Category: Evidence-based Management

Last week, I was talking with with Jeff Pfeffer, my friend and frequent co-author, about power in organizations.  Jeff is author of Managing With Power, a great book, which is a standard text for management classes on organizational power and politics throughout the world.  I had just finished reading the first draft his new book on power, and I asked him "You write about many ways to gain power, but don't actually use most of them in your life. Why is that?" For example, Jeff recommends spending time having lunch and the like with powerful people you don't know and also identifying potential enemies and spending time getting them to like you.  He provides empirically sound steps (often based on his own research) about how people who want power should identify the most powerful people and groups, and try to join those groups, to pick an office location that will put you in constant contact with as many powerful people as possible, and a host of other things that I've rarely seen Jeff do. 

Jeff's answer, which I've heard from him before and shows much wisdom, was something like "You can have influence or you can have freedom, but you can't have both. I prefer freedom, my book is for people who prefer to have a lot of influence in an organization."  Indeed, a key implication of Jeff's research, is that if you want to have power, you need to spend your life around lots of other people, often people you don't necessarily like or would choose to socialize with otherwise, and to constantly be thinking of ways to wield influence over them to your advantage.  I've written about this before, and in fact, it is in my list of 15 things I believe on the left of this post (it is #3).

But it really struck for some reason the other day.  It also reminded me of something that the unhappy wife of one of the most successful rainmakers at a large law firm once said to me.  She was complaining about how all consuming her husband's job was, and in particular "We don't have any real friends, we just have one dinner after another with clients and potential clients.  When they are no longer clients, I rarely see them again, even if I like them because we are off with other clients."

Interesting stuff.  It is also astounding how well-crafted Jeff's writings are on power, especially given it is something he usually doesn't want for himself.  His new book will need to go through the editing process and all that, and doesn't have a title yet — but I found it compelling, extremely useful (for people who want to hold or get power), and as always with Jeff, evidence-based. 

 

I have been using Robert Cialdini's classic book Influence as a text in my introduction to organizational behavior class for about 20 years.  This charming and evidence-based book reviews six tools or "weapons" of influence that you can use to persuade others — and how to defend against unwanted influence attempts.  Perhaps the best testimonial to the power of this book and the ideas is that, when I run into students years later, it is usually the first thing they mention about the class, and upon closer questioning, I often realize is it the only thing! 

Cialdini has joined with two co-authors — Noah Goldstein and Steve Martin — to write a kind of sequel to Influence, called Yes! 50 Scientifically Ways to Be Persuasive. I recommend the book highly, as it presents all kinds of clever and effective influence tactics.  You can learn everything from the virtues of inconveniencing people, to why restaurants shouldn't offer a basket of mints for people on the way out, to how to use — and how not to use — fear as a motivator.  Yes! is based on the best behavioral science research and is an easy read. I can't quite recommend it above Cialdini's original as it doesn't quite have the personal charm of the original and, the original book provides six principles that can be applied in all sorts of different settings, while the 50 short chapters in Yes! each is wonderful, it is a lot easier to remember and act on 6 principles. 

For my class next year, I will likely still assign the original influence and make Yes! a suggested read.

I was talking on the phone with Hayagreeva (aka "Huggy") Rao today about a project we are working on, and he said something wonderful "Smart organizations make difficult things simple."

The first thing that came to mind was an experience I had about 2 years ago where I first set-up a new Dell Computer, which took me about 4 hours and entailed plugging in seemingly endless number of wires and opening about 10 boxes. Then I set-up a new Mac, which involved opening one box and took about 10 minutes. I also thought of McDonald's which, although not exactly the most politically correct organization, has done a simply brilliant job of scaling-up its brand and stores (with brilliant local customization). Finally, I couldn't help but think of the simply awful experience that I had with ATT setting-up Internet and phone service recently — I was sufficiently disgusted with them (I spent a total of 4 hours on the phone and was given constant misinformation and they made an astounding number of errors) that I canceled everything and switched to Comcast. ATT, at least from what I experienced, is the master of making simple things complicated.

I'd love to hear other examples of organizations that "make difficult things simple."  I think it is wonderful standard for judging an organization — or a leader or teacher.

P.S. I encourage you to read Andrew's comment below, it is inspired.

Lindsey Blakely interviewed me a few weeks ago for a BNET article on  “Five Signs That You Have a Crummy Job.”  She identifies five ways that downturns can make life worse even for people in organizations who have survived layoffs. Blakely marches through unpleasant changes such as reduced innovation, severed emotional ties, a climate of fear, and the one I talked about — that the bureaucrats sometimes seize power. The classic effect is that the rest of the organization shrinks, while the number of people who deal with money and enforcing rules increases, leaving fewer people to do the actual work of the organization. And those that remain are subjected to more and more red tape that is instituted in the name of saving money.  So the people doing the real work get less and less efficient, and the rule mongers keep reproducing themselves, and thus write and enforce more rules.

BUT I think that it is important to point out that tough times don’t always lead to these and other dysfunctions.  Some of the most effective leaders use financial troubles and other crises as an opportunity to make changes that can strengthen the organization. For example, check out this post at Harvard Business Online on Alan Meyer’s classic study that compares the different reactions of hospitals to a crisis.  Those leaders that labeled the crisis as an opportunity– rather than a threat — were able to make some impressive changes in their organizations.  Here is the advice I gave in that post last year based on Meyer’s study and other research, and I think it holds pretty well for leaders in a variety of settings:

 If you want to make the best out of a good situation, focus on what is going wrong and can go wrong.

If you want to make the best out of a bad situation, focus on what is going right and could go right.

Thanks, and let me know what you think of the crummy job article, including any other crummy things that happen and — especially — how to stop crummy things from happening to organizations when the going gets tough.

The recent supreme court ruling, which affirmed the right to bear arms and that interpreted the second amendment in a very pro-NRA kind of way, reminded me of one of my favorite old studies. In this 1975 study by Turner and his colleagues, they manipulated the situation so that a pick-up truck at a stop light was slow to start moving after the light turned green.  They measured aggression by how quickly and how intensely the driver behind the truck started honking.  Turner and his colleagues varied two things about the pick-up truck: a gun rack with or without a gun, and two different bumper stickers. One said “friend” and the other said “vengeance.”  It is an interesting study because many people — including me — predict in advance that the gun and vengeance stickers would lead to do less honking, as the impatient driver waiting behind the truck might fear getting shot by the aggressive and armed person.  In fact, Turner and his colleagues found the opposite pattern. The drivers stuck behind the truck were more likely to honk when the driver had a gun, and even more likely to honk when he had both a gun and a vengeance bumper sticker!  One explanation is that aggression breeds aggression.

P.S. There are a lot of studies on horn honking — people honk more when it is hot out, men honk more than women, both men and women honk more at women, and people in low status cars get honked at more than people in high status cars.

P.P.S. Here is the reference: TURNER, C. W., J. J. LAYTON, and L. S. SIMONS (1975) “Naturalistic studies of aggressive behavior: aggressive
stimuli, victim visibility and horn honking.” J. of Personality and Social Psychology 31 (June): 1098-1107.

My last post describes how several of us are blogging at BusinessWeek.com on toxic bosses.  As regular readers of this blog will know, I have devoted quite a bit of space here to the issues of credit and blame, and in particular, how leaders deal with failures and setbacks — this story about Andy Grove has always been one of my favorites, as it shows the complex skill required.  The challenges of dealing with credit and blame go to the heart of being an effective leader: skilled leaders do what is best for their organizations, not best for themselves, when things go wrong (or go right).  Credit and blame also go to the heart of good group dynamics: effective groups share blame and credit fairly, don't become trapped in battles over who is to blame and who is a hero.  And when things go wrong — rather than going into blamestorming mode — they join together to solve the problem (a good example is how Southwest Airlines deals with flight delays; teams focus on fixing the problem, not finding a goat). See the cartoon below from The Talent Zoo by Gary Kopervas for a great illustration of blamestorming.

I am thinking about credit and blame this morning because I just read Ben Dattner's BusinessWeek post on The Teflon Boss, and how such "unfair blamers" do so much damage.  The post is fantastic, but even better is his powerpoint deck on Credit and Blame in the Workplace.  It provides one of the most complete and integrated treatments of this managment challenge I have ever seen, and is chock-full of specific actions that leaders can take to strike a delicate and effective balance.  And although Ben touches on research lightly in the deck, these ideas are consistent in the best research I know of on leadership, attribution of responsibility, group dynamics, and personality — which is no surprise as Ben is well-versed in such studies, as he is a research psycholoigst by training. 

Also, don't miss Ben's other posts, especially his earlier one on narcissism.

And more generally, if you have thoughts on managing credit and blame, you might want to add a comment to Ben's inspired post.

I am not making this up, "perverse incentives" is how economists describe reward systems that lead to unexpected and unwanted behavior.  Jeff Pfeffer and I devoted quite a bit of attention to this problem in Hard Facts, Dangerous Half-Truths, and Total Nonsense, and you can read about one of my favorite examples in this U.S. News & World Report interview.  But I think Dilbert shows the process best.

Yesterday, my post on Mea Culpa described how there is
some trend in hospitals for doctors to admit and apologize to patients for
mistakes. The initial evidence suggests this practice saves money because it
reduces litigation costs, and money aside, is a more emotionally constructive
process for both doctors who make the mistake and patients and their families
who are damaged by such errors.  Unfortunately, whether we are talking
about doing surgery or leading an organizations, or just about anything else in
life, there is no doing without mistakes, and no learning either.  As
Diego and I like to say, failure sucks but instructs.

Continuing this theme, there is also growing evidence that leaders of companies
who choose to apologize for mistakes may actually help their careers and their
firms by apologizing in the right way.  Although most mistakes and
setbacks seem to provoke leaders to cover them-up, claim that it wasn’t their
fault, to point fingers at others, say”no comment,” or perhaps say
something mealy-mouth like “I misspoke, but it really wasn’t a
mistake”  I especially love the term “mistakes were made,” as it almost seems to be admission of error, but the leader or politician
in question never quite associates the term “mistake” with “I” or
“we.”  It is as if errors somehow have made themselves, without
any human action or involvement.   Consider the story below for a
different tactic.

The Chef Executive ran a story in 2003 about a rather
nasty statement made by then Goldman Sachs CEO Henry Paulson Jr. (now the U.S. Treasury
Secretary). Paulson’s error and recovery is instructive, and the plot line is
reminiscent of the Hew York Times article on doctors that I wrote about
yesterday. I quote:

‘Henry Paulson, Jr., chairman
and CEO of Goldman Sachs Group, recently demonstrated how an apology from the
top can help repair the reputations of both a chief executive and his or her
company. During a question-and-answer session at a Salomon Smith Barney
conference in January, Paulson seemed to imply that between 80 and 85 percent
of Goldman Sachs’s employees were irrelevant to the company’s success. “I
don’t want to sound heartless,” the CEO said, “but in almost every
one of our businesses, there are 15 to 20 percent of the people who really add
80 percent of the value. I think we can cut a fair amount and not get into
muscle and still be very well-positioned for the upturn.

Paulson’s comments drew an immediate and overwhelmingly negative reaction.
Rather than wallow in explanations as to what he really intended, or suggest
that the comment was taken out of context, Paulson faced the music. In a voice
mail to all of Goldman’s 20,000 employees, he acknowledged that his remarks
were insensitive” and “glib.” In other words, he apologized.’

Stories like these are heartwarming to hear. But there are still plenty of
CEOs, lawyers, and PR firms who will advise leaders that that they should never
apologize, and also some theory in psychology that suggests self-serving
attributions — taking credit when things go well and blaming others and
outside forces when they go badly — is an effective impression
management.  BUT a series of studies by psychologists suggest that
managers and leaders who apologize when things go wrong, report what they’ve
learned, and then convey how and in what way the organization’s direction will
change as a result not only enjoy more favorable reputations than leaders who
point fingers at others and external events, there is also evidence that their
firms do better over the long haul.  There seems to be two reasons this
happens, one more objective the other more subjective.  The more objective
part is that by admitting mistakes and updating their behavior, this means the
leader and his or her team is learning along the way.  Jeff Pfeffer and I
have (borrowing from psychologists and philosophers) called this “the attitude of wisdom,”
which means have the courage to act on what you know and the humility to change
course when new and better information comes along that you are heading in the
wrong direction.   The second theme is that one of the main
challenges for leaders is to convince insiders and outsiders that they are in
control of the organization — which is a big challenge because — although
there is a lot of evidence that leaders get lots of credit and lots of blame
for what happens to their organizations — there is also a lot of evidence that
they have only modest control over organizational processes and performance. As
such, one way that leaders fuel the illusion — and to some extent the reality
— of control is by convincing people that when they do something good, good
things happen to the organization and when they do something bad, bad things
happen to the organization.   This may all sound a bit weird, but as
we show in Hard Facts, there are few situations where
leadership actions appear to be able to affect organizational performance by
any greater than 10% (small, young companies appear to be an exception in some
studies).

So to return to apologies, there are not only sound conceptual reasons for
leaders to make them, there is also some interesting evidence to support
apologies in this context.  Here is an excerpt from Chapter 8 ofHard Facts
that provides a nice summary of major studies — and also indicates that,
although apologizing works for managers and leaders, it may not be effective
for politicians, at least if they want to get elected. Here is the excerpt, plus
I left in the citations for those who want to dig deeper.

‘[R]esearch
on winning vs. losing U.S. presidential candidates shows that – in 80% of
elections between 1900 and 1984– winners avoided talking about negative events
and, when setbacks were raised, winners were more likely than losers to deny
blame and point fingers at others and events they couldn’t control.

On
the other hand, it turns out that company executives are different than
politicians.  Leaders who claim that “it isn’t my fault” and “ I couldn’t
have done anything about it” aren’t doing themselves or their organizations any
favors over the long haul.  Deflecting blame might help them keep their
jobs for a time, enjoy better mental health, and persist in the face of
failure.  But ducking the heat shatters the illusion of control. 
Investors, customer, employees, and the press conclude that leaders who don’t
take responsibility for mistakes and setbacks lack the power to make things
better.  Controlled experiments by Fiona Lee and her colleagues show that
hypothetical managers who took responsibility for bad events like pay freezes
and failed projects were seen as more powerful, competent, and likeable than
managers who denied responsibility. 

The
wisdom of acknowledging blame is confirmed by two studies that tracked Fortune
500 firms over long periods.  Both were careful studies designed to rule
out alternative explanations.  Gerald Salancik and James Meindl examined
18 Fortune 500 firms over 18 years.  They found that, especially in firms
with wild swings in performance from year to year, performance was superior
down the road when executives attributed both good and bad
performance to internal actions.   Similarly,
Fiona Lee and her colleagues examined yearly stock price changes in 14
companies over a 21-year stretch.  They found that taking blame for
setbacks wasn’t just effective in companies with wild performance swings. In
years when senior management blamed their firm’s troubles on internal and
controllable factors, stock prices were consistently higher the next year,
compared to when executives denied responsibility for setbacks.

What do you think? Should leaders
apologize when things go wrong?  If so,
what is the most effective way to do it?  

Here are some of the key references:

Lee,
Fiona., & Robinson, R. (2000). An attributional analysis of social accounts:
Implications of playing the blame game. Journal of Applied Social Psychology;

Lee, F., & Tiedens, Larissa.
(2001). Who’s being served? “Self”-serving attributions and their implications
for power. Organizational Behavior and Human Decision Processes, 84:254-287.

Salancik,
Gerald., & Meindl, James (1984). Corporate attributions as strategic
illusions of management control. Administrative Science Quarterly, 29, 238-254.

Lee,
Fiona, Peterson, Christopher, & Larissa Z. Tiedens (2004) Mea culpa:
Predicting Stock Prices from Organizational Attributions.  Personality
and Social Psychology Bulletin. 30:1-14

The New York Times had an interesting article this Sunday called Doctors Say ‘I’m Sorry Before See You in Court, about a movement in some hospitals toward openly admitting mistakes to patients, both as a way to diffuse the tension that often leads to litigation and as way create a more open learning environment.  The early results also suggest that it is one of those instances where the misguided paranoia of the legal profession — where lawyers have counseled doctors for years to not admit mistakes — may have done more harm than good. And lawyers are starting to change their tune on this as well.  The Times reports:

At the University of Michigan
Health System, one of the first to experiment with full disclosure,
existing claims and lawsuits dropped to 83 in August 2007 from 262 in
August 2001, said Richard C. Boothman, the medical center’s chief risk
officer.

“Improving patient safety and patient communication is
more likely to cure the malpractice crisis than defensiveness and
denial,” Mr. Boothman said.

Mr. Boothman emphasized that he could
not know whether the decline was due to disclosure or safer medicine,
or both. But the hospital’s legal defense costs and the money it must
set aside to pay claims have each been cut by two-thirds, he said. The
time taken to dispose of cases has been halved.

The number of
malpractice filings against the University of Illinois has dropped by
half since it started its program just over two years ago, said Dr.
Timothy B. McDonald, the hospital’s chief safety and risk officer. In
the 37 cases where the hospital acknowledged a preventable error and
apologized, only one patient has filed suit. Only six settlements have
exceeded the hospital’s medical and related expenses.

The question of when admitting mistakes is a wise idea and how to do it is also an area that leadership researchers have studied in recent years.  My next post will focus on that research, but as frequent readers of this blog know, I’ve always been fascinated by these issues, and have argued that the best single diagnostic question for determining if an organization is learning and innovating as it moves forward is: What Happens When People Make a Mistake?  

P.S. The best book I know of on medical mistakes is Charles Bosk’s Forgive and Remember.  It is fairly academic, but so well-written and compelling that it is hardly dull.

P.P.S. I was reading through old posts on Metacool and came across one that is the same spirit as my diagnostic question (I should say "our" question, as it was developed with Jeff Pfeffer). Check out Diego’s post Where’s your place for failing?

This study is courtesy of the BPS Research Digest blog, which as I have written here before, does a lovely job of summarizing psychological research from peer review journals.  They describe an experiment which found that, when people cross their arms, they persisted twice as long when presented with anagrams that were impossible to solve, and when presented with anagrams that had multiple solutions, subjects who crossed their arms generated more solutions than subjects who kept their arms at their sides.  The researchers speculate that this happens because "over
many years, the act of crossing our arms comes to be implicitly
associated with perseverance, so that adopting that position activates
a nonconscious desire to succeed."  The researchers also caution that folding arms can be a sign of social distance (and I would add, a sign that people are uptight or trying to dominate others). 

Next time I am in a group that is facing difficult task, I am going to suggest that we all cross our arms and see if it helps!