Category Archives: Psychology

Profiting From Fear and Mistrust

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Profiting From Fear and Mistrust

GUEST POST from Greg Satell

When I lived and worked in Ukraine, it was commonplace to see men in camouflage fatigues and Uzi’s in the waiting rooms of offices around town. They weren’t there as security, or to rob the place, but to help transfer money between businesses. It was cumbersome and inefficient, but in an atmosphere of mistrust, it was a necessity.

In most countries, we’re still a long way from armed couriers as a daily routine, but according to Edelman’s recent Trust Barometer, we’re headed in that direction. Entitled “Innovation in Peril,” it details an overall collapse of confidence, finding that roughly two thirds believe that journalists, government leaders, and business executives, are “purposely trying to mislead.”

That’s a problem for all of us. Mistrust is corrosive to the norms that help our society run efficiently and the costs are very real. Our lack of trust in government prevents us from making needed investments. Suspicions about law enforcement undermine public safety. Mistrust in the workplace undermines performance. We desperately need to rebuild trust.

The Value Of Trust

Trust isn’t our natural state. Economists have developed a number of models to show how fragile it can be. For example, in a prisoner’s dilemma, two suspects are brought in for questioning. If they both stay true to each other, they get the best collective outcome, but if each follows his or her own self-interest, both will confess and get the worst overall outcome.

Related concepts are the tragedy of the commons, in which everybody has access to a common field to graze their livestock, depleting the resource so that everybody’s herd suffers, and the free rider problem which often occurs with respect to public goods. These situations are known as Nash equilibriums because nobody can change their preference without making themselves worse off.

When you take a moment to think, it’s kind of amazing that we operate with as much trust as we do. Local businesses faithfully serve communities for years, even decades. Corporations spend billions to build brands and governments work to earn legitimacy. That is what allows us to easily transact business throughout the day. When trust collapses, we get Uzis in waiting rooms.

Yet it doesn’t have to be that dramatic. Research by Accenture found that “trust events” cost businesses billions of dollars every year. For example, a consumer-focused company that had a sustainability-oriented publicity event backfire lost an estimated $400 million in future revenues. Another company that was named in a money laundering scandal lost $1 billion.

Profiting From Our Mistrust

Our brains are geared for mistrust in a number of ways. The first is a bias for loss aversion. We will do more to avoid a loss than we will for an equivalent gain. That makes trust hard to build and easy to lose, which is why the “trust events,” like those cited in the Accenture study, are so costly.

Another contributing factor is availability bias, our tendency to overweight easily accessible examples, such as a specific trust event, and ignore vague concepts, like years of good service. Once we accept a belief, our confirmation bias will lead us to seek out information that supports our prior beliefs and reject contrary evidence.

These effects are multiplied by tribal tendencies. We form group identities easily, and groups tend to develop into echo chambers, which amplify common beliefs and minimize contrary information. We also tend to share more actively with people who agree with us and, with little fear of rebuke, we are less likely to check that information for accuracy.

That, essentially, is the economics of disinformation. Fear breeds mistrust, which makes us feel insecure and leads us to seek out people we identify with to reinforce our beliefs. Research suggests media companies, especially social media companies, profit from the passions that the most polarizing information unleash in the form of greater engagement with their platforms.

Facts, Identity and Fear

We tend to think of truth as a simple matter of knowledge and understanding. We see the world as a set number of facts and believe that any disagreements arise from a lack of clarity about what the true facts are. In this view, mistrust can be corrected by better access to good information. Once people are informed, how could there be any disagreement?

Unfortunately, the world doesn’t work that way. In fact, a study at Ohio State found that, when confronted with scientific evidence that conflicted with their views, people would question the objectivity of the science. Another thing to consider is that, as Sam Arbesman explained in The Half-Life of Facts, our ideas about what’s true changes over time.

We can’t rigorously test every proposition, which is why we adopt the views of those around us, a phenomenon that psychologists call social proof. What makes the effect even more insidious, is that the relationship is reciprocal. We internalize the ideas of the tribes we join and then propagate those same ideas to others, intensifying the echo chamber.

Our beliefs are far more than mere acceptance of sets of facts, but become inherently part of our identity. Wars are not fought over ideologies because people disagree about empirical evidence, but because they see their sense of selves under attack. If truth is a force for good, then those who refuse to accept our version of it are, in the most basic sense of the word, evil.

From Victimization To Empowerment Through Purpose

Our ability to trust others is, to a great extent, a function of how we see ourselves and our situation. If we see ourselves as secure and in tune with our environment, it’s relatively easy for us to build bonds of trust. If we feel those around us share our values, it’s easier to feel a shared sense of identity and purpose.

However, if we see our surroundings as hostile, we will take steps to protect ourselves and that, to a great extent, is where we are at today. First the Internet, and then social media have tended to promote and juxtapose the most extreme elements, creating an atmosphere of heightened conflict among tribes, which further undermines our sense of security and trust.

This is what Marshall McLuhan meant when he wrote that the global village would result in a “release of human power and aggressive violence” greater than ever in human history. When we are confronted with ideas and values that are different from our own, it can feel more more like an assault and an affront than a refreshing interaction with the variety of life.

Here Ukraine offers a lesson. Over the past decade it has built a new identity and found a new purpose. Today most Ukrainians, especially the younger generations, feel a stronger affinity for European values than for their post-Soviet past. In fact, they have so internalized their European ambitions that they are willing to risk a war to maintain them.

We have a similar challenge before us. If a common identity is forged from shared values and shared purpose, on what foundation will we build our future? To what common project can we devote our energies? What are our ambitions and how best might we fulfill them? These are the questions that we need to answer if we are ever to rebuild the bonds of trust.

— Article courtesy of the Digital Tonto blog
— Image credits: Pixabay

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Are You Time Affluent?

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Are You Time Affluent?

GUEST POST from Mike Shipulski

When you have more than enough money, you have money affluence. With it, you can buy what you want, eat what you want, drive what you want, and travel where you want. But to have this unallocated money, or discretionary money, you probably need to spend a heck of a lot of time working. Climbing the ladder takes a lot of time. And once you’re at the top, you probably have a lot of commitments that pull hard on your calendar. Odds are, if you have unallocated or discretionary money (money affluence), you likely don’t have unallocated or discretionary time (time affluence).

If you have money affluence, but no time affluence, what do you really have?

To understand how much unallocated time you have, here’s an example day. You get up at 6:00 am, leave for work at 6:30, commute for an hour to arrive at work at 7:30, eat at your desk, leave work at 5:00 pm, arrive home at 6:00 and go to bed at 10:00. If this is your day, you have four hours of unallocated time per workday. I know this doesn’t include the realities of cleaning, cooking, yard work, paying bills, running errands, kids’ sporting events, and a number of other commitments, but makes the upcoming math work well and doesn’t demand we acknowledge we have little to no unallocated time.

In the contrived day described above, you’re getting enough sleep but not much else – no exercise, no time to relax during lunch. And, it’s likely you’re trading sleep for the time needed to accomplish the practical realities of daily life. But, let’s just say you have four hours of unallocated time. If you have four hours of unallocated time per day, do you think you have time affluence?

If you reduce your commute to thirty minutes, you have an extra hour of unallocated time (five). That doesn’t sound much, but you increased your unallocated time by 25%. And if you add thirty minutes of unallocated time for lunch and thirty minutes of exercise during the workday, you add another hour of unallocated time, increasing your unallocated time to six hours, or a 50% increase over the four hours of the baseline. But, to be clear, when you assign an activity of your choosing to unallocated time, it’s still unallocated time, but it may be helpful to think of it as discretionary time.

And if you tell your boss that for your first hour of work (from 7:30 to 8:30 am) there will be no meetings, no email, no phone calls, no Skype, no Slack, you increase your unallocated time by another hour, bringing your total up to seven hours, or a 75% increase in unallocated time.

As it stands, the world will take your unallocated time unless you protect it. And you won’t free up more unallocated time unless you grab your calendar and proactively squeeze out some time for yourself.

If you have money affluence, but no time affluence, you don’t have all that much.

Image credits: Pixabay

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Eliminating Customer Anxiety

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Eliminating Customer Anxiety

GUEST POST from Shep Hyken

If you have been to a Disney theme park, you know about standing in long lines. There are also signs that tell you how long your wait will be. Guests like this.

When you use Uber or Lyft for transportation, they not only tell you how long before your driver arrives, they also show you a map where you can track how close (or far) the driver is from where you are waiting.

When you order anything from Amazon, you receive at least three emails. The moment you place an order, you receive an email confirmation. Another email shows up in your inbox to let you know your order has shipped. And then, another email is sent once the order arrives, sometimes with a picture of the box sitting on your porch. This is one of the reasons customers love Amazon.

Let’s stick with Amazon for a bit longer. It’s not really the multiple emails that customers love. It’s the information. And why is this information important? There are two (at least) byproducts from these emails that can’t be ignored.

  • The first is confidence. Without confidence, why would a customer want to do business with a company again? Confidence also comes from a predictable experience.
  • The second is eliminating – or at least reducing – anxiety. This takes confidence to a higher level. The sharing of information gives customers a sense of control.

In all three examples – Disney, Uber and Amazon – there is communication. Even if it’s over-communication, customers are drawn to companies that provide information that reduces their anxiety, whether they know it or not. And once a customer experiences the pleasure of an anxiety-free experience, again, whether they know it or not, they may question why they would consider doing business with a competitor.

Shep Hyken Customer Anxiety Cartoon

Not all customers will realize this right away, unless you tell them. Consider making it part of your value proposition. Nordstrom did this with their extremely liberal and hassle-free return policy. Lifetime warranties on products give customers confidence and reduce anxiety because they know will be taken care of if there is a problem.

For my entire career I’ve preached that good customer service and customer experience sets you apart from the competition. Customer Experience (CX) is table stakes. Customers want to do business with nice, knowledgeable people. Take that to the next level by being easy and convenient to work with, in essence, eliminating friction. And now I want you to consider the next step. Find ways to reduce and eliminate anxiety. When you put all three of these together – great service, convenience and low or no anxiety – you have a CX triple threat!

Image Credits: Pexels

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Purpose Matters Because …

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Purpose Matters Because ...

GUEST POST from Greg Satell

When the Business Roundtable issued a statement in 2019 that discarded the old notion that the sole purpose of a business is to provide value to shareholders, many were dismayed. Some thought it was just another example of misguided altruism by “elites.” Others saw it as a cynical and disingenuous ploy.

Yet the primacy of shareholder value is hardly a well-established economic principle. The concept does not appear even once in Adam Smith’s seminal treatise, The Wealth of Nations. In fact, it is a relatively recent idea and when the economist Milton Friedman first proposed it in 1970, it was considered radical, even subversive, certainly not to be taken as gospel.

It has also been tremendously unsuccessful. Since Friedman’s essay we have become less productive, not more. One reason for the poor results is that Friedman and others like him failed to recognize that our economy is made up of people, not inanimate pieces of data that make up economic charts, and these people search for meaning and purpose in their lives.

Failed Cartesians

Often regarded as the father of modern philosophy, Rene Descartes was obsessed with human fallibility. Cursed with imperfect senses and emotions that can warp logic, he sought to build a new intellectual foundation based on cool, rational thought. “I think, therefore I am,” he wrote, proving that at least one thing could be known without referring to the use of the senses.

Descartes’ ideas led to the Rationalist school of philosophy as others tried to build on his work. The idea that, through pure reason, we could see truths with greater clarity held enormous attraction for intellectual giants such as Gottfried Leibniz and Baruch Spinoza. Unfortunately, other than in the field of mathematics, little was achieved.

That didn’t stop others from trying though. In the early 20th century, the Vienna Circle arose in response to the work of Ludwig Wittgenstein and others in order to create a logical system to guide human affairs. Wittgenstein himself would later disown it and Gödel’s incompleteness theorems would eventually expose the whole exercise as a failure.

Undeterred by centuries of failure, business consultants have tried to sell the same idea to executives. Yet despite fancy names like scientific management, financial engineering and six sigma, these didn’t fare any better. One study found that of 58 large companies that announced Six Sigma programs, 91 percent trailed the S&P 500 in stock performance.

Still, many remain undeterred. The idea of an infallible technocracy is just too tempting for many to resist.

The End Of History And The Washington Consensus

In 1992, Francis Fukuyama published The End of History to great acclaim. The Cold War had ended and capitalism was triumphant. Communism was shown to be a corrupt system bereft of any real legitimacy. It seemed that, as many philosophers had predicted, we had reached an end point in which human sociocultural evolution was complete.

A new ideology took hold, often referred to as the “Washington Consensus,” that preached fiscal discipline, free trade, privatization and deregulation. The world was going to be remade in capitalism’s image. Countries that hit hard times would be offered aid from multilateral institutions like the IMF and the World Bank in return for favored policy reforms.

Many pointed out that international bureaucrats were mandating policies for developing nations that citizens in their own countries would never accept. Strict austerity programs led to human costs that were both significant and real. In a sense, the Soviet error was being repeated. Ideology was being put before people.

Yet Fukuyama’s message had been misunderstood. His book was not meant as a prophecy, but as a warning. He pointed to the ancient Greek concept of thymos, a spirited blend of dignity and pride, to caution against rationalist explanations for human behavior. Given a choice between a well trod path and one less certain, he predicted that many will “set their eyes on a new and more distant journey.”

The Silicon Valley Myth

I was working on Wall Street in 1995 when the Netscape IPO hit like a bombshell. It was the first big Internet stock and, although originally priced at $14 per share, it opened at double that amount and quickly zoomed to $75. By the end of the day, it had settled back at $58.25 and, just like that, a tiny company with no profits was worth $2.9 billion.

It seemed crazy, but economists soon explained that certain conditions, such as negligible marginal costs and network effects, would lead to “winner take all markets” and increasing returns to investment. Venture capitalists who bet on this logic would, in many cases, become rich beyond their wildest dreams.

The conditions for increasing returns, however, only apply to a narrow swath of businesses, mostly limited to software and electronic gadgets. Nevertheless, entrepreneurs and their investors became convinced that they could apply the Silicon Valley model anywhere, leading to high profile failures like WeWork and Theranos.

That’s the Silicon Valley myth, that the rational logic of code can be applied to any problem. It’s the same fantasy that has been repeated throughout history, handed from Cartesians to logical positivists to “scientific” managers and now to the software engineers, puffed up with stock options who can’t seem to understand why everyone else doesn’t “get it.”

The costs have been substantial. Evidence suggests that the billions wantonly plowed into massive failures are crowding out real businesses. Productivity has been depressed for half a century. The Facebook papers revealed a culture that has lost its way, so single-mindedly focused on optimizing engagement it lost sight of the humanity it was supposed to engage.

Identity, Dignity And Purpose

If you believe in a rational Cartesian universe, a business is little more than a set of transactions. The nature of the firm, in this view, is simply to minimize transaction costs and skilled managers should focus on maximizing bargaining power among stakeholders in order to build a sustainable competitive advantage. Yet the world doesn’t actually work that way.

Consider the ultimatum game. One player is given a dollar and needs to propose how to split it with another player. If it is accepted, both players get the agreed upon shares. If it is not accepted, neither player gets anything. If the world was completely rational, the second player would accept even a single penny. After all, a penny is better than nothing.

Yet decades of experiments across different cultures show that most people do not accept a penny. In fact, offers of less than 30 cents are routinely rejected as unfair. It offends people’s dignity and sense of self. For many of the same reasons, there is increasing evidence that financial targets don’t motivate employees. No one wants to be a cog in someone else’s wheel.

That is the value of purpose. It bolsters, rather than undermines, our identity. When people feel that they are part of a common project, they feel a sense of ownership, that they are ends in themselves rather than means to an end. It uplifts, rather than demeans, us. It fortifies, rather than undermines, our spirit.

What separates great leaders from mediocre managers is that the leaders do more than calculate, they provide meaning to an endeavor that makes it more than merely a common enterprise. It becomes a collective mission.

— Article courtesy of the Digital Tonto blog
— Image credits: Unsplash

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Be Thankful, Whatever Your Situation

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Be Thankful, Whatever Your Situation

GUEST POST from Mike Shipulski

If you’re thankful for the success you’ve had, you’re in for a letdown because your success will be short-lived. And don’t take it personally – the Universe knows regression to the mean is real and it will bring you to your knees whether you believe it or not. Like with all things, success is impermanent.

Your success has a half-life. Sure, your success has been good. You’ve made money; your brand has prospered, and everyone is happy. But, don’t get too comfortable because it’s going away. Your recipe will run out of gas as your competition targets your success and figures out how to do it better. But don’t blame your competitors’ hard work. Blame yourself and your success. It’s pretty clear your success has blocked you from doing things differently. The real problem isn’t your competitors’ success; the real problem is your success. Your success has blocked you from trying something new. As the thinking goes – if it ain’t broke, don’t fix it. But, if it ain’t broke now, it will be broken soon.

If you’re sad (unthankful) because of the failure you’ve experienced, you’re in for a burst of goodness because your failure will be short-lived. And don’t feel special – the Universe knows regression to the mean is real and it will bring you success if you believe you’re worthy of it. Like with all things, failure is impermanent.

Your failure has a half-life. Sure, your failure has been bad. You’ve not made money; your brand has suffered; and everyone is unhappy. But, don’t hold onto your discomfort because it’s going away. Because your recipe hasn’t worked, you’ll target your competitors’ success and try a new recipe. It’s pretty clear your lack of success caused you to try a new recipe. And because you tried something new, you figured out how to do it better. But Don’t give credit to your competitors. Give credit to yourselves for trying something new. The real root cause isn’t your competitors’ success; the real forcing function is your lack of success. Your lack of success has opened up your thinking and enabled you to try something new. As the thinking goes – if it didn’t work last time, do something different. And that’s just what you did.

Don’t be thankful for your success; be thankful you have smart people who want to make a difference. And don’t be unthankful for your failure; be thankful you have smart people who want to make a difference.

As a leader in a successful company, what will you do to support people who want to make a difference? As a leader, you must protect their new ideas from the army of people that want to regurgitate what was done last time. Because of your success, their new ideas will be taken out at the knees. And what will you do? Will you roll over and kowtow to un-thinkers? Or, will you take the bullets and advocate for ideas that violate your long-in-the-tooth, geriatric recipe that can no longer deliver what it used to?

And as a leader in a yet-to-be successful company, what will you do to support people who want to make a difference? As a leader, you must protect their new ideas from the army of people that have no idea what to do next. Because of your failure, their new ideas will be met with negativity and derision. And what will you do? Will you give in to the naysayers? Or, will you take the bullets and advocate for ideas that transcend your unsuccessful recipe?

Be thankful for your success, but don’t let it limit you from trying something new. And be thankful for your failure, and use it to power your new ideas.

Whatever your situation, don’t dismiss it. Whatever your situation, learn from it. And whatever your situation, be thankful for it.

Image credits: Pixabay

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Six Reasons Norway is a Leader in High-Performance Teamwork

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Six Reasons Norway is a Leader in High-Performance Teamwork

GUEST POST from Stefan Lindegaard

If you research why certain countries are leaders and others are laggards in high performance teamwork, you quickly see that Norway and thus the Norwegian society has several notable characteristics that contribute to the success of high-performance teams in business and organizations.

Note: Thank you to those who joined me in Oslo to discuss high-performance teams and explore my new and developing concept of High Performance Zones for Teams: Trust, Empowerment, and Collaboration.

Here are a few key factors for Norway in the context of high-performance:

  1. High Levels of Trust: Norwegian society is characterized by high trust both in institutions and among individuals. This trust extends into the workplace, where there is a strong belief in the reliability and integrity of colleagues. High trust environments can enhance collaboration and the sharing of ideas, which are crucial for high-performance teams.
  2. Flat Organizational Structures: Norwegian companies often favor flat organizational structures over hierarchical ones. This promotes open communication and a sense of equality among team members, enabling quicker decision-making and greater flexibility – important attributes for high-performance teams.
  3. Work-Life Balance: Norway places a strong emphasis on work-life balance, which helps maintain high levels of job satisfaction and motivation among employees. Well-rested and well-rounded employees are more likely to contribute positively to their teams.
  4. Focus on Consensus-Building: In Norwegian business culture, there is a tendency towards consensus-building rather than top-down decision-making. This approach ensures that various perspectives are considered and that team members are committed to the agreed-upon course of action, leading to more sustainable and effective team performance.
  5. Investment in Employee Development: There is a significant investment in training and development within Norwegian organizations. A well-trained workforce with opportunities for continuous learning and improvement can adapt and perform better in dynamic business environments.
  6. Innovation and Technological Adaptation: Norway is well-known for its adaptation of new technologies and innovation. High-performance teams often leverage cutting-edge technologies and new practices to maintain competitive advantages.

These aspects of Norwegian society and organizational culture provide a supportive environment for cultivating high-performance teams, which are essential for achieving exceptional outcomes in business and other fields.

How does your country compare on these six factors? Please share, and let’s discuss.

Image Credits: Pixabay

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Why Reason Matters

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Why Reason Matters

GUEST POST from Robyn Bolton

How many times a day do you ask someone to do something? If you total all the requests you make of coworkers, family members, friends, people at restaurants and shops, and even strangers, the total is somewhere between 100 and 1 bazillion.  Now, what if I told you that by including just one word in your request, the odds of receiving a positive response increase by 50%?

And no, that word is not “please.”

The real magic word

Harvard 1978.  Decades before everyone had access to computer labs, home computers, and personal printers, students had to line up at the copy machine to make copies.  You could easily spend hours in line, even if you only had a few copies to make.  It was an inefficient and infuriating problem for students.

It was also a perfect research opportunity for Ellen Langer, a professor in Harvard’s Psychology Department.

Prof. Langer and her colleagues asked students to break into the line using one of three phrases:

  1. “Excuse me, I have five pages.  May I use the xerox machine?”
  2. “Excuse me, I have five pages.  May I use the xerox machine, because I have to make copies?”
  3. “Excuse me, I have five pages.  May I use the xerox machine, because I’m in a rush?”

The results were definitive and surprising.  Students who used the first phrase were successful 60% of the time, but those who used the phrases with “because” were successful 93% and 94% of the time.

“Because” matters.  The reason does not.

Note that in phrases two and three, the reason the student is asking to cut in line isn’t very good. You can practically hear the snarky responses, “Of course, you have to make copies; why else would you be at the copy machine?” or “We’re all in a rush,” and the request is denied.

But that didn’t happen.

Instead, the research (and hundreds of subsequent studies) showed that when the ask is simple or familiar,  people tend to follow instructions or respond positively to requests without paying attention to what’s said, even if the instructions don’t make sense or the request disadvantages them in some way.   Essentially, people hear “because,” assume it’s followed by a good reason and comply.

“Because” matters.  How you use it matters more.

The power of “because” isn’t about manipulation or coercion. It’s about fostering a culture of transparency, critical thinking, and effective communication.

Taking the time to think about when and how to communicate the Why behind your requests increases your odds of success and establishes you as a strategic and thoughtful leader.  But building your “Because’ habit takes time, so consider starting here:

Conduct a “Because” Audit: For one day, track your use of “because.” How many times do you make a request?  How many times to you explain your requests with “because?”  How many times do you receive a request, and how many of those include “because?”  Simply noticing when “because” is used and whether it works provides incredible insights into the impact it can have in your work.

Connect your “Becauses” As leaders, we often focus on the “what” and “how” of directives, but the “why” is equally crucial. Take your top three strategic priorities for the quarter and craft a compelling “because” statement that clearly articulates the reasoning behind it. For instance, “We’re expanding into the Asian market because it represents a $50 billion opportunity that aligns perfectly with our core competencies.” This approach not only provides clarity but also helps in rallying your team around a common purpose.

Cascade the “Because” Habit: Great leaders don’t just adopt best practices; they institutionalize them. Challenge your direct reports to incorporate “because” into their communications. When they bring you requests, ask them for the “because” if they don’t offer it.  Make it a friendly competition and celebrate people who use this technique to drive better outcomes.

Tell me how you’ll start because then you’re more likely to succeed.

(see what I did there?)

Image credit: Pexels

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Performance Management and Accountability

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Performance Management and Accountability

GUEST POST from Geoffrey A. Moore

Accountability begins with a voluntary commitment to put yourself in service to bringing about an outcome. To frame this effort for you and your team, I have found Salesforce’s V2MOM management system to be an invaluable tool. In that context:

  1. Vision describes the outcome you are all in service to.
  2. Values shape the approach you will all take to bringing it about.
  3. Methods present what each one of you will do to achieve the outcome and are assigned to single accountable leaders.
  4. Obstacles call out the challenges the leaders anticipate having to deal with, and
  5. Measures are the objective signals that everyone will use to assess your degree of success.

Performance management begins with securing each individual’s voluntary commitment to the outcomes associated with their jobs to be done as well as to the values to be honored while doing it. It then moves on to review their methods, obstacles, and measures to test them for coherence, feasibility, and credibility, and to ensure each person is confident they are set up to succeed and that they want to be held accountable for that success. The day-to-day work of performance management consists of inspecting, detecting, dissecting, course-correcting, and resurrecting the stream of work to keep it on track. Most of this effort consists of self-management, supported by regular check-ins with the team leader and quarterly reviews with the higher-ups. The majority of the work is focused on the near term, but this must be balanced with investments in the mid and long-term for sustained success.

That all said, that is not what most people think of when you bring up the topic of performance management. Instead, they associate it with a mandate to manage out under-performers. The word under-performer has unfortunate connotations, and this has cast a cloud over the entire effort.

To set things straight, begin by realizing that everyone is an under-performer at something. If you are unsure about what you personally under-perform at, just ask your spouse or your children, and they will let you know. The point is, there is no shame in under-performing per se. We just don’t want to persist in it.

When it comes to the workplace, under-performance shows up as a series of repeated shortfalls in our measures despite our best efforts to overcome our obstacles by course-correcting our methods. To ignore these signals without taking remedial action is to fall prey to Einstein’s definition of insanity, namely, doing the same thing over and over again and expecting a different result. Instead, one needs to intervene by invoking the “horse, rider, trail” principle. The horse is the offering, the rider is the person accountable for its success, and the trail is the target market. Changing any one of these factors will materially alter the dynamics of the situation such that you can expect a different result. Just understand that you probably won’t get to do this more than once, so choose wisely.

Finally, understand that while everyone is an under-performer at something, they are also likely to be an overachiever at something else. As a manager, you should act as a steward of your team members’ careers. If they are not the right fit for the job they are in, then both they and you need them to move on. Under-performing in this context is just nature’s way of telling us we are playing the wrong position, perhaps even playing the wrong game. Nobody likes to under-perform, and nobody is served by it. Meanwhile, our world is a needy place, so the sooner we can get people into their right roles, the better we all shall be.

That’s what I think. What do you think?

Image Credit: Pexels

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The Most Successful Innovation Approach is …

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The Most Successful Innovation Approach

GUEST POST from Howard Tiersky

There are three primary approaches to innovation. In our work with large brands focused on digital transformation, we have observed that the most effective of the three is also the least common. Which approach do you use?

Approach #1: The Artist

“I create for myself. I hope my customers like it.”

Georgia O’Keeffe said of art, “Whether you succeed or not is irrelevant; there is no such thing. Making your unknown known is the important thing.” And this philosophy of creating from one’s own mind and heart, of bringing to the world your unique and individual expression, is a powerful driving force for many innovators. Steve Jobs was the penultimate artist innovator. When asked what type of market research he had conducted in creating the Macintosh he replied, “Did Alexander Graham Bell do any market research before he invented the phone?” He also said, “Some people say, ‘Give customers what they want.’ But that’s not my approach. Our job is to figure out what they’re going to want before they do. I think Henry Ford once said, ‘If I’d have asked customers what they wanted, they would have told me they wanted a faster horse!’ People don’t know what they want until you show it to them. That’s why I never rely on market research. Our task is to read things that are not yet on the page. Great art resonates with people–it inspires and moves them to action. This is true of Georgia O’Keeffe’s paintings as well as Steve Jobs’ creations. They create from their instinct and their passion, and their work has been wildly successful commercially. However, there is a key challenge with the artist approach to innovation: Are you Steve Jobs? How many Georgia O’Keeffe’s do you have on your team? Because for every Jobs or O’Keeffe, there are thousands of others who have followed their gut to create an endless myriad of technology projects that have not resonated. For each Georgia O’Keeffe, there are vast numbers of aspiring painters following their hearts but who never achieve commercial success. Now if what O’Keeffe says is really true for you–if success does not matter if the mere expression of your idea in the real world is sufficient to satisfy you– then this may be an effective path. But if you are seeking commercial success, the reality is that only a small percentage of the personal expressions of people’s hearts will reach out to and resonate with a mass audience. So unless you are an innovator with a proven track record of doing that, or willing to take that chance, this is a highly unpredictable approach to innovation. We often see companies designing products, be they physical or digital, by getting a small team in a room with a whiteboard. Or there is an executive who has a vision he has imagined for a product that he wants his team to bring to life. This is, in fact, probably the most common method of corporate innovation, and it very often fails.

Approach #2 The Researcher

“Give people what they want. What you want is unimportant.” – Pete Waterman, record producer
Commercial success in innovation comes from creating something new that resonates with the customer– that solves a problem for the customer or empowers them in a new and exciting way, like the Post-it or Uber. So the research approach to innovation involves simply asking the customer what they want and giving it to them. The classic focus group is an example of this; however, there are several problems with this approach to innovation. First, Steve Jobs was right: Customers often don’t know what they want. They may tell you what they think they want, but in fact, their real-world behavior after a product is launched is often inconsistent with what they have told you in a focus group. There is probably no better example of this than the disastrous launch of New Coke in 1985. Prior to the launch, Coca-Cola spent $4 Million (in 1985 dollars!) on conducting over 190,000 taste tests of different formulations to find the one that customers would like best. Based on that research they changed the taste of Coke and then spent considerably more on a massive launch of New Coke, only to be followed by massive public backlash and the eventual need to restore “Classic” Coke. How could research lead us so disastrously astray? We see all the time in our own work that when customers are asked for the features, they would like to see in an app or for ideas for new products, the results are often weak. Also, when customers passionately identify innovations they would like to see, it’s common to discover that those same customers don’t actually use the innovations they requested. In fact, customers like to be artists too, and they like to share their personal vision of what a product could be. That doesn’t mean, though, that they are Steve Jobs any more than you are, and they often have poor insight into their own future behaviors. This “researcher” approach in some form is the second most common approach we see taken to innovation projects. It can be successful to some degree for incremental changes. For example, if many users of your product are clamoring for a different sorting option in a reporting application, then sure, listening to their feedback and integrating those priorities is probably a path to incremental improvement. But that is quite different from wholesale innovation. In that area, asking users what they want rarely proves to be a useful activity.

Approach #3: The Research-Ideation Cycle

The most successful approach that we see used is what we call the research-ideation cycle, an approach that blends science and art. Customer research is core to this approach. However, the goal of the customer research is not to ask customers what they want, but rather to understand their current experiences, goals, and points of pain or inefficiencies. Uber effectively understood that the moment when a customer arrives at their destination and has to wait to get out of the car to deal with paying the driver was a small point of pain, that once removed, creates a far better experience. In the research-ideation cycle, we first create a detailed picture of the different customer segments and use techniques like ethnography to truly understand how they are accomplishing the tasks we are targeting with our innovation, whether it’s vacation planning, home decorating or rebuilding a diesel engine. Once that research is complete we can access our inner artists, but not for the purpose of self-expression, but with the goal of problem solving. In fact, creativity is usually at its greatest when a problem is brought into clear focus via detailed customer research and anecdotes. Ideation cycles involve inventing a number of solutions to the customer problems identified through the initial research. Once those ideas are generated, they can be tested with customers. But unlike the New Coke research, the goal of the testing is not to ask users what they think. It’s nice to ask because it’s polite, but it’s not the primary data source. Rather, we observe users using prototypes of our ideated solutions and use that data to gauge the effectiveness of our solutions in solving the previously identified problems. Very often we have partial success in initial rounds and use the insights from the research to further ideate ways to improve the solution. Then the cycle goes back to research, and so on between ideation and research until we have a solution that appears market-worthy. Even then typically there is a small market test or beta test, with research to understand the actual usage patterns, and the iteration process continues.

“You’re not supposed to give people what they want, you’re supposed to give them what they don’t know that they want yet.” -Diana Vreeland, Editor-in-chief of Vogue
When we understand the problems and challenges users face, creative teams can invent novel solutions that the users may never have dreamed of or suggested directly.

This article originally appeared on the Howard Tiersky blog

Image Credits: Dall-E

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What Are the Toughest Words to Say?

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What Are the Toughest Words to Say?

GUEST POST from Mike Shipulski

As the world becomes more connected, it becomes smaller. And as it becomes smaller, competition becomes more severe. And as competition increases, work becomes more stressful. We live in a world where workloads increase, timelines get pulled in, metrics multiply and “accountability” is always the word of the day. And in these trying times, the most important word to say is also the toughest.

When your plate is full and someone tries to pile on more work, what’s the toughest word to say?

When the project is late and you’re told to pull in the schedule and you don’t get any more resources, what’s the toughest word to say?

When the technology you’re trying to develop is new-to-world and you’re told you must have it ready in three months, what’s the toughest word to say?

When another team can’t fill an open position and they ask you to fill in temporarily while you do your regular job, what’s the toughest word to say?

When you’re asked to do something that will increase sales numbers this quarter at the expense of someone else’s sales next quarter, what’s the toughest word to say?

When you’re told to use a best practice that isn’t best for the situation at hand, what’s the toughest word to say?

When you’re told to do something and how to do it, what’s the toughest word to say?

When your boss asks you something that you know is clearly their responsibility, what’s the toughest word to say?

Sometimes the toughest word is the right word.

Image credit: Pixabay

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