael Norton and Dan Ariely asked two groups of young women to wear sunglasses taken from a box labeled either “authentic” or “counterfeit.” (In truth, all the eyewear was authentic, donated by a brand-name designer interested in curtailing counterfeiting.) Then the researchers put the participants in situations in which it was both easy and tempting to cheat. In one situation, which was ostensibly part of a product evaluation, the women wore the shades while answering a set of very simple math problems — under heavy time pressure. Afterward, given ample time to check their work, they reported how many problems they were able to answer correctly. They had been told they’d be paid for each answer they reported getting right, thus creating an incentive to inflate their scores. Unbeknown to the participants, the researchers knew each person’s actual score. Math performance was the same for the two groups — but whereas 30 percent of those in the “authentic” condition inflated their scores, a whopping 71 percent of the counterfeit-wearing participants did so. Why did this happen? As Gino puts it, “When one feels like a fake, he or she is likely to behave like a fake.” It was notable that the participants were oblivious to this and other similar effects the researchers discovered: the psychological costs of cheap knockoffs are hidden. The study is currently in press at the journal Psychological Science.

And that got me thinking. Here is the comment I made on that post:

It [the research described above] actually explains the downwards trends in ethics over time and the fact that a small unethical decisions might lead to a major issues in the long run. It also reminds of the broken windows theory. As soon as we are already faced with something broken, it is easier for us to act “broken” ourselves. The importance of small choices is so significant it is almost too hard to understand it.

As always I try to translate such thoughts to the world of management and to the way managers connect with their employees. I think there are a number of implications:

1. There is no such thing as a small decision. Our every act matters. And in the things that are important, like praise and recognition and helping people excel, we are tested every day. We don’t know what deciding not to engage in such activities today means for the future.

2.While thinking about the possible outcomes of the every possible decision is impossible and paralyzing, it is important to realize that the biggest issues started small. If you decide to go down a certain path, you create momentum which is hard to recognize and hard to stop. Dr. Philip G. Zimbardo says in interview for the book Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition by Guy Kawasaki (You don’t have to read the whole book but read this chapter and page 365):

Good people don’t rush in to do evil where angels fear to tread; instead they start by straying only a small way away from their moral center and each successive step down is hardly different, barely noticeable, until it is too late and their behavior is shocking and may even be awesome or awful.

3. Finally, I write here in this blog that managers should stop with trying to create rules. I believe in employee autonomy and in practical wisdom. At the same time, I wrote this in my e-book:

I believe in doing things right because they are right. In obeying the rules because they are rules. I believe that there are certain things that are just not done. We have so many rules around us. Some are better, some are worse. But the sad thing is, that we are used to breaking them every day. Just think about jaywalking or avoiding certain tax payments or taking something from your office when you are not supposed to. I believe rules are there for a reason and we should follow them because they are there. Because it is right. If the rules are wrong, it is all right to try to change them. In fact, we must try and change wrong rules. But there is a legitimate way to do that. And as long as they are valid rules, we should obey them.

This might seem contradictory. It might be. I have also grown and changed in the year and a half that passed since I wrote those words. At the same time part of my philosophy is that we should celebrate contradictions – F. Scott Fitzgerald famously said that “the true test of a first-rate mind is the ability to hold two contradictory ideas at the same time”.

Elad