Management Strategy for Performance

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INSTRUCTORS GET:

• Interactive Applications – book-specifi c interactive assignments that require students to APPLY what they’ve learned.

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Less managing. More teaching. Greater learning.

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MANAGING ORGANIZATIONAL BEHAVIOR

What Great Managers Know and Do SECOND EDITION

Timothy T. Baldwin Indiana University

William H. Bommer California State University, Fresno

Robert S. Rubin DePaul University

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MANAGING ORGANIZATIONAL BEHAVIOR: WHAT GREAT MANAGERS KNOW AND DO

Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2013, 2008 by The McGraw-Hill Companies, Inc. All rights reserved. Printed in the United States of America. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a data- base or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.

Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

This book is printed on acid-free paper.

1 2 3 4 5 6 7 8 9 0 DOW/DOW 1 0 9 8 7 6 5 4 3 2

ISBN 978–0–07–353040–6 MHID 0–07–353040–9

Vice president and editor-in-chief: Brent Gordon Editorial director: Paul Ducham Executive editor: John Weimeister Executive director of development: Ann Torbert Development editor: Jane Beck Editorial coordinator: Heather Darr Vice president and director of marketing: Robin J. Zwettler Marketing director: Amee Mosley Senior marketing manager: Michelle Heaster Vice president of editing, design, and production: Sesha Bolisetty Senior project manager: Diane L. Nowaczyk Buyer II: Debra R. Sylvester Senior designer: Mary Kazak Sander Senior photo research coordinator: Jeremy Cheshareck Photo researcher: Ira C. Roberts Lead media project manager: Daryl Horrocks Media project manager: Suresh Babu, Hurix Systems Pvt. Ltd. Cover and interior design: Kay Lieberherr Cover image: Jan Greune/Getty Images Typeface: 10/12 New Aster LT Std Compositor: Laserwords Private Limited Printer: R. R. Donnelley

Library of Congress Cataloging-in-Publication Data Baldwin, Timothy T. Managing organizational behavior : what great managers know and do / Timothy T. Baldwin, William H. Bommer, Robert S. Rubin. — 2nd ed. p. cm. Rev. ed. of: Developing management skills : what great managers know and do / Timothy T. Baldwin, William H. Bommer, Robert S. Rubin. 2008 Includes index. ISBN-13: 978–0–07–353040–6 (alk. paper) ISBN-10: 0–07–353040–9 (alk. paper) 1. Management—Study and teaching. 2. Organizational behavior. 3. Executive ability. I. Bommer, William. II. Rubin, Robert S. III. Baldwin, Timothy T. Developing management skills. IV. Title. HD30.4.B355 2013 658.4'07124—dc23 2011040779

www.mhhe.com

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To JoEllen—25 years together and I can’t imagine the journey without you.

—Tim Baldwin

To the kids—always a test of my management skills.

—Bill Bommer

To Leah—the glue that holds us all together.

—Bob Rubin

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vi

ABOUT THE AUTHORS

TIMOTHY (Tim) T. BALDWIN   is the Eveleigh Professor of Business Leader- ship at the Indiana University Kelley School of Business. Professor Baldwin holds a PhD in organizational behavior and an MBA from Michigan State University. He has published his research work in leading academic and professional outlets, including the Academy of Management Journal, Journal of Applied Psychology, Per- sonnel Psychology, Journal of Management, Leadership Quarterly, and Academy of Management Learning & Education. He has won several national research awards including eight Best Paper Awards from the Management Education & Develop- ment division of the Academy of Management. He has twice been the recipient of the Richard A. Swanson Excellence in Research Award presented by the Ameri- can Society for Training & Development (ASTD). He is the co-author of Improv- ing Transfer Systems in Organizations (Jossey-Bass: 2003) and his current research interests include leadership development and organizational training effectiveness.

In his time at Indiana University, Tim has been recognized frequently for teaching excellence, winning eight MBA Teaching Awards, the Eli Lilly Alumni Teaching Award, the FACET All-University Teaching Award, and the Dow Innova- tion in Teaching Fellowship. He is a proud member of the Organizational Behav- ior Teaching Society (OBTS) and a passionate supporter of the mission of that organization to improve teaching effectiveness in our discipline.

Tim’s background includes consultation with Cummins Engine, Eli Lilly, FedEx, Ingersoll Rand, Whirlpool, and a variety of other organizations in both the public and private sectors. He has also designed and delivered numer- ous executive education seminars in the U.S. and abroad, including the Kel- ley School’s Asia-Pacifi c Management Development program. He serves on the Board of Directors of Cripe Architects & Engineers, Inc., a professional services fi rm based in Indianapolis.

Tim is married with one son, one dog, one cat, and until recently, one gerbil (a sad story, and the cat is implicated). His interests include coaching youth sports, golf, basketball, gardening, and a little amateur magic.

WILLIAM (Bill) H. BOMMER   earned his master’s degree in organizational development from Bowling Green State University, and his PhD in organiza- tional behavior from Indiana University. He is currently a professor of manage- ment in the Craig School of Business at California State University, Fresno. Prior to his move to California, Bill served as faculty at Bowling Green State Univer- sity, Southern Illinois University at Edwardsville, Georgia State University, and Cleveland State University.

Bill has published widely in the management area in journals including the Academy of Management Journal, Academy of Management Learning & Education, Leadership Quarterly, Organizational Behavior and Human Decision Processes, Per- sonnel Psychology, Journal of Applied Psychology, Journal of Management, Journal of Vocational Behavior, and Organization Science. His current research interests include transformational leadership, organizational and personal change, and the linkage between attitudes and behavior.

Prior to entering academia, Bill worked as a fi nancial analyst and as a group process consultant in private industry. Bill has remained active in his business relationships and has designed and led numerous executive education programs

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ABOUT THE AUTHORS vii

over the last 15 years. In support of his research interests, he has served as a trainer and consultant to a large number of manufacturing companies across the United States and has had a long-term relationship with the Centers for Disease Control. In this capacity, Bill has designed corporate universities for his clients. Bill is also managing partner of Collegiate Assessment Partners (CAPs), a com- pany that builds management skills assessment tools and consults with univer- sity business schools in support of their learning objectives and their compliance with accreditation standards. When not involved with teaching, researching, or consulting, Bill enjoys traveling, hiking, eating, and cycling.

Robert (Bob) S. Rubin   is an associate professor of management in the Kell- stadt Graduate School of Business at DePaul University. He received his BA in psychology from Indiana University, his MA in industrial-organizational psychol- ogy from Southern Illinois University at Edwardsville, and his PhD in organiza- tional psychology from Saint Louis University.

Bob specializes in human resource management and organizational behavior at DePaul, where he is an avid and award-winning teacher committed to advanc- ing the fi eld of management education. He has been nationally recognized for his dedication to management andragogy and scholarship, including multiple Best Paper Awards from the Management Education Division of the Academy of Management. His research interest centers on individual differences and their role in effective leadership and management development and includes forays into aspects of transformational leadership, managerial assessment and develop- ment, academic assessment centers, and emotions at work. Bob has published his work in leading academic journals such as Academy of Management Jour- nal, Journal of Applied Psychology, Personnel Psychology, Journal of Management, Academy of Management Learning & Education, The Leadership Quarterly, Jour- nal of Organizational Behavior, and Journal of Management Education. Currently, Bob is an editorial board member of three journals, the Academy of Management Learning & Education, Journal of Organizational Behavior, and Leadership and Organizational Studies.

In addition to his academic work, Bob has been an active human resources and organization development consultant to a variety of industries including bio- technology, health care, dentistry, and transportation. His consulting work has spanned employee selection, management assessment, and development. Bob also frequently serves as a coach for purposes of management skill development. When he’s not engaged in managing his more senior textbook co-authors (Note: He had a full head of hair prior to beginning this book project), Bob enjoys play- ing music, traveling, hiking, and wrestling with his three kids.

“The great thing about having a

PhD is when people do not under-

stand you, they think it’s them.”

— Henry Kissinger

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viii

A Different Kind of Textbook—Because Teaching and Learning OB Are Hard Enough!

Contemporary students put extraordinary demands on OB instructors and text- books alike. On one hand, students immersed in quantitative courses such as fi nance and accounting and other business disciplines are often quick to dis- miss OB/management courses as “soft” or “elementary” or “common sense”—so there is a pressing need for relevance and richness. On the other hand, modern technology and short attention spans have created an aversion to the theoretical grounding and evidence-based education necessary to build true understanding and applicable skills.

Thoughtful OB and management instructors are therefore often torn between opting for a traditional descriptive text, strong on concepts and defi nitions, but with little application focus, or choosing a more popular-press reading, strong on war-story anecdotes and prescriptions (often more popular with students), but short on theory and evidence.

Recognizing this tension in our own OB classrooms, we set out to create a book (and ancillary package) with an express mission of balance. To work for us, the book would have to be one that students would fi nd engaging but also would have the coverage, rigor, and evidence base demanded of professional OB and management instructors. So this text is evidence-based but targeted to application. It covers traditional OB topics but in a decision-oriented, not just descriptive, way. It embraces the best OB models and evidence but engages stu- dents in how to use those models to improve their skill-sets and more success- fully navigate organizational life. Just as the book’s title conveys, it is about both knowing and doing. It is expressly designed to reconcile student demands for relevance and application with instructor interests in rigor, evidence, and appro- priate coverage of the discipline. We know fi rsthand that teaching OB today is akin to straddling a glacier crevasse and this book is designed in that spirit.

Put another way, we saw our charge as creating a book that would inform, illuminate, and inspire. We wanted to inform students of the best and most current knowledge about organizational behavior and its application to man- agement contexts. We wanted to illuminate those concepts with the most vivid and memorable examples and illustrations. And we wanted to inspire learners by capturing and conveying the challenge and excitement and even playfulness involved in managing and working with people. To do that, we found it appropri- ate to diverge from conventional textbooks in several signifi cant ways, and we briefl y highlight those choices in the following.

Skills and Decisions vs. Concepts and Description For whatever reason, almost every leading OB textbook today still has a decid- edly descriptive orientation. For example, team effectiveness may sound like a very applied topic. Yet most textbook chapters so titled deal exclusively with the different types of teams, comparisons of individual and team decision making,

“Ideal management education

should reorient its priorities and

focus on skill training. A great deal

is known about inculcating such

skills, but the knowledge does not

typically make its way into the

business curriculum.”

— Henry Mintzberg , McGill University

PREFACE

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PREFACE ix

theories of team development and confl ict, and so on. In most cases, the infor- mation is accurate, but it leaves students marginally prepared to work effectively in a team.

Similarly, chapters on motivation and leadership often trace the history of research and theory in those areas but end up not directly addressing the skills and behaviors a student needs to actually motivate others or lead a group or a change project. Our goal in this text was to get beyond description to skill devel- opment and decisions, that is, not just what defi nes a good group, but how one might make a group function better. Our goal was to translate from description to decisions—from OB concepts to organizational and managerial action.

Student-Centric Evidence and Learning vs. Comprehensive Body of Knowledge In recent years, we have come to understand much more about how students actually consume textbook material. As a result, we approached the process of writing this book in a different way than perhaps a traditional textbook might be written. For example, in selecting the content for each chapter in this book, we purposively did not start by spreading out all of the existing textbooks and look- ing at all the accumulated knowledge about that topic. Rather, we began with the key questions, problems, and challenges people face in, say, managing time, communicating a persuasive message, overcoming resistance to change, or deal- ing with a problem team member, and then turned to the existing literature to build chapters around those problems.

Indeed, as we wrote each chapter, we adopted a position akin to editors of Consumer Reports magazine. That is, we tried to test assumptions about what students really read and consume, and what instructors really use from a text- book. And we asked ourselves: What do we want to use? What material connects with students? What are the best readings and exercises? What material do we rarely or never use? We call this student-centric material.

The Russian author Tolstoy once insightfully noted that “ all happy families resemble each other, but each unhappy family is unhappy in its own way. ” Simi- larly, we would contend that all effective managers resemble one another, but poor ones are ineffective in their own unique ways. And the fi rst phase of com- petence is how readily and skillfully novices can respond to routine situations, not simply their ability to handle unusual ones. So we should strive less for com- prehensiveness and more on achieving fundamental skills and knowledge that can help aspiring managers operate in the most core and recurring situations commonly faced (e.g., our Manage What? scenarios that frame each chapter are designed to do just that). Our goal was to include the material and evidence, and only that material and evidence, that might be labeled “mission critical.” The book is relatively short in order to do important things well, rather than attempt to superfi cially cover the waterfront.

We hasten to add, however, that to suggest that students today want nothing to do with research, or want their texts “dumbed down,” is both inaccurate and condescending. Indeed, our experience is that students do want to know the ori- gins of what they are being taught—provided the research helps bring concepts to life. For example, a fascinating recent study found that monkeys will turn down very desirable food if they know that other fellow monkeys are getting even more desirable food. In our view, this is a terrifi c illustration of the intense power of equity perceptions, and something that is likely to stick with students in their study of motivational concepts.

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Hearing the Voice of the Student vs. Pushing the Discipline We like to think that our “partners” in writing this book were the many students and practicing managers who have been in our courses, completed our surveys, and shared with us the ideas, tools, quotations, and “little gems” that helped them develop and refi ne their own skills. Indeed, over the last few years we have asked our students to interview practicing managers and to fi nd out how those manag- ers would evaluate the organizational behavior and management courses they took in college. In doing so, the managers frequently pointed out that courses focused a lot of attention on theories and concepts but, in their view, focused too little on relevant prescriptive principles and skills. They were challenged most by the “people problems” in their work, and yet felt their management education had not emphasized, or adequately prepared them for, that component of their job. So in writing this text, we tried to consistently take into account what those who ultimately must go and practice management most need to know.

Finally, in the course of writing this book we were often asked how our book would differ from popular-press books. In responding to that we are always quick to clarify that we certainly do not consider “popular” to be synonymous with bad. Indeed, there are some wonderful and useful popular works that we draw from in this book. We do, however, think the distinction between this book and many of the popular-press books on similar topics is pronounced and critically impor- tant. In our view, any book targeted to students in a university context must pro- vide exposure to the “whys,” that is, the conceptual foundation of skills. We think this book’s defi ning value is its practicality and usefulness, but we contend that this is so because it is based on good theory and research, not because we avoided the important conceptual grounding.

The OB Teaching Challenge: Aiming for Balance We believe that inculcating OB/management skills is perhaps the greatest chal- lenge in business education today—and it is time to more directly and intention- ally take on that challenge. Few people question the analytic capability of today’s graduating students—but the jury is still out on their interpersonal and leader- ship competence. We think a skills-based, decision-oriented approach, manifest in this text, is critical to addressing that challenge. In sum, working and man- aging effectively in organizations today is an act of supreme balance—and our hope is that we have created a textbook that is true to that charge.

Features of the Book

Manage What? One of our favorite teaching colleagues is an accounting professor who enjoys pointing out to us that, while every organization has accounting, information sys- tems, and marketing departments, he has never heard of a corporation that has a management department. He further chides us that having a degree in manage- ment invites the question, “ Management of what? ” In reality, he is a passionate advocate for improving the management skills of his accounting students and even pushed us to write this text. But his observation raises an important issue.

One of the legitimate criticisms of OB and management courses and text- books, even those with a stated skills focus, is that they tend to be rather abstract about what is really being managed. There is often a curious lack of focus on the

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PREFACE xi

specifi cs of what managers are challenged to do, and on how great professionals might respond to those challenges.

With that in mind, we decided to open each chapter with a section we call Manage What? The Manage What? feature consists of several fundamental and specifi c questions or challenges related to the skill focus of that chapter. For example, in the chapter on team effectiveness, one scenario poses a challenge regarding how to deal with members who are not pulling their weight. In the motivation chapter, one of the scenarios addresses how to diagnose and deal with a person who shows little desire to do better work, and so on. So that stu- dents can conduct a “skills check,” we have also included selected critiques or debriefi ngs of how a skilled manager might have proceeded on the Manage What? scenarios. We have intentionally, however, not included all of the debriefs at the end of the chapters. Some of the debriefs are only available in the instruc- tor’s manual so that those critiques can be distributed to students at any point— or sometimes as the key when we use the Manage What? scenarios as exam questions.

Taken together, the Manage What? scenarios comprise a set of the most fun- damental of management skills. They are hardly comprehensive—there is clearly much more to learn about management (and in the book) than how to handle just those scenarios—but the set is a concrete start toward isolating the main- stream and recurring things that great managers do well.

Our accounting professor friend likes to heighten student interest by point- ing out how his course material is good preparation to become a CPA (certifi ed public accountant). We would contend that an understanding and mastery of the Manage What? scenarios would likewise constitute a good step toward becoming a hypothetical CPM or “certifi ed people manager.” No such certifi cation actu- ally exists, but we have sought to include the recurring skills we would expect someone to demonstrate to be certifi ed as a great manager if there were such a reputable credential. Those skills are the focus of the Manage What? scenarios.

Management Live We doubt there is an OB/management instructor alive who would deny the criti- cal importance of illustration and examples in helping students develop the skills of great managers. So, in addition to liberally using examples in the text itself, we also have created a separate feature designed to highlight the most vivid and engaging illustrations, stories, and short cases we could fi nd. We call the section Management Live to capture the spirit of those illustrations, which is expressly to enliven the text and bring to life the concepts in ways meaningful and memo- rable to learners.

Learning theorists have begun using the term “stickiness” to describe learn- ing stimuli that ultimately stay with learners, and that very much captures the spirit of this feature of the book. Our experience is that our students often recall specifi c cases and examples long after they have forgotten lectures and text. So our goal was to infuse each chapter with Management Live examples that catch attention, strike the imagination, and really do “stick” with students as examples and guides.

Manager’s Tool Kits An irrefutable aspect of applying skills is to have a good set of tools. In our exec- utive education work, we have been struck by how much participants appreci- ate “takeaways” like self-assessments, good forms, quick checklists, and so on. Although we have never been particularly focused on such takeaways for our degree students, it occurred to us that such tools would be useful for anyone

“Example is not the main thing in

influencing others. It is the only

thing.”

— Albert Schweitzer

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PREFACExii

trying to improve his or her management skills. Indeed, a fundamental supposi- tion of the evidence-based management movement is that once evidence is well established, it should be codifi ed into practice through the use of checklists or other decision supports. In this spirit, we therefore embed several Manager’s Tool Kits into each chapter. For example, the performance management chapter has Manager’s Tool Kits for choosing the right performance evaluation method, ana- lyzing a performance problem, and terminating or reassigning an employee. The motivation chapter has a quick guide to rewarding effectively, the confl ict chapter includes a checklist for effective mediation, and so on. The Manager’s Tool Kits are presented in a way that students can copy and actually make use of them now or in the future. Taken collectively, the Manager’s Tool Kits comprise something of a management skills manual. We make no claims that these are original or novel or provocative or anything fancy at all. However, they are the things that make their way onto managers’ offi ce doors, desktop frames, purse cards, and so on.

Contemporary Cases Contemporary OB teaching is hard because students often think that OB teach- ing is not contemporary. That is unfortunate because many of the most progres- sive and “hottest” companies today are, in fact, wonderful exemplars of the best of OB practice. For example, Google’s recent investigation into what makes a great boss at the fi rm turned up a list of characteristics that have been validated for years by OB researchers. Zappos’ 10 cultural commandments read like a syn- thesis of OB research on high-performance cultures. Facebook, Microsoft, and leading hospitality fi rms do not rely on low-validity unstructured interviews and subjective selection practices favored by too many organizations. Rather, they employ the most valid of selection procedures supported by decades of rigorous research.

It was these observations that prompted us in this edition of our text to open each chapter with a case that would satisfy our students’ craving for examples that are (a) authentic— what they like to call “real world,” and (b) current and relevant. We expressly sought fi rms that would strike their imagination, and our goal was to show a clear linkage between what they are reading in the text and the application of those concepts in the most progressive and admired of today’s organizations. So we have endeavored to include cases that have that character at the end of each of our chapters. A master list of the contemporary cases is shown below:

Chapter 1 – eHarmony

Chapter 2 – CIGNA

Chapter 3 – Threadless and ChallengePost

Chapter 4 – TRUTHY

Chapter 5 – Tableau

Chapter 6 – Ritz-Carlton

Chapter 7 – The Dallas Mavericks

Chapter 8 – Klout

Chapter 9 – Google

Chapter 10 – Team Concepts

Chapter 11 – The NFL Players Association

Chapter 12 – Google, Microsoft, Southwest Airlines, and Doubletree Hotels

Chapter 13 – Zappos

Chapter 14 – The Indiana Bureau of Motor Vehicles

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PREFACE xiii

Ancillaries

It is hardly provocative to suggest that the ways students learn today have changed rather dramatically from a generation ago. Just as iPods have changed the way music is delivered and consumed, so too has the Internet, wireless technology, and portable video capability transformed the way learners consume education. Moreover, learning researchers have long recognized that students have different learning styles: some favoring reading and refl ection, and others engaged more by visual depictions and hands-on experience.

The instructional implication is that the most successful courses will be those that expose learners to multiple educational stimuli. With that in mind, we have supplemented this text with a set of supporting resources designed to facili- tate the learning of management skills in multiple ways. Central to these support materials are the Online Learning Center (OLC) at www.mhhe.com/baldwin2e and McGraw-Hill Connect Organizational Behavior.

In summary, we have tried to translate our own experiences in the classroom into a package of learning stimuli that will both appeal to and challenge students of organizational behavior and management. Although sometimes characterized as being elementary or commonsensical, great management is neither common nor easy, and the existence of so many ineffective managers and toxic organiza- tions attests to that. We fi rmly believe that many aspects of management can be learned, but it takes a focus on skills and a more concerted effort to bring those skills to life than many of our traditional learning materials provide. Our hope is that this text and set of ancillaries will be useful in that regard—but we con- sider it all a work in progress. We actively invite your input as we all try to foster better-managed organizations and healthy and engaging places to work.

McGraw-Hill Connect ® Organizational Behavior

Less Managing. More Teaching. Greater Learning.

McGraw-Hill Connect Organizational Behavior is an online assignment and assessment solution that connects students with the tools and resources they’ll need to achieve success. McGraw-Hill Connect Organizational Behavior helps pre-

pare students for their future by enabling faster learning, more effi cient studying, and higher retention of knowledge.

McGraw-Hill Connect Organizational Behavior Features Connect Organizational Behavior offers a number of powerful tools and fea- tures to make managing assignments easier, so faculty can spend more time teaching. With Connect Organizational Behavior, students can engage with their coursework anytime and anywhere, making the learning process more acces- sible and effi cient. Connect Organizational Behavior offers you the features described next.

Simple Assignment Management

With Connect Organizational Behavior, creating assignments is easier than ever, so you can spend more time teaching and less time managing. The assignment management function enables you to:

• Create and deliver assignments easily with selectable end-of-chapter questions and test bank items.

“Happiness is coming to class and

seeing the video projector set up.”

— Charlie Brown

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PREFACExiv

• Streamline lesson planning, student progress reporting, and assignment grading to make classroom management more effi cient than ever.

• Go paperless with the ebook and online submission and grading of stu- dent assignments.

Smart Grading

When it comes to studying, time is precious. Connect Organizational Behavior helps students learn more effi ciently by providing feedback and practice material when they need it, where they need it. When it comes to teaching, your time also is precious. The grading function enables you to:

• Have assignments scored automatically, giving students immediate feedback on their work and side-by-side comparisons with the correct answers.

• Access and review each response; manually change grades or leave com- ments for students to review.

• Reinforce classroom concepts with practice tests and instant quizzes.

Instructor Library

The Connect Organizational Behavior Instructor Library is your repository for additional resources to improve student engagement in and out of class. You can select and use any asset that enhances your lecture. The Connect Organizational Behavior Instructor Library includes:

• Instructor’s manual

• PowerPoint slides

• Test bank

• The Connect Organizational Behavior ebook

Student Study Center

The Connect Organizational Behavior Student Study Center is the place for stu- dents to access additional resources. The Student Study Center:

• Offers students quick access to lectures, practice materials, ebooks, and more.

• Provides instant practice material and study questions; easily accessible on the go.

• Gives students access to the Personalized Learning Plan described next.

Student Progress Tracking

Connect Organizational Behavior keeps instructors informed about how each stu- dent, section, and class is performing, allowing for more productive use of lec- ture and offi ce hours. The progress-tracking function enables you to:

• View scored work immediately and track individual or group perfor- mance with assignment and grade reports.

• Access an instant view of student or class performance relative to learn- ing objectives.

• Collect data and generate reports required by many accreditation organi- zations, such as AACSB.

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PREFACE xv

Lecture Capture

Increase the attention paid to lecture discussions by decreasing the attention paid to note-taking. For an additional charge, Lecture Capture offers new ways for students to focus on the in-class discussion, knowing they can revisit impor- tant topics later. Lecture Capture enables you to:

• Record and distribute your lecture with a click of a button.

• Record and index PowerPoint presentations and anything shown on your computer so it is easily searchable, frame by frame.

• Offer access to lectures anytime and anywhere by computer, iPod, or mobile device.

• Increase intent listening and class participation by easing students’ con- cerns about note-taking. Lecture Capture will make it more likely you will see students’ faces, not the tops of their heads.

McGraw-Hill Connect Plus ® Organizational Behavior McGraw-Hill reinvents the textbook learning experience for the modern student with Connect Plus Organizational Behavior. A seamless integration of an ebook and Connect Organizational Behavior, Connect Plus Organizational Behavior pro- vides all of the Connect Organizational Behavior features, plus the following:

• An integrated ebook, allowing for anytime, anywhere access to the textbook.

• Dynamic links between the problems or questions you assign to your students and the location in the ebook where that problem or question is covered.

• A powerful search function to pinpoint and connect key concepts in a snap.

In short, Connect Organizational Behavior offers you and your students pow- erful tools and features that optimize your time and energies, enabling you to focus on course content, teaching, and student learning. Connect Organizational Behavior also offers a wealth of content resources for both instructors and stu- dents. This state-of-the-art, thoroughly tested system supports you in preparing students for the world that awaits.

For more information about Connect, go to www.mcgrawhillconnect.com , or contact your local McGraw-Hill sales representative.

Tegrity Campus: Lectures 24/7 Tegrity Campus is a service that makes class time available 24/7 by automatically capturing every lecture in a searchable format for students to review when they study and complete assignments. With a

simple one-click start-and-stop process, you capture all computer screens and corresponding audio. Students can replay any part of any class with easy-to-use browser-based viewing on a PC or Mac.

Educators know that the more students can see, hear, and experience class resources, the better they learn. In fact, studies prove it. With Tegrity Campus, students quickly recall key moments by using Tegrity Campus’s unique search feature. This search helps students effi ciently fi nd what they need, when they need it, across an entire semester of class recordings. Help turn all your students’ study time into learning moments immediately supported by your lecture.

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To learn more about Tegrity, watch a two-minute Flash demo at http://tegrity campus.mhhe.com .

Assurance of Learning Ready Many educational institutions today are focused on the notion of assurance of learning, an important element of some accreditation standards. Managing Organizational Behavior: What Great Managers Know and Do, Second Edition, is designed specifi cally to support your assurance of learning initiatives with a simple yet powerful solution.

Each test bank question for Managing Organizational Behavior: What Great Managers Know and Do, Second Edition, maps to a specifi c chapter learning out- come/objective listed in the text. You can use our test bank software, EZ Test and EZ Test Online, or Connect Organizational Behavior to easily query for learn- ing outcomes/objectives that directly relate to the learning objectives for your course. You can then use the reporting features of EZ Test to aggregate student results in a similar fashion, making the collection and presentation of assurance of learning data simple and easy.

AACSB Statement The McGraw-Hill Companies is a proud corporate member of AACSB Inter- national. Understanding the importance and value of AACSB accreditation, Managing Organizational Behavior: What Great Managers Know and Do, Second Edition, recognizes the curricula guidelines detailed in the AACSB standards for business accreditation by connecting selected questions in the test bank to the six general-knowledge and skill guidelines in the AACSB standards.

The statements contained in Managing Organizational Behavior: What Great Managers Know and Do, Second Edition, are provided only as a guide for the users of this textbook. The AACSB leaves content coverage and assessment within the purview of individual schools, the mission of the school, and the faculty. While Managing Organizational Behavior: What Great Managers Know and Do, Second Edition, and the teaching package make no claim of any specifi c AACSB qualifi cation or evaluation, we have within Managing Organizational Behavior: What Great Managers Know and Do, Second Edition, labeled selected questions according to the six general-knowledge and skills areas.

McGraw-Hill Customer Care Contact Information At McGraw-Hill, we understand that getting the most from new technology can be challenging. That’s why our services don’t stop after you purchase our prod- ucts. You can e-mail our Product Specialists 24 hours a day to get product-training online. Or you can search our knowledge bank of Frequently Asked Questions on our support website. For Customer Support, call 800-331-5094, e-mail hmsup- [email protected] , or visit www.mhhe.com/support . One of our Technical Support Analysts will be able to assist you in a timely fashion.

McGraw-Hill Higher Education and Blackboard Have Teamed Up. What Does This Mean for You?

1. Your life, simplifi ed. Now you and your students can access McGraw- Hill’s Connect and Create ™ right from within your Blackboard course— all with one single sign-on. Say goodbye to the days of logging in to multiple applications.

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PREFACE xvii

2. Deep integration of content and tools. Not only do you get single sign- on with Connect and Create ™ ; you also get a deep integration of McGraw- Hill content and content engines right in Blackboard. Whether you’re choosing a book for your course or building Connect assignments, all the tools you need are right where you want them—inside of Blackboard.

3. Seamless gradebooks. Are you tired of keeping multiple gradebooks and manually synchronizing grades into Blackboard? We thought so. When a student completes an integrated Connect assignment, the grade for that assignment automatically (and instantly) feeds your Blackboard grade center.

4. A solution for everyone. Whether your institution is already using Blackboard or you just want to try Blackboard on your own, we have a solution for you. McGraw-Hill and Blackboard can now offer you easy access to industry-leading technology and content, whether your campus hosts it, or we do. Be sure to ask your local McGraw-Hill representative for details.

Changes from the First Edition

The response to our fi rst edition was immensely gratifying, as OB and man- agement instructors seem to be gravitating toward a more skills-oriented and decision-making approach. Among the most favored elements of the original edi- tion was our overt recognition of the knowing–doing gap and the features that engaged students to think about personal and managerial action rather than just the learning of descriptive concepts.

We also received many useful ideas for enhancing the text and have tried to incorporate those ideas into this new edition. Among the most signifi cant changes, this new edition includes:

• Broader coverage to better fi t OB courses. While many of our adoptions were for OB courses, and all three authors use the book in such courses at their respective institutions (Indiana University, California State University–Fresno, and DePaul University) feedback suggested that some instructors, who otherwise were attracted to the skills-oriented approach, did not fi nd the book quite broad enough for their OB course. In response, we restructured the text by adding some signifi cant content and brand-new chapters, resulting in a text that more fully refl ects the scope and evidence base of organizational behavior. Naturally, we changed the title to refl ect this substantial restructuring.

Note that there was no divergence from our skills-orientation or our focus on personal and managerial action. Indeed, we retained the subtitle

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(What Great Managers Know and Do) and intentionally included some content that has not typically been part of most traditional OB books (for example, performance management, selecting and retaining talent, change management, and so on), because the evidence is clear that these areas are essential to effective management and therefore critical in exposing stu- dents to what great managers really know and do. Importantly, these topics are all discussed from a manager’s perspective and should not interfere with or detract from other functional courses such as human resource manage- ment, but rather reinforce the close ties between organizational behavior and human resource management in actual practice. In short, our aim was to make the book better-suited to fi t the content and structure of a typi- cal OB course. And while not for everyone, we do think the text is a great option for those instructors who feel drawn to take a more skills-based and decision-oriented approach to their OB or management skills course

• Knowing and Doing Objectives. As our subtitle suggests, great manage- ment is about both knowing and doing, and so we now overtly include both knowing and doing learning objectives at the outset of each chapter. Instructors (and administrators) have told us that this feature is very useful for those schools concerned with assurance of learning (AACSB), alignment of curriculum to objectives, and related issues that are so ubiq- uitous in business schools.

• Addition of Contemporary Cases and Discussion Questions (with debriefs for instructors). We consistently hear from our students—and now from fellow instructors using the book—that contemporary students want more cases and examples of OB ideas in practice. So we heeded that call by adding two cases to every chapter—most of them drawn from progressive contemporary fi rms that best capture student interest. We also include accompanying discussion questions that challenge students to wrestle with ideas from the book using context from the most exciting and interesting contemporary fi rms.

• Embedded Manager’s Tool Kits. Staying true to our focus on knowing and doing, the new edition integrates the Manager’s Tool Kits (which used to appear at the end of the chapter) directly into the chapter text. We think this embedding makes the popular book feature more user- friendly and, most importantly, facilitates more effi cient transition from knowledge to action.

• More Manage What? Challenges — and New Debriefs. Any student of math knows how important “problem sets” are in facilitating the transi- tion from knowing principles to solving actual problems correctly. More- over, it is really wonderful to have the answers to those problem sets in the back of the book. We think OB learning is analogous. So we have added more of our popular Manage What? challenges that appear at the opening to every chapter. Moreover, in this edition we have also added answers so that students can compare their responses to expert commen- tary on how to address the challenge. On the advice of our book adopters, however, the debrief to at least one such challenge in each chapter is still provided only to instructors so it can be used as an evaluation tool if an instructor so chooses.

• Enhanced Ancillaries and Video Supplements. In today’s contemporary classroom, it takes more than a textbook to bring a class to life. So the book comes complete with an entirely new set of ancillaries, including McGraw-Hill’s innovative Connect program.

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xix

WALKTHROUGH

An Applied Text for an Applied Topic

In a world full of challenging analytic courses such as fi nance, accounting, and computer sci-

ence, students are often quick to dismiss OB/management courses as “soft” or “common

sense” or “just theory.” Unfortunately, many existing textbooks serve only to support those

misconceptions. Teaching and learning organizational behavior and management are hard

enough—your textbook shouldn’t make it harder.

So, unlike other textbooks today, Managing Organizational Behavior: What Great Man-

agers Know and Do, Second Edition, is written with a style and purpose to fi t the demands of

contemporary students and instructors. While including full coverage of the most important

OB models and evidence, the book’s distinct value is its focus on the skills and decisions

required to function effectively as a manager (or individual contributor) in today’s organi-

zations. Unlike traditional texts, the authors draw from the best OB theory and models to

describe how to develop the right mix of skills—and how those skills can be implemented in

contemporary contexts. The distinctive features of the text include the following.

Addresses the Knowing–Doing Gap

The most formidable challenge to OB learning is not knowing but doing —and this book

is expressly focused on facilitating the transition from knowing principles to solving

actual problems. Put another way, when it comes to behaving effectively in organiza-

tions, there is no knowledge advantage without an action advantage.

As the text subtitle (What Great Managers Know and Do) suggests, the authors

engage students to think specifi cally about personal and managerial action rather than

just learning descriptive concepts. Toward that end, every chapter opens with a section

called Manage What? which consists of several fundamental and specifi c challenges

related to the topical focus of the chapter. These scenarios are great for class discus-

sions or written assignments and focus on recurring skills that are fundamental to any

manager’s success. Moreover, at the end of each chapter are debriefs or “answers” to

those challenges that describe how skilled professionals would best respond.

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Provides Contemporary Cases and Examples

One of the most frustrating student perceptions is that organizational behavior is irrel-

evant or old-fashioned. That is unfortunate because many of the most progressive and

“hottest” companies today are, in fact, wonderful exemplars of the best of OB and

management practice. So every chapter in this text opens with a case that will sat-

isfy students’ craving for examples that are (a) authentic—what they like to call “real

world” and (b) current and relevant. The profi led fi rms (e.g., Google, Zappos, and eHar-

mony) are readily visible to students, strike their imagination, and show a clear linkage

between what they are reading in their text and the application of those concepts in the

most progressive and admired of modern organizations.

1. Making a Diffi cult Ethical Choice You have worked for your boss for fi ve years, and he has become a trusted mentor for you in the fi rm. Indeed, there is no one in the fi rm toward whom you feel more respect or loyalty. You just met with him and, due to an unforeseen market downturn, he let you know of a proposed layoff that will affect one of the three people who report to you (Joe). Because the decision has not been announced, and it will surely send shockwaves through the fi rm, he asked that you absolutely not tell any of your subordinates. In fact, concerned the information might get prematurely leaked, he even says, “It is critically important that no one know. Can I count on you?” You agreed emphatically that he could. Unfortunately, that evening you see Joe, who coaches a little league team with you. He tells you he and his wife have been accepted into an adoption process for a new child and he wanted to share his joy with you. He also has heard rumors of a layoff and says, sort of jokingly, “I am not going to be laid off, am I? We could never afford to take care of a new child without my income.”

What should you do? Is this an ethical issue? You are forced to choose between loyalty and your expressed promise on one hand, and your sense of caring and honesty toward Joe (and his potential new child) on the other. What factors will you consider in your decision? On what basis would you justify the ethics of your decision?

2. You Be the Ethicist Author Randy Cohen serves as The Ethicist for The New York Times Sunday Magazine. He frequently poses ethical dilemmas to his readers and an adapted set of those (and similar themes) are listed next. Respond to each of the following scenarios, being sure to identify the ethical frame (utilitarian, universalism, or virtuous person) you are using as the rationale for your response.

a. Is it ethical to buy a sweater to use for a family picture and then return it for a refund?

b. Is it ethical to download a song from the Internet without paying for it given that (a) you would not have downloaded it if you had to pay, (b) you have no money and the artist and record label (or Apple, Inc.) are beyond wealthy, (c) you are actually promoting the artist by listening to and sharing your impressions with others.

c. How much is a cat worth? Your affectionate and obedient cat needs a procedure that will cost a few hundred dollars. Your instinct is to pay for what she needs, but you can’t help thinking it’s wrong. Wouldn’t the cash be better spent on sick humans?

d. Can you ethically round off your 2.958 GPA to 3.0 when using it on your resumé?

e. Is it OK to take those hotel shampoos and soaps and give them to homeless shelters?

f. Should you tell on someone you observe researching bomb-making on the Internet? Or on a friend having a too- friendly dinner with a woman who is not his wife?

g. Is it ethical to buy cheap seats to a baseball game you know will be sparsely attended and then sneak down and sit in the expensive seats? Similarly, is it ethical to grab open fi rst-class seats (once everyone is on board and in their pur- chased seats) when you only paid for coach?

h. Is it ethical for a homeless mother to steal a loaf of bread to feed her starving child?

i. If you scored the wrong answer on a test, and the instructor marked it correct and you very honestly let him know, is it ethical for the instructor to let you keep the points and reward your honesty?

3. Creating a Culture That People View as Fair You are a relatively new manager and times are tough at your fi rm. You know you are going to have to make some really tough decisions regarding promotions, job assignments, bonuses, and even who gets laid off and who stays. When you took your new management position two years ago, the fi rm was booming, and with ample resources to work with you thought to your- self that you would just give everyone the same rewards and schedules and anything you controlled and that would solve the problem. But now resources are scarce and you are worried that if people view your decisions as unfair you will run the risk of destroying your positive culture and even losing key people. If your goal is to create a fair workplace that is also a productive one, what should you do? What types of standards would you put in place and then how would you decide “who gets what”?

4. Being a Responsible Whistle-Blower As a manager in your fi rm, you have become disturbed with some of the claims that are being made (by people in your mar- keting and sales group) about some of your products. Although you often work with that department, you are employed in a different function and not sure if you should “stick your nose” into that area. Moreover, although you feel something of an ethical obligation to ensure that no customers are harmed by false information, you also are very concerned that blowing the whistle in this case could prompt serious repercussions and potentially be detrimental to your career, cause the loss of trust and friends in the fi rm, and even impact your family.

MANAGE WHAT?

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WALKTHROUGH xxi

Written to Be “Sticky”

Another persistent student criticism of organizational behavior coursework is that it is

too abstract or even “boring”—and given the nature of many existing texts, it is not

hard to see how students might reach that conclusion. The spirit of this book was to

infuse each chapter with examples that catch attention, strike imagination, and really

do “stick” with students as examples and guides. Such examples are sprinkled liber-

ally within the text, but there are also separate boxes labeled “Management Live” that

highlight the most vivid and engaging illustrations, stories, and short cases that bring to

life the concepts in ways meaningful and memorable to learners.

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WALKTHROUGH xxii

Includes Pragmatic Tool Kits

An irrefutable aspect of applying skills is to have a good set of tools. Most executive

education seminars and corporate training programs are known for providing par-

ticipants with such tools for better conducting their work. Yet, while common-place

in many business educational settings, for some reason the notion of tools and tool

kits has not made its way into traditional college texts. This book rectifi es that omis-

sion by embedding very practical “how to” tool kits in each chapter. These tool kits

offer tangible takeaways for students through self-assessments, forms, and quick

checklists.

MANAGEMENT LIVE 1.2

The Best Places to Work Are Also the Best-Performing Companies Independent fi nancial analysts have studied the fi nancial performance of the “100 Best” companies beginning with the publication of the book The 100 Best Companies to Work for in America (by Robert Levering and Milton Moskowitz, 1994), and have accompanied that with each of the “100 Best Companies” lists from Fortune since that list’s inception in 1998. Using various profi tability indicators, these data illustrate the extent to which the pub- licly traded 100 Best Companies consistently outperform major stock indices over the 10-year periods preceding the publication of the 100 Best lists. It is notable that those companies selected for the 100 Best list generally spend far more on employee benefi ts and services than their counterparts—that is, it is often expensive to be a best place to work. However, the data clearly support that the expense is worthwhile because people ultimately engage more fully, work productively, and lift company performance.

Russell 3000

S & P 500“100 Best” Buy and

Hold

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“100 Best” Reset

Annually

10%

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4%

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100 Best Companies to Work For vs. Overall Stock Market 1998–2010

Copyright © 2011 Great Place to Work ® Institute, Inc. All Rights Reserved.

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WALKTHROUGH xxiii

Responsive to Management Education Critics

Few people question the analytic capability of today’s graduating students—but the jury

is still out on their managerial and interpersonal competence. Critics of business educa-

tion are increasingly focusing on the development of OB/management skills as perhaps

the greatest gap and challenge today—and it is time to more directly and intention-

ally take on that criticism and challenge. Although sometimes characterized as being

elementary or common sense, great management is neither common nor easy, and the

existence of so many ineffective managers and toxic organizations attests to that.

With those criticisms very much in mind, the overriding goal of this text is to help

instructors inform, illuminate, and inspire. Inform students of the best and most solid

and current evidence in organizational behavior and its application to management con-

texts—never “dumbing it down” or neglecting key theory or models. Illuminate those

concepts with the most vivid and “sticky” examples and illustrations—not the tired old

examples (often from dated manufacturing contexts) that have too often defi ned OB

instruction in the past. And inspire learners by capturing and conveying the challenge

and excitement and even playfulness involved in managing and working with people—

not simply describing the concepts of the fi eld.

We hope you will join in the crusade to redefi ne OB teaching and try to foster bet-

ter-managed organizations and healthy and engaging places to work.

Tool Kit 1.2 Personal Quality Checklist 43 Building on the principles of organizational quality improvement efforts, Bernie Sergesteketter and Harry Roberts have devised a tool for self-management called the personal quality checklist (PQC). Using their approach, you defi ne desirable standards of personal behavior and performance and then keep track of failures or “defects” to meet those standards. The specifi c steps to the approach are:

1. Draw up a checklist of standards. This is the hardest part. Two samples are included at the end of this Tool Kit as illustrations (one by a practicing manager and one from a college student). Each standard should have a clear relationship to a “customer” either in the workplace or in your family or circle of friends. Each standard has to be unambiguously defi ned so you can recognize and tally a defect when it occurs. Thus, “get in shape” is not a good standard. A better standard would be to “break a sweat every day.”

There are two broad types of standards: (1) waste reducers/time savers (for example, be on time to class or group meetings), and (2) activity expanders (call parents at least once a week, get résumé com- pleted). If you include all activity expanders on your list, be sure you have enough waste reducers and time savers to create free time for them.

2. Tally your daily defects. Defects should be tallied by days but can ultimately be aggregated by weeks or months. One intriguing strategy is to let others help you keep score. For example, if a checklist standard is to talk to your spouse only in respectful tones, or spend at least a half hour with your daughter each day, then your spouse or daughter may well be the best tally keeper for those standards.

3. Review your tallies and action plan. Some people fi nd the word “defect” objectionable, but it is key to the system. First, it is easy to recognize and tally. Moreover, defects can become your friends because they suggest opportunities for improvement. Why did it occur? How can it be prevented? The whys lead to hows and suggest possible routes toward improvement.

Do not put faith in trying harder; you probably already are trying hard. Rather, fi gure out a different way to reach your objective. As the adage goes, rather than trying to be a better caterpillar, become a butterfl y.

As a general rule you should stick with 10 or fewer standards, or the process becomes unwieldy and unfo- cused. Of course, your checklist standards will only be a small fraction of your activities. Your fi rst PQC should focus on a few things you currently do that, if improved, could increase your customer satisfaction. Once you determine that you have those standards under control and customer satisfaction is high, then you can ask your colleagues and family for help in raising the bar and adding new standards. The approach is deceptively simple but powerful. Sergesteketter and Roberts report on a wide variety of successes by managers and executives from leading fi rms who have enjoyed success with the personal quality checklist approach. Draw up your own checklist and give it a try!

Sample Manager PQC

• On time for meetings

• Never need a haircut

• Answer phone in two rings

• No more than one project on desk at time

• Shoes always shined

• Weight below 190 pounds

• Exercise at least three times a week

MANAGER’S TOOL KIT

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WALKTHROUGH xxiv

Heard from the Workplace

One of the biggest challenges instructors face in teaching OB and management is help-

ing students understand the importance of starting now to develop their managerial

skills. Students are rightly focused on their fi rst role after college—often analyst or

individual contributor jobs that do not entail people management responsibility. But

the misnomer is that OB and management skills are not important right away. As some

recent graduates eloquently attest in their own words below, the reality is that, regard-

less of industry or job, managerial skills are a critical differentiator in the marketplace

and are important very early in careers.

“I work in a service industry

where our assets are the people

working for us; therefore managing

them and motivating each of the

team members individually is key

to our success. A critical part of

my job is to ensure that I inspire

my team to grow and become

future leaders of our business,

thereby always focusing on a suc-

cession plan. This ensures that

our business doesn’t stagnate

and continues to be a solid going

concern.”

— Shradha Adnani , Media Industry

“I am now regularly trusted to

manage teams of new hires

joining us out of college and it

happened so much earlier in my

career than I ever expected. Hav-

ing good management skills — so

that you can lead your team to

a common goal, teach them the

skills they need to achieve suc-

cess, and correct them when they

veer astray — is just as important

as your analytic competence.

Once you build a high-performing

team, their success makes you

more valuable, and this will be evi-

dent to your own managers.”

— Mason Duke , Private Equity

Management

“Understanding how managers

motivate and effectively utilize

their subordinates is absolutely

crucial for a new hire analyst.

There are often situations in the

workplace where your supervisor

does not necessarily have your

best interests in mind. This lack

of support is not always malicious

but can be driven by numer-

ous factors, including competing

priorities, upward pressure, or

large spans of control. In these

situations, understanding how to

manage upwards is a powerful

skill that can help you meet your

professional objectives.”

— Ricky P. Singh , Financial Services

Industry

“The managerial skills that I

learned in my behavioral manage-

ment class have helped to cata-

pult me into a position where I

continue to grow and lead, where I

am also the youngest in my group.

I have been able to provide an

open mind, solid work ethic, and

great cost benefit analysis skills

that put me in a different league.

I have been able to show to my

co-workers that leadership isn’t

always tied directly to age and

experience.”

— Megan Mennel , Real Estate

Industry

Heard from Past Adopters

“This text has proven ideal for

my intro organizational behavior

course. It blends sound theory

and evidence — which I think is

critical — with a practical skills ori-

entation, engaging writing style,

and contemporary flavor that my

students really enjoy.”

— Brian Blume , University of

Michigan–Flint

“[This text provides an] even

mix of concept, examples, and

application/action.  . . . In academic

circles from years past, authors

seemed to believe the more

theory and cases, the better. But

today, it is about telling them what

they need to know, showing them

how to do it, and then letting them

experience the material. Students

will like the text. This text, as indi-

cated, covers everything, but it is

application-based. [It has] enough

theory and concept to move you

forward, but [it is a] clear applica-

tion so that you can move forward

sooner.”

— Stephen Peters , Clarkson College

“The focus of this text is exactly

what I’ve been looking for.  . . . It

is more comprehensive, includes

relevant research evidence for

its propositions and the theories

explained, and includes a truly rel-

evant set of experiential exercises

and examples.”

— Deborah Erdos Knapp , PhD, Kent

State University

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WALKTHROUGH xxv

Students can refer to the OLC for chapter reviews, self-grading quizzes, and select

premium content.

Ask your local McGraw-Hill sales representative how to gain access to the Asset

Gallery and Premium Content for your course.

Enhanced Ancillary Package

In today’s contemporary classroom, it takes more than a textbook to bring a class to life.

So the book comes complete with an entirely new set of ancillary resources designed for

students and instructors—including McGraw Hill’s innovative Connect program. Seam-

lessly integrated within the book’s pedagogy, the OLC at www.mhhe.com/baldwin2e

serves as a resource for both instructors and students. Instructors will fi nd the following

resources for each chapter in a password-protected location on the OLC:

• Comprehensive instructor’s manual that contains chapter summaries, lec- ture outlines, suggested solutions to exercises in the text, and teaching notes to help instructors utilize the Management Live, Manager’s Tool Kit, and Manage What? materials in each chapter.

• PowerPoint presentations that outline the key points, learning objec- tives, and exhibits in each chapter; the PPTs may be customized for each instructor’s needs.

• Test banks that challenge students’ application of the concepts cov- ered in the text through multiple-choice, true-false, short-answer, and essay questions; each test bank question is tagged according to learning objective, Bloom’s Taxonomy, AACSB guidelines, and level of diffi culty.

• Interactive components in the form of the Asset Gallery (Manager’s Hot- Seat videos, Self-Assessments, and Test Your Knowledge exercises) and suggested videos to accompany each chapter.

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ACKNOWLEDGMENTS

No set of authors ever really endeavors to write a book by themselves, and we are grateful to so many people who have had a hand in helping this text come to life. Among those we would particularly like to recognize are Halden Williams and Corey Gallon, two young consulting stars at PricewaterhouseCoopers (Corey has since taken a promotion elsewhere) for their immense help in uncovering contemporary business cases that demonstrate how the concepts in the book are being used by progressive organizations worldwide. We are also indebted to Bob Marx of the University of Massachusetts and Mark Wellman at the University of Maryland for their excellent recommendations of cases, videos, and materials. Both Bob and Mark are widely acclaimed master teachers and we are fortunate to have their contributions to our text package.

All of our institutions are special places and we are indebted to many col- leagues who have directly or indirectly contributed to this project. At Kelley, special thanks to Steve Whiting, Brian Blume (now at University of Michigan –Flint) and Jason Pierce who have all used the fi rst edition of this book in their own classes and subsequently provided insights and feedback that have been instrumental in this new edition. Tim Baldwin would also like to acknowledge Al Oak, Fred Green, Denny Southerland, Bruce Breeden, and his many other great friends and colleagues at Cripe Architects and Engineers. He treasures that association, and many lessons from his connection there are incorporated into this text.

At Fresno State, special thanks to Jim Schmidtke, Brian Lyons (now at Wright State), Jill Bradley-Geist, and Rudy Sanchez for their insights and obser- vations that have improved various aspects of the second edition. At DePaul, special thanks to Pat Werhane and Laura Hartman for providing access to their perfected course materials on business ethics. Thanks also to colleagues Ken Thompson, Erich Dierdorff, Alyssa Westring, Stephanie Dorn, Ray Coye, and Patricia Spencer for their many hall conversations that helped to inform the development of this book.

We are all indebted to John Weimeister, Jane Beck, Diane Nowaczyk, Anke Weeks, and Michelle Heaster of McGraw-Hill, who have supported this project with zeal and who love the author team more than ice cream.

A hearty thanks to you all! We also gratefully acknowledge a sterling set of reviewers who include:

Valerie Atherley Suffolk University

Forrest Aven University of Houston, Downtown

Erica Berte Indiana University–Purdue University, Columbus Center

Scott Bryant Montana State University

Marian Crawford University of Arkansas, Little Rock

George De Feis Iona College

Beverly Dennis Alaska Pacifi c University

Megan Endres Eastern Michigan University

Mamdouh Farid Hofstra University

Ann Fischer University of Pennsylvania

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xxviiACKNOWLEDGMENTS

Allen Frazier Harding University

Mahmoud Gaballa Mansfi eld University

Javier Garza Cerritos College

Michele Gee University of Wisconsin, Parkside

Barry Gold Pace University, NYC

Joan Hartley Portland Community College

Merrily Joy Hoffman San Jacinto College Central

Melissa Houlette College of Mt. Saint Joseph

John Humphreys Texas A&M University, Commerce

Sharron Hunter-Rainey North Carolina Central University

Uma Iyer Austin Peay State University

John Jemison Southwestern Assemblies of God University

Sirkwoo Jin Merrimack College

Camille Johnson San Jose State University

Paul Johnson Western Carolina University

Dorothy Kirkman University of Houston, Clear Lake

Mary Beth Klinger College of Southern Maryland

Jack Kondrasuk University of Portland

Arlene Kreinik Western Connecticut State University

Don Larsen Montana State University, Billings

Marc Lavine University of Massachusetts, Boston

Lee Lee Central Connecticut State University

David Maddox Regis University

Kimberly Melinsky College of St. Rose

Frances McDonald Nova Community College, Annandale

Christine Miller Tennessee Tech University

Tracy Miller University of Dayton

Leann Mischel Susquehanna University

Rakesh Mittal New Mexico State University, Las Cruces

Lam Dang Nguyen Palm Beach State College

David Nino University of Houston, Downtown

Gianna Phillips Golden Gate University

Emily Porschitz Keene State College

Rosemarie Reynolds Embry Riddle Aero University, Daytona Beach

DeShawn Robinson-Chew Nova Community College, Woodbridge

Nancy Rossiter Jacksonville University

Golnaz Sadri California State University

Christy Shell Houston Community College, Northwest College

Art Shriberg Xavier University

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xxviii ACKNOWLEDGMENTS

Paula Silva California State University, Fullerton

C. Mike Smith Roanoke College

George Smith Albright College

Chester Spell Rutgers University, Camden

Shane Spiller Western Kentucky University

Gil Taran Carnegie Mellon University

Pat Thompson Virginia Commonwealth University

Neil Tocher Idaho State University

Tyra Townsend University of Pittsburgh

William Turnley Kansas State University

Anthony Urban Rutgers University, Camden

Alix Valenti University of Houston, Clear Lake

John Watt University of Central Arkansas

Barbara Wech University of Alabama, Birmingham

Joann White Jackson State University

Robert Yamaguchi Fullerton College

John Yudelson California State University, Channel Islands

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xxix

BRIEF CONTENTS

About the Authors vi Preface viii Walkthrough xix Acknowledgments xxvi

PART ONE Personal Skills

1 Organizational Behavior and Your Personal Effectiveness 2 2 Managing Stress and Time 40 3 Solving Problems 76

4 Making Ethical Decisions 118

PART TWO Interpersonal Skills

5 Communication 156 6 Motivating Others 194 7 Managing Employee Performance 236 8 Using Power and Infl uence 272 9 Leading Others 308

PART THREE Group and Organizational Skills

10 Team Effectiveness 340 11 Resolving Confl ict Through Negotiation and Mediation 376 12 Recruiting, Selecting, and Retaining Talent 416 13 Culture and Diversity 446 14 Making Change 494

Endnotes 534 Glossary 554 Index 564

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CONTENTS

About the Authors vi

Preface viii

Walkthrough xix

Acknowledgments xxvi

1 PART ONE PERSONAL SKILLS

MANAGE WHAT? 4 Making the Business Case for People Management

Skills 4 Using OB Evidence Instead of Just Intuition 4 Making a Personal Improvement 4 Describing Yourself and Your Style: Expanding Your

Self-Awareness 4

INTRODUCTION 4 Success Through People Management 6 Playing for Keeps: Getting Serious About OB Right

Now 10 Becoming a Great People-Manager 12

CHAPTER 1 Organizational Behavior and Your Personal Effectiveness Learning About Organizational Behavior Is Hard 14

LEARNING AND PERSONAL IMPROVEMENT 19 Personal Effectiveness: The Foundation of Great

Management 19 A Model of Self-Management 22

BUILDING SELF-AWARENESS 27 Self-Awareness: The Key to Successful Learning and

Growth 27 Individual Differences and Their Importance 27

CONCLUDING NOTE 34

2 MANAGE WHAT? 42 Getting a Priority Done Under Stress 42 Overcoming the Two Biggest Time Management Traps 42 Minimizing Your Chances of Choking in a Pressure Situation 42 Making Changes in a Workplace to Lower Stress and Enhance (Not Lower) Productivity 42 INTRODUCTION 42

Personal and Organizational Consequences of Stress 44

Some Stress Is Good 44 Stress Is Personal: Individual Differences and Their

Relationship to Stress 45

COMMON SOURCES AND CAUSES OF STRESS 48 Traumatic Events vs. Daily Hassles 48 Role Confl ict and Ambiguity 49 Exhaustion of Resources and Burnout 50 Emotional Labor 51 High Demands and Low Control 52

CHAPTER 2 Managing Stress and Time STRESS MANAGEMENT STRATEGIES 53

The Importance of Matching Strategies with Causes 53

Prevention Strategies 54 Avoiding Choking 56 Coping Strategies 59 Outlets for Relief/Dealing with Stress in the

Moment 61

TIME MANAGEMENT FUNDAMENTALS 62 First Be Effective, Then Be Effi cient 62 Plan the Work, Then Work the Plan 66 Know Yourself and Your Time Use 67 Fight Procrastination 68

WORKPLACE CULTURES THAT FOSTER HIGH PERFORMANCE WITH LOWER STRESS 69

CONCLUDING NOTE 71

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3 MANAGE WHAT? 78 Defi ning and Structuring a Vague Problem 78 Avoiding Common Decision Errors 78 Excelling in a Case Interview 79 Learning from Past Decisions 79 INTRODUCTION 79 THE CHALLENGE OF PROBLEM SOLVING 79 WHY SMART PEOPLE MAKE BAD DECISIONS 80

Intuition 80 The Ladder of Inference 82

CHAPTER 3 Solving Problems Six Ways People Exercise Poor Judgment Without

Knowing It 84 Overcoming Judgment Biases 89

SOLVING PROBLEMS EFFECTIVELY 91

A PROBLEM-SOLVING FRAMEWORK: PADIL 92 Defi ne and Structure the Problem 92 Generate Creative Alternatives 102 Decide on a Solution 105 Implement 109 Learn and Seek Feedback 110

CONCLUDING NOTE 112

4 MANAGE WHAT? 120 Making a Diffi cult Ethical Choice 120 You Be the Ethicist 120 Creating a Culture That People View as Fair 120 Being a Responsible Whistle-Blower 120 INTRODUCTION 121 ETHICS: MAKING THE TOUGH CHOICES 123 Recognizing Ethical Issues 123

SIX STEPS TO MAKING AN ETHICAL DECISION 128

Step 1: Gather the Facts 128 Step 2: Defi ne the Ethical Issues 128 Step 3: Identify the Affected Parties, Consequences,

and Obligations 132 Step 4: Consider Your Integrity 134 Step 5: Think Creatively About Actions 137 Step 6: Check Your Instincts 139

FAIRNESS IN THE WORKPLACE 139 Economics 139 Equality 140 Justice 140

MANAGING JUSTICE PERCEPTIONS 140 Distributive Justice 140 Procedural Justice 141 Interactional Justice 143

NAVIGATING COMMON MANAGERIAL ETHICAL SITUATIONS 146

Work Assignments and Opportunities 146 Performance Evaluation 147 Punishment and Discipline 147 Harassment 148 Family and Personal Issues 148

CONCLUDING NOTE 150

CHAPTER 4 Making Ethical Decisions

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PART TWO INTERPERSONAL SKILLS

5 MANAGE WHAT? 158 Selling an Idea to Your Boss 158 The Elevator Pitch: Making Your Case in a Very Short Time 158 Fixing a Typically Bad PowerPoint Presentation 158 Actively Listen to Understand a Problem 158 INTRODUCTION 158 CREATING PERSUASIVE AND STICKY MESSAGES 160

Overcoming the Curse of Knowledge 160 Audience Analysis 162 The Fundamental Elements of Persuasion 162 Making Messages Sticky: The SUCCES Model 165

DELIVERING POWERFUL MESSAGES 169 The Basics of Effective Presentations 169

CHAPTER 5 Communication Presenting Plans That Bosses (and Others) Can

Approve Of 176 Effective Use of PowerPoint and Visual Aids 177

CHOOSING YOUR COMMUNICATION MEDIUM 179

About E-Mail 182

ACTIVE LISTENING 183 The Paradox and Importance of Active Listening 183 Traps and Barriers to Active Listening 184 Principles of Effective Listening 187

CONCLUDING NOTE 189

6 MANAGE WHAT? 196 Taking Over as Manager: Building a More Motivational Workplace 196 Dealing with the Unmotivated Person 196 Motivating in an Economic Downturn 196 Motivating People in a Foreign Country 196 Enriching the Boring Job 196 INTRODUCTION 197

THE MULTIDIMENSIONAL NATURE OF PERFORMANCE 199

FRAMING MOTIVATION CHALLENGES AND IDEAS: THE EXPECTANCY THEORY 199

Why Capable People Are Not Motivated 201

THE PERSON AS A SOURCE OF MOTIVATION 203 An Equity Approach to Motivation 204 The Platinum Rule 206 McClelland’s Learned Needs 207

CHAPTER 6 Motivating Others THE JOB AS A SOURCE OF MOTIVATION 211

The Job Characteristics Model 211

THE MANAGER AS A SOURCE OF MOTIVATION 217 Goal Setting 217 Reinforcement Theory and Behavior Modifi cation 220 Examples of Behavior Modifi cation in the

Real World 221 The Effect of Reinforcers on Employee Performance

Improvement 227

CONCLUDING NOTE 230 Putting It All Together to Increase Motivation 230

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7 MANAGE WHAT? 238 Critiquing an Existing Performance Evaluation Form 238 Evaluating Job Performance 238 Managing Both the Problemand the Star Employee 238 Conducting an Effective Performance Appraisal Feedback Session 239 INTRODUCTION 239

JOB PERFORMANCE 240

JOB ATTITUDES 242 Job Satisfaction 242 Organizational Commitment 243 Organizational Cynicism 244

PERFORMANCE MANAGEMENT: THE DAY-TO-DAY WORK OF GREAT MANAGERS 244

SETTING EXPECTATIONS AND EVALUATING PERFORMANCE 246

Ensuring Goal Commitment 247 Observing and Assessing Performance 247 Defi ning Job Performance Criteria: Behavior and

Results 248

CHAPTER 7 Managing Employee Performance Assessing Behavior, Not Traits 249 Using Multiple Methods to Assess Behavior and

Results 249 Absolute Assessment Techniques 250 Relative Assessment Techniques 250 Using Multiple Sources of Data or People 251

PROVIDING EFFECTIVE FEEDBACK 253 The Principles of Good Feedback 253 Managing Perceptions of Fairness in Performance

Management 255

DEALING WITH THE PROBLEM EMPLOYEE 256 Diagnose the Problem 257 Hold a Performance Improvement Discussion 257 Train Employees When Appropriate 259 Making a Reassignment or Termination Decision 260

RECOGNITION AND REINFORCEMENT: MANAGING THE STAR 260

Understanding Star Performers 262 Engaging the Star Performer 262

COACHING FOR EMPLOYEE GROWTH 263 Coaching vs. Mentoring 264

CONCLUDING NOTE 265

8 MANAGE WHAT? 274 Infl uencing Without Formal Authority 274 Selling an Idea to Your Boss 274 Making a Positive First Impression 274 Building a Personal Network That Enhances Your Power 274 INTRODUCTION 274 Authority and Infl uence 275 Dependence and Networks 275

THE SOURCES OF POWER AND INFLUENCE 278 Bases of Power 278 Norms and Conformity 280

INFLUENCING WITHOUT AUTHORITY 282 Frequency and Effectiveness of Different Infl uence

Tactics 282 Social Infl uence Weapons 285

CHAPTER 8 Using Power and Influence MANAGING YOUR BOSS 291

General Strategies for Managing Your Boss 292 Managing Your Boss Through Effective

Communication 292

PROFESSIONALISM: A SOURCE OF TRUST AND RESPECT 293

Building Positive Relationships 294 Power Etiquette and First Impressions 296

CONCLUDING NOTE 303

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9

10

MANAGE WHAT? 310 Making the Transition to a Leadership Position 310 Leading People to Performance Beyond

Expectations 310 Leading People Older than Yourself 310 Developing Yourself as a Leader 310

INTRODUCTION 310 Leadership Matters 311 The Full Range of Leadership 313

PERSONAL CHARACTERISTICS OF LEADERS 315 Important Personal Traits in Leadership 315 Characteristics That People Admire 316

TRANSACTIONAL LEADERSHIP 317 Leading Through Transactions 317 Leader-Member Exchange 318 Transactional Leader Behaviors 318

MANAGE WHAT? 342 Helping the Highly Cohesive but

Low-Performing Team 342 Getting a Team Started: Leading

the First Meeting 342 Dealing with a Problem Team Member 342 Forming and Leading a Virtual Team 342

INTRODUCTION 342

WHEN DO TEAMS MAKE SENSE? 343

DIFFERENT TEAMS—DIFFERENT CHALLENGES 344

HIGH-PERFORMING TEAMS 345 The High-Performance Team Scorecard 346 The Five Disciplines of High-Performing Teams 346

MANAGING THREATS TO TEAM PERFORMANCE AND DECISION MAKING 355

Information Processing Biases 356 Social Loafi ng and Self-Limiting Behaviors 357

CHAPTER 9 Leading Others

CHAPTER 10 Team Effectiveness

TRANSFORMATIONAL LEADERSHIP: GETTING PERFORMANCE BEYOND EXPECTATIONS 322

Articulating a Vision 323 Providing an Appropriate Model 324 Fostering the Acceptance of Group Goals 325 Communicating High-Performance Expectations 326 Providing Individualized Support 327 Providing Intellectual Stimulation 328 Putting the Full Range of Leadership into Action 329

BECOMING A LEADER 330 Key Actions That Impact Leadership

Development Success 331

CONCLUDING NOTE 334 Dare to Lead 334

Social Conformity 358

EFFECTIVE TEAM INTERVENTIONS 360 Holding Effective Meetings 360 Understanding Member Profi les 361 Building Team Cohesion 362 Conducting After-Action Reviews and Process

Checks 364 Dealing with a Free-Rider 364

CREATIVITY IN TEAMS 365 A Climate of Trust and Risk Taking 365 Creative Problem-Solving Techniques 366

VIRTUAL TEAMS AND MEETINGS 368 Electronic Meetings 370

CONCLUDING NOTE 372

PART THREE GROUP AND ORGANIZATIONAL SKILLS

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11

12

MANAGE WHAT? 378 Resolving a Team Dispute 378 Negotiating an Agreement Between

Confl icting Parties 378 Starting from a Position of Strength 378 Getting Beyond Failed Negotiations 378

INTRODUCTION 378

TYPES OF CONFLICT AND THEIR EFFECTS 380

MANAGING CONFLICT 382 Diagnosing Confl ict Sources 382 Matching Confl ict Styles with Situations 385 Seeking Superordinate Goals 391

EFFECTIVE NEGOTIATIONS 391 To Negotiate or Not? Recognizing Negotiation

Situations 391 The Negotiation Scorecard: Outcomes of an Ideal

Negotiation 393 Win–Win Negotiation 393

MANAGE WHAT? 418 Expanding Your Pool of Candidates: Using Effective

Recruiting Tactics 418 Choosing the Best Person for a Role 418 Conducting a More Effective Selection

Interview 418 Retaining a Talented Employee 419

INTRODUCTION 419

CHAPTER 11 Resolving Conflict Through Negotiation and Mediation

CHAPTER 12 Recruiting, Selecting, and Retaining Talent

STAGES OF EFFECTIVE NEGOTIATIONS 394 Negotiation Preparation 394 Understanding the Needs of Other Parties 397 List and Discuss Possible Options 397 Employing Process Tactics During Negotiations 399 The End of the Negotiation 404 Evaluate How Well It Went 405

MEDIATION 406 When Is Mediation Used? 407 Trust Building: The Foundation of the Mediation 408 The Mediation Process 408

CONCLUDING NOTE 412

SELECTING PEOPLE FOR ROLES 419 Choosing the Right People for the Right Jobs 419 Clarify the Job Context 421 Establish a Process 424 Recruit Talented Applicants 425 Decide on Methods and Assess 429

RETAINING YOUR BEST TALENT 440

CONCLUDING NOTE 442

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13 MANAGE WHAT? 448 Will I Fit In Here? Decoding an Organization’s Culture 448 Avoiding Culture Shock 448 Making a Culturally Diverse Team Productive 448 Building Your Own High-Performance Subculture 448 INTRODUCTION 449 UNDERSTANDING CULTURE AND ITS IMPORTANCE IN ORGANIZATIONS 450

Making a Cultural Choice: The Competing Values Model 452

An Alternative View of Culture 454 Is One Type of Culture the Best? 455

ORGANIZATIONAL STRUCTURE: A KEY CULTURAL INGREDIENT 455

Structure Infl uences Behavior 456

PEOPLE MAKE THE PLACE: PERSON–ORGANIZATION FIT 458

The ASA Framework 458 Cultural Adaptation: Socialization and Onboarding

Employees 460

CHAPTER 13 Culture and Diversity NATIONAL CULTURAL DIFFERENCES 461

Managing People from Different Cultures 461

INCLUSIVE CULTURES 466 Characteristics of Inclusive Cultures 466 The Payoffs from Inclusive Cultures 469

WORKING PRODUCTIVELY WITH DIVERSE PEOPLE AND TEAMS 470

Building Awareness 471 Understanding Differences 473 Taking Action 476

BUILDING “PEOPLE-FIRST” HIGH-PERFORMANCE CULTURES 477

How Cultures and Subcultures Are Created: You Can Make a Difference 478

The Characteristics of High-Performance Cultures 478

Corporate Examples of High-Performance Cultures 484

CULTURAL AUDITS 485 Common Areas to Assess in Cultural Audits 486 Following Up a Cultural Audit 487

CONCLUDING NOTE 489

14 MANAGE WHAT? 496 Converting an Organizational Problem into an Achievable Change Initiative 496 Creating Urgency for a Change 496 Dealing with Change Resisters 496 Evaluating a Change Initiative 496 INTRODUCTION 497 THE CHALLENGE OF CHANGE 497

GENERAL MODELS OF THE CHANGE PROCESS 499

Lewin’s Unfreeze-Change-Refreeze Model 499 Punctuated Equilibrium 501 Bridges’ Model of Transitions 501 Kotter’s Eight Stages of Change 503 McKinsey 7S Framework 506

A PRACTICAL MODEL OF PLANNED CHANGE 508

Structuring the Problem 508 Contracting with Those Involved in the

Change 509 Externalizing the Threat/Enemy 512 Defi ning Goals in Terms of Results Instead of

Activities 512

CHAPTER 14 Making Change COLLECTING DATA AND PROVIDING FEEDBACK 513

Different Methods of Collection 513 Providing Feedback 515 Diagnosing Change Readiness 517 Looking for Small Wins to Generate Momentum 517

IMPLEMENTING INTERVENTIONS 517 Types of Interventions 518 Framing, Reframing, and Selecting Interventions 521 Communicating What You Are Doing 522

OVERCOMING RESISTANCE TO CHANGE 523 Accelerating Change, Reducing Opposition 523 Strategies for Overcoming Resistance 524 Managing Organizational Cynicism 525

EVALUATING AND SUSTAINING CHANGE EFFORTS 527

CONCLUDING NOTE 529 Stay Focused on the Basics 529

Endnotes 534

Glossary 554

Index 564

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v

2

O B J E C T I V E S

PART ONE PERSONAL SKILLS

KO 1-1 Describe the importance of people skills for achieving business success.

KO 1-2 Describe what is meant by evidence-based management.

KO 1-3 Defi ne organizational behavior. KO 1-4 Explain the role of organizational

behavior and evidence-based management in effective management.

KO 1-5 Explain the steps involved in making a personal change.

KO 1-6 Describe the importance of self-awareness in becoming an effective manager.

1 Organizational Behavior and Your Personal Effectiveness

KNOWING DOING

“If you want to be a great

manager, the most fundamental

lesson is that it starts with

you. Know yourself. Listen to

feedback. Build on your strengths.

Do what you say you will do.

Build a network of support. Be

positive. If we can find people

who do those things well, they

tend ultimately to be successful

managers.”

— Al Oak , Chief Executive

Officer, Cripe Architects

& Engineers

After reading this chapter, you should be able to:

DO 1-1 Develop a strong argument for the importance of people-skill development.

DO 1-2 Persuade a colleague to utilize evidence-based methods in management interventions.

DO 1-3 Apply evidence-based methods of self-management to make a personal improvement.

DO 1-4 Solicit high-quality feedback consistently with others.

DO 1-5 Demonstrate self-awareness by accurately describing your strengths and developmental needs.

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> > Case: eHarmony

F ounded in 1998 by Dr. Neil Warren and his son-in-law, Greg Forgatch, eHarmony

was targeted to a segment of the e-dating market that had not been well served: singles seek- ing serious and sustainable rela- tionships. That is, unlike other e-dating sites emerging at the time, the key selling point of eHarmony was matching people on the basis of long-term compatibility.

In an effort to create such long- lasting matches, Warren and his team felt they had to get much more information on singles than had been typically solicited by matchmaking services. Toward that end, before the launch of their website, they surveyed over 2,000 couples in an effort to discern the most critical personal informa- tion required to successfully match people for the long term. The result was the creation of the eHarmony Relationship Questionnaire, which had to be fi lled out by anyone who wanted to become an eHarmony member. Although originally much longer, today the questionnaire is 258 questions and takes about 45 minutes to complete.

Dr. Warren claims that the length of the questionnaire and the involve- ment required is an important part

of the process because, since it is so time-consuming to sign up, eHarmony people self-select. This means that only those willing to go through the extensive process are ultimately included on the site. As Dr. Warren notes, “There is a shared sense of investment to be part of eHarmony. A full completion of the questionnaire says in effect, ‘I’m really serious about this . . .’”

Today, eHarmony is millions of members strong and claims tens of thousands of successful matches. TV commercials regularly trumpet the success of their system and the many wonderful long-term matches and marriages that have resulted.

1. Relative to other matchmaking services, why has eHarmony been so successful?

2. What is it about the eHarmony approach that seems to promote long-term matches? Why is self- awareness so important here?

3. What are the most important things you would want to know

about a potential partner? If you were to see two eHarmony pro- fi les, what would be the most important aspects of a match? For example, would you look solely for shared interests and preferences?

4. List a few questions that you think might be on the eHarmony relationship questionnaire.

5. If you were to become an eHar- mony member, would you be fully honest, or put a positive spin on your profi le? Similarly, would you post a “touched up” picture? In that regard, critique the following post with respect to the individual’s and eHar- mony’s goals: “Bald, short, fat, and ugly male, 53, seeks short- sighted woman with tremendous sexual appetite.”

6. Pretend you are to match two members of your class team. Gather some information, hypo- thetically make the match, and then refl ect on how you went about the matchmaking process.

BUILDING SELF-AWARENESS FOR LOVE AND PROFIT

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1. Making the Business Case for People Management Skills You have been asked to serve on a committee at your fi rm and make recommendations for cutting costs in response to a weak economy and a downturn in revenue. The very fi rst meeting is kicked off by your company president who goes around to each committee member with the goal of identifying any “untouchables”—that is, those areas that committee members feel should be off limits to cuts or at least targeted as a last resort. Unfortunately, you are seated at the immediate right of your president and he asks you to go fi rst. You take the opportunity to suggest that the fi rm should do nothing that would detract from the quality of people management you have or erode the people-oriented culture. You even quote from your long-lost organizational behavior textbook (burned in a weenie roast celebration years ago) that “ few things matter more to the success of a fi rm than the way people feel about how they are managed. ” The president seems to accept this.

But the VP of Research and Technology is so angry he is about to burst a blood vessel. He rises and in an angry tone says, “With all due respect, I have to say that all this stuff about the importance of people management strikes me as non- sense. I have nothing against our management development efforts, but if you give me the same amount of money for new technology and research funding, I will turn it into far more of a benefi t for this fi rm than we will get from trying to improve our managerial performance. In fact, I have two specifi c problems: (1) I see no connection between the quality of our people management and important outcomes that relate to our “bottom line,” and (2) good people management is so fuzzy that there really is no way to determine who is doing a good job and who is not, anyway.”

The president nods. “Hmm, he may have a point.” He then looks at you and says, “I suspect you disagree. So go ahead and make a business case for me as to why we should devote signifi cant resources to building better people management and a people-oriented culture. But I don’t want any soft ‘touchy-feely’ babble. Be specifi c and use examples.”

2. Using OB Evidence Instead of Just Intuition You have heard so many stories of bad managers and read so many accounts of poor decisions that you are determined to be more “evidence-based” in your own organizational career. But why are more decisions not made on good research evidence? How do you go about fi nding more evidence? Where would you fi nd such evidence, and how might you apply it to commonly faced managerial situations such as how to set appropriate goals, motivate high effort, or build strong employee commitment and a high-performance culture?

3. Making a Personal Improvement You have been in your fi rst job for two years and are itching to get promoted as quickly as possible. In your last performance review, however, your boss identifi ed time management as a weakness. You have never felt that your time management was superb, but you did not know that weakness might affect your career advancement. In any case, you are now committed to improving your management of time. However, realizing that old habits die hard and that accomplishing personal change is very diffi cult, you know you will have to do more than just “hope” to change.

So how would you proceed to improve yourself? What would you do fi rst? What strategies would give you the best chance of actually improving your time management skills signifi cantly?

4. Describing Yourself and Your Style: Expanding Your Self-Awareness “Tell us about yourself” is the fi rst query in your introductory meeting with the four people who will be reporting to you in your new managerial job. You naturally struggle with where to start. You have been a great individual contributor for four years, but everyone has told you that managing people is a very different responsibility. And the thing that really scares you is you have heard sarcastic joking around the fi rm about a colleague who got promoted to manager and how with that promotion the fi rm “lost its best analyst and found its worst manager.”

So what should you tell the group about yourself and how you will manage? What would be most relevant and useful? Based on your own self-assessment, what particular characteristics would you highlight? What should you be doing to know yourself even better so you can answer this question more confi dently in the future? What would it be like to be managed by you?

Introduction

If you’re like most students who are new to management courses, you’re prob- ably preparing to be totally underwhelmed and perhaps a little skeptical about what this text and course have to offer. Our experience tells us that you probably

MANAGE WHAT ?

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CHAPTER 1 Organizational Behavior and Your Personal Effectiveness 5

come to this course with at least one of the following concerns (or perhaps com- plaints). First, you may be concerned about the overall usefulness of the knowl- edge contained within this text. In fact, you may have heard from others that your management course will be nothing more than common sense, bloated theory, and will be essentially a “blow off.” Even if you haven’t heard such things about this course, you might feel that at the end of the day management can’t be taught. Unlike say, accounting, where there are clearly specifi ed rules and principles to follow, you may believe that management isn’t something that can be taught in a course, much less from a textbook. Second, as you look out at the decades of organizational work life ahead of you, management may seem so very unimportant compared to functional areas like fi nance, marketing, and accounting. These functions, after all, represent the major departments or units in organizations and they house critical jobs—the very jobs recruiters are post- ing to fi ll. Third, you may feel that your career is going to be one that is built on your technical expertise and managing others is simply not something you want to do or will ever do. As such, you might feel like this course is just one more in a long line of required educational obligations on the road to getting your degree. You are not alone if you have such concerns and we are not surprised—we face such skepticism prior to every course we teach. Indeed it was our sense that organizational behavior and management courses are undervalued by business students (at every level)—relative to the importance of those topics for success in the real world—that stoked our passion for a new kind of textbook. Specifi cally, the idea for this book was born out of three important observations we shared from our collective experience of teaching organizational behavior and manage- ment courses to college students and practicing managers.

1. Managing people is a distinct and critically important skill set. Our most infl uential business leaders have always recognized that manage- ment and people skills —not just fi nancial and technical knowledge—are critically important to the success of individuals and organizations. Yet, as we will discuss shortly, such skills often do not get the educational attention they warrant.

2. Evidence for the importance of management may be less accessible to you, but is nonetheless abundant and clear. The research evidence is overwhelmingly clear that the possession of management skills cre- ates a competitive advantage for individuals and organizations. Although management skills appear on the surface to be relatively straightforward, the chief complaint of most senior leaders is that they can’t fi nd enough competent people-managers.

3. Most OB and management textbooks do not focus on developing the most critical management skills. Sadly, most existing books and courses on managing organizational behavior are not well suited to help- ing students develop and refi ne the skills they really need to become great managers. Most textbooks are accurate, informative, and descriptive but lack a decision- or action-oriented approach that allows for real skill development.

With those observations in mind, we insisted that the focus of this book be on the application of organizational behavior evidence to the skills required to be a great manager and organizational contributor. That is, we do not want you to just know and understand a book full of ideas—we want you to be able to do something with that knowledge.

A simple philosophy that permeates this book is that organizations succeed through people. If there is one ultimate truth of organizational life it is this: Orga- nizations big and small, public or private, for profi t and not, only succeed when

Practice this! Go to www.baldwin2e.com

“Take away my people, but leave

my factory, and soon grass will

grow on the factory floor. Take

away my factory, but leave my

people, and soon we will have a

new and better factory.”

— Andrew Carnegie

“I will pay more for the ability to

handle people than for any other

talent under the sun.”

— John D. Rockefeller

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PART ONE Personal Skills6

their people succeed. A great product doesn’t market itself—great marketing peo- ple do. A new accounting practice doesn’t implement itself—outstanding accoun- tants do. An organization doesn’t simply grow sales—salespeople increase their productivity. And yet despite this simple principle, a recipe for how to get people to succeed (and thus organizations) remains incredibly elusive. To be certain, there is not one formula or playbook that leads people to be successful in orga- nizations. But the best chance organizations have for creating successful people is by fi nding and nurturing great managers. The most successful organizations are those with work environments that are personally fulfi lling, rewarding, and challenging. And the single most important factor in creating such successful environments is great managers.

Of course not all managers are very good, or for that matter even competent. Indeed, we laugh at the clueless antics of managers in comic strips like Dilbert, movies like Offi ce Space, and television shows like The Offi ce. In these examples, and perhaps from your own personal experiences with bad bosses, we see the impact on people and fi rms when managers act in dysfunctional ways. In real life, however, such managers have a toxic effect on the people they manage, as well as their own careers, and it’s far from a laughing matter. In the following sections, we will talk about what managers do to be successful and how organi- zational behavior knowledge is a contributing factor.

Success Through People Management

The hero or heroine in this text is that of a manager. You might fi nd that to be a bit odd given most peoples’ reaction to the word “manager.” For decades, the term “management” has had a decidedly negative connotation. Consider the fol- lowing account by Professor Denise Rousseau, former President of the Academy of Management: 1

Management was a nasty word in my blue collar childhood, where everyone in the family was affected by how the company my father worked for managed its employ- ees. When the supervisor frequently called my father to ask him to put in more over- time in an already long work week, all of us kids got used to covering for him. If the phone rang when my father was home, he’d have us answer it. We all knew what to say if it was the company calling: “Dad’s not here.” The idea of just telling the super- visor that he didn’t want to work never occurred to my father, or anyone else in the family. The threat of disciplinary action or job loss loomed large, reinforced by din- nertime stories about a boss’s abusive behavior or some inexplicable company action.

The term “manager” can evoke notions of a person who is power hungry and incompetent and can’t do “real” work themselves. This reputation of managers as people who abuse and exploit their subordinates and care only about their own personal success and advancement has been reinforced over the decades by real anecdotes of bad bosses. 2 These negative connotations of managers are unfor- tunate because volumes of research studies and organizational examples have shown that when managers get it right, employees, organizations, customers, and the managers themselves all win. For example, meta-analytic studies (that is, the syntheses of many studies) have demonstrated that the fi nancial performance of organizations is positively associated with management practices like selec- tive hiring, succession planning, reward systems, performance management, and training and development. 3 Other research indicates that managers are a key component in reducing high employee-related costs, such as turnover and coun- terproductive behaviors (for example, theft and the abuse of resources), as well as increasing employee and team performance, cooperative behaviors, commit- ment, and employee satisfaction. 4 Still other studies have shown that personal career outcomes, such as speed of progression and leadership effectiveness, stem

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CHAPTER 1 Organizational Behavior and Your Personal Effectiveness 7

from competent and supportive management. 5 Finally, it is also clear that poor management practices (see the section “Management Live 1.1”), such as abusive supervision and harassment, have substantial harmful effects on individuals and their organizations, resulting in counterproductive behavior, low performance, and psychological stress, as well as career derailment and fi nancial loss. 6 Management skills are also the key elements in what makes for healthy and desirable workplaces. Indeed, the Great Place To Work Institute (GPTWI), which conducts the research on the nation’s best employers for Fortune magazine’s “100 Best Companies to Work for in America” annual article, has found that the single most important element of every great workplace is the trust between employ- ees and management. 7 Such trust stems from the managers’ skill level in those organizations. GPTWI research has found that workplaces with great managers receive more qualifi ed job applications for open positions, experience less turn- over, have lower health care costs, enjoy higher levels of customer satisfaction, and induce greater customer loyalty. While you may not be familiar with the research evidence, we hope none of it comes as a huge shock to you. Anyone would rather have a good manager than an incompetent one. You probably know of someone who is technically or analytically skilled but has few “people skills,” or is de-motivating, or cannot “get along well with others.” Few of us would refute that it takes a competent manager to lead groups who go the extra mile required to achieve highly satisfi ed customers, and so on.

But, having taught OB and management courses for many years, what we fi nd is not typically intuitive to most aspiring managers is that good management is so essential to good business. Management is often characterized as being elementary or “just common sense,” but great management is neither common nor easy, and the existence of so many ineffective managers and toxic organiza- tions attests to that. Indeed, as important as they may be, management skills have proven stubbornly hard to develop; thus making great managers and man- agement rare commodities. Some estimates indicate that nearly 50 percent of

MANAGEMENT LIVE 1.1

What Is the Real Cost of a Bad Manager? A recent advance in research on learning and education is known as value-added analysis. It uses standardized test scores to look at how much the academic performance of students in a given teacher’s classroom changes between the beginning and end of the year. 8 Accumulating evidence suggests that students of a very bad teacher will learn, on average, half a year’s worth of material in one school year. On the other hand, the students in the class of a very good teacher will learn a year and a half’s worth of material—and the cost to the school district of those two teachers is (usually) roughly the same. Moreover, while the United States currently is behind many developed nations in student test performance, researchers have estimated that the gap could be closed simply by replacing the bottom 6 to 10 percent of teachers with others of just average quality. 9

We believe that this same type of value-added approach and mindset is long overdue in management education—and the urgency is great. Given the dismal scores found in recent research on applied management knowledge (see “Management Live 1.3”), imagine the productivity lost and the number of people who have spent time working for an incompetent manager. What truly is the cost of a bad manager? More importantly, what is the value of competent ones? The accumulating evidence reveals that organizations can no longer afford to neglect the development of their managers—the costs are simply too high.

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PART ONE Personal Skills8

MANAGEMENT LIVE 1.2

The Best Places to Work Are Also the Best-Performing Companies Independent fi nancial analysts have studied the fi nancial performance of the “100 Best” companies beginning with the publication of the book The 100 Best Companies to Work for in America (by Robert Levering and Milton Moskowitz, 1994), and have accompanied that with each of the “100 Best Companies” lists from Fortune since that list’s inception in 1998. Using various profi tability indicators, these data illustrate the extent to which the pub- licly traded 100 Best Companies consistently outperform major stock indices over the 10-year periods preceding the publication of the 100 Best lists. It is notable that those companies selected for the 100 Best list generally spend far more on employee benefi ts and services than their counterparts—that is, it is often expensive to be a best place to work. However, the data clearly support that the expense is worthwhile because people ultimately engage more fully, work productively, and lift company performance.

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people moved into management roles essentially fail. 10 In other rather depress- ing surveys, over half of employees have reported they were less than satisfi ed with their current manager and many noted that the worst aspect of their job was their immediate boss. 11 Some even rated their manager as “remarkably bad.” The same skills that will advance your career also happen to be the skills that make an organization a great place to work. And the best places to work also happen to be the highest-performing fi rms. That’s the good news. The bad news is that the reason management skills create a competitive advantage for people and organizations is because they are hard to master and are therefore still quite uncommon.

100 Best Companies to Work For vs. Overall Stock Market 1998–2010

Copyright © 2011 Great Place to Work ® Institute, Inc. All Rights Reserved.

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CHAPTER 1 Organizational Behavior and Your Personal Effectiveness 9

The Central Role of Management in Organizations

One of the reasons that good management is so hard is that few managers, particu- larly aspiring ones, are forced to confront the realities of management early enough to understand them. In Table 1.1 we outline these primary managerial realities.

TABLE 1.1 Managerial Realities

Managerial Reality 1: Management is the process of getting things done through others. This means that your primary role as a manager is to manage other people. Sometimes organizations lose sight of this and ask managers to engage in substantial technical work leaving little room for this primary people-management role. This is, by and large, a costly mistake.

Managerial Reality 2: Managers get rewarded for what their employees do, not for what managers do. In other words, your success as a manager occurs only when others succeed. The extent to which you can make others successful in their jobs will determine how successful you are as a manager.

Managerial Reality 3: People join organizations but they leave managers. Managers play such an important role in peoples’ work life that it is almost trite to suggest that when people leave organizations they do so, in part, because their manager has failed them, failed to fi nd ways to challenge them, promote them, reward them, and provide good opportunities.

Managerial Reality 4: People generally manage the way they themselves have been managed. As we discuss later in the chapter, we learn by watching. If you have had great bosses in your previous work experience, you should be excited about your prospects to be an effective manager. If on the other hand, your managerial models have been largely ineffective, you will likely have to work extra hard to break away from their methods.

Managerial Reality 5: People problems are far more complex than any other organizational problem. When asked what keeps managers awake at night, the response is rarely, “We don’t know how to market a product well” or “I’m not sure how we’ll integrate our software system with the old legacy system.” Rather, the response is almost always about people, “Jim is a great performer, but he’s a lousy teammate,” “Marsha’s husband is sick, so she’s taking six weeks off. How will I get others to take on her work?” and so forth.

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Managing people is indeed complex work requiring a wide variety of com- petencies. These competencies can generally be sorted into one of three broad categories: conceptual, technical/administrative, and interpersonal. 12

Conceptual Competencies. Managerial work requires that managers collect and analyze an enormous amount of information. Such information is used to diagnose problems, formulate plans, integrate ideas, and examine effectiveness of current practices.

Technical/Administrative Competencies. Effective management requires that managers be well equipped to understand the functions of business such as accounting, operations, and marketing. Importantly, managers must use their technical/administrative expertise to coordinate activities.

Interpersonal Competencies. Managers are required to interact with, infl u- ence, and lead others. To do so, managers must possess competencies that allow them to negotiate confl ict, communicate, motivate, and develop other people— competencies that require managers to manage relationships with others.

According to the results of a recent large-scale study of 52 managerial occu- pations in the U.S. labor force, all managers’ jobs, regardless of occupation (for example, fi nancial manager, funeral director, CEO, and so on), require profi ciency in these three categories of competencies to be successful. That is not to say that managerial jobs do not differ in their skill requirements; they do. In particular, managerial roles differ substantially in the type of technical expertise required for a given role. For example, although all managers must coordinate activities among employees, sales managers are not coordinating the same activities as production managers. So by and large, managerial work, regardless of the occu- pation, is more the same than it is different. This is generally good news as the skills discussed in this book are largely applicable to any managerial role you will ever fi ll. It is certainly true that you will need to gain expertise in the technical skills associated with the particular occupational role you assume, but the skills presented throughout this book will support your success in that role by help- ing build your conceptual and interpersonal managerial competencies. Further, although such competencies are essential for those wanting to be great manag- ers, our experience is that these competencies are also critical to those wanting virtually any type of career that involves substantial interaction with people (for instance, nurse, sales representative, engineer). Moreover, while such competen- cies are certainly necessary for future success, we would also contend they should have an impact on your performance right now. Decision making, teamwork, confl ict management, and others are fundamental to most any line of work.

Playing for Keeps: Getting Serious About OB Right Now

One of the problems we face as management educators is, quite frankly, try- ing to help our students understand the importance of starting now to develop their managerial skills. The reason for this is twofold. First, students are rightly focused on their fi rst role after college which is not likely to entail full-blown management responsibility. Thus, it’s hard to capture students’ attention when recruiters are on campus seeking applicants for individual contributor roles such as a staff accountant, marketing specialist, or fi nancial analyst position. Second, we fi nd that students simply aren’t aware of how competitive managerial skills will make them in the marketplace and how absolutely detrimental the lack of

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CHAPTER 1 Organizational Behavior and Your Personal Effectiveness 11

such skills will be to their early careers and beyond. In order to explain this sec- ond point more fully, we need to take a quick detour and look at a few important studies about managerial skills and success on the job.

All managers deploy their skills to manage six key general work activities at work, which are as follows: 13 (1) managing human capital (for example, staffi ng, motivating, leading, performance management, and so on); (2) managing tools and technology (for example, production, operations, information technology); (3) managing decision-making processes (for example, gathering information, analyzing data, conducting research); (4) managing administrative activities (for example, budgeting, fi nancial management and control); (5) managing strategy/ innovation (for example, future planning, product development, strategic deci- sions); and (6) managing the task environment (for example, public relations, marketing).

Which of these six activities do you think are most critical or important to a manager’s success? In a recent study utilizing U.S. Department of Labor data from 8,633 managers across all managerial occupations, professors Erich Dier- dorff, Robert Rubin, and Fredrick Morgeson found that while all six activities are seen as important, managing human capital and managing decision-making processes were rated by managers as being signifi cantly more important than the rest. This means that to be successful in a managerial role you will need to pay particularly close attention to how to manage people and gather and analyze information that will enable effective decision making.

In another study, researchers from the Center for Creative leadership tracked young professionals who were viewed by their organizations as having high potential to reach the executive ranks in Fortune 500 organizations. 14 The study followed these professionals over a 20-year period and sought to understand why some of them (all of whom were seen initially as having great potential) did not make it to the top echelon of their organization. The results generated fi ve major themes for why these managers were “derailed” or fell off the track leading to the top: (1) failure to meet their business objectives over time; they simply were not consistent about reaching their goals; (2) they showed an inability to build and lead a team as they progressed in the organization; (3) they exhibited an inability to develop, change, and adapt with the changing times; (4) despite moving into broad management roles, they retained a narrow functional/technical orientation; and (5) they displayed consistent problems with interpersonal relationships. Thus, the fi ndings of this study demonstrate that the rise to the top of a Fortune 500 organization certainly involves getting results, but to do so professionals rely heavily on their ability to manage relationships with others.

So it’s clear from these two powerful studies that interpersonal skills, so- called “people skills,” must be mastered to achieve long-term success in mana- gerial roles. Why then aren’t students knocking down the doors of management professors and enrolling in elective courses where these skills are learned, as opposed to taking yet another fi nance class? Maybe it’s that recruiters simply don’t care about skills involved with managing people and thus students don’t pursue it because there’s no immediate payoff. The evidence suggests just the opposite, however. In a study of 1,300 recruiters, these recruiters rated interper- sonal skills, leadership, communication and adaptability as the most desirable yet scarcest skills present in today’s graduates. These recruiters claim that the possession of such skills is rare among graduates and that recruiters routinely struggle to fi nd these skills in the marketplace of talent.

We have observed that students often think that they can pick up these mana- gerial skills at some later time or that perhaps they’ll learn them on the job. Once again, the evidence doesn’t support such a conclusion. In one study, MBA alumni cohorts spanning a fi ve-year period were asked how often they used various skills and what skill areas they felt needed additional training. The results of that

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PART ONE Personal Skills12

FIGURE 1.1 MBA Skills Acquisition in School and Skills Use After Graduation: A Gap Analysis

From 2008 MBA Alumni Perspectives Survey (Survey Report). GMAC®, GMAT® Graduate Management Admission Council® and Graduate Management Admission Test® are registered trademarks of the Graduate Management Admission Council in the United States and other countries.

0% 0%

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Low Level of Use and High Need for Training

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High Level of Use and High Need for Training

Knowledge of general business functions

Managing the task environment

Managing tools and technology

Foundation skills

Managing administrative activites

Operations skills

Knowledge of human behavior and society

Managing human capital

Managing strategy and innovation

Managing decison-making processes

Generative thinking

Interpersonal skills

Strategic and systems skills

Knowledge of technology, design, production

Knowledge of media communications

and delivery

study revealed a signifi cant skills gap between what is currently being covered in MBA programs and what people report that they ultimately need when they get on the job. That result is illustrated in Figure 1.1 in the upper-right quadrant, which represents the skills MBA alumni reported using most and most in need of additional training. These fi ndings held true regardless of the functional areas in which these MBA alumni were working, including marketing/sales, operations/ logistics, consulting, general management, fi nance/accounting, human resources, and information technology/management information systems. Thus, even after completing an MBA, alumni report needing considerably more development of their interpersonal, decision-making, generative-thinking (creativity), and man- aging human capital skills.

The bottom line is that now is the time to get serious about management skills. If you want to be both competitive in the marketplace and effective on the job, you must start to master managerial skills today. Importantly, master- ing managerial skills should never be to the exclusion of mastering discipline- based technical skills. To be certain, you must become an expert at something. Organizations won’t promote people to sales management positions who are not competent salespersons themselves, nor will they promote a staff accountant to an accounting manager role if the person is not a capable accountant. So do not misunderstand: Technical, fi nancial, strategic, and operational skills are of course important elements in job success and career advancement. But a steadily increasing body of research is showing that what ultimately distinguishes the good from the great achievers is the development and refi nement of their man- agement skills. Thus, the general rule of thumb is as follows: On average, great technical skills get you noticed in organizations and great management skills get you promoted. If you’re playing for keeps, now is the time to invest.

Becoming a Great People-Manager

If managers and good management matter so much, you might wonder why more attention isn’t given to such skills and why good management seems more like the exception rather than the rule. Although there are numerous and sys- temic explanations to these questions, one critical explanation is that learning about managing organizational behavior is fraught with traps and distractions.

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CHAPTER 1 Organizational Behavior and Your Personal Effectiveness 13

For example, although there are hundreds of books on leadership, there are prob- ably less than ten built on a solid foundation of evidence that might be appli- cable across managerial situations. The problem is, as you stare at the long list of books on Amazon.com, how do you decide which ones to read because they will be helpful and which ones to reject as nothing more than a “good read”? Learning about management fi rst requires a critical understanding about what constitutes strong evidence for a given managerial practice. Every consultant, newspaper article, or book on the topic of management uses the phrase “research shows.” Yet, determining the usefulness of such “research” is one of the most vexing problems facing managers today.

Let’s say you’ve injured your back somehow and you go to a doctor who examines you. She proceeds to write you a prescription about which you ask a very reasonable question, “What is this that you’re prescribing?” She says, “Oh, it’s a great drug that everybody has been using lately.” To which you reply, “Well, what does it do?” “It reduces swelling and spasms in muscle tissues.” “Got it,” you remark, “so my problem is muscle spasms?” “Not sure,” the doctor replies, “but it worked for the last guy who was in here for pain in his ankle.” A bit befuddled now, you ask, “Well, has the drug been tested on people with back pain?” She responds, “Not specifi cally, but I’ve had two patients who responded well to it for back pain—I think it should work for you.”

Before you’re half-way out the door, you are hopefully looking for a new doc- tor and you’re certainly not taking this drug. It just doesn’t pass the logic smell test. In this case, you should want to know that the doctor has correctly diag- nosed your injury, that the drug being prescribed is designed specifi cally to treat your injury, and that the drug has been tested and studied in large populations to understand its effectiveness and potential side-effects. Put simply, you should be looking for better evidence.

Unfortunately, this little vignette illustrates how we too often go about apply- ing management concepts. First, like the doctor, we are drawn to solutions to problems that we have heard others say do “work.” Yet such evidence is usually built on rather limited data or information, or more commonly on half-truths — practices or concepts that may be true some of the time in some instances. Sec- ond, we tend to apply solutions broadly, regardless of whether it will specifi cally address the underlying problem. Third, in the absence of credible information or evidence, we make the assumption that the doctor (or another perceived expert) knows best, even if the recommendations don’t stand up to simple logic.

Evidence-based management (EBM) refers to translating principles based on the best available scientifi c evidence into organizational practices and “making decisions through the conscientious, explicit, and judicious” use of such evidence. More specifi cally, evidence-based management includes the following fi ve key practices: 15

1. Learning about cause and effect connections. If you’ve ever pondered whether employee job satisfaction is related to employee turnover, you’re engaging in a fundamental EBM practice of trying to understand the relationships among important organizational factors. Like doctors who attempt to link certain life-style choices (for example, a high-fat diet) to health outcomes (for example, heart disease), management researchers study relationships over time and in different settings in order to draw conclusions about effective management practices.

2. Isolating variations that affect desired outcomes. It’s not enough to know that low job satisfaction may increase employee turnover. In order to practice EBM, one must also attempt to understand the specifi c conditions under which such a relationship might be strengthened or weakened. For example, while job dissatisfaction, on average, may be

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PART ONE Personal Skills14

associated with increased employee turnover, in economically depressed times, such a relationship may be considerably weakened.

3. Reducing the overuse, underuse, and misuse of specifi c prac- tices. If the best available evidence suggests that graphology (hand- writing analysis), for example, is not a good predictor of who will make a good manager, EBM suggests that it is our obligation to discontinue the use of such a practice in selecting our management talent. If, on the other hand, evidence is clear that cognitive ability tests are useful, we ought to seek ways to increase the use of cogni- tive ability testing. To be clear, sometimes practices are useful for one situation, but not for another. Thus, EBM holds that effective manag- ers use practices only as solutions to the problems for which they were developed.

4. Building decision supports to promote practices that evidence vali- dates. Once it is known that certain practices work more often than not under certain conditions, EBM suggests that managers institutionalize such practices through the use of tools (or “Tool Kits” as we do through- out the book) to help keep managerial behavior consistent with the evidence.

5. Creating a culture of evidence-based decision making and research participation. When managers take an evidence-based approach, they also contribute to an organization that values and encourages active par- ticipation in the evidence-based process. For example, in many manufac- turing environments, teams of employees meet weekly to discuss quality control issues. These teams are actively engaged in developing research questions, collecting data, analyzing data and making decisions consis- tent with the evidence they discover.

So where is the research evidence that can serve as the foundation of effec- tive management practices? In short, organizational behavior is the primary fi eld of study that contributes to the foundation of evidence from which to formulate evidence-based management practices. Specifi cally, organizational behavior (OB) is a social science that attempts to describe, explain, and predict human behavior in an organizational context. As such, organizational behavior scientists are dedicated to studying and ultimately prescribing how individuals, groups, and organizations can be most effective. The key to this defi nition is that OB rep- resents the study of people in an organizational context. In other words, the study of OB is concerned with how to achieve important organizational outcomes such as profi tability, productivity, and performance, as well as individual outcomes like employee turnover, commitment, satisfaction, and safety. Organizational behavior certainly does not describe all research on organizations. Indeed, sub- stantial contributions to the study of organizational behavior come from other core social sciences such as sociology, psychology, anthropology, and political science. However, much of what translates into effective managerial practice will be found in the research domain of OB.

Learning About Organizational Behavior Is Hard

Unfortunately, EBM of organizational behavior is not widely practiced. This is not because people believe it’s a bad idea, but rather multiple impediments exist that simply make it diffi cult. One of the key reasons EBM is not widely practiced is that learning about organizational behavior is not straightforward. Indeed, to become a great manager you will have to learn to become something of a “bull- fi ghter,” able to sort out the many myths and misconceptions frequently espoused about what is and is not effective management. Managing organizational behavior

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absolutely requires you get beyond just reading and study. To really learn and master skills, you will have to actively engage in practice and actually experience those skills in your life and work. Certainly, mastering management skills is diffi - cult and the process of learning them can be more challenging than you ever may have imagined. Three key learning challenges are likely to arise that include, but are not limited to: (1) learning how to evaluate and use evidence to make deci- sions; (2) learning how to use management frameworks; and (3) learning how to overcome the knowing-doing gap so prevalent in management development. We briefl y discuss these next.

Evaluating and Using Evidence

Mark Twain once quipped that there are three types of lies: lies, damn lies, and sta- tistics. This aptly describes the dilemma new managers face as they contemplate their most important people-related decisions: namely, differentiating between facts and fi ctions, especially those cloaked as “research.” The biggest impediment here, however, may not be other people, but rather our own experience. That’s right. It’s your own experience that may get in the way of you becoming a great people-manager. One reason for this is that our experience in the world tends to be heavily infl uenced by our belief system and how we view world events. 16

That is, your beliefs about the world—or rather what you want to believe— may often stand in the way of you applying the best available evidence. For example, most people assume that ibuprofen (used in Advil, Motrin, and other products) is highly effective in reducing pain. Yet, a large study found that the relationship between ibuprofen and pain reduction is incredibly low—almost so low as to have little effect on most people (unless of course your pain is associ- ated with infl ammation where ibuprofen is most effective). Similarly, most peo- ple assume that psychotherapy (that is, psychological counseling) is essentially an ineffective treatment for depression. 17 Here again, our beliefs are not accurate because substantial research shows that psychotherapy can greatly improve peo- ples’ well-being. And for most people who have never been in psychotherapy, the way they learn about psychotherapy is through television, movies, and stories. Few competent psychotherapists would agree, however, that movies like Anger Management, What About Bob?, or TV shows like The Sopranos accurately depict the psychotherapeutic process.

For an example closer to home, we routinely ask our students how important grades are to their success on the job. The answer from most is, “not at all.” In other words, students tend to believe that grade point average (GPA) is simply an academic indicator and irrelevant. Yet, recent evidence based on 71 studies suggests that undergraduate GPA is highly correlated with performance on the job in the fi rst year post-college and remains a good predictor of job performance through fi ve years post-college. Graduate school GPA (for example, an MBA) is even more highly correlated with job performance post-graduate school. 18 Even after we present this evidence, students remain in disbelief. “How can this be?” they say. “My brother had a very low GPA in college and is now a star salesperson for an awesome company.” Unfortunately, this sort of conclusion based solely on a very small sample and personal experience (what we call a hasty generalization in Chapter 4) does not lead to the right conclusion. If you care about your future job performance, the right conclusion based on the evidence is that you should put forth great effort in school. GPA captures a high degree of motivation and knowledge accumulation, both of which are immediately important on the job.

The point is that throughout your career in organizations, you will be con- fronted with information and observations and existing practices, and not all of it will be good or even accurate. In many cases, our experience in the world often gets in the way of being able to make this determination because we take for

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PART ONE Personal Skills16

granted relationships we believe exist despite the evidence. It is for this reason that every chapter in this text begins with a discussion on the prevailing myths or conventional wisdom about the topic, with the explicit idea of exposing our “taken for granted” view of the world.

One easy way to begin to understand the usefulness of evidence is to make a distinction between Big E evidence and little e evidence. Big E evidence refers to generalizable knowledge regarding cause and effect connections derived from scientifi c methods. Big E evidence is based upon years of studies, across many different types of samples or contexts, with many different types of jobs, peo- ple, and organizations. Most importantly, Big E evidence represents a form of research which is systematic —meaning that it is planned and methodical and avoids drawing conclusions simply on the basis of opinion or anecdote. Such evidence is often summarized in large scientifi c literature reviews or empirical summaries known as meta-analyses or “studies of studies.” Goal setting (see Chapter 7), for instance, is one such idea that has substantial Big E evidence sup- port. Decades of research supports the idea that setting specifi c and challenging goals increases employee performance, and this fi nding is highly generalizable (applies broadly to most any situation). By and large, when managing organiza- tional behavior, Big E evidence is likely to be the best source for informing prac- tices since it is drawn from years of study across large populations under varying circumstances. Like our doctor example, this is the type of information you want when asking, “Will this management practice work in my offi ce?”

In contrast, little e evidence represents local or organizational specifi c data collection efforts to inform a specifi c decision. Popular quality improvement pro- cesses such as Six Sigma provide little e evidence, important information that helps the organization but may not generalize or translate into other arenas or other organizations. Examples abound of organizations that failed by trying to apply a practice that while wildly successful in another organization didn’t take hold in their own. Thus, while little e evidence may improve decision making in any organization, we must be careful not to apply it broadly.

Learning and Using Evidence-Based Frameworks

It is often said that the absence of evidence is not evidence of its absence. In other words, not every problem you will encounter has been studied with such depth that it constitutes Big E or even little e evidence. In such cases, we encour- age you to begin by seeking evidence-based frameworks that rely on logic and well-developed theory. It may strike you as unusual that, in a skills-oriented book, we do not shy away from discussions of research evidence and theories. In fact, we sought out every good research study we could fi nd. That may seem like a direct contradiction of a skills-based approach, but actually it is central to it. Many students these days are unfortunately led to believe that theoretical means irrelevant or not practical or just simply boring. But in reality, to paraphrase the great sociologist Kurt Lewin, nothing is as practical as a good theory. Our goal is to have a practical skills development text based in the best and most recent theory and research. Short of that, any material becomes just someone’s opinion or cannot rightly be generalized to other situations.

Studies in many fi elds have explored how experts go about attacking particu- lar challenges or problems in practice. What those studies have generally found is that such experts internalize their own “theories in use” or what we call frame- works. That is, they do not have a rote way to act in every situation. However, they do habitually evoke ways of framing problems and considering options. So a great deal of our focus in designing this book was to include frameworks that are conceptually sound but also practical in application. Those frameworks can help you diagnose situations and proceed more thoughtfully. Hopefully, the

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CHAPTER 1 Organizational Behavior and Your Personal Effectiveness 17

frameworks will stick with you and help you know where to start, what informa- tion to get, and what not to do as you face new and different situations.

Yet sometimes even the most nicely crafted framework is baseless with respect to evidence, and recent research suggests that even when well-intentioned manag- ers seek evidence and frameworks to inform their practice, they face enormous amounts of misinformation—some of which is potentially harmful. For exam- ple, researcher Sara Rynes and colleagues examined fi ve years of popular busi- ness magazine articles for their representation of three critical managerial topics, namely, (1) personality in the workplace, (2) intelligence, and (3) use of goals. 19 Their results were shocking. Across fi ve years, less than 1 percent of the 537 articles in their sample addressed these topics. More importantly, when they did address them, the authors in those articles did so in ways that disguised the topic so as to appear novel or cutting-edge. Further, few of the articles that addressed the impor- tant topics relied on any empirical evidence to substantiate their points. As Rynes and colleagues remarked, their fi ndings showed the overwhelming tendency to:

. . . focus on claims and testimonials from individuals that were unsupported by any references to empirical evidence. In the absence of such evidence, readers are left completely to their own devices in choosing how to decide among competing claims. Evidence suggests that under such circumstances, people are likely to choose the claims that most closely conform with their prior beliefs. As a result, the odds that anyone will actually learn something new or change his or her behavior as a result of reading such periodicals would seem to be quite small.

If you’re surprised by this, keep in mind that those in the business of sell- ing magazines likely feel that discussing issues from an evidence-based perspec- tive doesn’t give an article the feeling of freshness or innovation. This pattern of misinformation or lack of attention to the evidence is not unique to business magazines but rather it’s endemic to business book publishing in general, where advice is dispensed based upon anecdotal evidence. This general practice led Ed Lawler, a well-respected organizational scholar, to comment:

A great deal that passes as “best practice” in [management] most likely is not. In some cases, there simply is no evidence to support what is thought to be best practice. In other cases, there is evidence to support that what are thought to be best practices are, in fact, inferior practices. In short, most organizations do not practice evidence- based [management]. As a result, they often underperform with respect to their major stakeholders: employees, investors and the community.

Thus, when someone says “research shows” or the “evidence is clear,” great managers know to dig a little deeper to understand the quality of that evidence. At the end of the day, anecdotes and previous experience may be all that is avail- able to help inform decisions, but in far too many cases anecdotes are used where a rich scientifi c literature exists to help make better decisions.

Overcoming the Knowing-Doing Gap

For most management skills, the conceptual rules are relatively easy to know and understand. Most 12-year-olds could be taught to pass a test on the general rules or guidelines of the skills that comprise great management. The real challenge is to actually execute them. For example, listing the rules of effective behavior in a team is relatively easy. However, actually joining a team in a competitive busi- ness situation and contributing in a way that adds real value to that team is an entirely different matter. Similarly, the fundamental elements of models of moti- vation are elementary. But trying to create a culture that motivates peoples’ best efforts is extraordinarily complex.

We chose the subtitle of this book— What Great Managers Know and Do — because it takes both knowledge (“know that ”) and application practice (“know

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PART ONE Personal Skills18

how ”) to master a skill. Successful application of management skills is more than just following a cookbook list of sequential behaviors and is much more compli- cated than developing skills such as those associated with a trade (say, welding) or a sport (hitting a golf ball). That is because management skills (1) are linked to a more complex knowledge base than other types of skills and (2) are inherently connected to interaction with other (frequently unpredictable) people. A stan- dardized approach to welding or hitting golf balls or baking a cake may be fea- sible, but a standardized approach to managing human beings is not possible. 20

Nonetheless, one of the most encouraging elements of management skills is that they can be improved—we have seen it happen countless times. You do not, however, master the skills simply via hope, intuition, or common sense. Rather, it requires conscious persistent effort and practice. At the same time, practice without the nec- essary conceptual foundation is misguided and ignores the need for fl exibility and adaptation to different situations. In short, any serious attempt to develop manage- ment skills must involve a dose of both conceptual learning and behavioral practice. It requires intentional study and a skill-oriented and problem-based approach. 21

So one of the key questions that students studying organizational behav- ior must confront is whether or not investing time, money, energy, or any other resource in developing the skills associated with good management is really worth the effort. You might rightly ask yourself, “Given my limited resources, would I be better off perfecting my coding skills or should I invest in learning how to run a team?” “Should I take an extra fi nance course in preparation for the CFP exam or should I spend time running a club?” The answer quite simply is, “yes.” Yes, you should hone your technical skills, and yes, you should start now (while the stakes are rather low) to seek every opportunity to practice managing organiza- tional behavior. In the remaining sections of this chapter, we discuss the process of learning how to learn about yourself and managing organizational behavior.

MANAGEMENT LIVE 1.3

Knowing vs. Doing: The Disturbing State of Applied Management Effectiveness 22 A wealth of anecdotal data suggests that, despite suffi cient book knowledge of what constitutes effective management practice, managers may often lack the ability to apply that knowledge in context —and a recent comprehensive research report supports those suspicions. The authors used a management assessment known as the MSAT (Management Skills Assessment Test) to measure the applied management capability of over 20,000 managers, or aspiring managers, over the past 25 years. The MSAT consists of eight common funda- mental management scenarios (for example, delegating jobs, dealing with a low-performing employee, manag- ing confl ict) presented on the Internet. For each of the eight items in the MSAT, candidates must respond by (1) identifying the important issues, (2) describing the actions they would take to be most effective, and (3) actually taking those actions (writing memos, follow-up notes, and so on) where appropriate. That means that they have to be able to execute the action and also know when to do so and why they chose to do so—all without any cues or prompts.

The results leave little question that there is, in fact, a substantive knowing-doing gap in management prac- tice. More specifi cally, despite relatively high scores on cognitive aptitude and multiple-choice tests of manage- ment principles, the MSAT test-takers generally failed to reach even the midpoint scores of the assessed items. There was considerable variance and some candidates scored very high, but the disturbingly low level of the aver- age scores points to the critical importance of a focus on skill application and decision making in management education—and the pressing need to get beyond just the conceptual knowledge of principles.

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• Management learning comes with age and experience. Unfortunately, that simply is not true. Learning is hard work and comes from a conscious and persistent desire to attend to effective models, learn and retain what they do, and practice new behaviors consistently.

• We know ourselves. In fact, a number of revealing research studies have shown that the gap between how we perceive ourselves and how others perceive us is often signifi cant. These gaps, many of which we are blind to, frequently lead to management problems or failure. 24 True self-awareness is the foundation of personal effectiveness.

• Growth opportunities lie solely in our weaknesses. We succeed because of what we do well. However, it is common to become so focused on improving our weak areas and gaps that we neglect our strengths. Personal development of new skills is important, but you should also spend time clarifying what it is you do well and then try to position yourself in situations where you can leverage your strengths to excel.

• Personal development is all just about positive thinking. With the appeal of popular books like The Secret, people may believe that being optimistic is all there is to development. Just wish it and it will become true! While an optimistic outlook does have a number of benefi ts, you will not become a skilled manager by just wishing it. Becoming a skilled manager takes practice, dedication, and rational optimism.

• It’s not me, it’s them! If you learn one management “truth” it should be this: You can never fully control the behavior of others, but you do have control over your own behavior. The best way to change others is to fi rst change yourself.

MYTHS 1.1 Myths of Personal Effectiveness ? ?

CHAPTER 1 Organizational Behavior and Your Personal Effectiveness 19

Learning and Personal Improvement

Personal Effectiveness: The Foundation of Great Management

Effective management starts from the inside. Indeed, when people are asked to describe great managers, it is remarkable how often they give personal, rather than interpersonal or organizational, descriptions. Put simply, those who can manage themselves are much more likely to be effective managers of others. Personal effectiveness is the foundation of great management, and the skills presented in the following chapters all stem from a base of personal excellence. Although many elements comprise personal effectiveness, our focus is on action- able knowledge and behaviors—things you can actively learn and do to improve your personal competence. No one is born a great manager, or becomes one overnight. So the most fundamental aspect of personal competence is to know yourself and to have a clear understanding of how you learn new skills and moti- vate yourself to improve your capability.

We start with models of learning and self-management. Great manage- ment is often as much about not acting on misconceptions, and avoiding what not to do, as it is about expertly pursuing a course of action. 23 With that in mind, the Myths 1.1 box contains fi ve of the more persistent myths of personal effectiveness.

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Hope is not a personal

improvement strategy.

— Anonymous

Practice this! Go to www.baldwin2e.com

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PART ONE Personal Skills20

Learning How to Learn

Much has been written about the high failure rates of people trying to learn and change. For example, a tiny percentage of people actually keep their New Year’s resolutions. The vast majority of people who set out to “get in shape” are back to being overweight in a couple of months. Most of those who say, “This is the year I am going to get organized,” fi nd that it ultimately was, in fact, not the year. The problem with most personal improvement attempts is they are mostly wishful thinking with far too little understanding of how personal improvement really happens. That is, most everyone hopes to improve, or wishes they could enhance their effectiveness. However, far too few actually know and discipline themselves to do what is necessary to learn new skills. The most powerful and useful framework for thinking about personal improve- ment in management skills comes from the work of Albert Bandura, and his social learning theory. 25 Bandura’s theory suggests that the learning of any new behavior is the result of three main factors—the person, the environment, and the behavior—and they all infl uence each other. Behavior is not simply the result of the environment and the person, just as the environment is not simply the result of the person and the behavior. This mutual infl uence is referred to as reciprocal determinism and is at the root of social learning theory. This is because the envi- ronment provides important models of behavior from which we learn. A model of social learning theory can be seen in Figure 1.2.

Personal factors include a person’s internal mental processes such as motiva- tion, attention, self-regulation, and self-effi cacy. Behavior is the person’s response or action. Environment includes the physical and social environment surround- ing an individual. It includes reinforcement and punishment contingencies and models.

Although this concept may sound a little abstract, the principles of social learning theory are exceptionally practical and have been applied to help fos- ter personal change in a wide variety of settings including but not limited to counseling, acting, addictive behaviors, and athletics. One reason social learning has been so infl uential is because it refutes widely held notions that people only learn through their own personal experience of rewards and consequences. For example, traditional conceptions of learning suggest you would learn that a stove burns you only by actually touching that stove yourself. Bandura suggests that, in fact, most learning is actually done through observation and modeling of the behaviors of others. That is, most people learn the stove burns by watching the behavior of others (perhaps seeing them burned or actively avoiding it). This simple phenomenon helps explains why so many people who work for ineffective managers often become poor managers themselves; we often manage the way in which we were managed. A second reason social learning notions are particularly appropriate for man- agement skills is because there is such a big disconnect between knowing and doing. For most management skills, the conceptual rules are relatively easy to know and understand. Most teenagers could be taught to pass a test on the gen- eral rules or guidelines of the skills that comprise great management. But the real challenge is to actually execute them.

Fortunately, one of the most encouraging elements of management skills is that it is possible to improve your execution of such skills—but not simply via intuition or common sense. Rather, improvement requires conscious persistent effort and practice. Bandura outlines four critical components required to learn through observation, and these are the key building blocks of the most successful management training methods used in organizations today. 26 These components are attention, retention, reproduction, and motivation.

The will to win is vastly overrated

as a means of doing so. What is

more important is the will to prac-

tice and the means to execute. — Bob Knight , Basketball Hall

of Fame Coach

In theory, there is no difference

between theory and practice. But,

in practice, there is.

— Jan L. A. van de Snepscheut

P

B E

FIGURE 1.2 Social Learning Theory Personal factors include a per- son’s internal mental processes such as motivation, attention, self-regulation, and self-effi cacy. Behavior is the person’s response or action. Environment includes the physical and social environ- ment surrounding an individual. It includes reinforcement and punishment contingencies and models.

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CHAPTER 1 Organizational Behavior and Your Personal Effectiveness 21

MANAGEMENT LIVE 1.4

Where Does Talent Really Come From? Some fascinating fi ndings are emerging from a group of researchers trying to answer an important and age-old question: When someone is very good at doing something, what is it that actually makes him or her good? This stream of research work, led by Anders Ericsson, Conradi Eminent Scholar and Professor of Psychology at Florida State University, is collectively known as the Expert Performance Movement. Ericsson’s fi rst experiment, nearly 30 years ago, involved memory—training a person to hear and then repeat a random series of numbers.

Ericsson’s study refuted the commonly held notion that cognitive skills, particularly those like memory, are mostly genetically determined (for example, “He was born with a photographic memory”). As he notes, “With the fi rst subject, after about 20 hours of training, his digit span had risen from 7 to 20. He just kept improving, and after about 200 hours of training he had risen to over 80 numbers.”

Based on that and later research showing memory is not genetically determined, Ericsson concludes that the act of memorizing is more a function of dedicated commitment and practice than a genetic gift. In other words, what- ever innate differences two people may exhibit in their abilities, those differences are overwhelmed by how well each person has engaged in deliberate practice. Deliberate practice is not just simply repeating a task— playing a C-minor scale 100 times, for instance, or hitting tennis serves until your shoulder pops out of its socket. Rather, it involves set- ting specifi c goals, obtaining immediate feedback, and concentrating as much on technique as on outcome.

Ericsson and his colleagues have since taken to studying expert performers in a wide range of pursuits, including soccer, golf, surgery, piano playing, Scrabble, writing, chess, software design, stock picking, and darts. Based on that work, they made the startling assertion that the trait we commonly call talent is important but gen- erally overrated.

Ericsson’s research further suggests that when it comes to choosing a life path, you should do what you love—because if you don’t love it, you are unlikely to work hard enough to get very good. Most people naturally don’t like to do things they aren’t “good” at doing. So they often give up, telling themselves they simply don’t possess the talent for math or skiing or the violin. But what they really lack is the desire to be good and to under- take the deliberate practice that would make them better.

Source: Adapted from Dubner, S. J., and S. D. Levitt. (2006, May 7). “A Star Is Made.” New York Times Magazine, p. 24 .

Attention. Not too surprisingly, if you want to learn anything, you have to pay specifi c attention. Thus, the fi rst challenge of learning is to focus. Anything that puts a damper on attention will decrease your learning comprehension. If you are unfocused, nervous, or distracted by other things, you will not learn as well. Thus, a critical step in learning new skills is to fi nd the right models and devote undivided attention to them. If you do not make what you want to learn a top priority and give the subject ample attention, you are unlikely to succeed.

In addition, it is critical you isolate as specifi cally as possible the behaviors you hope to learn. This approach may seem like common sense, but it is fre- quently violated. Many try to learn too much or change too many things at once. An example from basketball would be to repeatedly watch a successful player’s form while shooting foul shots rather than trying to learn to shoot foul shots from watching an entire basketball game. In a management context, it would be better to isolate the nonverbal motions of an effective speaker than to attempt to emulate the speakers in a debate.

Retention. You must be able to understand and remember what you have observed. Coding what we observe into words, labels, or images results in better

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PART ONE Personal Skills22

retention than simply observing. If you can relate your observations to a theory or framework, and understand why what you observed was effective or ineffec- tive, you have a better chance of retrieving it when you need it. This is where the study of written models and frameworks can be most useful. That is, just observ- ing an effective speech, decision process, or team meeting is a good start. But real learning—the kind you can ultimately transfer to your own situations—comes from understanding the underlying principles that made the behaviors effective and being able to recall and translate those principles when appropriate.

Reproduction. Perhaps the most critical contribution of social learning theory to developing management skills is it highlights the importance of practice, or actual demonstration, of a skill. That is, you cannot learn management by just observing, reading, or understanding the concept. Rather, you have to translate the images or descriptions into actual behavior. Research shows that our abilities improve even when we just imagine ourselves performing! 27 Many athletes, for example, imagine their performance in their mind’s eye prior to actually compet- ing. However, the more we can actually reproduce the skill we aim to learn, in the actual context where the skill will be applied, the more likely we are to add that skill to our repertoire.

Another critical point with respect to reproduction is that the saying “Prac- tice makes perfect” is only a half-truth. “Practice with feedback makes perfect” or at least enables people to learn. Feedback is essential for learning or developing any kind of skill. This is one of the reasons why video games are so satisfying for people to play. They provide an opportunity to reproduce the behavior (that is, play the game) with immediate feedback (your score).

Motivation. Finally, even with careful attention, retention, reproduction, and feedback, you still won’t successfully acquire a new skill unless you are moti- vated to persist and stay with it. Without some conscious reason to keep up the effort required to learn a new skill, or change a habit, you are doomed to fail. Your motivation may derive from past reinforcement, promised reinforcements (incentives) that you can imagine, or vicarious reinforcement—seeing and recall- ing the models you observe being reinforced. Of course, you may also use pun- ishments for failure to achieve your learning goals. However, Bandura has found that punishment does not work as well as reinforcement and, in fact, has a ten- dency to backfi re on us.

Bandura’s principles may seem intuitive to most of us, but observational learning is neither easy nor self-evident. If it were easy to just observe and mimic the effective behavior of others, many more people would be success- ful in improving themselves. Rather, it takes disciplined self-management to apply the principles Bandura has proposed. In Table 1.2 , we present a common example of breakdowns in learning, using the example of improving interview- ing skills.

A Model of Self-Management

Using Bandura’s work as a base, Charles Manz and his colleagues have cre- ated a simple and practical framework for self-management. 28 They defi ne self- management as a process of modifying our own behavior by systematically altering how we arrange different cues in our world, how we think about what we hope to change, and how we attach behavioral consequences to our actions. The framework takes into account that personal change is rarely a discrete, sin- gle event but rather a process with multiple infl uences. The underlying theme is that we all have the ability to change our immediate worlds in ways that will help us learn new things and behave in desirable ways.

The way to get started is to quit

talking and begin doing.

— Walt Disney

Nothing will work unless you do.

— Maya Angelou

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CHAPTER 1 Organizational Behavior and Your Personal Effectiveness 23

TABLE 1.2 What’s Keeping Max from Learning to Interview Better?

Max, who is soon graduating from college, has a strong record of achievement (high grades and a good extracurricular profi le) but is struggling with the recruiting process. After several interviews, he has failed to make it to the next round a single time, and feeling discouraged, he has asked some of his interviewers for comments. The three who were willing to respond all essentially said he did not “interview well.” As a result, Max hopes to improve his interviewing skills. Overlaying the principles of social learning and self-management can help illuminate Max’s challenge and common traps that occur.

Attention. Max needs to address at least two issues to be consistent with effective social learning. First, he needs to set aside time to practice his interviewing skills in the midst of many competing time demands. He is likely to feel his classes, part-time job, and social life take precedence and thus may well not devote enough time to improving his interviewing skills—a classic case where hoping will supersede a real learning strategy.

Second, Max needs to understand more specifi cally what he is doing or not doing in his interviews that is leading to poor outcomes. Without some specifi c understanding of his weaknesses (and relative strengths), he is destined to fl ounder in trying to determine how to improve. Unfortunately, that information may well be hard to come by in this case and he may need some mock interviews to tease it out.

Retention. Max needs to build an understanding of what makes for an impressive interview performance. Learning how to illustrate his background and accomplishments using the STAR model outlined in Chapter 12 would likely be a good step.

Max would also benefi t from observing models with recognizable excellence in what he is trying to improve. In these cases, we often see people make the mistake of attempting to learn from friends or relying on anecdotal evidence from well- intentioned, but non-expert, sources.

Reproduction. Max needs practice accompanied by feedback on that practice. Practice should be treated like an actual interview. The more elements Max can re-create, the better his learning will be. A great deal of time needs to be dedicated to rehearsal, feedback, and more rehearsal. Mock interviews would seem to be essential here but are often awkward or diffi cult to arrange and therefore are not utilized.

Motivation. Max needs to decide how important improving his interview skills is to him and if he is willing to dedicate the time to changing. He needs the discipline to avoid taking shortcuts and saying “good enough” to really make a long-term lasting change. He should fi nd ways to reinforce himself for devoting the time and should certainly celebrate any success on the interview front.

The self-management framework provides a means of avoiding some of the most common “hope vs. action” traps and of putting Bandura’s principles into practice. It includes strategies we directly impose on ourselves to infl uence our own behavior and those whereby we attempt to alter our external world to help affect our behavioral change. While Manz and colleagues have presented their model in a variety of ways and with different labels (for example, self-management, self- leadership, super leadership), 29 we have condensed it here to the fi ve essential ele- ments most effective in facilitating personal improvement (see Tool Kit 1.1).

Note that this self-management framework has been successfully applied in many different contexts, including drug therapy, weight loss, health care, the- ater, and athletics. For example, all successful golf training is based on the ele- ments of this framework. As you progress further in this book, you will see that

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PART ONE Personal Skills24

the effective behaviors of self-management are also entirely consistent with what great managers do when it comes to coaching and motivating others. This should not be surprising because, as we noted earlier, effective people-managers are fi rst successful in managing themselves.

Self-Observation/Exploration

You can’t induce or recognize a change in behavior until you have some informa- tion about what you currently are doing. Self-observation involves determining when, why, and under what conditions you currently use certain behaviors. For example, if your personal improvement challenge is to improve your grades via more focused study time, it is important to ask when and where you fi nd you study best now. How many hours are you currently devoting to each subject? Which courses are you doing the best in? And so on. Self-observations provide the building blocks for managing ourselves. The best self-observation strategies involve actually recording your observations and keeping close tabs on your behavior, both before you begin changes and after. This recording can be as simple as counting how many minutes you are late to meetings or can be more complex diaries of your behavior. Learning a new skill or habit often requires that we also change or unlearn other dysfunctional habits, adding signifi cantly to the challenge.

In that vein, a critical aspect of self-observation is to learn from mistakes or failed efforts. While we all have a tendency to be defensive, look to blame others, or ignore failure, viewing mistakes as learning opportunities builds a foundation for further learning. Mistakes can prompt us to look inward and evaluate our limitations and shortcomings. Mistakes are only problems if you repeat them or do not learn from them. Indeed, if you are not making mistakes, it is worth ask- ing whether you are stretching yourself in your job and taking any developmen- tal risks. Great managers make a lot of mistakes, but those mistakes are seen as “productive failures” and are rarely made twice. 31

Self-Set Improvement Goals

The fi rst task of setting goals is to determine what your desired outcome or effec- tive behaviors look like. The best goals often derive from attention to effective models. Some of the things that infl uence our attention involve characteristics of

Not everything that is faced can

be changed, but nothing can be

changed until it is faced.

— James Baldwin

If you’re not making mistakes,

then you’re not doing anything.

I’m positive that a doer makes

mistakes.

— John Wooden

Tool Kit 1.1 Five Behavior-Focused Strategies to Improve Self-Management 30

1. Self-Observation/Exploration: Observe and collect information about the specifi c behaviors you have targeted for change.

2. Self-Set Goals: Determine what more effective behavior is (often by observing effective models) and set specifi c goals for your own behaviors.

3. Management of Cues: Organize your work environment to assist you in performing the behaviors you want to change.

4. Positive Self-Talk and Rehearsal: Go over the behavior in your head and imagine its successful applica- tion. Actually practice the new behavior at available opportunities and seek feedback.

5. Self-Reward and Punishment: Provide yourself with personally valued rewards that are linked to perform- ing desirable behaviors or with punishments linked to undesirable behaviors.

MANAGER’S TOOL KIT

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CHAPTER 1 Organizational Behavior and Your Personal Effectiveness 25

the model or learning stimuli. As a result, we are more likely to adopt a modeled behavior if the model is similar to the observer (more like us), has admired sta- tus, and if the behavior has functional value (gets us something we want). Thus, if the model is attractive or prestigious or appears to be particularly competent, we pay more attention.

An example of this can be seen in thinking about how to effectively study for a class. One tactic for this challenge would be to observe the study habits of highly successful students to see if you might emulate some of their behaviors. Self-set goals need to address long-range pursuits and short-run objectives along the way. The shorter-range goals should be consistent with the long-range goals for maximum consistency. The process takes effort, and although our goals are likely to change, it is important we try to have current goals for our immediate efforts. Goal setting is so fundamental to great management that we reinforce it throughout this book.

Studies have shown that goal setting works because:

1. In committing to a goal, a person devotes attention toward goal-relevant activities and away from goal-irrelevant activities.

2. Goals energize people. Challenging goals lead to higher effort than easy goals.

3. Goals affect persistence. High goals prolong effort, and tight deadlines lead to more rapid work pace than loose deadlines.

4. Goals motivate people to use their knowledge to help them attain the goal and to discover the knowledge needed to obtain it. 32

The best goals are characterized by the acronym SMART, which represents specifi c, measurable, attainable, relevant, and time-bound. SMART goals make for smarter learners. 33

Management of Cues

Taking your lead from your self-observations and goals, you can begin to modify your environment. The objective is to organize your world to assist you in per- forming the behaviors you want to change. For example, if you are trying to quit smoking and improve your health, put away the ashtrays, drink tea instead of coffee, and take the ice cream out of the freezer and replace it with low-fat sub- stitutes. If you are trying to study more on Thursday nights, get out of the apart- ment when everyone is heading to social engagements (and enticing you to come along), and go to the library or some quiet spot.

A related strategy is to create reminders and attention focusers you will notice and act on. A sticky note on the refrigerator reminding you of your weight loss goal, or a screensaver or text message to yourself about a forthcoming test, can provide a cue that will help you focus on an important improvement objective.

Positive Self-Talk and Rehearsal

Positive self-talk and rehearsal are applications of the social learning principle of reproduction. Search for opportunities to practice new behavior in the most realistic situations you can fi nd. Basketball players know that just shooting 100 free throws will not simulate the pressure of shooting one at the end of a close game. So the best shooters fi nd ways to practice under conditions that mirror those pressurized conditions (for example, team running for missed free throws, everyone lined up around the key trying to distract the shooter, simulated crowd noise). Some people treat their jobs as games (like salespeople) by trying out new techniques and seeing how well they work. Whatever the context, you must prac- tice and rehearse any new skill for it to ultimately become part of your repertoire.

“One must learn by doing the

thing, for though you think you

know it, you have no certainty

until you try.”

— Sophocles

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PART ONE Personal Skills26

Further, the use of positive self-talk is extremely important. If you have ever repeatedly said to yourself, “I know I can do this,” before attempting a diffi cult task, you were practicing a proven technique of self-management. The idea is to create a frame of mind that energizes your self-confi dence and gets you beyond self-defeating and negative feelings that can accompany learning diffi cult tasks. Just as managers and coaches work on team morale and motivation, individuals can affect their behavior by getting “pumped up” and self-motivated.

Self-Reward and Punishment

Although no manager would deny the importance of reward and punishment for infl uencing employee behavior, the concept is strangely neglected when we think of ourselves. The truth is we can profoundly induce our actions by reward- ing ourselves for desirable behavior. For example, “I will go out to dinner on Sat- urday night if I accomplish my goal. I will do paperwork instead if I do not.” You simply arrange to reward yourself when you adhere to your plan and possibly punish yourself when you do not.

Generally speaking, it is better to use self-reward than self-punishment. Cel- ebrate your victories and don’t dwell on your failures. A great deal of learning research has found that punishment does not work as well as reinforcement. 34 However, there may be times when the most powerful or immediate incentive for you may be a punishment, and in such cases it may make an appropriate disin- centive. Do not, however, punish yourself for slips or lapses. Changing habits and learning new things is never a straight path, and as the Tool Kit on relapse pre- vention at the end of this chapter illustrates, expecting and preparing for those inevitable lapses will be more fruitful. 35

Putting It All into Practice

The self-management model represents the best methodology currently available for facilitating personal improvement. The basic notions are simple. To really get beyond mere hope and make a sustainable personal improvement requires you to:

1. Understand your current behavior and desired future behavior.

2. Set SMART goals for your change.

3. Arrange your world so it focuses your attention and reminds you of your improvement plan and goals.

4. Stay positive and rehearse the desired behaviors at every opportunity.

5. Create your own rewards for accomplishing your targets.

Since many of us already use some of these strategies, and they seem sim- ple enough, why are most people not more effective at self-management? It is mostly because we often use them either ineffectively or inconsistently. That is, the piecemeal use of these strategies tends to make them relatively ineffective. Thinking through your own experiences, consider how often you see (or prac- tice) one of these strategies in isolation, but how rarely you see them together.

For instance, many people have started down a path of weight loss by set- ting a goal and monitoring their eating behavior—a good start. But more often than not, they do not consistently manage their cues, practice new habits of gro- cery shopping and ordering while dining out, or create reinforcements powerful enough to sustain their efforts. So they start well, with much hope, but do not have the strategies in place to persist until they have succeeded. Engaging in one strategy, while not engaging in the others, is much like ordering a Diet Coke to go with a big greasy cheeseburger and super-sized fries. It may be better than hav- ing a milk shake, but it is really not helping someone lose weight.

Whether you think you can or you

think you can’t, you are right.

— Henry Ford

We all have dreams. But in order

to make dreams into reality, it

takes an awful lot of determina-

tion, dedication, self-discipline, and

effort.

— Jesse Owens , Olympic Gold

Medalist

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CHAPTER 1 Organizational Behavior and Your Personal Effectiveness 27

We suspect that much here has validated what you already knew and are doing to some extent. Hopefully, though, it can make it easier to more systemati- cally go about learning and managing yourself in an increasingly complex world.

Building Self-Awareness

Self-Awareness: The Key to Successful Learning and Growth

The models of learning and self-management described earlier point to the crit- ical importance of self-awareness. Self-awareness is mission critical for those attempting to accelerate their managerial learning and to become more person- ally effective. The best managers not only consistently seek feedback to know themselves better and what areas they need to improve, but also isolate their personal strengths and preferences so they can best position themselves for suc- cess. Self-awareness is essential to learning and growth in a management role because it forms the basis by which we learn about ourselves and how we differ from others.

Individual Differences and Their Importance

There is perhaps no more obvious yet curiously neglected truth than “people are different.” Recognizing our own differences is important because they impact how we react and behave in different situations.

Every popular magazine these days seems to include some sort of self- assessment of an intriguing individual difference. Headlines claim you can learn some hidden truth about yourself by answering a few questions and then scoring yourself with the provided scoring guide. Magazines like Cosmopolitan, GQ, and Vogue regularly have some sort of “self-assessment” that sounds like it will be helpful, but they are rarely what they appear to be. But since your “cool quotient,” “hottie index,” or “marriage potential” are not of great concern in managerial environments (at least hopefully not), what, specifi cally, should the self-aware manager know?

Of course, people differ in an infi nite number of ways. From a managerial performance perspective, however, the two important categories of difference are (1) ability and (2) personality (which includes values and motives). 36 Ability can be simply defi ned as what a person is capable of doing. 37 This “capacity to do” leads some people to be able to dunk a basketball, calculate complex math in their heads, or interpret abstract patterns very quickly. Abilities come in many dimensions and include cognitive ability, physical ability, and emotional ability (now often referred to as emotional intelligence and an area of study in which there’s been a recent explosion of interest).

Personality represents the pattern of relatively enduring ways in which a person thinks, acts, and behaves. 38 Personality is determined both by nature (genetics) and nurture (situational factors) and tends to represent our “domi- nant” or “natural” behavior. While it may be appealing to think about it in these terms, there is not a “good” or “bad” personality profi le. Although some personal- ity characteristics have been associated more frequently with some occupations and interests, no personality combination limits you from types of occupations you might enjoy or determines your destiny.

How you behave at any given time is an interaction of your personality and your environment. This interaction accounts for why we often behave differ- ently at home than we might at work or school. For example, your dominant

KO 1 - 6

D O 1 - 4

D O 1 - 5

Practice this! Go to www.baldwin2e.com

Success in the new economy

comes to those who know

themselves—their strengths,

their values, and how they best

perform.

— Peter Drucker

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PART ONE Personal Skills28

personality trait may be one of introversion, yet in order to perform well on your job you have to “turn it on” to talk with clients and customers—that is, dem- onstrate extraversion. Sometimes the situation or environment has much more to do with how we behave than does our personality. It is a fundamental error to assume that behavior is solely a function of one’s personality since the environ- ment will always play a role as well.

Assessment of managerial ability and personality has become increasingly popular in both organizational and educational contexts. It can be intriguing, even fun, to see where we stand on different scales (for example, who would not be curious about your own “love quotient”?), and some form of assessment is essential if we are to clarify our own abilities, personality traits, values, and pref- erences. However, our experience suggests assessments are most useful when an individual has a defi ned need to know. Put another way, the most fruitful assess- ment process is ideally a research project where you are the focus of the research.

With that in mind, we sought to identify the set of fundamental personal questions most important to managerial and interpersonal self-awareness, and to identify assessment tools that can help you begin your personal inquiry into those questions. We boldly call our seven elements of self-awareness the Essen- tial Managerial Assessment Profi le. Other aspects of self-awareness (for example, learning style, tolerance of ambiguity, confl ict style, leadership behavior) are relevant and important, and we include measures of some in your instructor’s supplemental materials. If you become more self-aware on these seven aspects in an informed and thoughtful way, you will have a fi rm baseline of self-knowledge.

Ultimately, we want you to be able to answer the question “Tell me about your- self” in a way that will have meaning and relevance to those you might work with or manage. The goal is not simply to describe your favorite characteristics, but to know how your abilities and personality may impact your behavior and perfor- mance. Table 1.3 categorizes and defi nes the seven dimensions, identifi es leading assessment tools associated with each dimension, and briefl y highlights the posi- tive implications of higher self-knowledge on each dimension. Today, there are many online resources for taking self-assessments and getting feedback and devel- opmental recommendations. The appendix to this text and your instructor should help you identify appropriate self-assessments for your personal performance.

Important Self-Awareness Issues

As you embark on a journey toward greater self-awareness, you should also take into account several important points regarding the interpretation of assessments. First, assessment results are simply feedback. As we’ve stated before, these results are not the absolute or fi nal truth, nor do they dictate your destiny. Abilities (some- times called talents) are only valuable when they are applied and manifested as skills or behaviors. The world is full of high-ability folks who do not succeed; ath- letic coaches often refer to such people as “wasted talent.” Similarly, just having certain personality characteristics is less important than how you attempt to put yourself in positions where those traits are most valued and rewarded.

Second, as we noted earlier, literally thousands of self-assessments exist but many have questionable legitimacy. So look for measures that have an estab- lished norm base (signifi cant data reporting from prior assessments) and have stood the test of time. The example assessments included in your essentials pro- fi le are all well established with a base of research evidence related to their out- comes and relevance for managerial contexts.

Third, preferences are choices we make about how we perceive the world and function best in it. Some of these “choices” are not necessarily conscious ones but rather modes of behaving that seem most natural for us. If you’ve ever done any acting, you know that attempting to “be someone you’re not” is not easy and

All facts are friendly.

— Unknown

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Self-Awareness Dimension

Ability, Personality, or Preference?

Example Assessment Tool Implication

Cognitive Ability (critical and analytical thinking)

Ability to recognize quantitative and verbal patterns quickly and accurately. Includes the ability to acquire knowledge.

• Watson-Glaser Critical Thinking Test

• Wonderlic Personnel Test

Is cognitive ability a strength or an area to supplement with the help of others? What types of jobs and industries suit my analytical ability?

Emotional Intelligence

Ability to accurately recognize and understand emotions in others and self and to use emotional information productively.

• MSCEIT Do I understand and use emotion to make effective decisions? Can I relate to people well because I appropriately read their emotional states?

Cultural Intelligence

Ability to function effectively in the context of differences.

• Cultural Quotient Scale (CQS)

Am I aware of important cultural differences? Do I understand and act in ways that will value those differences and create stronger relationships?

Personality Traits

Primary personality characteristics that remain relatively stable over one’s life.

• Big Five Inventory What are my dominant personality traits? How do I maximize my fi t to best utilize my personality?

Personality Preferences (temperament)

Preference for direction of energy, decision making, information acquisition, and orientation to the outer world.

• Myers-Briggs Type Indicator

How do I like to work with others and process information? What do I look for in others to complement my preferences? How will I best interact in different team combinations?

Personal Values

Preference for desirable ends or goals and the process for attaining them.

• Rokeach Values Checklist

• Hogan MPV Scale

What do I value most and seek in others? What will I not bend or compromise on? What to me is non-negotiable?

Career Orientation Preference for particular types of work environments and occupations.

• Holland Occupational Preference Scale

What occupational elements are most important to me? With what types of people will I thrive?

CHAPTER 1 Organizational Behavior and Your Personal Effectiveness 29

TABLE 1.3 The Essential Managerial Assessment Profi le

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PART ONE Personal Skills30

requires a great degree of attention, direction, and energy. Our personal charac- teristics such as core values, interpersonal preferences, and career orientations are those with which we feel most comfortable and natural. You can choose to behave outside your preferences, but it will require a signifi cantly higher level of your conscious energy to do so.

Finally, we always recommend you look for patterns and consistency across your assessments. When you fi nd consistency, it is evidence of a more dominant trait or preference. Inconsistency suggests a less-defi ned characteristic. Perhaps most importantly, you should always interpret your self-assessments in the con- text of other feedback you’ve received and not dwell on assessed weaknesses or limitations. We elaborate on those two issues next.

Involve Others: Seek Regular Feedback

Although the evidence is compelling that feedback-seeking behavior and increases in self-awareness are associated with positive outcomes like job satisfaction and performance, 39 many young managers do not actively pursue greater self- awareness. Why is that so?

A useful analogy for this curious reluctance can be found in the fi eld of medi- cine. Many illnesses could be cured and diseases halted, if only people were not afraid to get a checkup—but they are often too scared to fi nd out if anything is wrong. The same holds for seeking interpersonal and management feedback. We all want to protect, maintain, and enhance our self-concepts and the impressions we think others hold of us. And we often have fears and inadequacies (for exam- ple, I hate speaking to groups; I can’t handle confl ict; I look awkward on camera) that we would prefer not to focus on or reveal even to ourselves.

Reliable knowledge about ourselves can help us gain insights into what areas we want to change and improve, and even more importantly, the strengths we should aim to utilize more in our work and relationships. Always keep in mind your perception of yourself is likely to differ from others’, 40 and some folks we typically turn to (for instance, our mothers) are not always likely to be entirely truthful with us.

Simply put, the major obstacle to seeking feedback is fear. So the fi rst and most important step toward developing self-awareness is a willingness to put aside that natural fear and push beyond our comfort zone in learning things about ourselves. However, a critically important point is that it is virtually impos- sible to dramatically increase self-awareness unless we interact with and dis- close ourselves to others. That is, while self-assessments are a good fi rst step, no amount of self-examination is enough to really know yourself. You can analyze yourself for weeks, or meditate for months, and you will not fully know yourself, any more than you can tickle yourself or smell your own breath.

The reason it is so important to get beyond yourself is that we are just not very good judges of our own behavior and ability. There are many ways in which other people know us better than we know ourselves, particularly when it comes to how adept we are in our relationships. Multisource feedback (that is, feed- back provided by many sources other than yourself, such as a boss, co-worker, customer, and subordinate) enhances self-knowledge and consequently improves managerial behavior. 41 In fact, research has found that higher levels of agree- ment between managerial “self” and “other” behavioral ratings are associated with managerial effectiveness and performance. 42

In short, the ideal evaluation relies not on any one source but on multiple perspectives. These may include self-reports as well as peer, boss, and subor- dinate feedback. Feedback from multiple sources can be a powerful source of data for highlighting your strengths and targeting the competencies that need to improve. Multiple perspectives on yourself are extremely powerful ways to build self-awareness and get you ready to embark on personal improvement.

We would rather be ruined by

praise than saved by critique.

— Norman Vincent Peale

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CHAPTER 1 Organizational Behavior and Your Personal Effectiveness 31

Tool Kit 1.2 Personal Quality Checklist 43 Building on the principles of organizational quality improvement efforts, Bernie Sergesteketter and Harry Roberts have devised a tool for self-management called the personal quality checklist (PQC). Using their approach, you defi ne desirable standards of personal behavior and performance and then keep track of failures or “defects” to meet those standards. The specifi c steps to the approach are:

1. Draw up a checklist of standards. This is the hardest part. Two samples are included at the end of this Tool Kit as illustrations (one by a practicing manager and one from a college student). Each standard should have a clear relationship to a “customer” either in the workplace or in your family or circle of friends. Each standard has to be unambiguously defi ned so you can recognize and tally a defect when it occurs. Thus, “get in shape” is not a good standard. A better standard would be to “break a sweat every day.”

There are two broad types of standards: (1) waste reducers/time savers (for example, be on time to class or group meetings), and (2) activity expanders (call parents at least once a week, get résumé com- pleted). If you include all activity expanders on your list, be sure you have enough waste reducers and time savers to create free time for them.

2. Tally your daily defects. Defects should be tallied by days but can ultimately be aggregated by weeks or months. One intriguing strategy is to let others help you keep score. For example, if a checklist standard is to talk to your spouse only in respectful tones, or spend at least a half hour with your daughter each day, then your spouse or daughter may well be the best tally keeper for those standards.

3. Review your tallies and action plan. Some people fi nd the word “defect” objectionable, but it is key to the system. First, it is easy to recognize and tally. Moreover, defects can become your friends because they suggest opportunities for improvement. Why did it occur? How can it be prevented? The whys lead to hows and suggest possible routes toward improvement.

Do not put faith in trying harder; you probably already are trying hard. Rather, fi gure out a different way to reach your objective. As the adage goes, rather than trying to be a better caterpillar, become a butterfl y.

As a general rule you should stick with 10 or fewer standards, or the process becomes unwieldy and unfo- cused. Of course, your checklist standards will only be a small fraction of your activities. Your fi rst PQC should focus on a few things you currently do that, if improved, could increase your customer satisfaction. Once you determine that you have those standards under control and customer satisfaction is high, then you can ask your colleagues and family for help in raising the bar and adding new standards. The approach is deceptively simple but powerful. Sergesteketter and Roberts report on a wide variety of successes by managers and executives from leading fi rms who have enjoyed success with the personal quality checklist approach. Draw up your own checklist and give it a try!

Sample Manager PQC

• On time for meetings

• Never need a haircut

• Answer phone in two rings

• No more than one project on desk at time

• Shoes always shined

• Weight below 190 pounds

• Exercise at least three times a week

MANAGER’S TOOL KIT

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Sample College Student PQC

• No more than 10 hours of TV viewing a week

• Use stairs instead of elevator for four fl oors or less

• Follow up job contacts within 24 hours

• Stick to one subject when studying, do not hop around

• In bed before midnight on all school nights

• Pay bills on time

• Make a to-do list for the next day before turning in

PART ONE Personal Skills32

Focus on Strengths, Not Just Weaknesses

Getting assessment feedback can be humbling, and sometimes even discourag- ing, so it is particularly important to not focus on just the gaps or weaknesses in your profi le. Of course, some focus on weak areas is often appropriate, but it is all too easy to become obsessed with the negative feedback. Indeed, some recent authors have made the case that a “defi cit reduction” or problem-fi xing approach may actually hinder personal effectiveness. 44 Rather, they contend individuals are better served by recognizing and building on their strengths and managing, rather than obsessively trying to improve, their weaknesses.

Managing a weakness means taking ownership of it and acknowledging it both as a weakness and as part of you. Rather than trying to make it a strength, aim to fi nd ways to minimize its impact on you. Such strategies can include doing it as little as possible, engaging others for whom the characteristic is a strength, and developing and using support systems and tools to compensate (for example, become a zealot for a practical time management system if managing time is a weakness for you). The key point, and the one that is often the most productive, is placing your focus on your strengths and those things you can realistically change. 5

Too many people overvalue what

they are not and undervalue what

they are.

— Malcolm Forbes

MANAGEMENT LIVE 1.5

Identifying and Crafting Your Own Personal Brand Back in 1997, Tom Peters wrote an article in Fast Company titled “The Brand Called You.” In the article, he said:

It’s time for me—and you—to take a lesson from the big brands, a lesson that’s true for anyone who is interested in what it takes to stand out and prosper in the new world of work. Regardless of age, regardless of position, regardless of the business we happen to be in, all of us need to understand the importance of branding. We are CEOs of our own companies, Me, Inc. To be in business today, our most important job is to be head marketer for the brand called You. It’s that simple—and that hard. And that is inescapable.

Since that time, the emergence of social media on the Internet has made Mr. Peters’ call to action even more relevant and created a whole industry of personal branding consultants, speakers, and authors. While you may not yet be consciously creating an online presence, you may be surprised to fi nd out what’s already out there on Facebook, Twitter, blogs, or in myriad other places. Many experts agree that online branding is not just for

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CHAPTER 1 Organizational Behavior and Your Personal Effectiveness 33

celebrities (although certain celebrities seem to have practically invented the entire idea). In fact, as part of your efforts to enhance your own personal effectiveness, we challenge you to conduct the following personal-branding exercises.

1. Identify an individual who currently holds a position that you think you would aspire to in 5 or 10 years. This could be a person in your current organization or employed elsewhere. Search the Web for informa- tion on this person and write a brief summary of that person’s “brand,” as expressed in the information you fi nd on the Web.

2. Search and summarize what is on the Internet today about you. You might start with Google and also check out Technorati for blogs and social media sites. Are there persons with the same name as you that come up in these searches? Would others be able to distinguish between you and those people with the same name?

3. If you were to get serious about building an online brand presence, what would you do? What brand would you hope to convey and why? What, if any, social media sites would you use? Would you develop a blog, and if so, what topics would you address and discuss?

4. How would you monitor your personal brand on the Web? Would any measures or sources of information be most useful?

CASE CONCLUDED

The eHarmony Personality Profi le questionnaire includes 258 questions that assess three primary personal characteristics: personality, values, and interests. Specifi c areas assessed include personal lifestyle preferences, communication style, family background, birth order, energy level, intelligence, spirituality, special interests, and future aspirations. eHarmony developed the Personality Profi le by fi rst generating a voluminous set of items asking people to report on most anything imaginable. They then had different people look at the items and pare them down, followed by small focus groups, and then larger groups to get some initial estimates of relevance and reliability.

Beyond completion of the questionnaire, eHar- mony also requires members to proceed through what they call “guided communication.” Guided communication was created because the company suspected that, if left on their own, people would gravitate to the most superfi cial questions, like sports or activities, but not to those issues that eHarmony had determined were most important to sustainable long-term relationships.

Guided communication leads potential couples through a formal process before ever allowing them to communicate directly, and the process is com- prised of three distinct activities. First, each member of the pair is asked to choose fi ve easy-to-answer questions from a list provided by eHarmony—and then send their responses to the other member.

> Questions such as “If you were taken by your date to a party where you knew no one, how would you respond?” would be followed by multiple-choice answers, like (a) Stay close to my date, letting him/ her introduce me; (b) Find a quiet spot and relax alone; (c) Strike out on my own and make friends; or (d) Ask my date if I could skip the event.

Once both parties answer, they move on to the next stage, where they are asked to exchange their personal list of “must haves” and “can’t stands.” In the fi nal stage, the potential pair are asked to exchange three open-ended questions to allow for more detailed descriptions of respective values. eHarmony provides some sample questions, such as “What person in your life has been most inspirational and why?” or “Tell me about your closest friend. How long have you known them, and what do you like best about them?” But members can also write in their own questions.

Once this exchange is successfully completed, the two parties can move into “open communica- tion.” During open communication, the pair can send e-mails to each other, exchange photos, and prepare for their fi rst meeting. A potential couple could then decide when, where, and how to meet in the offl ine world if they wanted to pursue a relation- ship. Moreover, at any point in the process, either party can “close” the match and cease any further contact. Given the number of opportunities to drop out, only 20 to 30 percent of matches ended up in open communication.

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PART ONE Personal Skills34

Concluding Note

As we noted earlier, although sometimes characterized as being elementary or simply common sense, great management is neither common nor easy, and the existence of so many ineffective managers and toxic organizations attests to that.

Much of management deals with managing other people, but the subject of this opening chapter is about managing oneself. The most personally effective manag- ers are those who are active learners, who know themselves and their strengths and weaknesses, and who act professionally in a way that develops and nurtures strong relationships. You will undoubtedly fi nd it diffi cult to apply these principles all the time. But a large part of management is by example; managers who are not personally effective set the wrong example. Personal effectiveness is perhaps more a self-discipline than a complex learning task and is a lifetime endeavor. Great management starts with your personal effectiveness. Make it your fi rst priority!

It is easier to act yourself into

a better way of feeling than to

feel yourself into a better way of

acting.

— O. H. Mowrer

The result is that when people do meet in person to pursue the relationship they already have a collec- tive history and many starting points for discussion. Indeed, eHarmony claims that, by the time people actually meet, it will feel like they already know each other quite well. And it seems to work. The company estimates that, on average, a successful subscriber takes four to six months to get matched to someone they will eventually marry and the company boasts of tens of thousands of happy marriages.

Questions

1. Do you see any parallels to the process eHarmony promotes that might be relevant for managing people or selecting teams or job choice?

> 2. Would you be concerned about people

reporting things about themselves that were not true?

3. eHarmony contends that “opposites attract and then attack.” Explain this and support or refute the statement.

4. Note that all personal information revealed on eHarmony is self -reported. What are the pros and cons of self-reported information as a means of self-assessment?

5. Assume you had been through the eHarmony guided communication process and no dates emerged from your exchanges; how would you proceed? Should you address your weaknesses or build on your strengths, or both?

KEY TERMS

ability 27 attention 21 Big E evidence 16 cognitive ability 27 conceptual competencies 10 emotional intelligence 27 evidence-based management 13 extraversion 28 half-truths 13 interpersonal competencies 10

introversion 28 little e evidence 16 modeling 20 motivation 22 multisource feedback 30 organizational behavior

(OB) 14 personality 27 positive self-talk 26 punishment 26

reciprocal determinism 20 reproduction 22 reward 26 self-management 22 self-observation 24 SMART goals 25 social learning theory 20 technical/administrative

competencies 10

CASE CONCLUDED (continued )

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CHAPTER 1 Organizational Behavior and Your Personal Effectiveness 35

Adam Bryant conducted and condensed this interview. A longer version is at

www.nytimes.com/2009/08/02/ business/02corner.html . Published: August 1, 2009.

John T. Chambers, chairman and C.E.O. of Cisco Systems, has learned that big setbacks make great companies and great leaders.

Q. What are the most important leadership lessons you’ve learned? A. People think of us as a product of our successes. I’d actually argue that we’re a product of the challenges we faced in life. And how we handled those challenges probably had more to do with what we accomplish in life.

I had an issue with dyslexia before they understood what dyslexia was. One of my teachers, Mrs. Anderson, taught me to look at it like a curve- ball. The ball breaks the same way every time. Once you get used to it, you can handle it pretty well.

So I went from almost being embar rassed reading in front of a class—you lose your place, and I read right to left—to the point where I knew I could overcome challenges. I think it also taught me sensitivity toward others.

I learned another lesson from Jack Welch. It was in 1998, and at that time we were one of the most valuable companies in the world. I said, “Jack, what does it take to have a great company?” And he said, “It takes major setbacks and overcoming those.”

I hesitated for a minute, and I said, “Well, we did that in ’93 and then we did it again in ’97 with the

CASE In a Near-Death Event, a Corporate Rite of Passage

> >

Asian fi nancial crisis.” And he said, “No, John. I mean a near-death expe- rience.” I didn’t understand exactly what he meant.

Then, in 2001, we had a near- death experience. We went from the most valuable company in the world to a company where they questioned the leadership. And in 2003, he called me up and said, “John, you now have a great com- pany.” I said, “Jack, it doesn’t feel like it.” But he was right.

Q. How has your leadership style evolved over time? A. I’m a command-and-control per- son. I like being able to say turn right, and we truly have 67,000 people turn right. But that’s the style of the past. Today’s world requires a different leadership style—more collaboration and teamwork, including using Web 2.0 technologies. If you had told me I’d be video blogging and blogging, I would have said, no way. And yet our 20-somethings in the company really pushed me to use that more.

Q. Did you need to be pushed? A. I thought I was very leading-edge in terms of how I communicated. My team just kept pushing, and I fi nally said, “Why do you want me to do this?” And they said: “John, if you don’t do it our company won’t learn

how to do this. It won’t be built into our DNA for the way we interface with customers, our employees. The top has to walk the talk.” I was expecting text blogging and we did video blogging.

The fi rst one was a little bit uncomfortable, because it’s very unprofessional. You just basically put a camera there, and you go. By the second one, I realized this was going to transform communications—not just for the C.E.O., but it would change how we do business.

Q. You mentioned Jack Welch. Who else do you rely on for advice? A. My wife. She has a way of pick- ing me up when I get knocked on my tail. But also if I get a little bit overconfi dent, she brings me back to earth.

The other day, I was practicing a concept with her and saying, “You know, there are two major mistakes that I make and Cisco makes repeat- edly.” She looked at me and she said, “Only two?” My mistakes are always around moving too slow, or moving too fast without process behind it. And it’s something that, if we’re not careful, we’ll repeat again and again.

Q. How do you hire? A. First thing I want to ask you about: tell me about your results. I

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PART ONE Personal Skills36

never get hard work confused with success. So I’d walk you through the successes, and what did you do right. I’d also ask you to tell me about your failures. And that’s something people make a tremen- dous mistake on. First, all of us have had mistakes and failures. And it’s surprising how many people say, “Well, I can’t think of one.” That immediately loses credibility. It’s the ability to be very candid on what mistakes they’ve made, and then the question is, what would you do differently this time?

Then I ask them who are the best people you recruited and devel- oped, and where are they today? Third, I try to fi gure out if they’re really oriented around the customer. Are they driven by the customer, or is the customer just somebody who gets in the way?

And I look at their communication skills, and one of the largest parts of communications is . . . what?

Q. Listening? A. You betcha. Seeing how they listen, and are they willing to chal- lenge you? And then I look at their knowledge in industry segments, especially the area I’m interested in.

Q. What’s changed in the last few years? A. Big time, the importance of col- laboration. Big time, people who have teamwork skills, and their use of technology. If they’re not col- laborative, if they aren’t naturally inclined toward collaboration and teamwork, if they are uncomfort- able with using technology to make that happen both within Cisco and in their own life, they’re probably not going to fi t in here.

Discussion Questions

1. What two major lessons would you take from John Cham- bers and his background and career at Cisco? What surprised you about his background and perspectives?

2. How would Mr. Chambers con- tend that you treat setbacks and failures? Should you talk about them in a job interview?

3. What does Mr. Chambers think are the biggest changes in the workforce today? What implica- tions does that have for your per- sonal development and career success?

4. Invite a leading manager in your area to be interviewed. Ask simi- lar questions that were asked of Mr. Chambers and compare and contrast the responses.

SELECT MANAGE WHAT? DEBRIEFS

Making the Business Case for People Management Skills: Debrief The overall theme of your response should be that there are very strong and documented relationships between people management quality and important fi rm variables like turnover, applicant attraction, citizenship behavior, performance, and productivity. The Great Places to Work institute has even found relationships between lower health care costs and safety records and customer satisfaction.

Perhaps most impressively, there is a very strong relationship between people management satisfaction and fi nancial performance. For example, the charts in the text show that if you invested in just the 100 Best Places to Work in America—rated such in large part because of the quality of their people management practices—you would get a fi nancial return of better than twice the standard market indices over the same period. That is partic- ularly powerful data because people management practices (for example, training, family-friendly benefi ts, perks like subsidized vacations, sabbaticals, meals, and so on) are quite expensive and might be thought to therefore lower the net fi nancial performance of fi rms that spend in those ways. But, in fact, those fi rms still dramatically outperform the market—simply because they attract, retain, and motivate the best people to do the best work.

(continued)

Adapted and excerpted from “In a Near-Death Event, A Corporate Rite of Passage,” Adam Bryant, The New York Times, August 1, 2009.

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CHAPTER 1 Organizational Behavior and Your Personal Effectiveness 37

With respect to how we know who the good managers are, employee ratings (360 feedback and other sources) that look at employee satisfaction (not just happiness) with their supervision are pretty good indicators. A critical point is that it is ratings of immediate managers —not some general index of culture or management or leadership—that makes all the difference. So if a manager’s direct reports say that he/she sets clear expectations, supports their work, provides regular feedback, respects them as human beings, communicates important infor- mation to them, and distributes rewards fairly, it is safe to say that they are providing the type of people manage- ment that will yield positive outcomes for the fi rm.

One other potentially powerful point is that, with no other information to the contrary, we can probably assume that this fi rm is average in its people management performance. If so, that means that probably 50 per- cent of people in the fi rm are currently less than satisfi ed with their current manager, and probably less than 25 percent of managers engage in the people management basics at least once a week.

So, the overall point is that money spent on people management development (for example, the selection of managers, management development, mentoring, rewards geared to the success and development of others, and so on) would be well directed and, if well spent, would certainly have the potential for impact on a par with investments in product development, technology, and so on. The quote in the book, “Nothing is more important in the life of a fi rm than the way people feel about how they are managed,” is an apt synthesis of all this.

Using OB Evidence Instead of Just Intuition: Debrief A good goal for every organizational decision, and certainly for managers, is to try to be more evidence-based in your decisions. That is, your ultimate objective should be to fi nd ways to make the right decision more often than not. One way to do this is to adopt an “evidence-based decision making” (EBM) approach, as discussed in this chapter. This form of decision making rejects using gut feeling and relying on past limited personal experience and instead is based on seeking available evidence.

Perhaps the major obstacle to EBM is that in many organizations it often runs counter to the way things are currently done. A great deal that passes as “best practice” most likely is not. In some cases, there simply is no evidence to support what is thought to be best practice. In other cases, there is evidence to support that what are thought to be best practices are, in fact, inferior practices. In short, most organizations do not practice evidence- based management. As a result, they often underperform with respect to their major stakeholders: employees, investors, and the community.

Although there are many specifi cs and nuances to becoming more evidence-based in your decision style, three strategies are particularly important: (1) Do not jump to conclusions—seek and ask for evidence; (2) know the different types of evidence; (3) evaluate your decisions.

Do not jump to conclusions. Perhaps the biggest, and most elusive, element in using EBM is to be able to mitigate the natural human tendency to rely on fi rst instincts and our own experience or a compelling testimonial, and instead to actually seek evidence. Thus, when someone says “research shows” or the “evidence is clear,” great managers know to dig a little deeper to seek out that evidence. At the end of the day, anecdotes and previ- ous experience may be all that is available to help inform decisions, but in far too many cases anecdotes are used where a rich scientifi c literature exists to help make better decisions. This text, for example, relies heavily on the scientifi c base of knowledge that exists in organizational behavior.

Understand the different types of evidence. One easy way to understand the usefulness of evidence is to make a distinction between Big E evidence and little e evidence. Big E evidence refers to generalizable knowl- edge regarding cause and effect connections derived from scientifi c methods. Big E evidence is based upon years of studies, across many different types of samples or contexts with many different types of jobs, people, and organizations. Most importantly, Big E evidence represents a form of research that is systematic —meaning that it is planned and methodical and avoids drawing conclusions simply on the basis of opinion or anecdote. Such evidence is often summarized in large scientifi c literature reviews or empirical summaries known as meta- analyses or “studies of studies.” Big E evidence is likely to be the best source for informing practices since it is drawn from years of study across large populations under varying circumstances.

In contrast, little e evidence represents local or organizational specifi c data collection efforts to inform a specifi c decision. Popular quality improvement processes such as Six Sigma provide little e evidence, impor- tant information that helps the organization but that may not generalize or translate into other arenas or other

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PART ONE Personal Skills38

organizations. Examples abound of organizations that failed by trying to apply a practice that while wildly suc- cessful in another organization didn’t take hold in their own. Thus, while little e evidence may improve decision making in any organization, we must be careful not to apply it broadly.

Evaluate your decisions and create a culture of EBM. No true EBM can exist without some systematic evalua- tion of decisions. That is, once decisions are made, how did it go? What worked and didn’t work? What additional evidence will we have to inform future decisions? When managers take an evidence-based approach, they con- tribute to an organization that values and encourages active participation in the evidence-based process.

Describing Yourself and Your Style: Expanding Your Self-Awareness: Debrief There are, of course, an almost infi nite number of things you could talk about (education, past jobs, hobbies, and so on) in responding to the question “Tell us about yourself.” As a result, rambling and unfocused responses to that question are all too common. The key is to try and focus on those elements of your personality, background, and experience that would be directly relevant to your role as a manager.

A good place to start would be to engage in multiple self-assessments (such as those presented in Table 1.3). Having completed these types of assessments, you should be able to talk in an informed way about your critical- thinking capacity, your personality characteristics and preferences, what you value most, your emotional and cultural competence, and/or your career orientation.

It is important to note here that there really is no one preferred managerial profi le—and that is not just sugar- coated “nice talk.” Most personal profi les can be adapted in ways to be successful in most situations, but to do so it is critical that you are fully aware of your personal profi le—and very few young managers rarely are. More- over, you need to be able to translate your profi le into an understanding of the implications (both strengths and potential liabilities) of that profi le for success in a particular managerial role. For example, if your personality is especially extroverted, you may excel in stimulating ideas and dealing with people, but are challenged in listening to others and paying attention to details. If you value collective behavior and cooperation, you may wish to seek contexts where such values are embraced and rewarded relative to solely individual outcomes. If your analytical ability is below average, you may wish to leverage other strengths and partner with colleagues who have more refi ned analysis skills to complement your profi le. Refl ect on the type of situations where you have been most successful and be aware of when and how you have been able to adapt your personal style to be effective in dif- ferent situations.

Most importantly, you should feel no compulsion to suggest that you are something you are not— indeed that is a recipe for managerial failure. Rather, you want to accurately convey who you are and then determine how best to leverage your strengths and mitigate your weaknesses to excel in any given situation. And always start by focusing on your strengths—research has shown that it is both easier and far more productive to leverage your strengths than to try to “fi x” your weaknesses.

Finally, although a self-assessed profi le gives you a means of framing your different personal characteristics and orientations in a logical and focused way, such self-assessments are only one “lens” on yourself. It is also important to include actual examples of how you have behaved in ways that are consistent with your profi le, as well as external feedback from sources outside yourself. That is, your credibility is enhanced if you can provide external validation of your self-assessment, and examples of how you have, say, shown conscientiousness in an actual work situation, or found ways to complement your strengths (and compensate for weaknesses) with the differing strengths of others, or clarifi ed your preferences in ways that facilitated the accomplishment of a team goal. Ideally, you will be able to create your own personal story that conveys who you are in an informed way that paints a picture of a manager we would want to be led by.

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40

O B J E C T I V E S

PART ONE PERSONAL SKILLS

KO 2-1 Describe the personal and organi- zational consequences of excessive stress.

KO 2-2 Describe the most common causes of stress in work contexts.

KO 2-3 Describe supporting evidence for effective stress management interventions.

KO 2-4 Explain the fundamentals of effec- tive time management.

KO 2-5 Describe the characteristics of work- place cultures that reduce stress while retaining high performance and productivity.

2 Managing Stress and Time

KNOWING DOING

“Stress primarily comes from

not taking action over something

that you can have some con-

trol over. So if I find that some

particular thing is causing me to

have stress, that’s a warning flag

for me. What it means is there’s

something that I haven’t

completely identified that is

bothering me, and I haven’t yet

taken any action on it.”

—Jeff Bezos , CEO, Amazon

After reading this chapter, you should be able to:

DO 2-1 Diagnose your own sources of stress.

DO 2-2 Demonstrate effective strategies to manage your own workplace stress.

DO 2-3 Advise a colleague about how to manage stress using evidence- based recommendations.

DO 2-4 Apply research-supported strategies for minimizing choking in a pressure situation.

DO 2-5 Apply fundamental time manage- ment strategies to your work or school life.

DO 2-6 Advocate for development of work- place characteristics that create high-performance, low-stress work environments.

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41

> > Case: CIGNA

M ost competitive busi- ness organizations have taken the approach that

work is inevitably stressful and that managing stress is up to each individual employee— not the company. However, one progres- sive fi rm that has taken a more responsive approach to managing its employees’ stress is CIGNA. CIGNA is a global health care insurance organization, based in Philadelphia, Pennsylvania, that has over 30,000 employees. The company has con- cluded that the stressors facing their workforce today are greater than ever before. Among the growing sources of stress are increased hours necessitated by tight economic times and leaner staffs, new technologies that keep the job in front of people 24/7, and “survivor guilt” that work- ers feel when their co-workers lose their jobs.

Instead of expecting its work- ers to soldier on despite unsettling feelings and situations, CIGNA devotes considerable time and resources to help its employees resolve their stress. The assistance is available via CIGNA’s pioneer- ing Employee Assistance Program (EAP), which provides counseling for a wide range of personal and work-related stressors. CIGNA even offers its EAP services to some of its client companies as part of its health benefi ts plan.

1. Is personal stress really a com- pany’s business? Shouldn’t per- sonal issues be kept private and

dealt with by each individual employee?

2. What are the most damaging contemporary causes of stress? Is stress more or different today than ever before? Does technology and rapid change make our workplaces more or differently stressful?

3. How do stress-related issues potentially reduce an individual’s performance in a fi rm?

4. What potential business per- formance metrics (for example, productivity, cost reduction, cus- tomer service) might be affected by effective stress management strategies or interventions?

STRESS REDUCTION AS A BUSINESS STRATEGY

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1. Getting a Priority Done Under Stress You have been in a management role for two years and fi nd yourself absolutely overwhelmed. While you feel as if you are working hard most every hour of the day, you are frustrated with your inability to get all your priority work done. You have begun to work much longer hours and are experiencing a great deal of stress and a loss of balance in your life. There are so many distractions during the day that you generally fi nd it diffi cult to get started on bigger projects. Now you have a really important project due and have already missed one deadline. You feel guilty about missing that deadline, but you feel so tired and stressed that you aren’t sure how you’re going to keep from slipping further behind in your most important work.

How would you defi ne the problem here? How might you deal with the many time robbers and distractions that keep you from working on the big project? What specifi c strategies might you use? What should you do right away?

2. Overcoming the Two Biggest Time Management Traps Effective time management is among the most pronounced cases of a knowing-doing gap. That is, most everyone has a pretty good idea what they should do—but most of us just can’t muster the discipline to actually do it. Simply stated, the two big- gest time management traps are (1) failure to prioritize—that is, research shows that we often procrastinate and put off work- ing on our major priorities in favor of more easily accomplished chores with lower priorities; and (2) we do not devote our peak productivity times to our most important tasks (for example, responding to our e-mail fi rst thing in the morning).

Given that you want to be an effective manager of your time, identify three proven strategies, feasible for you, that will help you avoid the two time management traps that haunt so many.

3. Minimizing Your Chances of Choking in a Pressure Situation You are under consideration for the biggest job of your life. You just found out that you have made it to the fi nal three can- didates and will be asked to come to the company headquarters where you will be evaluated in a panel interview (multiple interviewers shooting questions at you), a half-hour presentation, and a leaderless group discussion where company execu- tives will observe your performance.

Like any normal person, the opportunity excites you—you want it so much—but the process scares you to death and you are fearful that you will choke and lose your chance. The cold reality is that many people, even superstar athletes, choke in the situations that matter most—so your fear is hardly unwarranted or irrational. You talked with your father and he said, “Hey, don’t worry about it, just go and do your best,” but that was not very satisfying and does little to calm your nerves. So what should you do to prepare? What type of preparations and strategies give you the best chance of avoiding choking?

4. Making Changes in a Workplace to Lower Stress and Enhance (Not Lower) Productivity The president of your company just appointed you to a task force that he says is a high priority in the company. In kicking off the fi rst meeting, he notes that he is concerned that “. . . stress has gotten out of hand in our workplace. Economic times are hard and our revenue streams are at risk, but we cannot be so worried about our bottom line that we stress-out our people to the point of exhaustion and sickness. My understanding is that lower stress can save us in health care costs, keep absenteeism and turnover low, and even raise productivity if we do it right. I want to have a generally healthier and lower-stress place to work. I hear Google has foosball tables in their headquarters and their people just love them—should we get a few of those or stuff like that? . . .”

Given that your president is truly serious about creating a lower-stress workplace culture, what feasibly could be done? What features of the workplace have been linked to lower stress, and is there any evidence they could be implemented with- out a huge investment and without lowering productivity?

MANAGE WHAT?

Introduction

The demands of work are ever-increasing, and organizations are expecting people will do more and more with less and less. A recent survey of American workers found almost 80 percent of employees felt the previous year was their most stressful year ever at work. 1 At one point or another, all of us have expe- rienced stress. Some of you may very well be feeling it right now. Stress is a

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• Stress is a personal, non-work issue and should not be a concern in a work organization. This myth prevails all too often and leads to nonsense like “stress is all in your head” and “people should deal with personal issues on their own time.” The reality is that stress generates enormous costs for organizations and should be a priority consideration for anyone working or managing.

• All stress is bad. In fact, all stress is not bad and some level of stress is necessary for performance—and has even been shown to be positively related to good mental health. Too much stress, however, is extraordinarily damaging to both people and organizations.

• A stressor is a stressor. One of the most important lessons of stress management is that stress is personal on several levels. Most obviously, what stresses one person may not stress another. In addition, the best coping strategies should be customized to an individual context and time. The best stress management strategy for a soldier about to enter a battle is generally very different than a parent caring for a terminally-ill child, or a manager with too many competing priorities.

• Only novices choke. Research on professional soccer players and golfers reveals that even their performance declines dramatically as the pressure and consequence of failure increases. Choking stems from pressure situations and mental overload, and even people we recognize as superstars often choke under pressure.

• Good time management means being an effi cient workaholic. Just the opposite is true. The best time managers work smarter, rather than harder, and focus their energy on true priorities.

MYTHS 2.1 Myths of Stress and Time Management ? ?

CHAPTER 2 Managing Stress and Time 43

common feature of modern life; indeed, it is so well known to many of us that it seems almost unnecessary to defi ne what stress is exactly. It is, however, help- ful to know how scientists and researchers have defi ned stress so that we have a common language to use throughout this chapter. Stress is the physiological and psychological states of arousal (for example, rapid heartbeat, loss of sleep, anxi- ety) activated when we encounter a stressor. Think about a time you have experi- enced stress. Almost always, it was because you were uncertain about something you really cared about: You weren’t sure you could fi nish an important project on time, you worried whether you had the ability to handle an assignment, or per- haps you were overwhelmed with the prospect of competing with someone you perceived as more skilled or competent.

Strains are defi ned as outcomes of stress. Often, strains are more long-term consequences of chronic stress that have not been alleviated by some means. If you are a sufferer of tension headaches, low back pain, depression, or fatigue, your woes could possibly be caused by unmanaged stress. While some people used to scoff at stress as being something that is trivial and “all in your head,” a massive amount of research suggests otherwise. The evidence is clear that sus- tained stress plays a role in strains, ranging from heart disease to cancer, and can weaken the body’s immune function so that it is less capable of fi ghting off illness and disease. Moreover, stress and the accompanying strains can take a huge toll on an organization’s productivity and performance.

Stress is often misunderstood, and some of the most persistent misconcep- tions are presented in the Myths 2.1 box below.

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PART ONE Personal Skills44

Personal and Organizational Consequences of Stress

Stress has many detrimental consequences and can inhibit effective listen- ing, decision making, planning, and the generation of new ideas. For example, several research studies have shown that managers experiencing high stress are more likely to selectively perceive information, fi xate on single solutions to prob- lems, revert to old habits to cope with current situations, show less creativity, and overestimate how fast time is passing. 2

In addition to the direct effects on work performance, people who incur long-term stress are also much more likely to develop physical and mental prob- lems. Medical researchers estimate that between 50 and 70 percent of disease and illness are in part due to long-term stress. Common stress-related physical problems include heart disease, stroke, cancer, diabetes, and lung disease. Stress- related psychological problems include sleep dysfunction, sexual dysfunction, depression, and problems with interpersonal relationships. The evidence is clear that a high degree of sustained stress makes our immune systems less effective at fi ghting illness.

Clearly, if stress goes on unmanaged, there are consequences for an indi- vidual’s health and well-being. However, there are also consequences that extend beyond the individual and impact relationships, work, and society. From a man- agerial perspective, the costs of job stress and strain are great, with estimates ranging as high as $300 billion annually in the U.S. alone. 3 Researchers have linked stress to a variety of workplace outcomes and have found that stress has a detrimental effect in terms of reducing people’s commitment to their organiza- tion and increasing absenteeism and turnover intentions. 4

Some Stress Is Good

At the same time, although stress is thought of as a negative or unpleasant state, some level of stress is essential to high performance. The father of stress research, Hans Selye, called this eustress, which he defi ned as a controlled or productive stress. 5 It is eustress (pronounced “u-stress”) that gives us our competitive edge. Without any sense of pressure and arousal, many of us would have no reason to get out of bed in the morning; thus eustress represents that ideal amount of arousal.

Increasingly, researchers are probing the upside of stress. Some now believe that short-term boosts of stress can strengthen the immune system and protect against some diseases like Alzheimer’s by keeping the brain cells working at peak capacity. People who experience moderate levels of stress before surgery have a better recovery than those with high or low levels. Other research has found that stress can help prevent breast cancer because it suppresses the production of estrogen, and children of mothers who had higher levels of the stress hormone cortisol during pregnancy were developmentally ahead of those of women with lower levels. 6 In organizations, it is well known that sales representatives often respond to quotas, and customer service people often work hardest to mollify angry customers—revealing that stress can and does facilitate higher perfor- mance and productivity.

So, the paradox of stress is that too much will kill performance, but so will too little (see Figure 2.1 )! Each person has an optimal point at which stress helps improve performance by motivating and grabbing their attention as if to say, “Don’t take this for granted, it’s important.” So the challenge is not to eliminate stress, but to understand how it arises and to manage it in a way that does not derail our life and work. Great managers are aware of different sources of stress and seek ways to proactively manage it to avoid its harmful effects.

KO 2 - 1

We hire for skills but then the

whole person shows up.

—Unknown

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CHAPTER 2 Managing Stress and Time 45

Stress Is Personal: Individual Differences and Their Relationship to Stress

Have you ever wondered why it is some people under stress can still function and move forward while others sit depressed, withdrawn, or become physically sick? Given that so many stressors are inevitable and beyond our control, the most critical lesson of stress management is not to aim to eliminate all stresses in your life, but rather to build your resiliency and personal systems (for example, time management) to cope with the stress you will face. The fact is that events by themselves do not cause stress; it is how we experience events, and how resilient we are, that determines how stress affects us.

Imagine that you are about to give a speech in front of an auditorium of hun- dreds of people. How would you feel? Exhilarated? Terrifi ed? Bored? How about instead of a speech you were about to go skydiving? Can you think of any activi- ties or things that you fi nd particularly stressful that are not stressful (or perhaps are even enjoyable ) to other people? Those who study stress have made the same observation and have proposed a theory, known as transactional theory, which suggests that the negative effects of stress on a person are a function of the inter- action between the person and their environment. 7 They specify several major components to the stress process: First, when people encounter something poten- tially stressful in the environment, they go through primary appraisal where they evaluate the potential stressor with respect to its potential impact on them. It is possible that different people will recognize the same situation in different ways.

One person may view a trip to the dentist as threatening while another per- son may have no problem with the dentist but may instead be fearful of being in confi ned spaces like in an elevator. If the stimulus is not deemed threatening to the person in question, he or she simply goes on with life as normal. However, if the stimulus is perceived as a threat during primary appraisal, the person will engage in secondary appraisal, which is the individual’s assessment of what he or she can do in response to the threat. The individual can engage in coping, which can include cognitive and behavioral responses to the stressor. Coping strategies, which we will be discussing in greater detail later in the chapter, vary by person and also by the type of stressor. Some people have certain coping strategies they frequently turn to—for example, avoiding problems or seeking help from other

It is not falling in the water that

makes you drown. It is what you

do once you’re in there.

—Anonymous

P E R F O R M A N C E

Eustress Distress

S T R E S S L E V E L Optimum Stress

FIGURE 2.1 The Stress/Performance Curve

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PART ONE Personal Skills46

people. Different stressors also call for different coping strategies. Sometimes we can avoid the stressor altogether by changing the environment. For example, people who are afraid of heights can often avoid situations with this stressor. In contrast, people who are afraid of crowds might not be able to avoid large groups of people indefi nitely. Instead, these individuals might try to use rationalization to remind themselves that their fears are unwarranted or may try relaxation or deep-breathing exercises.

In addition to the idea that different people have different ideas of what is or is not a stressor, researchers have identifi ed certain personality variables that affect people’s appraisal of and reaction to potential stressors. That is, differ- ences in personality can impact how someone experiences and copes with stress, and we describe and illustrate three of the most important of these personality characteristics next.

Type A behavior pattern. You may have heard people describe themselves as being “Type A”—you may even have described yourself this way. The term has been around since the 1950s when fi rst identifi ed and reported by medical doctors Friedman and Rosenbaum. 8 Being cardiologists, Friedman and Rosen- baum were particularly interested in the relationship between cardiovascular disease and people’s personality. They described a cluster of characteristics and

Tool Kit 2.1 Type A Personality Assessment Read the following questions and then put an X next to the items with which you agree.

1. _____ I never seem to have enough time to accomplish my goals.

2. _____ I don’t understand people who become so impatient in traffi c that they start honking.

3. _____ I frankly don’t care whether I do or do not make it into the top 10 percent.

4. _____ I fi nd it diffi cult and useless to confi de in someone.

5. _____ A driver’s license should be more diffi cult to get in order to avoid having all those idiots on the road.

6. _____ It doesn’t bother me if I cannot fi nish what I planned for the day.

7. _____ I often choose to spend time with my friends or family, even though I have something important to do.

8. _____ I am hardly ever satisfi ed with my achievements.

9. _____ I get no particular pleasure out of acquiring things.

10. _____ It is easy for me to express my feelings.

11. _____ People who don’t know what they want get on my nerves.

12. _____ I think that hobbies such as fi shing or bowling are just a waste of time.

13. _____ When I fi nish my task, I feel good about myself.

14. _____ I function best under stress or pressure.

15. _____ Talking about emotions is a sign of weakness and can be used by others to get at you.

16. _____ It doesn’t matter whether my family is fi nancially secure. The important thing is to be together.

17. _____ If everybody did their job properly, my life would be much easier.

To calculate your score, count the number of X’s that were next to numbers 1, 4, 5, 8, 11, 12, 13, 14, 15, 17. Scores of 0–3 suggest a strong Type B, 14–17 suggest a strong Type A, and scores of 4–13 suggest a mixed

Type A/B profi le.

MANAGER’S TOOL KIT

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CHAPTER 2 Managing Stress and Time 47

behaviors that included time urgency, hostility, ambitiousness, impatience, and perfectionism. Specifi cally, they described people with a Type A behavior pat- tern as “individuals who are engaged in a relatively chronic struggle to obtain an unlimited number of poorly defi ned things from their environment in the shortest period of time and, if necessary, against the opposing effects of other things or persons in this same environment.” 9 In their rush to achieve success and conquer their environments, Type A individuals (see Tool Kit 2.1 for a quick measure of your behavior type) are likely to do everything quickly from talking to walking to eating to driving. Because achievement is typically very important to them, Type A individuals usually like to have control over their environments and sometimes dislike working in teams or with other people. 10

Although initially thought to be related to coronary heart disease, current research shows that it is one specifi c aspect of the Type A behavior pattern—hos- tility—that is most predictive of one’s health. For example, a recent study found that together with job demands, trait hostility predicted individuals’ health care usage. 11

Locus of control. Do you believe that the stars are responsible for your fate and that whatever your horoscope reads is what you are destined for that day? Or do you think you are in control of your day and your ultimate fate? If you answered yes to the latter question, you are likely someone with an internal locus of control and you can be pleased by the knowledge that you are likely more resilient to stressors and stress than are people who answered yes to the fi rst question. Locus of control is the extent to which we believe we control our own environments and lives. Having an internal locus of control means that you believe you have control over your environment, whereas having an external locus of control means you think sources outside yourself (for example, luck or fate) are generally responsible for your environment. In general, having an inter- nal locus of control is more benefi cial with regard to job performance and stress because people with such a mindset are more likely to take positive actions to address stressors because they believe that their actions will be effective. 12 Tool Kit 2.2 provides you with a brief locus of control diagnosis.

However, an extremely strong internal locus of control is not always ben- efi cial. After all, we cannot control every situation in our lives, and to think that we can is not healthy. For example, during Hurricane Katrina, many people who could have evacuated decided not to, perhaps because they felt immune to the storm and capable of taking care of the situation themselves. Many of those peo- ple ended up having to be rescued by emergency workers and some even died. Research indicates that people who demand an extreme amount of control, even in situations where they can’t have control, suffer in terms of increased stress and physiological reactivity. 13 , 14

Self-effi cacy. If the train from the popular children’s book The Little Blue Engine That Could was given a personality test, that little train would probably score highly on self-effi cacy, which is a personal assessment of “how well one can execute courses of action required to deal with prospective situations.” 15 An abundance of research demonstrates the positive effects of self-effi cacy. People who believe they can accomplish something have higher motivation and are more likely to persist in the face of obstacles. Because they think they can succeed, they engage in the behaviors necessary to succeed, and are in fact more likely than people with low self-effi cacy to succeed at their jobs and tasks. 16 In contrast, a lack of self-effi cacy has been speculated to relate to the stress process because people low in self-effi cacy believe they do not have the resources available to cope with stressors. As an example, one study found that self-effi cacy played a role in whether or not salespeople experienced symptoms of burnout. 17

It’s not the load that breaks you

down. It’s the way you carry it.

—Legendary singer and actress,

Lena Horne

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PART ONE Personal Skills48

Common Sources and Causes of Stress

Traumatic Events vs. Daily Hassles

Everyone encounters a variety of stressors, and they can derive from many sources. Stress may stem from interpersonal relationships such as confl ict with co-workers or subordinates, ambiguity regarding one’s role, or feelings of inequity or poor communication with others. It may also stem from conditions in the working environment such as changes in responsibility, reduction in company resources, or pay cuts. It might come from personal issues such as a divorce, potential law- suit, or the death of a family member. And it may emerge from the pressure of too little time to handle the workload, scheduling confl icts, and deadlines.

KO 2 - 2

D O 2 - 1

Stress is the trash of modern

life—we all generate it but if you

don’t dispose of it properly, it will

pile up and overtake your life.

— Terri Guillemets

Tool Kit 2.2 Locus of Control Put an X next to the response in each pair with which you agree more.

_____ People’s misfortunes result from the mistakes they make.

_____ Many of the unhappy things in people’s lives are partly due to bad luck.

_____ In the long run, people get the respect they deserve in this world.

_____ Unfortunately, an individual’s worth often passes unrecognized no matter how hard he tries.

_____ Capable people who fail to became leaders have not taken advantage of their opportunities.

_____ Without the right breaks, one cannot be an effective leader.

_____ People who can’t get others to like them don’t understand how to get along with others.

_____ No matter how hard you try, some people just don’t like you.

_____ In the case of the well-prepared student, there is rarely, if ever, such a thing as an unfair test.

_____ Many times exam questions tend to be so unrelated to course work that studying is really useless.

_____ Becoming a success is a matter of hard work; luck has little or nothing to do with it.

_____ Getting a good job depends mainly on being in the right place at the right time.

_____ The average citizen can have an infl uence in government decisions.

_____ This world is run by the few people in power, and there is not much the little guy can do about it.

_____ In my case, getting what I want has little or nothing to do with luck.

_____ Many times we might just as well decide what to do by fl ipping a coin.

_____ What happens to me is my own doing.

_____ Sometimes I feel that I don’t have enough control over the direction my life is taking.

To calculate your score, count the number of Xs associated with the fi rst (or top) choice in each pair. This is your score. Scores of 7–9 indicate a highly internal locus of control, while scores of 0–3 indicate a highly external locus of control. Scores from 4–6 indicate a middle of the road score.

MANAGER’S TOOL KIT

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CHAPTER 2 Managing Stress and Time 49

One important research fi nding related to the sources of stress is that people tend to overestimate how much large events in their lives contribute to their stress level and grossly underestimate the effects of “daily hassles.” 18 Certainly, major life event stressors such as moving, a new job, or the death of a loved one can take a toll on an individual. Yet these stressors are often accepted as traumatic in people’s lives and thus organizations often make accommodations for them.

On the other hand, the stressful effects of daily hassles are typically dis- counted. Daily hassles are annoying events that occur during the workday that make accomplishing work more diffi cult. Take, for example, the all-too-common event of a computer crash, and losing all access to e-mail and work fi les. For many of us, daily hassles also include unexpected walk-ins who want to “shoot the bull,” phone calls or e-mails from bosses or colleagues who need immediate responses, and other urgent meetings or requests.

Research has shown that these daily hassles are more likely associated with reported stress than more major life events. Indeed, some research has found that daily hassles are the most signifi cant infl uence on mood, fatigue, and perceived workload. 19 Put simply, the more you must deal with daily hassles, the more stressed out you are likely to be. Trying to overcome the unexpected unplanned obstacles of daily hassles is often what really wears you down. Conversely, daily uplifts or unexpected positive outcomes can have the opposite impact and can recharge an individual.

Role Conflict and Ambiguity

All of us play multiple roles in our lives. For example, your boss may also be a mother and a dance instructor. Your colleague runs the local chapter of Habitat for Humanity and cares for his aging uncle. Think of all the roles you play in your life. The potential list might be quite lengthy: employee, manager, volunteer, men- tor, parent, sibling, daughter/son, neighbor, and so on. Role theory is a perspec- tive to understanding stress that focuses on the roles we play in our lives. When we don’t know how to fi ll a role or what we are supposed to do in it, we experience role ambiguity. Role ambiguity can occur at work if employees are not given clear job descriptions or managers do not communicate performance expecta- tions and feedback. Role ambiguity is stressful for employees because if they don’t know what they are supposed to be doing, they can’t very well do a good job at it.

In addition to role ambiguity, another potential problem addressed by role theory is role confl ict, which occurs when our multiple roles confl ict with each other. At work, role confl ict might occur for employees answering to two manag- ers who have different expectations. Such arrangements are common in matrix organizations in which employees often report to both their department man- ager and the project manager. While such arrangements certainly have their benefi ts, they can also cause problems if the managers have confl icting expecta- tions. If employees fulfi lling their department roles are simultaneously unable to fulfi ll their roles on their project team, you can understand why they might feel stressed: They are in a no-win position because they can’t successfully succeed in both roles at once.

Another common role confl ict that causes stress has to do with the roles people play inside and outside of work. Work–family confl ict is “a form of inter- role confl ict in which the role pressures from the work and family domains are incompatible in some respect.” 20 Work interferences with family (WIF) occur when in fulfi lling their work roles, people are unable to fulfi ll their family roles in the way that they want. For example, if a manager must travel for work on the same weekend that his or her child is performing in a sports event, that per- son’s work is interfering with the family role. Family interferences with work (FIW) are experienced when in fulfi lling a family role, a work role is neglected.

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PART ONE Personal Skills50

For example, if someone is going through a divorce or is taking care of an ail- ing family member, it is likely that this stress will impact his or her work role. Whether the person is physically or simply mentally absent from work, family obligations can prevent a person from performing at 100 percent capacity in the workplace.

Research on role theory has shown that both role ambiguity and role confl ict are signifi cantly related to a number of negative outcomes: lower job satisfaction, reduced commitment to one’s organization, higher anxiety, and increased turnover intentions. 21 In addition to those fi ndings, research focus- ing more specifi cally on work–family confl ict has shown that people reporting more extreme WIF and FIW are at increased risk for substance abuse, anxi- ety disorders, emotional exhaustion, and reduced job performance. In fact, a recent meta-analysis of work–family confl ict found that a person’s job satisfac- tion is signifi cantly related to his or her reports of family factors like stress, confl ict, and support. 22

Exhaustion of Resources and Burnout

We only have so much we can give to others in terms of our time, energy, money, and other resources. A model known as conservation of resources (COR) sug- gests that stress results from three possible threats to our resources: (1) the threat of losing a personal resource; (2) the actual net loss of a personal resource; or (3) the lack of resource gain following the investment of our personal energy and resources. 23

For example, when organizations experience mass layoffs, the remaining employees (the “layoff survivors”) are often expected to pick up the slack. They must devote more time and energy, and usually they do not receive additional resources for doing so. These time and emotional pressures, not to mention the threat of the loss of their own job in future layoffs, can lead to severe stress. As another example, counselors, social workers, nurses, and other people who work in the “helping professions” often experience stress as a result of con- stantly giving their energy and time to take care of others. Indeed workers in these types of professions may be particularly susceptible to a severe state of stress called “burnout.” Burnout refers to “a syndrome of emotional exhaus- tion, depersonalization, and reduced personal accomplishment that employ- ees may experience after prolonged stress that has exceeded their resources to address.” 24

A number of specifi c emotional components are associated with burnout. Emotional exhaustion is the state of feeling psychologically “drained” or “used up” by the job. For example, a counselor experiencing emotional exhaustion might feel like he has lost the ability to feel the emotions necessary to perform his work. Depersonalization is associated with feeling cynical, psychologically detached, and indifferent to one’s work. Reduced personal accomplishment is the feeling that one’s work doesn’t really matter. A manager experiencing reduced personal accomplishment might feel that she can’t get positive results out of her employees no matter how hard she tries. She may feel personally ineffective and powerless in her work.

Originally, burnout was conceptualized as something that happened to employees in the helping professions. However, we now know that people in any work can experience burnout if they feel that their resources are depleted. Other research shows that certain kinds of people might be more prone to burn- out than others. Age is one of the strongest demographic predictors of burn- out with younger employees experiencing signifi cantly greater burnout than older employees. 25 However, because younger workers also tend to have less

Practice this! Go to www.baldwin2e.com

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CHAPTER 2 Managing Stress and Time 51

experience, status, and income on the job, it is diffi cult to determine whether it is in fact age or these other factors that primarily contribute to burnout. Although burnout was originally presumed to affect more women than men, research does not confi rm this assumption. The only gender differences seem to be that men experience more cynicism (depersonalization) symptoms, while women experi- ence slightly more emotional exhaustion symptoms. 26 Some studies show a posi- tive correlation between education and burnout, perhaps because people with more education have jobs that demand more out of them. With regard to marital status, married employees show less burnout than do single employees, perhaps because they have more support. 27

Emotional Labor

Imagine that you are having a very bad day. You have gotten into an argument with a family member, your car had a fl at tire on the way to work, and you have a pounding headache. At work you have a very important meeting with clients who are upset about their account with the company and they start shouting at you. What do you do? If you’re like most people, you do your best to remain pro- fessional and pleasant even though you actually feel miserable and angry. There is a name for what you’re doing and it is called “emotional labor.” Emotional labor is the process of regulating both feelings and expressions for the benefi t of organizational goals. 28 The term was originally coined by a researcher who was observing the phenomenon in fl ight attendants. 29 Like burnout, emotional labor is likely to be common in the helping professions, but it has been reported by many workers, including supermarket cashiers, Disneyland ride operators, and salon employees. In many of these jobs, part of the job is acting a certain way even if you don’t feel like doing so. Expanding on this notion of “acting” on the job, an important distinction can be made between employees engaging in “sur- face acting” and those engaging in “deep acting.” Surface acting is “managing observable expressions,” such as maintaining a pleasant facial expression and vocal tone. Deep acting is the actual management of feelings, or actually trying to feel a certain way that is consistent with the emotions that are supposed to be expressed. 30 Comparing surface to deep acting, the former is like “faking” your emotions while the latter is trying to manage your emotions so you don’t really need to fake your expressions.

Obviously, organizations want their employees to act in ways consistent with the organization’s goals. However, managers should be aware that emo- tional labor can be taxing on employees, particularly employees who are not well suited to that type of work. Some research has found that emotional labor is stressful and can lead to burnout, job dissatisfaction, and increased inten- tions to quit one’s job. 31 With regard to preventing or alleviating the problems associated with emotional labor, managers have several strategies available to them. For jobs that require a great deal of emotional labor (for example, bill collectors or fl ight attendants), managers may want to focus their recruit- ment and selection techniques on identifying people who are good at manag- ing their emotions and have a natural disposition that suits the job. 32 Beyond selecting the right people for the job, there may be additional benefi ts to train- ing employees on how to deal with and manage their emotions. Social sup- port and positive group cohesion in the workplace can also be benefi cial, as can giving employees some latitude over the emotions they can express. 33 For example, instead of subscribing to an unwavering belief that “the customer is always right,” employees likely would benefi t from some degree of latitude—for example, being allowed to refuse service to a particularly rude or aggressive customer.

The time to relax is when you

don’t have time for it.

— Sydney J. Harris

Tension is who you think you

should be. Relaxation is who

you are.

—Chinese Proverb

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PART ONE Personal Skills52

High Demands and Low Control

Another well-documented source of stress and strain occurs when people are experiencing both high work demands and low control over the task. 34 This source of stress has been labeled the “demand-control model” and the basic notion is that the combination of excessive demands and low decision latitude (rather than just one in isolation) leads to stress. Demands include the physi- cal, intellectual, and emotional requirements of a job. Control is the amount of personal discretion and autonomy the person has in doing the job. Some jobs are inherently more stressful than others if they require great demands but afford the employees little control. For example, nurses, food service employees, and customer service representatives often have great demands put on them in terms of time, emotional labor, and physical labor. However, they do not typically have much say in how they do their job, instead being required to follow strict guide- lines or procedures. In contrast, jobs like managers, journalists, and engineers may also have great demands placed on them, but are often granted signifi cantly more control.

Research studies of the demand-control model have shown some support. For example, one study found that people reporting high demands but low con- trol in their jobs and lives were at signifi cantly higher risk of illness than other people in the study. 35 A group of researchers found that high demands and low control predicted high systolic blood pressure and lower job satisfaction. 36 In a fi ve-year longitudinal study, nurses with the highest reported demands and low- est reported control were sick more often and had higher health care expendi- tures than other nurses in the sample. 37

Some research suggests that social support can buffer the negative effects of high demand and low control. 38 Other studies, however, are not as optimis- tic that social support can reduce the stress associated with high demands and low control. 39 In spite of the mixed fi ndings, social support from peers and managers rarely has a negative impact on employees! Thus, offering social support to employees experiencing high demands and low control can be a relatively easy and inexpensive means of possibly alleviating stress and strain for those around you.

Stress management starts with identifying the sources of stress in your life. This isn’t as easy as it sounds. Your true sources of stress aren’t always obvious, and it’s all too easy to overlook your own stress-inducing thoughts, feelings, and behaviors. Sure, you may know that you’re constantly worried about work dead- lines. But maybe it’s your procrastination, rather than the actual job demands, that leads to deadline stress. To identify your true sources of stress, look closely at your habits, attitude, and excuses:

• Do you explain away stress as temporary (“I just have a million things going on right now”) even though you can’t remember the last time you took a breather?

• Do you defi ne stress as an integral part of your work or home life (“Things are always crazy around here”) or as a part of your personality (“I have a lot of nervous energy, that’s all”)?

• Do you blame your stress on other people or outside events, or view it as entirely normal and unexceptional?

Until you accept responsibility for the role you play in creating or maintain- ing it, your stress level will remain outside your control. Tool Kit 2.3 is a good way to begin your journey to better stress management.

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CHAPTER 2 Managing Stress and Time 53

Stress Management Strategies

The Importance of Matching Strategies with Causes

It may seem that there’s nothing you can do about your stress level. The job or school requirements aren’t going to go away, there will never be more hours in the day for all your commitments, and your career or family responsibilities will always be demanding. But you have a lot more control than you might think. In fact, the simple realization that you’re in control of your life is the foundation of stress management.

Managing stress is all about taking charge: taking charge of your thoughts, your emotions, your schedule, your environment, and the way you deal with problems. The ultimate goal is a balanced life, with time for work, relationships, relaxation, and fun—plus the resilience to hold up under pressure and meet

KO 2 - 3

D O 2 - 2

D O 2 - 3

D O 2 - 4

The biggest difference between

an experienced speaker and an

inexperienced speaker is when an

experienced speaker is scared to

death, he knows it is normal.

— Mark Twain

Tool Kit 2.3 What Are the Sources of YOUR Stress: Starting a Stress Journal A stress journal can help you identify the regular stressors in your life and the way you deal with them. Each time you feel stressed, keep track of it in your journal. As you keep a daily log, you will begin to see patterns and com- mon themes. Write down:

• What caused your stress (make a guess if you’re unsure)

• How you felt, both physically and emotionally

• How you acted in response

• What you did to make yourself feel better

Next, think about the ways you currently manage and cope with stress in your life. Your stress journal can help you identify them. Are your coping strategies healthy or unhealthy, helpful or unproductive? Unfortunately, many people cope with stress in ways that compound the problem.

For example, the following strategies may temporarily reduce stress, but they cause more damage in the long run:

• Smoking • Using pills, alcohol, or drugs to relax

• Drinking too much • Sleeping too much

• Overeating or undereating • Procrastinating

• Zoning out for hours in front of the TV or computer

• Filling up every minute of the day to avoid facing problems

• Withdrawing from friends, family, and activities • Taking out your stress on others (lashing out, angry outbursts, physical violence)

Your ultimate goal is to replace unhealthy strategies with those that have been proven to help prevent and cope with stress—but you cannot do that until you are clear on where your stress comes from and what you cur- rently do to cope.

MANAGER’S TOOL KIT

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challenges head on. Moreover, a critical point that is too often overlooked or just ignored in stress management seminars and books is that no strategy works for all people all the time. Different situations call for different responses. For exam- ple, it makes little sense to tell combat soldiers about the advantages of avoiding too much cholesterol or salt in their diets. Similarly, it would be pointless to tell an overwhelmed single parent of four about the stress-reduction advantages of getting a hobby.

Different timing and preferences also call for different stress management strategies. Before a big test, studying hard may be the best way to relieve stress. If necessary, you can tell yourself later that one bad grade won’t ruin your life. Exercise can be a great stress reducer, but only if you like exercise. If you hap- pen to hate working out, you’ll feel stressed out every time you enter the gym. Likewise, experts are always telling stressed-out people to seek social support, something that has been shown in many circumstances to be a proven stress reliever—but not always. A bad marriage is much worse than not being married, and nobody needs to build a friendship network with people who will just criti- cize everything you do.

The simple but powerful point is that the strategies identifi ed and described in the following section are not universally effective nor will they be useful in every situation with every person. Rather, they are strategies for which there is evidence of success in reducing stress and its consequences under certain circum- stances. There are many healthy ways to manage and cope with stress, but they all require change. You can either change the situation (prevention) or change your reaction (coping). Prevention s trategies are aimed at removing or altering the stressors in your environment. Thus, they are “fi rst line” defenses in that they are aimed at stopping stress before it starts. For example, role ambiguity, one of the stressors identifi ed in role theory, might be reduced by giving employees clear job descriptions, goals, and feedback on goal progress. Excessive work and time demands are frequently cited as stressors and might be lessened with technolo- gies that take some of the burden off the employees.

Of course, primary prevention strategies are not always practical because it is not possible to remove every stressor from the work environment or our lives. For example, consider an employee who has experienced the death of a close family member. As the employee’s manager, you obviously cannot “undo” this death or remove it as a stressor. Or as another example, consider the problems associated with a bad economy where a business must choose between a number of bad options: layoffs, increased work for current employees, pay cuts, or busi- ness closure. In such cases, coping strategies are required.

Coping strategies are aimed at helping people cope and minimizing the negative impact once stress has been experienced. Sometimes coping interven- tions are known as “band-aid” approaches because they don’t really prevent the stressor (the “cut”) but hopefully minimize the damage. 40 There are many secondary interventions available, including exercise, meditation, relaxation techniques, social support, time management training, and communication or relationship-building training. Again, no single method works for everyone or in every situation, so experiment with different techniques and strategies. Focus on what fi ts your situation and the nature of the stress that you (or those working with you) are facing.

Prevention Strategies

Enhancing Control and Predictability

Stress turns out to be much less stressful if you think there’s something con- structive you can do about it. 41 This makes intuitive sense. If you’re trying to

Practice this! Go to www.baldwin2e.com

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sleep at night and there’s a barking dog nearby with owners who are not home, you’ll experience a lot less stress if you know you can reduce the noise by closing the window or if you have some way to contact the owner. If the dog is so loud that closing the window doesn’t reduce the noise much, or if you don’t know the owners or have a way of getting in touch with them, the barking is much more stressful. If someone’s laid off, they’re in much better psychological shape if they have the sense that they’ll get another job soon when they go looking. If a person sinks into hopelessness and inaction, they suffer a much greater toll in mind and body.

Indeed, researchers have found that the most important variable among types of stress is an individual’s sense of control in a given situation. 42 The least harmful stress scenario is one in which an individual has a suffi cient degree of control or some idea of predictability. Put simply, predictable pain is less stress- ful because individuals know when to relax (gaining relief from pain as well as protecting themselves from its damaging effects). But when individuals have no warning of pain, they are in a state of constant stress. A common example from business organizations is the difference between the stress experienced by top executives who are in control of their fate and their middle-level man- agers who are not. The former can pick and choose when to enter or engage a stressful situation or problem, but the latter have no control or any ability to predict when such a situation will arise and are constantly on alert or in a state of anxiety.

Although it is not always possible or desirable to reduce the demands and increase the control of a job, managers might benefi t from thinking through such possibilities. Especially if managers must place increased demands on employ- ees, for example, during times of layoffs, it may be helpful to give employees more control over how they meet those demands. Using the example of a layoff, when layoff survivors are expected to take on additional workloads, managers might consider allowing for fl exible work arrangements that allow them to work some of the time from home.

Predictability fi gures into the stress equation in one more way. If we know enough about the stressor to judge just how dangerous it is, it’s a lot less stressful than if we can’t tell. It’s easier if we know the barking dog is safely behind a fence than if we’re afraid the dog’s waiting for us outside or is strong enough to break in through the window.

Novelty, the opposite of predictability, can be stressful in itself. An interest- ing study of people who lived through the bombing of London during World War II demonstrates this in graphic terms. At the beginning of the bombing, central London was hit every night, whereas in the suburbs the bombing was more inter- mittent and unpredictable. Suburbanites living through this experience had a signifi cantly greater incidence of stomach problems than those living in the more regularly bombed urban core. By the third month of the bombing, after everyone had had a chance to get used to it, rates dropped back to near-normal. 43

Social Connectedness

It’s no surprise to anyone living with high stress levels that having someone there to share the experience is one of the best stress-relievers. Put simply, stress (or more importantly, stress relief) loves company. 44 Robert Sapolsky, author of the landmark work on stress and its effects, Why Zebras Don’t Get Ulcers, spent much of his life researching the coping behavior of baboons. Highly intelligent and social, these higher primates serve well in many ways as models for human behavior.

Baboons typically live in groups of 50–150 and structure their societies hier- archically. Alpha males are the dominant baboons in their tribe. Sapolsky has

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identifi ed two distinct styles of alpha-male baboons—the competitor and the cooperator:

• The competitor climbs to the top and stays on top (while he can) by being the baddest baboon in the tribe. He intimidates, he beats up the opposition, he takes no prisoners.

• The cooperator builds alliances and relationships, spends more time playing with young baboons and grooming younger females in a non- sexual manner.

Guess which one has higher stress levels and a shorter life? That wasn’t too hard. The competitor, reminiscent in many ways of classic human Type A behav- ior, always has to watch his back. The cooperator tends to live a lot longer, aging much more gracefully. 45

Many studies in humans are consistent with the baboon fi ndings and show that stress is much less damaging if we have social support and can interact well with others. 46 People with larger and more varied social networks tend to have better well-being. There are many types of support that other people can offer us in times of need to help us deal with the stressors in our lives. Sapolsky identifi ed several different kinds of support that include instrumental, emotional, informa- tional, and appraisal. Instrumental support is support that is tangible and prac- tical in nature and is a direct means of helping someone. For example, imagine you are experiencing stress because you want to leave work on time to get to an important family event but you need to fi nish a work project before you leave. Now imagine that your very compassionate co-worker offers to stay late and fi n- ish the work so you can attend the family function. In this example, your kind co-worker is offering instrumental support.

Emotional support includes sympathy, listening, and caring for others. If you lost your job or you are going through a divorce and a friend listens to your troubles and tells you that he cares, that person is offering emotional support. Now imagine that you have a particularly touchy human resources issue with an employee and you aren’t sure how to handle it. If you have a friend who is a human resource specialist or an employment lawyer, that friend may offer you informational support, or information that helps you solve the problem. Another type of support is appraisal support, which is feedback that builds your self-esteem. If you just botched a big presentation at work, and a co-worker listens to you and reassures you that it wasn’t so bad and that normally you give fantastic presentations, this person is giving you appraisal support.

One of the most arresting examples of the power of connectedness (and the lack thereof) comes from King Frederick II of Sicily, a 14th-century monarch who was prone to dramatic experiments. 47 The king wanted to discover the “natural” language of humans—in other words, what they would speak if they never heard any words from their parents (Latin seemed like a strong possibility). The king “acquired” a group of infants and instructed his servants to feed the children but not hold them, play with them, and above all, speak with them. The children all died before the experiment got very far. At any age, loneliness and isolation are some of the biggest stressors of all and social connectedness is therefore a key element in stress reduction.

Avoiding Choking

One of the most painful consequences of stress is what is commonly known as “ choking ” which is defi ned as performance decrements under pressure circum- stances. Choking got its name because a person frayed by pressure might as well

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not have oxygen. What makes choking so fascinating is that it happens to all of us—from superstar athletes to high-school test-takers—and it is among the most dreaded fears of human beings.

Preventing Choking

Fortunately, scientists have begun to uncover the causes of choking and some preventative strategies. The sequence of events typically goes like this: When people get nervous about performing, they become self-conscious. They start to fi xate on themselves, trying to make sure that they don’t make any mistakes. This can be lethal for a performer. The soccer player misses the penalty kick by a mile. The golfer lightly taps his putt and comes up way short. The test-taker suddenly cannot remember how to do the simplest math calculation. In effect, performers are incapacitated by their own thoughts and self-destruct.

The existing research suggests that there are two antidotes for choking that have shown promise: pressure practice and focused automated behavior. A good example of pressure practice comes from the work of a researcher named Raoul Oudejans who studies many kinds of high-pressure situations, with a particular focus on police offi cers. Oudejans found that training to shoot a handgun under stress helps to prevent police offi cers from missing an important target when it counts. 48 More specifi cally, Oudejans asked a group of police offi cers to practice shooting fi rst at an opponent who was putting the pressure on by actually fi r- ing back—not with real bullets, but with colored soap cartridges. He then asked these same police offi cers to take shots at cardboard targets (the kind you see cops practicing on in the movies). After the shooting practice, Raoul split his police offi cers into two groups. Half of the offi cers practiced fi ring at the live opponent and the other half only practiced shooting at the cardboard targets. Then, everyone came back together and took some fi nal shots—fi rst at the live opponents and then at the stationary cutouts.

During the initial shooting practice, all of the offi cers missed more shots when fi ring at a live opponent compared with fi ring at the sedentary cardboard targets. Not so surprising. This was true after training as well, but only for those offi cers whose practice had been limited to the cardboard cutouts. For those offi - cers who practiced shooting at an opponent, after training they were just as good shots when aiming at the live individuals as they were when aiming at the sta- tionary cutouts. The opportunity to “practice under the gun” of an opponent, so to speak, helped to develop the police offi cers’ shots for more real-life stressful shooting situations.

You might wonder if this type of “pressure practice” is really effective, given that the stress simulated in training is not nearly as overwhelming as that of a real high-stakes performance. Just think about the pressures a police offi cer faces when forced to shoot at someone who is fi ring back with real bullets rather than soap cartridges, or the pressure a professional soccer player feels when he is about to take a decisive penalty kick in the World Cup fi nals, or even the pres- sure a high-school senior feels as she sits down to take the SAT that will make or break her college dreams. Can you even begin to mimic the types of stressors that come into play in actual high-stakes situations? The answer is, yes, because even practicing under mild levels of stress can prevent people from falling victim to the dreaded choke when high levels of stress come around.

The evidence is clear that regardless of whether you are shooting at someone on the battlefi eld, shooting hoops in basketball, or sitting for the SAT, you can benefi t from mild stress training. 49 When people practice in a casual environment with nothing on the line and are then put under stress to perform well, they often choke under the pressure. But if people practice shooting a gun or shooting hoops

We all choke. . . . No matter who

you are, you just feel pressure in

the heat of the moment.

— Pete Sampras ,

Hall of Fame tennis player and

holder of the most singles titles

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PART ONE Personal Skills58

or even problem solving on the fl y with some mild stressors to begin with (say, a small amount of money for good performance or a few people watching a dress rehearsal), their performance doesn’t suffer when the big pressures come around. Even if you are not an athlete or ever in the position of saving lives or performing heroic feats, you too can benefi t by closing the performance gap between practice and high-stakes performance situations. The next time you are preparing for a big presentation, don’t rehearse alone. Instead, pull aside a co-worker whose opinion you value to hear your speech. The nervousness you feel with your co-worker staring at you might be just what allows you to shrug off the added pressure that will inevitably occur in the real do-or-die business meeting. Simulating low levels of stress helps prevent cracking under increased pressure, because people who practice this way learn to stay calm in the face of whatever comes their way.

A second line of research on choking illuminates another antidote. Sian Beilock, a professor of psychology at the University of Chicago, has spent much time studying golfi ng—a common arena for choking. 50 When people are learn- ing how to putt, it can seem very daunting. Golfers need to assess the lay of the green, calculate the line of the ball, and get a feel for the grain of the turf. Then they have to monitor their putting motion and make sure they hit the ball with a smooth straight stroke. For an inexperienced player, a golf putt can seem unbear- ably hard, like a life-sized trigonometry problem. Interestingly, Beilock has shown that novices hit better putts when they consciously refl ect on their actions. The more time they spend thinking about the putt, the more likely they are to make it. By concentrating on their game, by paying attention to the mechanics of their stroke, they can avoid beginner’s mistakes.

A little experience, however, changes everything. After golfers have learned how to putt—once they have memorized the necessary movements—analyzing the stroke is a waste of time. In fact, Beilock’s data demonstrate the benefi ts of relying on the automatic brain when playing a familiar sport. She found that when experienced golfers are forced to think about their putts, they hit signifi - cantly worse shots. When you are at a high level, your skills become somewhat automated and that is a good thing with regard to choking. That is, you don’t want to pay attention to every step in what you’re doing. When you do, the part of your brain that monitors your behavior starts to interfere with actions that are normally made without thinking. You begin second-guessing skills that you have refi ned through years of practice and the worst part about choking is that it tends to spiral. The failures build upon each other, so a stressful situation is made more stressful.

For example, in studies of soccer penalty kicks, researchers found that in the highest-pressure situation, the kickers tended to fi xate on the goalie, looking at him earlier in the kicking process and keeping their eyes on him longer. As a result, they subsequently tended to kick their shots toward him more often as well, making their shots easier to block. The tendency of people under stress to focus on the threat to the exclusion of all else is a well-established process called “cognitive narrowing.” A driver who is trying to avoid a ditch, for instance, might become so fi xated on it that she drives right into it.

It turns out that the best strategy for soccer penalty-kick takers is to pick a spot in the goal net and practice hitting that spot relentlessly, always totally ignor- ing the goalkeeper in the process. Training in this strategy is likely to build on the tight coordination between eye movements and subsequent actions, making for more accurate shooting. In other words, the way to avoid choking is to devise a strategy and then train, train, train. Well-learned behaviors hold up better under stress than those that haven’t been fully transferred to procedural memory. If you want to do something well under intense pressure, make sure you can do it automatically —thereby avoiding the critical element of choking—which is think- ing too much.

You play like you practice.

— Vince Lombardi ,

legendary football coach

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MANAGEMENT LIVE 2.1

Coping Strategies

Psychological Hardiness

The fact is people who have their stress levels under control still experience an equal share of bad events and daily hassles in their lives. They face the same pressures and adversities as everyone else. Yet some people do have a mental resiliency or hardiness that helps them cope with stress. During the breakup of AT&T in the 1980s, researchers explored what distinguished those managers who were most susceptible to physical and emotional illness from those who demon- strated psychological hardiness, 52 the ability to remain psychologically stable and healthy in the face of signifi cant stress. Other studies of successful coping have been conducted in a variety of demanding settings, including businesses, battlefi elds, schools, and medical clinics. 53 That research has helped identify four recurring factors that distinguish those with psychological hardiness: physical fi tness, commitment, control, and challenge.

Physical Fitness. It may seem a bit far afi eld for a management book to discuss physical fi tness, but fi tness boosts mental performance and is critical to coping with stress. 54 Indeed, hundreds of studies demonstrate that exercise can reduce the negative physical and psychological consequences of stress. For example, a meta-analysis of fi tness studies demonstrated that exercise can alleviate clini- cal depression and is just as effective at doing so as more traditional strategies like therapy, behavioral intervention, and social contact. 55 More specifi cally, one study of college professors found that those most physically active processed data faster and experienced slower age-related decline in information process- ing. 56 In another study, commercial real estate brokers who participated in an

Choking Under Stress: It Even Happens to Superstars Consider the following statistics, reported recently by researchers in Norway:

Professional soccer players in penalty kick shootouts score at a rate of 92 percent when the score is tied and a goal ensures their side an immediate win. But when they need to score to tie the shootout, with a miss meaning defeat, the success rate drops to 60 percent.

Geir Jordet, a professor at the Norwegian School of Sport Sciences in Oslo, has analyzed shootouts with fervor. Jordet also found that shooting percentages tend to drop with each successive kick—86.6 percent for the fi rst shooter, 81.7 for the second, 79.3 for the third, and so on. According to Jordet, his data starkly demonstrate the impact of pressure and stress. 51

Penalty kicks, in theory, represent a relatively simple task for a professional player: score against only the goalkeeper from 12 yards, and do it at your own pace. And yet the shootout has become a confounding stum- bling block, one that regularly has leading stars self-destructing in front of international audiences.

The choking effect is hardly limited to soccer. Chuck Knoblauch, for instance, was one of major league base- ball’s fi nest infi elders. But in 1999, playing for the New York Yankees as a second baseman, he developed the “yips” and started making inaccurate throws to fi rst base. (This involves throwing the ball less than 20 feet—it’s the shortest throw in the game.) Although Knoblauch had been playing in the position for more than two decades, his throws were now sailing into the stands—even injuring fans on occasion. Paradoxically, it was the easy throws that had become the most diffi cult, simple tosses that allowed him time to think. This strange psychological lapse would ultimately end his career.

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MANAGEMENT LIVE 2.2

aerobics training program (walking or running once a day, three times a week, for 12 weeks) earned larger commissions than brokers who did not participate. 57

People who are fi t are also less likely to suffer from illnesses exacerbated by obesity and more likely to possess higher levels of energy and become more resilient to depression, tension, and stress. The resiliency allows you to fend off those uncontrollable stressors and deal more productively with daily hassles. In an aptly named book, Fit to Lead, Christopher Neck and his colleagues outline three essential elements of fi tness: body fi tness, nutritional fi tness, and mental fi tness (that is, psychological hardiness). 58 While it is beyond our scope to go into specifi cs of fi tness and nutritional programs, we simply underscore their impor- tance to stress management because they are directly related to psychological hardiness.

In a study of managers in an extremely stressful transition, it was found that those with the highest psychological hardiness engaged in signifi cantly more regular physical exercise. 59 Unfortunately, a common stress-induced trap is to believe we are too busy to exercise and maintain our physical condition. That thinking produces a negative cycle that further reduces our physical capacity to deal with stress at the very times we need it most. The importance of physical hardiness is further illustrated in Management Live 2.2.

Exercise can be benefi cial in many forms, such as yoga and lifting weights, and aerobic exercise like running, biking, swimming, or dancing. Organizations can encourage employees to seek the benefi ts of exercise by offering onsite gyms or discounted gym memberships. Some companies have done creative competi- tions or activities like having employees log their exercise time to receive prizes for various levels of activity. Or, after the popularity of shows like The Biggest Loser, some companies have even started friendly competitions for employees to get healthy, lose weight, and exercise.

Commitment. Commitment refers to persevering or sticking it out through a hard time. Being committed to an outcome keeps us going even in the midst of setbacks, obstacles, and discouraging news. Being committed to a goal helps us overcome occasional losses of motivation and remain steadfast in our efforts. Commitment can also refer to a sense of connection beyond a single domain.

For example, in the AT&T study, while the hardy managers were clearly invested in the company’s reorganization, they were not restricted to interest in their work life. They had a broader life and were nurtured by their commitment to family, friends, religious practice, recreation, and hobbies. Recall the earlier discussion of the research that has shown that social support (friends, family,

Physical fitness is the basis for all

other forms of excellence.

— John F. Kennedy

Executive Fitness and Performance 60 Research has demonstrated that physical fi tness is associated with managerial performance. Fit managers have more energy and experience more positive moods and well-being. In addition, fi t managers are more likely than unfi t managers to have lower anxiety, tension, and stress. A large percentage of disease in the United States stems from, or is exacerbated by, stress. Obviously, the sicker one is, the less likely he or she is able to perform at peak levels. A survey of 3,000 companies revealed many leading executives understand the role that diet and exercise play in their performance as those from a range of different fi rms reported running fi ve miles a day, lifting weights for 30 minutes, or jogging along airport roads between fl ights. Managers serious about their performance know exercise and diet are key to enhancing their ability to stave off work stress and stay productive under pressure.

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and others who will say to you, “You can do this” or “We believe in you”) is important in buffering the effects of stress. Social support can help you put your stressors in perspective.

When under intense stress, we naturally withdraw from the world and concen- trate exclusively on solving the problem causing the stress. Sometimes that reac- tion is useful and appropriate, but, more often, asking for help from our network of family and friends is crucially important to coping with stress. Commitments that extend beyond our work world are an especially good remedy for stress.

Control. The third element of hardiness is perceived control. In a tough situ- ation, hardy individuals do not become overwhelmed or helpless. Instead, they strive to gain control of what they can by going into action. While acknowledging that many aspects of a crisis situation cannot be controlled, they also understand that, by intentionally holding a positive, optimistic, hopeful outlook, they can determine their reaction to any predicament. If we approach life and its inherent stressors with this optimistic attitude, we’re much more likely to deal easily with stressful situations than if we’re convinced that what happens to us is outside our control and nothing we do affects our outcomes.

One stress-management strategy closely aligned with control is that of seek- ing small wins. Large projects can be inordinately stressful, and many people facing a daunting task will avoid it as long as possible, thereby only increasing their stress. However, if you break a large task into smaller chunks, with action steps, you’ll fi nd you can get early wins. Small but meaningful milestones can give us confi dence and insight to know “we can do it.” So celebrate and reward your- self each time you get a small win in whatever way reinforces your behavior best.

Challenge. Finally, psychologically hardy individuals see problems as chal- lenges rather than as threats. This difference is important because, rather than being overwhelmed and seeking to retreat, these individuals get busy looking for solutions. Seeing a problem as a challenge mobilizes our resources to deal with it and encourages us to pursue the possibilities of a successful outcome. Quickly dealing with feelings of loss, while not harboring false hopes and illusions about the future, enables us to explore new options. Hardy people view change as a stepping stone, not a stumbling block.

The key point of emphasis here is that psychological hardiness is less about the actual stressors faced and more about how we frame our response to those stressors. From a stress management standpoint, that is encouraging. We can never eliminate stressors, but if we can fi nd ways to help cope with the inevitable stressors we will face, then we can more effectively manage stress in our lives.

Outlets for Relief/Dealing with Stress in the Moment

While much of the previous discussion has been focused on planned stress reduc- tion and longer-term strategies, we are often in situations where we must be able to deal with stress in the moment. Hardy and resilient individuals do not panic, withdraw, or fl ounder, but rather rely on several techniques for dealing with their stressors. That is, they are more skilled in relaxing their mind and body, taking a timeout, and knowing how to “repair” their mood. The following are examples of techniques you can use to deal with stress in the moment.

Muscle Relaxation. Sometimes stress is so great that a timeout is needed. Muscle relaxation only takes a few minutes, but can help relieve stress immedi- ately. Simply tense and then release muscle groups, starting with your feet and

Only optimists get things done.

— Ralph Waldo Emerson

Celebrate any progress. Don’t wait

to get perfect.

— Ann McGee Cooper

If people concentrated on the

really important things in life,

there’d be a shortage of fishing

poles.

— Chuck Lawler

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PART ONE Personal Skills62

working your way up your body (legs, torso, arms, neck). Roll your head and shrug your shoulders.

Deep Breathing. This simple exercise can make a difference in short-term stress relief. First, take in a deep breath and hold it for about fi ve seconds. Then breathe out slowly (that’s important) until you have completely exhaled, trying to extend the length of the out-breath a little bit longer each time. Repeat this about 5 to 10 times.

Mood Repair. Research demonstrates that people in positive mood states are more resilient to stress. 61 Moreover, it has been found that you can curb or “repair” your negative moods by understanding what triggers your positive moods. 62 For some, it’s a piece of chocolate or a latte; for others it may be lis- tening to a piece of music, talking on the phone with a friend, or visualizing a scenario that gives them pleasure (their “happy place”). Learn what puts you in a positive mood and use it when you’re in a stressed or negative frame of mind.

Time Management Fundamentals

One of the most important ways of coping with stress is through effective time management. By managing time better, most of us can prevent many of the problems that stress causes by not putting ourselves in stressful situations in the fi rst place. The inability to manage time is among the greatest sources of stress and can doom the most talented, motivated, and conscientious of people. While most everyone would agree that time management and organization are among the most critical elements of personal effectiveness, a person trying to enhance his or her time management is often told to exercise willpower, try harder, resist temptation, or seek divine guidance. Although well intentioned, this advice offers little in terms of actionable strategies or skills to help an individual undertake the process of development. Remember, it’s the execution of time management skills that remains your biggest challenge. So learn the fundamentals of time manage- ment, but remember that it is the discipline to apply them that is your ultimate objective.

Today, there are thousands of books on time management and a staggering number of training programs and “systems” on the market. Close inspection of this bewildering volume of material, however, reveals a few simple but power- ful principles. In the following, we discuss and illustrate four principles that, although called by various names, are consistently present in the research and writing of time management experts.

First Be Effective, Then Be Efficient

Managing time with an effectiveness approach means you actually pay attention to your goals and regularly revisit what is important to you—and avoid just dili- gently working on whatever comes up or is urgent or in front of you. As manage- ment guru Peter Drucker has famously noted, doing the right things should come before doing things right.

Start with Written Goals

Most people have an intuitive sense that goals are an important organizing mech- anism. Stephen Covey, author of The 7 Habits of Highly Effective People, calls this “starting with the end in mind.” The notion is simple. A set of long-term lifetime

KO 2 - 4

D O 2 - 5

If you are not sure why you are

doing something, you can never

do enough of it.

— David Allen

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CHAPTER 2 Managing Stress and Time 63

goals can help you discover what you really want to do, help motivate you to do it, and give meaning to the way you spend your time. It can help you feel in control of your destiny and provide a measuring stick to gauge your success. Written goals can help you choose and decide among many different aspects of your life.

For some reason, however, a surprisingly small percentage of people actually write down, review, and or update their short- or long-term goals. This is unfor- tunate because studies have shown that those with written goals actually achieve higher levels of success. There is nothing mystical about writing personal goals, and though perhaps not explicitly aware of it, you have probably been think- ing about your lifetime goals almost as long as you have been alive. However, thinking about your goals is quite different from writing them down. Unwritten goals often remain vague or utopian dreams such as “get a great job” or “become wealthy.” Writing down goals tends to make them more concrete and specifi c and helps you probe beneath the surface. So always start with goals and revisit them regularly. And don’t limit them to fi nancial or career progression goals. What personal, social, or spiritual aspirations do you have?

Follow the 80/20 Rule

Often referred to as Pareto’s Law, the 80/20 rule holds that only 20 percent of the work produces 80 percent of the value, 80 percent of sales come from 20 per- cent of customers, 80 percent of fi le usage is in 20 percent of the fi les, and so on. Sometimes that ratio may be a little more, and sometimes a little less, but the rule generally holds true. In the context of time management, then, if all tasks on a list were arranged in order of value, 80 percent of the value would come from 20 percent of the tasks, while the remaining 20 percent of the value would come from 80 percent of the tasks. Therefore, it is important to analyze which tasks make up the most important 20 percent and spend the bulk of your time on those.

Use the Time Management Matrix

Expanding on the 80/20 principle, several time management experts have pointed out the usefulness of a “time management matrix,” in which your activities can be categorized in terms of their relative importance and urgency ( Table 2.1 ). 63

A goal unwritten is only a dream.

— Anonymous

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TABLE 2.1 Time Management Matrix

Urgent Not Urgent

Important QUADRANT I QUADRANT II

• Crises

• Pressing problems

• Deadline-driven projects

• Prevention

• Relationship building

• Recognizing new opportunities

• Planning

Not Important QUADRANT III QUADRANT IV

• Interruptions

• Some calls

• Some mail

• Some reports

• Some meetings

• Trivia

• Busy work

• Some mail

• Some phone calls

• Time wasters

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PART ONE Personal Skills64

Important activities are those that are tied to your goals and produce a desired result. They accomplish a valued end or achieve a meaningful purpose. Urgent activities are those that demand immediate attention. They are associated with a need expressed by someone else or relate to an uncomfortable problem or situation that requires a solution as soon as possible.

Of course, one of the most diffi cult decisions you must make is determining what is important and what is urgent. There are no easy rules, and life’s events and demands do not come with “important” or “urgent” tags. In fact, every problem or time demand is likely important to someone. However, if you let others determine what is and is not important, then you certainly will never effectively manage your time. Perhaps the most important objective is to manage your time in a way that reduces the number of things you do on an urgent basis and allows you to devote your attention to those things of true importance to your life and work.

Just DON’T Do It: Learn to Say No

One of the most powerful words in your time management vocabulary should be the word no. In fact, a good axiom for your time management improvement might well be a reversal of Nike’s popular Just do it! slogan to Just don’t do it! Of course, that approach is a lot easier to talk about than to actually use when we are confronted with demands or attractive offers from others. Many of us have an inherent desire to please and fear we may miss out on some opportu- nity. However, as noted earlier, effective time management is largely learning to devote yourself fully to your most important tasks. That means what you choose not to do can be as important as what you do. So learn how to say no. Three effective ways to say no are:

• “I’m sorry. That’s not a priority for me right now.”

• “I have made so many commitments to others; it would be unfair to them and you if I took on anything more at this point.”

• “No.”

For more specifi c time management suggestions, please read Management Live 2.3.

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CHAPTER 2 Managing Stress and Time 65

MANAGEMENT LIVE 2.3

Never Check E-Mail in the Morning—and Other Surprising Time-Savers 64 Don’t look at e-mail fi rst thing. Instead, use the morning to focus on your most important tasks. Most people’s minds are sharpest in the morning, and completing important responsibilities before lunch creates a sense of relief and accomplishment that can carry you through the afternoon. If the fi rst thing you do in the morning is check your e-mail, then there are any number of ways that you’ll be diverted from your critical tasks to deal with all the little things your inbox has for you. E-mail creates a false sense of accomplishment for people because in the span of an hour or so you’re likely to deal with a large number of different issues (likely half of them are personal) and so you feel like you’ve accomplished quite a bit, but now that it’s almost time for lunch you really haven’t done much at all. You feel like you have been working very hard but you probably haven’t done anything that is a priority on your to-do list.

Avoid the urge to multitask. When many things need to get done, it’s tempting to try to do them all at once. But multitasking isn’t the secret to productivity—it’s a sure way to be ineffi cient. Recent evidence suggests that it takes the brain longer to recognize and process each item it is working on when multitasking than when it is focused on a single job. Other studies have found that work quality suffers when we try to multitask. 65 To get many things done, either in the offi ce or at home, do just one thing at a time. If another obligation crops up or an unrelated idea pops into your head, pause from your current task only long enough to enter it in your planner.

Shorten your workday. If 10 hours isn’t enough, try nine and a half. Losing 30 minutes of work time each day makes you organize your time better. No longer will you tolerate interruptions  .  .  . make personal phone calls from the offi ce . . . or chat around the water cooler. Your pace will pick up, your focus will sharpen, and you’ll soon fi nd you’re getting more done despite the shorter workday. You have freed up two and a half hours for yourself each week. This works just as well outside the workplace. Allot fewer hours for chores and projects, and you’re more likely to buckle down and get them done.

Take a break. Hard workers often feel that they don’t have time to take a break. Recharging your batteries isn’t wasted time—it keeps you running. Escape from your workday life for at least 30 minutes each day or a few hours each week. Use this escape time to do whatever it is that most effectively transports you away mentally from your daily responsibilities. That might be reading a novel, exercising at the gym, or listening to music. These escapes keep your mind sharp and your energy level high. If you just can’t fi nd the time, add the escape more formally to your schedule. If your escape is exercise, plan a game of tennis or golf with a friend—the friend will be count- ing on you, so it will be tough for you to back out. If your escape is music, buy season tickets to a local concert series—you’re more likely to attend if you have already purchased the tickets.

Don’t do chores when big deadlines loom. Faced with a big important task and several small, easy, but less vital chores, many people start by tackling the chores. Knocking these off provides a sense that progress has been made, and it clears the tables to focus on the big responsibility—but it is still a poor strategy.

Always tackle the most important job fi rst, though it might be the most diffi cult and time-consuming. In the corporate world, the most important task usually is the one that will generate or save the most money for the company. If you put off this crucial task, unforeseen complications or new assignments might prevent you from getting the important tasks done at all.

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PART ONE Personal Skills66

Plan the Work, Then Work the Plan

Make Good Lists for Effective Prioritization

The time management matrix is essentially about prioritization, and virtually every time management expert focuses on the importance of prioritizing and scheduling, usually in the form of a daily or weekly “to-do” list, a “next-action” listing, or a defect tally checklist. The basics of good lists are simple: create and review them every day, ideally at the same consistent time; keep them visible; and use them as a guide to action (see Tool Kit 2.4 for how to make effective “to-do” lists). One of the important rules is to keep all of your to-do items on a master list, rather than jotting them down on miscellaneous scraps of paper or typing them indiscriminately in a cell phone or iPad. You may want to keep your list in a separate planner or in your phone or computer.

Perhaps the more diffi cult challenge is to determine what goes on the list and how to prioritize it. David Allen, author of the bestseller Getting Things Done, argues that what he calls “collection” is the foundation of productive time

Tool Kit 2.4 Making Effective To-Do Lists66 M aking effective to-do lists saves time, energy, stress, and even gas. A good list lets you forget—once you have a written reminder, your mind is free to concentrate on other things. A to-do list even helps you meet your goals. Whether you’re a legal pad, iPhone, or back-of-the-phone-bill type, pick a system that works—and write it down!

Have one master list—in one place. Pull those scraps out of your pockets, purse, and glove compartment, and gather them in one place.

• Investigate the many electronic options for list makers. Your PDA is a great repository for all of your lists, including movies to rent, gifts to buy, and important contacts who expect a call that day.

• Categorize your to-dos, keeping like items together such as calls to make, things to buy, and errands to run. Other categories might include gifts, projects, contacts, and goals.

• Prioritize the items on your list to stay focused on what’s critical. Revisit your to-do list regularly to reas- sess and reprioritize as situations change, and to check off completed items.

• Break it down. Then break it down some more. Don’t confuse to-dos with goals or projects. A to-do is a single, specifi c action that will move a project toward completion. It’s just one step. For example, “Plan the committee lunch” is a project. “E-mail Karen to get catering contact” is a to-do. In this case, the action of e-mailing Karen is a simple, two-minute undertaking—something small and innocuous that you can do without thinking. The lunch plans won’t be complete after you’ve fi nished this to-do, but you’ll be much closer than you were while you were ignoring the “Plan the committee lunch” project. After it’s done, add the next step to your list. Breaking down your task to the smallest possible action forces you to think through each step up front. With the thinking out of the way, it’s easy to dash off that e-mail, make that call, or fi le that report, and move your work along with much less resistance.

• Use specifi c action verbs and include as many details as you’ll need. You’re overdue for a cleaning, but the “Make a dentist appointment” to-do just hasn’t gotten done. When you write that task down, use an actionable verb (call? e-mail?) and include whatever details your future self needs to check it off. “Call Dr. M. at 555-4567 for a cleaning any time before 11AM on Jan 17, 18, or 19” is a specifi c detailed to-do. Now that’s something you can get done while you’re stuck in traffi c with a cell phone.

Your to-do list is your way of assigning tasks to yourself, so be as helpful to yourself as you would to a per- sonal assistant. Make your to-dos small and specifi c to set yourself up for that glorious moment when you can cross them off the list as DONE.

MANAGER’S TOOL KIT

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CHAPTER 2 Managing Stress and Time 67

management. 67 He suggests that you need to collect everything that commands your attention and do so in some place other than in your head. Contrary to some traditional time management advice, you do not want things on the top of your mind, unless you are working on them. Some people, students in par- ticular, often try to just keep their to-do list in their heads. That rarely works well. Effective time managers collect and organize their tasks where they can be reviewed and serve as a reminder, so they do not have to be stored in their minds.

Once you’ve collected your to-do list, most experts recommend you review not just routine items but everything that has a high priority today or might not get done without special attention. Alan Lakein further suggests you use what he calls the ABC method: assigning an A to a high-priority item, a B to an item of medium priority, and a C to low-priority items. To use the ABC system effec- tively, you should ensure you are incorporating not just short-term but long-term items, derived from your lifetime goals. Most importantly, always start with As, not with Cs, even when you have just a few minutes of free time. The essence of effective time management is to direct your efforts to high priorities. That is eas- ily stated but exceedingly hard to do. 68 For a good example of the importance of having a good list, see Management Live 2.4.

Ask “What’s the Next Action?”

The most critical question for any to-do item you have collected is: What is the next action? Consideration of that step is one of the most powerful mindsets of effective time management. Many people think they have determined the next action when they write it down or note something like “set meeting.” But in this instance, “set meeting” is not the next action because it does not describe a physical behavior. What is the fi rst step to actually setting a meeting? It could be making a phone call or sending an e-mail, but to whom? Decide. If you don’t know, you simply postpone the decision and create ineffi ciency in your process because you will have to revisit the issue and will have it hanging over you.

Know Yourself and Your Time Use

Consistent with the earlier section on self-awareness, a principle that is included in almost every good time management discussion is that you have to know your- self and your style. While we would not recommend you monitor every minute of your time, some documented record of how you currently spend your time is certainly a useful exercise. One good strategy is to record your time selectively, keeping track of particular problem items you feel are consuming an inordinate amount of time.

Each of us has both external and internal prime time. Internal prime time is that time of the day when we typically work best—morning, afternoon, or evening. External prime time is the best time to attend to other people—those you have to deal with in classes, at work, or at home.

Internal prime time is the time when you concentrate best. If you had to pick the two hours of the day when you think most clearly, which would you pick? The two hours you select are probably your internal prime time and you should aim to save all your internal prime time for prime high-priority projects.

Interestingly, studies have shown that most business people pick the fi rst couple hours at work as their internal prime time, yet this is usually the time they read the newspaper, answer routine mail, get yesterday’s unanswered e-mails and voicemails, and talk to colleagues and employees. It would be much better to save such routine tasks for non-prime hours.

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PART ONE Personal Skills68

MANAGEMENT LIVE 2.4

Fight Procrastination

It is hardly provocative to point out that procrastination is a major stumbling block everyone faces in trying to achieve both long- and short-term goals. Pro- crastination is that familiar situation when you have written down and priori- tized a critical A task and just can’t seem to get started on it. Instead, we may resort to doing a bunch of C priority tasks, like straightening the desk, checking our e-mail, or reading a magazine, to avoid focusing on the A task.

One strategy to address this common human scenario is what Alan Lakein calls the Swiss Cheese Method. 69 The Swiss Cheese Method refers to poking small holes in the A project and those holes are what Lakein calls instant tasks. An instant task requires fi ve minutes or less of your time and makes some sort of hole in your high-priority task. So in the 10 minutes before you head off to class, you have time for two instant tasks. To fi nd out what they should be, (1) make a list of possible instant tasks and (2) set priorities. The only rule for generating instant tasks is that they can be started quickly and easily and are in some way connected to your overwhelming A project. Perhaps the nicest thing about the Swiss Cheese Method is it does not really matter what instant tasks you ultimately select. How much of a contribution a particular instant task will make to getting your A project done is far less important than to do something, anything, on that project. Whatever you choose, at least you will have begun.

The Two-Minute Rule

One of the great shared traditions of many families with young children is “the fi ve-second rule.” The fi ve-second rule holds that if a piece of food accidentally ends up on the ground it can still be eaten safely, provided it was retrieved in less than fi ve seconds. While the fi ve-second rule is actually nonsense, 70 the two- minute rule is a functional and rational approach to time management. The two-minute rule suggests that any time demand that will take less than two minutes should be done now. The logic is that it will take more time to catego- rize and return to it than it will to simply do it immediately. In other words, it is right at the effi ciency cutoff. If the thing to be done is not important, throw it away. If you are going to do it sometime, do it now. Getting in the habit of fol- lowing the two-minute rule can be magic in helping you avoid procrastination. Do it now if you are ever going to do it at all. For specifi c guidance on being more effi cient, see Tool Kit 2.5.

The secret of getting ahead is

getting started. The secret of

getting started is breaking your

complex overwhelming tasks into

small manageable tasks, and then

starting on the first one.

— Mark Twain

Is This Advice Worth $250,000.00? 71 Charles Schwab was appointed in 1903 to run Bethlehem Steel, which became the largest independent steel producer in the fi eld. One day, Schwab was approached by a man named Ivy Lee, an effi ciency consultant. Unlike most modern consultants, Lee agreed to work for nothing if his techniques did not pay off. After a few days, Lee left without payment. He asked Schwab to give his technique 90 days and send whatever amount his advice had been worth. In three months, Schwab generously sent $35,000.00—or the modern-day equivalent of roughly $250,000.00.

What was the advice Schwab felt was so valuable? Lee said, for each day, write down six things you must accomplish. Then do those six things in order of priority. Work on the fi rst until it’s fi nished, then the second, and so on. If you don’t complete the list, don’t worry; you fi nished the most important tasks. Make a list, prioritize, and do it. That’s $250,000.00 worth of advice.

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CHAPTER 2 Managing Stress and Time 69

Workplace Cultures That Foster High Performance with Lower Stress

Global business and its inherent hyper competition have made organizations potentially more stressful than ever before. The most successful organizations, however, are those that have been able to maintain their competitive edge while maintaining a lower-stress environment. Regardless of the stress management strategies chosen, supervisor support has been shown to decrease job stress and increase performance. People who feel supported are also more likely to take actions that are favorable to the organization and that go beyond assigned responsibilities. The perception that the organization is supportive, respectful, and caring about its members can have a signifi cant impact on helping people

KO 2 - 5

D O 2 - 6

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Tool Kit 2.5 Getting Yourself Organized: A Quick Primer Most people struggle with personal organization because of one of three things: technical limitations (like inad- equate storage space), external limitations (like working conditions), and psychological obstacles (like anxiety over changing your routine). If your limitations are technical, the best approach is usually to minimize as much as possible—get rid of stuff you don’t use, for starters. If external elements are limiting things, look for options to reduce your workload for a bit so you can get organized, as this will enable you to tackle more work effi ciently. If the limitations are psychological, throw yourself into focusing on something else and let organization just be something that’s assistance, not a primary focus.

To get started, ask yourself these fi ve questions about the area you wish to organize:

What’s working?

What’s not working?

What items are most essential to you?

Why do you want to get organized?

What is causing the problems?

For your paper and e-mail, use the TRAF system 72 • Toss: Open your mail over the wastebasket, tossing as you go. This goes symbolically for your e-mail as

well: Use the Delete button in the same way you would dispose of paper. For those items you are unsure about, it is generally preferable to bite the bullet and throw them away or delete.

• Refer: Create individual “referral folders” for the handful of classes or projects you deal with most fre- quently. Make those folders especially accessible. For your personal affairs, create a “personal” fi le.

• Act: A key obstacle to good organization is to push aside a piece of paper or quickly blow by an e-mail thinking, this isn’t pressing, I will just look at it tomorrow. A good rule is to take some action, however small, on every paper or e-mail touched. Remember the two-minute rule—if it is worth doing and can be done in two minutes or less, go ahead and do it now.

• File: A good fi ling system can be a gift to yourself and your future. Start now and get in the habit of maintaining such a system. Three important rules are (1) opt for a few big fi les instead of many little ones, (2) name your fi les using general recognizable labels (for example, job search) and store them alphabeti- cally, and (3) make a point to mark the fi les you use. After a year, throw out or store in a remote place any fi le you did not use in that year. This is hard to do but key to good organization.

MANAGER’S TOOL KIT

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CASE CONCLUDED

So how exactly does CIGNA’s EAP work? Here are the mechanics: Employees as well as their family members can use up to fi ve EAP counseling visits for any particular issue (for example, survivor guilt, sub- stance abuse, smoking cessation, family turmoil, or a number of other personal problems). Employees can speak with counselors to alleviate their despair and stress, reawake their sense of purpose, and revive personal enthusiasm for their work.

In addition, employees can avail themselves of any special CIGNA-sponsored seminars, such as “ Employees in Crisis: How Personal Finance Can Impact Job Performance ” and “ Working Through Diffi cult Times. ” The latter is especially popular. Says Marilyn Paluba, director of health programs at CIGNA, “We fi nd that 8 percent to 10 percent of employees are dealing with this problem.”

Of course, CIGNA is a for-profi t business and, while widely appreciated by employees, the EAP is quite costly and not a cost shared by most competitors. So how does the fi rm justify the expenditures? “Our stress reduction programs are certainly not altruistic or just about making people feel better,” says Mary Bianchi, EAP program man- ager at CIGNA. “People tell us the EAP has made them more productive at work, and allows them to actively do something rather than just sit and worry about their problems. They say: ‘My family is healthier, and I’m not taking time off to deal with my problem.’”

> Even more objectively, CIGNA has seen a 5 percent

reduction in its medical costs which they attribute directly to their EAP. And at a company the size of CIGNA, that amounts to very big savings and a sub- stantive contribution to their business outcomes.

Beyond the fi nancial benefi ts, the overt attempt by CIGNA to acknowledge and address issues that are generally not openly discussed has led to a healthier workplace. No matter how workers and managers choose to use the EAP, Marilyn Paluba says, the results can be summed up simply: “People say they have better control over their lives.”

Questions

1. As a manager, what are your options when you see stress taking its toll on people? What are the most progressive fi rms (and managers) doing to manage stress and increase productivity?

2. Is there really a business case for stress reduc- tion? Can’t high stress be a good thing and a powerful driver for high-performance fi rms?

3. Don’t tough-minded managers and coaches say “Drive out the weak and the strong survive”? What, if anything, is misguided about that philosophy?

4. EAPs like those of CIGNA are reactive. How might a fi rm or manager be proactive in trying to prevent rather than simply treat stress?

From Rebecca Reisner, “Cigna’s In-House Compassion,” Business Week, March 31, 2009. Used with permission of Bloomberg L.P. Copyright © 2011. All rights reserved.

PART ONE Personal Skills70

meet stressful demands. Other organizational characteristics that have been associated with high performance and lower stress include the following (with action strategies included for each):

Frequent and Open Communication

• Share information with employees to reduce uncertainty about their jobs and futures.

• Clearly defi ne employees’ roles and responsibilities. • Make communication friendly and effi cient, not mean-spirited or petty.

Employee Participation

• Give workers opportunities to participate in decisions that affect their jobs. • Consult employees about scheduling and work rules. • Be sure the workload is suitable to employees’ abilities and resources;

avoid unrealistic deadlines. • Show that individual workers are valued.

Incentives for Work–Life Balance

• Praise good work performance verbally and institutionally.

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blessing, and a few companies do it better than most of their peers. Six of the most dedicated to creating

low-stress, people-fi rst workplaces are briefl y described next.

CHAPTER 2 Managing Stress and Time 71

• Provide opportunities for career development.

• Promote an “entrepreneurial” work climate that gives employees more control over their work.

Cultivate a Friendly Social Climate

• Provide opportunities for social interaction among employees.

• Establish a zero-tolerance policy for harassment.

• Make management actions consistent with organizational values.

Concluding Note

Stress robs people of their health and organizations of productivity so it is a critical topic for students of organizational behavior and management. Effective stress control is largely a function of your physical hardiness, your psychological hardiness, and your management of time. Learning the behaviors that contribute to each of those three can yield big payoffs in your productivity and health.

KEY TERMS

ABC method 67 appraisal support 56 burnout 50 choking 56 conservation of resources (COR) 50 control 52 deep acting 51 demands 52 depersonalization 50 80/20 rule 63 emotional exhaustion 50

emotional labor 51 emotional support 56 eustress 44 family interference with work (FIW) 49 informational support 56 instrumental support 56 locus of control 47 psychological hardiness 59 reduced personal accomplishment 50 role ambiguity 49 role confl ict 49

role theory 49 self-effi cacy 47 small wins 61 strains 43 stress 43 surface acting 51 Swiss Cheese Method 68 transactional theory 45 Type A behavior pattern 47 work–family confl ict 49 work interference with family (WIF) 49

Adapted from divinecaroline. com and 100 Best Companies to Work For.

Going to work each day for some people is a joy, believe it or not. While a large portion of Americans dread crawl- ing out of bed in the morning and going through the daily grind en route to a paycheck, some people are happy to do it. Working for a company that allows you to enjoy your work is a

CASE Creating a Low-Stress Happy Workplace: SAS, Google, and Other Companies That Take It Seriously

> >

(continued)

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PART ONE Personal Skills72

SAS

SAS is a North Carolina software company specializing in business analytics. It also specializes in mak- ing employees happy. The fi rst perk of being an SAS employee was free M&M’s. Now there’s a country club, onsite daycare, onsite doctors and nurses, a 35-hour work week, live piano music during lunch, a 50,000-square-foot fi tness center, swimming pools, no dress code, a masseur, onsite car detailing, and more. If you need assistance in adopting a child or fi nding a college for your child or a nursing home for a parent, they have people to help you with that, too.

Google

With Google’s success has come the opportunity to treat its lucky employees like few other compa- nies can. Employees at Google enjoy a great benefi ts package that includes affordable medi- cal coverage, company-matched 401(k) plans, maternity and pater- nity leave, as well as a lot of unique workplace extras. Within the offi ces of Google, employees can see the in-house dentist or doctor, get a massage, or do yoga. Snacks are also available to those who want them throughout the day and there are outdoor activities such as a run- ning trail when fresh air seems like the best environment for a meeting.

Genentech

San Francisco biotech giant “DNA by the Bay,” as employees

affectionately call it, is the absolute paragon of perk-laden employers. What sets them apart? Onsite day- care not just for the kids, but pets, too. Doggie daycare and optional bargain pet insurance are offered as well. Add to that six-week paid sabbaticals to prevent burnout, a free shuttle service that garners employees a four-dollar daily credit, a drop-off laundry service, and sea- sonal produce stands in company cafeterias. Jealous yet?

Patagonia

For employees at Patagonia, the Ventura, California–based outdoor clothing and equipment company, “surf’s up” is more than a mar- keting ploy. Daily surf reports are posted at the reception desk and particularly outstanding swells gen- erate a companywide loudspeaker announcement. Running out to catch a few waves during the work- day is an accepted practice and a way to keep employees from burn- ing out. Surfi ng not your thing? Company bikes are waiting out- side, as are volleyball courts. Want a more refl ective break? Head back inside for the onsite yoga.

eBay

Is the daily grind putting your stress meter in the red? That’s not a prob- lem for workers at the online auc- tioneer’s two San Jose, California, campuses. eBay sets aside ergo- nomic meditation and prayer rooms decorated in relaxation-inducing colors and replete with pillows and

comfy mats so employees can take a load off.

Accenture

Sometimes, the best job is the one that lets you not come to the offi ce at all. At Accenture, the glo- bal consulting and tech fi rm, the work day begins wherever you might be or want to be—a full 92 percent of employees telecom- mute. Staffers get reimbursed for home-offi ce setups and are required to work just one hour a week to get health insurance. And it’s family friendly. New moms get eight paid post-delivery weeks off; dads get one.

Discussion Questions

1. What is the motivation for these fi rms to invest so much in employee perks?

2. Is the low-stress happy worker a more productive worker?

3. The six companies described cer- tainly appear to be good com- panies to work for —but would you want to invest in such fi rms? Explain.

4. Does it have to be expensive to create an enjoyable, low-stress workplace? In what ways might a lower-stress organizational envi- ronment be created without sig- nifi cant fi nancial cost?

5. SAS and Google are facing increasing competition in their markets. Do you suspect this means their employee perks will eventually decrease?

(continued)

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SELECT MANAGE WHAT? DEBRIEFS

CHAPTER 2 Managing Stress and Time 73

Getting a Priority Done Under Stress: Debrief Prioritization is a challenge faced daily by managers at all levels, and the addition of stress (for example, a loom- ing deadline, a demanding boss or customer, distracting personal issues) makes this a particularly challenging skill. The central point is that the addition of stress does not change the fundamental personal strategies that will be effective, but rather simply heightens their importance.

The most general prescription is to ensure that you are as physically hardy as you can be. While it is tempting to neglect exercise and sleep and good nutrition because you are “too busy,” the reality is that stressful times are when those elements are most essential. Research has shown that those who are able to maintain healthy habits when under pressure are more likely to stay productive and avoid the ravages of stress. You want to be as “fi t to lead” as you can be, so either stay with or establish routines of good health and nutrition.

More specifi cally, to accomplish a priority in the face of stress, you will want to direct your focus on the most recurring lessons of good time management. Three of those lessons would seem to be most pertinent in this case: (1) a focus (even obsession) with written goals; (2) good lists and action steps tied to those goals; (3) an awareness and management of your internal and external prime times.

Goals. The fi rst step is to ensure you are crystal clear about what your actual priorities are and how you will determine if you have accomplished (or ideally exceeded) them. Put simply, ask yourself: What is the priority and why is it a priority? (Is it goal-related?) Among all that you have to do, is this truly among the top priority? (Related to your most important goals?) Assuming that it is, then make sure you have the ultimate goal you are seeking written down.

Lists and action steps. Collect everything you need to do on one master list and then cut it into small pieces and get to work. Use the “Swiss Cheese Method,” which simply means poking small holes in your priority project by doing small tasks. Small tasks require fi ve minutes or less of your time and make some sort of hole in your high-priority task. Use your to-do list like a daily map and get obsessive about making progress on it every day. Your momentum will typically carry you if you can get yourself to truly drive your activity off a set of goals and a living to-do list.

Your prime times. Each of us has both external and internal prime time. Internal prime time is that time of the day when we typically work best—morning, afternoon, or evening. External prime time is the best time to attend to other people—those you have to deal with in classes, work, or at home. Internal prime time is the time when you concentrate best. If you had to pick the two hours of the day when you think most clearly, which would you pick? The two hours you select are probably your internal prime time and you should aim to save all of that time for high-priority projects.

Interestingly, studies have shown that most business people pick the fi rst couple of hours at work as their internal prime time, yet this is usually the time they read the newspaper, answer routine mail, review yesterday’s unanswered e-mails, and talk to colleagues and associates. It would be much better to save such routine tasks for non-prime hours. Students often schedule their classes during their internal prime time when it would be better used for study and the completion of deliverables.

Overcoming the Two Biggest Time Management Traps: Debrief As noted in the Manage What? scenario, the two biggest time management traps are (1) a failure to prioritize and thus we procrastinate on our major tasks, and (2) not devoting our peak productivity times to our most important tasks. Perhaps the more diffi cult challenge is to fi rst get clear on what your personal priorities really are. To do that, collect everything that commands your attention and do so in some place other than in your head. Contrary to some traditional time management advice, you do not want things at the forefront of your mind unless you are working on them. Some people, students in particular, often try to just keep their to-do list in their heads. That rarely works well. Effective time managers collect and organize their tasks where they can be reviewed and serve as a reminder. This way the tasks do not have to be stored in their heads.

(continued)

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PART ONE Personal Skills74

Once you’ve collected your to-do list, most experts recommend you review not just routine items but every- thing that has a high priority today or might not get done without special attention. One straightforward way to do that is to use the ABC method: assigning an A to a high-priority item, a B to an item of medium priority, and a C to low-priority items. To use the ABC system effectively, you should ensure you are incorporating not just short-term but long-term items, derived from your lifetime goals. Most importantly, always start with A items, not with C items, even when you have just a few minutes of free time. So, for example, don’t look at e-mail fi rst thing in the morning. Instead, use the morning to focus on your most important tasks. One specifi c strategy to avoid procrastination is what is known as the Swiss Cheese Method.

Making Changes in a Workplace to Lower Stress and Enhance (Not Lower) Productivity: Debrief Your president is right to believe that the most successful organizations are those that have been able to maintain their competitive edge while maintaining a lower-stress environment. However, he would be wrong if he thought it was just foosball tables, or fancy free lunches, or casual dress codes that create such environments. In some cases, those elements might be part of the mix but there are a set of more general cultural factors that have been repeatedly linked to both employee commitment and high organizational performance.

First, supervisor support has been shown to decrease job stress and increase performance. People who feel supported are also more likely to take actions that are favorable to the organization and that go beyond assigned responsibilities. The perception that the organization is supportive, respectful, and caring about its members can also have signifi cant impact on helping people meet the demands of job stress. Other organizational char- acteristics that have been associated with high performance and lower stress include (a) frequent and open communication, (b) employee participation in decision making, (c) incentives for work–life balance, and (d) an actively promoted social climate. Put simply, the healthiest and highest-performing workplaces are those where people feel “in the know” and are asked for input on key decisions that affect them. Moreover, they are places where there is overt recognition of the importance of employee health and balance, and an encouragement of personal relationships and connecting with fellow employees, as well as complete intolerance of harassment and discrimination.

So your advice to your boss should be to worry less about using Google’s foosball tables and well-publicized perks, and more on the ways in which the company involves associates in decision making and promoting a social climate of cooperation and innovation.

(continued)

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v

76

O B J E C T I V E S

PART ONE PERSONAL SKILLS

KO 3-1 Defi ne intuition and its role in solving problems.

KO 3-2 Recognize judgment traps that hinder the decision-making process.

KO 3-3 Describe the key steps in the PADIL framework for making a good decision.

KO 3-4 Identify evidence-based methods for increasing the quantity of solution alternatives.

3 Solving Problems

KNOWING DOING

“The great thing about fact-based

decisions is that they overrule the

hierarchy. The most junior person

in the company can win an argu-

ment with the most senior per-

son with regard to a fact-based

decision. For intuitive decisions,

on the other hand, you have to

rely on experienced executives

who’ve honed their instincts.”

—Jeff Bezos , CEO, Amazon

After reading this chapter, you should be able to:

DO 3-1 Implement techniques to minimize or avoid decision-making biases.

DO 3-2 Solve a problem using the PADIL framework.

DO 3-3 Apply a stakeholder analysis to a problem.

DO 3-4 Use decision tools to narrow a set of problem alternatives.

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77

> > Case: Two Contemporary Com- panies’ Use of Crowdsourcing: Threadless and ChallengePost

T he renowned American physicist Linus Pauling once observed that “the

best way to have a good idea is to have lots of ideas.” And the grow- ing popularity of a strategy known as crowdsourcing is very much in that spirit. Crowdsourcing is defi ned as the act of outsourcing tasks, traditionally performed by an employee or contractor, to an unde- fi ned large group of people or com- munity (a “crowd”), through an open call made possible by the wide and instantaneous reach of the Internet.

Jeff Howe, one of the fi rst authors to employ the term, contends that crowdsourcing works because open calls to a large undefi ned group of people ultimately attract those who are the most motivated and able to offer relevant and fresh ideas. In the following, we highlight two contemporary companies that are creatively employing crowdsourc- ing to address some of their most important objectives.

Threadless is an online apparel store co-founded in 2000 by Jake Nickell and Jacob DeHart. The founders started with just $1,000 in seed money that they had won in an Internet T-shirt design contest. The company has now grown to be a multimillion-dollar enterprise and is revolutionizing the process of product design.

While most design shops employ high-priced talent to create their product lines, Threadless uses the crowdsourcing concept to execute an entirely different approach. More spe- cifi cally, the fi rm invites anyone inter- ested in being part of the Threadless community to submit T-shirt designs online—afterward, the designs are put to a public vote. A small per- centage of submitted designs are selected for printing and then sold through their online store. Creators of the winning designs receive only a small cash prize and some store credit. In the open-source commu- nity, a Threadless T-shirt or design is considered to be crowdsourced because the designer and the com- pany retain all rights to the design.

On average, around 1,500 designs compete in any given week. Design- ers upload their T-shirt designs to the website, where visitors and members of the community score them on a scale of 0 to 5. Each week, the staff selects about 10 designs. Not sur- prisingly, the printed T-shirts tend to sell well because they have already been proven popular via the design

process. Threadless shirts are run in limited batches and when shirts are sold out, customers can request a reprint. However, reprinting occurs only when there is enough demand, and the decision to reprint is ulti- mately up to the company.

The Threadless experience amounts to something of a revolution in product design models and cost effi ciency. It is an intriguing example of the power of crowdsourcing.

1. Why is Threadless so successful? What competitive advantages do they have over comparable design fi rms using traditional strategies for product design?

2. What is the logic of crowdsourc- ing and why has it caught on in so many areas and for so many applications?

3. What are some potential traps and limitations of crowdsourcing efforts?

4. Identify at least two other busi- nesses, or business functions, that you think could achieve breakthrough gains via the use of crowdsourcing.

IN TODAY’S WORLD, WHY SOLVE YOUR PROBLEMS ALONE?

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1. Defi ning and Structuring a Vague Problem The third-quarter quality fi gures for the customer call center you manage have been posted. Although your numbers look good, you quickly notice that, compared to other call centers in the company, your ratings for customer service are below average. Given that part of your bonus is tied to these fi gures, you are obviously concerned and very motivated to fi x the problem. You call your counterparts in other call centers to see what they’ve been doing recently and to generate some ideas that might infl uence customer service. One manager said she instituted a new game called “Answer the Call for Baseball,” where the top 10 customer service representatives get to take off work for a midday baseball game. Another manager in a successful call center has increased his monitoring of reps on the phone and is intervening immediately when a rep doesn’t perform well. A third manager hasn’t done much of anything innovative and said, “I guess my customers are easier to handle than yours.” You sit back in your chair, perplexed to say the least.

What is the problem here? What other information would be useful? How would you begin to improve your customer service quality rating? Is the problem defi nitely with your reps, or could it be something else?

2. Avoiding Common Decision Errors Putting your answers in the grid that follows, respond with your fi rst instinct to each of the following six items. Also include your level of confi dence in each of the responses you provide.

A. Which is the more likely cause of death in the United States: being hit by a falling airplane part or being attacked by a shark?

B. Take just fi ve seconds for each mathematical string and estimate the multiplicative product of 8  3  7  3  6  3  5  3  4  3  3  3  2  3  1, and then 1  3  2  3  3  3  4  3  5  3  6  3  7  3  8.

C. You have been carefully monitoring two slot machines in a Las Vegas casino. One has paid off twice in the last hour. The other has not paid off. You are now ready to play yourself. Which one of those machines would give you the best chance of winning?

D. Suppose each of the following cards has a number on one side and a letter on the other, and someone tells you: “If a card has a vowel on one side, then it has an even number on the other side.” Which card(s) would you need to turn over in order to decide whether the person is lying?

• Card 1: E

• Card 2: K

• Card 3: 4

• Card 4: 7

E. Which city is located farther north, New York, NY, or Rome, Italy?

F. Six months ago, you sank the last $5,000 of your student loan money into the purchase of a stock that was highly rec- ommended to you by a trusted family friend. As of today, the stock has already dropped 20 percent and is now worth just $4,000. You are nervously ready to sell, but you simply cannot afford to lose that $1,000 (plus commission costs) and still pay for school next year. Would you sell?

How confi dent are you in each of your decisions to these problems? Do you suspect there might be inaccurate biases or judgment errors in any of your decisions? Are there any keys or cues you can look for to avoid falling prey to the most common and insidious judgment errors and decision traps?

Problem Record Your Answer

Confi dence Level How confi dent are you that your answer is correct, on a scale from 1 (not at all) to 100 (totally)?

A

B

C

D

E

F

MANAGE WHAT?

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CHAPTER 3 Solving Problems 79

Introduction

If you are like most people, you make about 100 decisions a day. Some are easy decisions (for example, what to eat for breakfast), while others are more diffi cult (how to allocate your work time). Every day, management life brings new deci- sions to be made and problems to be solved. Many managers report truly loving the problem-solving aspect of the job—ever-changing, always interesting—while others frequently cite problem solving as among the most challenging and dif- fi cult aspects of management life. Deciding on courses of action, especially when other people are involved, is what keeps managers awake at night. Unfortunately, examples in today’s organizations of poor problem solving are all too common. The good news is that much is known about solving problems and avoiding deci- sion traps. This chapter is devoted to these very important skills.

The Challenge of Problem Solving

Of the skills covered in this book, problem solving may well be the most complex— and one of the most important to your day-to-day work life. By defi nition, a “problem” does not have a clear solution; otherwise it wouldn’t be considered a problem. Given the complexity inherent in most problems, it is probably not surprising that problem solving is typically found to be among the most defi cient skills in assessments of young managers. Some research even suggests as high as 50 percent of managerial decisions made in organizations either fail or are sub- optimal. 1 With odds like that, it might seem that fl ipping a coin would save the time and effort involved. The reality, however, is we can achieve a much higher decision success rate—but only if we consistently adhere to methods of solving problems that have a demonstrated record of success.

Most problem-solving frameworks are simple in form and concept, but the trap is assuming simple understanding can substitute for the discipline of execu- tion. Moreover, perhaps more than any other skill, effective problem solving and decision making are in large part a function of what traps to avoid and what

“When you confront a problem,

you begin to solve it.”

—Rudy Giuliani

3. Excelling in a Case Interview Recognizing the importance of problem-solving skills, many organizations now use case interviews to evaluate candidates for jobs. Assume you are in an interview and have been presented with the following case problem: “Your fi rm is a U.S.-based manufacturer of natu- ral, health food products and is considering growing the business by entering the huge and expanding Chinese market. Should it?” How would you respond? How would you go about analyzing the opportunity? What questions would you ask? How might you structure your answer to best demonstrate problem-solving skills?

4. Learning from Past Decisions You belong to a local service club and have been asked to serve a three-year term as chair of the club’s annual fund-raiser. However, the club has decided to scrap their traditional fund- raiser and “start a new chapter” with you as the leader. This means that many, many deci- sions have to be made and you have very little past history or precedent to go on. In an effort to manage expectations (and not let them get too high), you tell the club that “this year is a pilot and we will learn from it and certainly have greater success in the next two years.”

How do great managers ensure that such learning really occurs? What questions will you ask and what types of information will you collect? What mistakes are typically made that get in the way of such learning from experience?

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PART ONE Personal Skills80

not to do. The following section outlines some of the most common traps to good decisions and why smart people can often make such bad choices. We then describe a framework to help overcome biases and approach problem solving in an effective way.

Why Smart People Make Bad Decisions

As we noted in the introduction, research on decision making suggests bad deci- sions happen about as frequently as good ones. Very smart, well-intentioned managers make many of these fl awed decisions. In fact, very smart people often make very bad decisions because several insidious judgment traps exist that have been found to hamper the decision making of the best of us. Decision making is another area where true expertise involves knowing the traps that so frequently hinder sound judgment.

Intuition

Talking glowingly about the importance and value of “going with your gut” or of using your intuition to guide decisions is popular these days. In fact, a survey of executives in Fortune 1,000 fi rms found that 45 percent relied upon “their gut” more often than facts and fi gures when running their businesses. 2 However, evidence is mixed regarding how useful intuition is in solving problems. Despite the courageous tone often characterizing descriptions of making decisions from the gut, we can’t recommend relying solely on your intuition in problem solving. That doesn’t mean you should totally discount intuition, but just that you should

KO 3 - 1

D O 3 - 1

KO 3 - 2

“I’m guilty of doing too much,

and I’m guilty of not seeing my

mistakes coming. What I’m not

guilty of is making the same

mistake twice.”

—Michael Dell

• Taking action is better than standing by. When faced with a problem, we want to act; it makes us feel like we’re accomplishing something. But taking action isn’t always better. Sometimes a poorly conceived cure can be much worse than the disease. Many problems managers face today come directly from yesterday’s solutions. The “do nothing” option is too often ignored or neglected and should be at least recognized as an option in almost all problem-solving situations.

• Trust your gut. Of course, sometimes your “gut” is right. But unless you’ve tracked your gut decisions to know your success rate, your gut probably won’t be very helpful. Experience can play an important role in problem solving, but requires knowledge of previous results to evaluate its effectiveness. In organizational situations, intuition is vastly overrated as a source of decision success.

• I know when I’m making a poor decision. In truth, few people can know this without training and practice. Researchers have discovered a phenomenon known as the bias blind spot. Even when people are good at spotting decision traps and logical fallacies in the decisions of others, they often fail miserably in spotting the same fallacies in their own decisions.

• Dividing an elephant in half produces two small elephants. In reality, few complex problems lend themselves to easy solutions or effective knee-jerk compromises. Effective problem solving focuses on facts and recognizes that problems are rarely as they appear. Most are symptoms of more complex issues and require a holistic approach to solve effectively.

MYTHS 3.1 Problem-Solving Myths ? ?

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CHAPTER 3 Solving Problems 81

MANAGEMENT LIVE 3.1

The “First Instinct” Fallacy One great example of how conventional intuitive wisdom can be wrong involves the question of whether to change answers in the course of taking a test. Most of us have probably been told something on the order of “When taking a multiple-choice test, always trust your fi rst instinct.” It usually includes a rationale such as “If you are not fully certain of an answer, do not change it because your fi rst instinct was probably right.”

While that may sound reasonable enough, a recent meta-analysis (33 studies in all, representing over 70 years of research) found that going with your fi rst instinct is actually likely to be a poor choice. In one study ,3 researchers examined midterm exam answer sheets (or Scantrons) of over 1,500 students taking the same course. They noted each instance in which students changed an initial response to an alternative response by examining erasure marks made on the Scantron sheets. If the saying about trusting your fi rst instinct is true, then students hoping for the right answer should stick with their fi rst response. Yet the results showed that over half the time a student changed an initial response, the student benefi ted!

Student Response Changes and Results

Change from Wrong to Right,

51%

Change from Right to Wrong,

25%

Change from Wrong to Wrong,

24%

The researchers found that students dread the notion of potentially changing a right answer to a wrong one. Thus, they become paralyzed and place more stock in their fi rst instinct than they should. This fi rst instinct, which is hard to detect in ourselves, drives our behavior and often leads to poorer decisions.

bear in mind most people have a diffi cult time applying their intuition systemati- cally to solve problems.

In its simplest form, our intuition represents a collection of what we’ve learned about the world, without knowing we actually learned it. 4 Intuition can be useful if we track what we have learned and under what circumstances that learn- ing led to success so we can replicate it in the future. Moreover, some research shows intuition is important in automatic processes such as social interactions or driving a car—things we do without thinking about them.

However, knowing without understanding becomes problematic in deci- sion making. For example, unconscious biases we bring to bear on situations commonly infl uence our intuition. Such biases help explain the long-standing phenomenon of the disproportionately large number of men being selected to

“My life is the complete opposite

of everything I want it to be. Every

instinct I have in every aspect

of life, be it something to wear,

something to eat . . . It’s all been

wrong.”

—George Costanza, character from

the TV sitcom Seinfeld

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PART ONE Personal Skills82

professional orchestras. Orchestra directors traditionally held auditions face-to- face and apparently held an unconscious bias in favor of men. 5 When the audi- tions were held blindly (with a screen separating the judges and the musician), women were selected at a much higher rate than before.

The Ladder of Inference

To show how our intuition operates and can lead to mistakes, it’s useful to con- sider what has been termed the ladder of inference. 6 Inference is drawing a conclusion about something we don’t know based on things we do know. We make inferences multiple times a day to try to make sense of our world. The problem is we don’t realize we’re making such inferences. Why? The process happens so quickly and effortlessly we almost never devote cognitive energy to it. The ladder of inference ( Figure 3.1 ) is an analogy that illustrates just how this process of making inferences occurs.

At the very bottom of the ladder, we observe or experience what people say and do. This information is objective in the sense that the behavior doesn’t change from person to person. For example, say your teammate Bob is 45  minutes late for a team meeting. You would all observe that fact—that he is indeed 45 minutes late. There is no disputing that.

Yet people have a hard time observing every possible aspect of situations, so they select certain aspects of the behavior to pay attention to. You may have noticed that the content of a meeting was particularly controversial; others may have noted it was a nice day out, perfect for golf. You probably didn’t pay atten- tion to everything either, however. Next, you make some assumptions about what you’ve observed based upon your own cultural and personal experiences with the observed behavior. You might assume people who don’t show up for meet- ings have something to hide. Or perhaps your experience tells you traffi c is par- ticularly bad at this time of day. Either way, you draw conclusions about the behavior—for example, “Bob knew it would be a diffi cult meeting and opted out.”

Practice this! Go to www.baldwin2e.com

FIGURE 3.1 The Ladder of Inference

Source: Senge, P. M., Kleiner, A., Roberts, C., Ross, R. B., and Smith, B. J. (1994). The fi fth discipline fi eldbook. New York: Doubleday.

I take Actions based on my beliefs.

I adopt Beliefs about the world.

I draw Conclusions.

I make Assumptions based on the meanings I added.

I select “Data” from what I observe.

I observe “data” and experiences (as a camera might capture it).

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CHAPTER 3 Solving Problems 83

At this point, you have adopted a belief about how the world works: “Some people skip meetings when they anticipate controversy.” Those adopted beliefs then infl uence how you see future events and the actions you take. You might then believe, “Bob can’t deal with tough issues,” and take action that says, “We shouldn’t include Bob in our meetings going forward” (see Figure 3.2 ).

Well, the truth is Bob was just at the wrong location. Let’s not let Bob off the hook for that move, but should we take the action of not including him on the team? Solving problems requires heightened awareness to our limited human abilities to consider all alternatives simultaneously. Solving problems also requires we not jump to inappropriate conclusions and that we keep an open mind about people, problems, and situations.

When we analyze people’s ladders of inference, a highly destructive error becomes readily apparent. The error deals with the process of attributing causes to events—that is, explaining why things occurred. This error is so important to understanding human behavior it has been termed fundamental attribution error. The essence of the fundamental attribution error is people tend to over- attribute behavior to internal rather than external causes. Thus, when determin- ing the cause of another person’s behavior, you are more likely to consider factors related to the person’s disposition (personality, ethnicity, gender, and so on) than to her particular situation (weather, lighting, traffi c, and so on).

Perhaps more insidious is the self-serving bias, where we attribute personal successes to internal causes and personal failures to external causes. For example, let’s say you got an A on your last test. To what would you likely attribute your suc- cess? Hard work, excellent study habits, natural intellect? But what if you failed the test miserably? To what would you likely attribute your failure? Tricky ques- tions, perhaps a confusing professor, or the sniffl ing of students with colds dur- ing the test. The self-serving bias helps us maintain a comfortable positive image about ourselves. Unfortunately, that image is often built on false information.

This process plays out in problem solving every day. “Why is our customer service so poor? Must be those customer service agents; they’re incompetent.” Or “How are we ever going to compete in this market? Get more talented people in the organization.” If you are going to solve problems well, you need to expand your thinking about the causes of events and others’ behaviors.

“If there is such a thing as a basic

human quality, self-deception is it.”

—Colin Turnbull

“Informed decision-making comes

from a long tradition of guessing

and then blaming others for inad-

equate results.”

—Scott Adams, creator of the

“Dilbert” cartoon strip

FIGURE 3.2 The Ladder of Inference Example Bob is unreliable.

We shouldn’t include him anymore. (Action)

Bob probably can’t deal with tough issues.

(Adopted Belief)

Bob knew it was going to be a rough meeting and came late on purpose. (Assumption —

Personal Meaning)

The meeting started at 4:00 p.m. and Bob

arrived at 4:45 p.m. — and didn’t say why.

(Objective Data)

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Six Ways People Exercise Poor Judgment Without Knowing It

7

We’ve tried to show that people are just not very good at consistently drawing appropriate or accurate conclusions from intuition. 8 We now discuss ways in which people, using their gut instinct and “experience,” exercise poor judgment. Our hope is you will (1) recognize quickly how easy it is to make simple mistakes by using intuition alone, (2) learn to spot the most common decision-making biases, and (3) discover simple methods for combating these biases in judgment.

Judgment Error 1: Availability

The following are eight corporations (divided into two groups) that were highly ranked in the Fortune 500 according to total sales volume in 2009.

Group A includes: Apple, Coca-Cola, McDonald’s, Nike

Group B includes: Japan Post Holdings, Dexia Group, Gazprom, Pemex

Which group of four companies (A or B) had the larger total sales volume in 2009? If you answered Group A, pat yourself on the back, as you’re not alone. You’re wrong, but not alone! In fact, Group B’s sales were approximately six times that of Group A. Further, every company in Group B had sales higher than all of Group A combined. Let’s try another one. Which of the following causes more deaths per year in the United States, suicide or homicide? Most people believe homicides cause more deaths, but in fact suicides lead to more deaths by a ratio of 2 to 1.

These two simple problems represent what’s known as the availability bias. This bias clouds our judgment because things more readily available to us (that is, those more easily brought to mind) are likely to be interpreted as more fre- quent or important. There are many stories in the news about homicides, few about suicides. The companies in Group A are household names, but not as large as the lesser-known companies in Group B. When solving a problem, we often choose solutions we’ve heard about. We feel more comfortable with them and assume that if we’ve heard about them, they’ll work. Marketing fi rms know this well, which explains why they want their products on the tip of your tongue.

Judgment Error 2: Representativeness

Let’s say we told you the best student in our MBA class this past term writes poetry and is rather shy and quite introspective. What was the student’s under- graduate major—fi ne arts or business? Which type of job is the student likely to accept—management of the arts or management consulting? When asked these questions, most students suggest the student’s major must have been fi ne arts and that the student will likely take a job in managing the arts. These conclusions completely ignore, however, that the majority of MBA students hold undergradu- ate degrees in business and that many more MBAs take jobs in management consulting fi rms than they do in arts management. In other words, people ignore the “base rate” or the frequency of which people belong to certain groups or cat- egories. The easily made mistake— representative bias —is that people pay more attention to descriptors they believe to be more representative of the person’s career choice than the key base rate information that leads to the better choice.

Another classic example of the representative bias comes in the form of peo- ple’s misconceptions about chance. For example, people assume that, when a sequence appears nonrandom, it must be nonrandom. 9 If you won the lottery, would you play different numbers? If you fl ipped a coin and it was heads nine times in a row, are you due for a tails on the tenth toss? Of course not, but this bias is applied with great regularity. So much so, it has been termed the “gam- bler’s fallacy,” in which people truly believe that each coin fl ip or pull of the slot

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CHAPTER 3 Solving Problems 85

MANAGEMENT LIVE 3.2

The Hot Hand Imagine that your favorite team is in the NCAA championship basketball game. There are three seconds left on the clock and your team is down by one. The coach is huddled with his players designing the fi nal play. But every- one knows who’s getting the ball—the player with the “hot hand,” the one who has made his last six shots. He’s on fi re! Anyone who has played sports long enough believes in the phenomenon of the streak and the hot hand. Unfortunately, it simply isn’t true.

Researchers analyzed the shooting patterns of the Boston Celtics and Philadelphia 76ers in the mid-1980s. 10 They found prior shot performance did not infl uence or change the likelihood of success on later shot perfor- mance. That is, if you make your fi rst three shots, you’re no more likely to make the fourth than you were the fi rst three. This is a classic representative bias regarding chance and doesn’t only occur in sports but biases decisions in many contexts including where and when to invest money.

PHILADELPHIA 76ERS

Probability of Next Shot Being a Hit After . . .

Three Straight Hits .46

Two Straight Hits .50

One Hit .51

One Miss .54

Two Misses .53

Three Misses .56

Reprinted from Cognitive Psychology, Vol. 17, No. 3, Thomas Gilovich, Robert Vallone, and Amos Tversky, “The Hot Hand in Basketball: On the Misperception of Random Sequences,” pp. 295–314. Copyright © 1985, with permission from Elsevier.

machine is somehow connected to previous actions. The coin, the slot machine, and so on, have no memory, yet it is common to assume the probabilities of future outcomes must somehow increase or decrease to offset or “compensate for” earlier outcomes. If you have ever played roulette, the posting of previous winning numbers is designed to trick you into making this error. Another great example of this is the “hot hand” in basketball that we discuss in Management Live 3.2. Even highly paid, experienced coaches make some very poor decisions based on this very seductive fallacy.

Another special case of the representative bias is what is known as the hasty generalization fallacy. For a variety of reasons, people often draw inappropri- ate general conclusions from specifi c cases because they do not realize (or they think you don’t realize) their specifi c example is not necessarily so in all, or even most, cases. Consider the guy who argues against motorcycle helmet legislation because he has ridden for 25 years without a helmet and has never been hurt. That may well be true, but so what? One helmet-less rider’s personal experience in no way refutes the notion that it is safer to ride with a helmet. Similarly, it is not uncommon to hear someone assert, “I do not agree with all the fuss over cho- lesterol. My grandfather lived to 95, and he ate bacon and eggs every morning.”

The hasty generalization fallacy occurs because we tend to operate by what has been called the law of small numbers—that is, we are willing to leap to gen- eral conclusions after seeing only one or two examples. In fact, we are particularly

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PART ONE Personal Skills86

prone to make this thinking error because we tend to personalize all experience (we assume our experience is everyone else’s) or even misinterpret our experi- ence (“That’s the way the world is—I have seen it with my own two eyes”).

Judgment Error 3: Anchoring and Adjustment

Consider an experiment in which students were asked to add 400 to the last three numbers of their student ID and write it down. They then were asked to use this number to estimate when Attila the Hun invaded Europe into regions of France—that is, whether that event happened before or after the date created by the ID number). The results showed the following:

If ID number “date” was between: Average response was:

400–700 676 CE

701–1000 738 CE

1001–1200 848 CE

1201–1400 759 CE

Students tended to use their initial value as a starting point and adjusted their estimates around that starting value. But remember, this initial value was based on their ID numbers, not any historically relevant data! (By the way, the correct answer is 451 CE.) Research shows we often provide estimates based on the initial starting estimate. Even when people are told the initial estimate is random, their adjusted estimates remain close to the initial estimate or anchor. 11

This pattern of anchoring and adjustment is quite prevalent. That is, different starting points lead to different end results. Consider the following scenario:

A newly hired teacher for a large private high school has fi ve years of experience and solid qualifi cations. When asked to estimate the starting salary for this employee, one friend (who knows very little about the profession) guessed an annual salary of $31,000. What is your estimate?

If you’re like most people, your answer will be affected by the friend’s ini- tial estimate. In studies using similar scenarios, when the friend’s estimate was much higher, say $70,000, subsequent estimates were much higher. This is the case even when the scenario states that the friend knows very little about the profession!

The common mishaps resulting from this bias abound. Think about the last time you negotiated for anything. Who threw out the fi rst number? That fi gure served as a starting point for the negotiation, regardless of whether it was a rea- sonable fi gure or based on anything objective.

Judgment Error 4: Confirmation

Participants were asked in a research study to think about this series of numbers: 2, 4, 6. This series conforms to a particular rule. Students were asked to identify the rule and, to do so, were allowed to propose a new sequence of numbers they believed conformed to the rule to test whether their rule was correct. After this period of experimentation, the students were asked to identify the rule. Common responses were:

• Numbers that increase by two.

• The difference between the fi rst two numbers is equivalent to the difference between the last two.

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CHAPTER 3 Solving Problems 87

The rule used in the experiment was actually any three ascending numbers. Few students actually identifi ed this rule because the solution requires students to collect disconfi rming, rather than confi rming, information. In other words, the confi rmation bias represents people’s tendency to collect evidence that sup- ports rather than negates our intuition before deciding. When students found a rule that seemed to work, they were done searching. In solving problems, one of the most insidious traps is gathering data that seek to confi rm our ideas and exclude data that might disconfi rm them.

Judgment Error 5: Overconfidence

Consider the following quotes:

Heavier-than-air fl ying machines are impossible. —Lord Kelvin, president of the British Royal Society, 1895.

I think there is a world market for about fi ve computers. —Thomas J. Watson, chairman of IBM, 1943.

We don’t like their sound, and guitar music is on the way out. —Decca Recording Co. rejecting The Beatles.

Now consider these facts: 12

• 81 percent of surveyed new business owners thought their business had at least a 70 percent chance of success, but only 39 percent thought that most businesses like theirs would succeed.

• 80 percent of students believed they were in the top 30 percent of safe drivers.

• A survey asked 829,000 high school students to rate their own ability to “get along with others,” and less than 1 percent rated themselves as below average. Further, 60 percent rated themselves in the top 10 percent, and 25 percent rated themselves in the top 1 percent.

What do all of these things have in common? They are indicative of peoples’ overconfi dence in their abilities and underconfi dence in others’. Often termed the Lake Wobegon Effect (after the radio show in which the imaginary town boasts all of its children are above average), this overconfi dence bias leads us to believe we possess some unique trait or ability that allows us to defy odds, whereas oth- ers simply don’t have such a trait or ability. An example of the overconfi dence bias in action can be seen in investor behavior in the late 1990s. Because of a boom in technology stocks, even novice investors experienced huge growth in their portfolios. As technology stocks kept going up, many investors believed that their success was due to their stock-picking ability rather than unsustainable growth in one sector of the economy. The result for many was huge losses. This same process occurred in the recent real estate bubble of 2007. Lenders and buy- ers were overly confi dent that prices would keep going up and the subsequent drop in housing values left both banks and borrowers with huge losses.

In an eye-opening study about the role of overconfi dence in decision mak- ing, researchers examined who could predict stock performance better, laypeople (in this case, students) or stock market professionals (that is, portfolio managers, analysts, brokers, and investment counselors). 13 The two groups were asked to forecast the best performing stocks out of a pair in 30 days with only the name of the company, industry, and monthly percent price change for each stock for the previous 12 months. In addition to trying to pick the winning stock, the two groups were asked to rate how confi dent they felt about their predictions. The results showed that the students picked the best-performing stock 52 percent of the time, while the stock market professionals were only 40 percent accurate. That’s correct,

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PART ONE Personal Skills88

the stock market professionals performed signifi cantly worse than would be expected by chance alone! Yet these very same professionals indicated that they were, on average, 67 percent confi dent about their picks, while students indicated being only 59 percent confi dent about their choices. It turns out that students, like most laypeople, simply relied on past performance in making their predictions. Yet stock market professionals indicated that they relied mostly on their judgment and experience, believing that they possessed knowledge that could defy the out- comes that were reasonably suggested by chance and prior stock performance.

Being confi dent is a great thing: It allows people to approach diffi cult situa- tions with courage and determination. Unfortunately, most of us are overconfi - dent and we greatly overestimate the true probability of success. Research has shown there is virtually no relationship between one’s confi dence level about being right and actually being right. That is, people (think consultants, experts, advisers) often exude confi dence about their opinions, but confi dence doesn’t make them any more accurate. The good news is some research shows that, when given feedback about being overconfi dent or asking people to explain their estimates, people reduce their subsequent estimates to be more realistic.

Judgment Error 6: Escalation of Commitment

You just replaced the entire exhaust system on your somewhat rusty 1996 Volvo sedan, for $850. Two days later, you hear a clanking sound and take your Volvo directly to the mechanic. She tells you your Volvo will need a new clutch and major engine overhaul—at a cost of $1,400. Most people in this situation would spring for the repairs on the car, believing they have already spent $850. Yet the money already spent is irrelevant to the cost of the new repairs. This phenom- enon is known as escalation of commitment. The idea is simple: People are likely to continue to invest additional resources (time, money, and so on) in fail- ing courses of action even though no foreseeable payoff is evident. The phrase “throwing good money after bad” is the essence of escalation of commitment.

Escalation is prevalent for several reasons. First, we don’t want to admit that our solution may not have been the right one, so we stay the course. Second, we don’t want to appear inconsistent or irrational, so we continue to hope for the best even though data simply don’t justify such a response. Third, in organiza- tions, not continuing could be seen as giving up rather than fi ghting onward— and nobody likes a quitter.

“When you discover you are

riding a dead horse, the best

strategy is to dismount . . . do

not buy a stronger whip, declare

that the horse is better, faster or

cheaper dead, or harness several

other dead horses together for

increased speed.”

—Judge Thomas Penfield Jackson

“If at first you don’t succeed, try

again. Then quit. There’s no use

being a damn fool about it.”

—W. C. Fields

ProfessionalsStudents

70

50

Average Accuracy and Confidence on Stock Selection (%)

60

40

20

30

10

0

Confidence Accuracy

Source: Tomgren and Montgomery (2004).

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CHAPTER 3 Solving Problems 89

Overcoming Judgment Biases

Unfortunately, there are no simple or surefi re ways to always avoid common decision biases. Such biases remain exceedingly hard to avoid even when we are acutely aware of what they are and how often they occur. Consider the case of Jeffrey Z. Rubin, who was among the most notable scholars in the study of escalation before his death in 1995. 14 Professor Rubin was killed in a climbing accident when he continued to climb after his climbing partner turned back due to adverse weather conditions. Make no mistake, the biases are insidious and hardest to detect in our own decision making. Nonetheless, useful tactics exist: (1) confi dence estimates, (2) trial-and-error calibration, and (3) healthy skepticism.

Confidence Estimates

Since we tend toward overconfi dence in our decision making, one way to curb that bias is to attach an estimate of confi dence to beliefs held by ourselves and others. For example, say you want to improve the on-time delivery problem of your pizza delivery drivers. You ask one driver, “How many on-time deliveries can you make per night?” Your driver says 18. Okay, fair enough. But how con- fi dent is your driver? When asked, she (You were thinking it was a man, weren’t you? Pesky biases!) claims about an 80 percent confi dence level. Well, now it seems 18 isn’t really a good estimate after all. In fact, a more accurate and use- able estimate would be 14 to 22 on-time deliveries per night. Now you have a more realistic estimate of what your driver can reasonably accomplish.

Most experts agree reliance on “single-point” estimates is dangerous—they just don’t provide enough information. So using confi dence estimations to build “confi dence ranges” can move you away from single-point estimations. As psy- chologist Scott Plous notes, the best method is simply to stop yourself or others and ask, “What is the chance that this judgment is wrong?” 15

Trial-and-Error Calibration

One familiar, but underutilized, method for improving problem solving is through trial and error. That is, if you want to improve your success rate and reduce failure tomorrow, you must learn from your successes and failures today. To illustrate, most people are surprised to learn weather forecasters are incred- ibly accurate. In fact, when an experienced weather person predicts a 40 percent chance of rain, it rains 39 percent of the time!

Compare that accuracy rate to that of physicians. One study in a clinical set- ting asked physicians to review patients’ medical history and conduct a physical examination, afterward predicting the likelihood that a patient had pneumonia. 16 The results make you wish that physicians were more like weather forecasters. That is, when physicians said there was a 65 percent chance of pneumonia, they were accurate only 10 percent of the time. It didn’t improve with confi dence either. When they predicted an 89 percent chance of pneumonia, they were right just 12 percent of the time (see Figure 3.3 ). Why are weather forecasters so accu- rate and physicians less accurate? The answer lies in a key aspect of trial and error, namely, regular feedback and knowledge of results.

Weather forecasters predict rain and in a few hours get the results of their prediction; they get to see immediately weather that confi rms or disconfi rms their meteorological model. If the model was right, they note what they did; if it was wrong, they examine the data and note the aspects that led to the wrong prediction. This process repeats itself every day as forecasters calibrate their pre- dictions with the results. Research supports this calibration process as a way to avoid biases and make better decisions.

“Good judgment comes from

experience. Experience comes

from bad judgment.”

—Walter Wriston

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PART ONE Personal Skills90

Training yourself to use trial-and-error calibration involves a few simple steps. First, with every prediction, record the reasons why you’ve established the prediction. In several studies, researchers have found that when they make note of the reasons for their decision they do a better job of tracking and learning. 17

Second, track the results. Consequences are often separated greatly by time; not all of us get the luxury of seeing the immediate results of our forecasts each day. So keep good records of what happened so you have the ability to defend decisions. When others say, “We always lose business when we release a product too soon,” you’ll be ready with data that might poke holes in such thinking.

Third, study the success and failures—you need both confi rming and discon- fi rming evidence to truly know. Fourth, remember that chance is not self- correcting. A string of failures does not mean you are “due” for a success or vice versa.

Healthy Skepticism

Another simple but powerful rule of thumb is to approach all decisions and pre- sented evidence with healthy skepticism. Be prepared to challenge yourself and other “experts” and seek out negative or disconfi rming evidence. Here are a few specifi c questions that refl ect a healthy skepticism and can ultimately lead to better decisions:

• What are the strongest arguments against my position? On what basis am I rejecting them? (You may want to write these down.)

• What are the weakest parts of my position? On what basis am I accepting them? Would I fi nd this reasoning convincing if an opponent used it to justify her arguments?

• How will I know if I am wrong? Given that we have a strong tendency toward escalation of commitment and denial, if we can construct in advance a personal defi nition of failure/error, then we may know when it’s time for plan B. Sharing that with someone else is a good way to keep you honest.

“I’ve learned that mistakes can

often be as good a teacher

as success.”

—Jack Welch

0 0

10

20

30

40

50

60

70

80

90

100

20 40 60 80 100

Physicians

Weather Forecasters

Calibration of Weather Forecasters and Physicians

Predicted Probability

A ct

u al

P ro

b ab

ili ty

FIGURE 3.3 Accuracy of Weather Forecasters Versus Physicians

Source: Plous, S. (1993). The psychology of judgment and decision making. New York: McGraw-Hill.

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CHAPTER 3 Solving Problems 91

• In considering facts, ask questions like: How do we know this? What is the base rate (could something just be random and we mistakenly presume cause)? Percentage of what? What are the available facts?

• Are there more alternatives?

In short, the best defenses for decision biases are:

1. Do not jump to conclusions.

2. Do not assume a relationship is a cause; record and test your decision outcomes.

3. Do not base your conclusion only on your own experience.

4. Do not just look to support your case. Look for the nonsupporting evidence, too.

5. Do not fall prey to overconfi dence; get confi dence estimates and ranges.

These defenses are simple to know but hard to do. If you fi nd yourself think- ing how commonsensical these defenses may seem, you would be wise to recall the remarkable frequency of decision biases even among the brightest of peo- ple. Challenge yourself to recognize and steer clear of those biases in your own thinking.

Solving Problems Effectively

In thinking about an effective model for attacking problems, two notes are important to make at the outset. First, as the quote from W. Edwards Deming insightfully conveys, there truly is a difference between good decisions and good outcomes. That is, you can never fully control the outcomes of your decisions. What you can control is how you will decide—and that is the importance of understanding a framework and having the discipline to use it.

Second, there is no such thing as a perfect decision or a perfect decision process. As humans, we will always be subject to bounded rationality. 18 Our brains’ limitations constrain our thinking and reasoning ability, and, thus, it is impossible to consider simultaneously all information relevant to any decision or problem. Bounded rationality leads managers to engage in what is known as satisfi cing or determining the most acceptable solution to a problem, rather than an optimal one. Nonetheless, adhering to a problem-solving model has been shown to improve decision quality, and a number of proven tools and techniques are worth utilizing in different situations. In the following, we outline a popular model as well as some of the better tools for employing each element of that model. The model consists of fi ve major steps that we abbreviate into the acro- nym PADIL (pronounced “paddle”), or problem, alternatives, decide, implement, learn (see Figure 3.4 ).

“A good decision cannot guar-

antee a good outcome. All

real decisions are made under

uncertainty. A decision is there-

fore a bet, and evaluating it as

good or not must depend on the

stakes and the odds, not on the

outcome.”

—W. Edwards Deming

FIGURE 3.4 The PADIL Problem- Solving Framework Problem

Implement

Learn

Alternatives

Decide

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PART ONE Personal Skills92

A Problem-Solving Framework: PADIL

Define and Structure the Problem

The fi rst step in any good problem-solving process is to defi ne and structure the problem. Put another way, you want to be sure you are working on the correct problem. One common way this seemingly obvious starting point is mishandled is to begin with a solution, not the problem. For example, take the common managerial lament: “In my company, there is a serious lack of training.” That may potentially be true, but a more appropriate problem- framing process would bring forth the question, “What’s the problem that more training would address?” Training is one potential solution to a problem of skill defi ciency, but we fi rst need to clarify that skill defi ciency is a problem rather than, say, motivation or availability of resources. Moreover, even if skill defi ciency is the problem, training is only one possible solution. People can acquire skills through several other means, such as on-the-job practice, experi- ence, and mentoring.

The temptation to jump to a solution is very powerful and leads to what problem-solving expert Ian Mitroff calls “solving the wrong problem pre- cisely.” 19 There are several ways in which people solve the wrong problem precisely.

• Picking the wrong stakeholders. Solving the wrong problem often occurs because the problem solver fails to include key players. For example, in order to solve a problem on a manufacturing line, including people who actually work on the line to help defi ne the problem would be helpful.

• Framing the problem too narrowly. Problems are often larger than they may at fi rst appear. Managers can mistakenly limit that scope early by assuming the problem is narrow. For example, a manager might deal with theft in his department by assuming the problem is unique to his department rather than throughout the organization. Starting with a par- ticular solution in mind is not an effective strategy.

• Failure to think systemically. Individuals focus on a particular aspect of the problem, rather than the entire system or interrelated aspects of the problem. Focusing on the system allows for the examination of the real problem or “root cause.”

• Failure to fi nd the facts. The old adage “First seek to understand” is critical if you are to solve the right problem. There are good and effi - cient tools for uncovering the facts in any problem situation, rather than making hasty generalizations with untested assumptions and anecdotes.

Assess Key Stakeholders

Few problems in organizations are unique to one person. That is, problems and their proposed solutions likely have far-reaching implications beyond those in your immediate surroundings. For this reason, no problem-solving effort is com- plete without an understanding of the key stakeholders. A stakeholder is literally anyone who has a stake in the problem or solution. Any problem you’re trying to solve usually impacts more people than you might initially think. Therefore, one critical piece of problem defi nition is to conduct a stakeholder analysis, which will help you uncover the various parties involved in a problem and its potential solution. Tool Kit 3.1 describes the specifi c steps involved in completing such an analysis.

KO 3 - 3

D O 3 - 2

KO 3 - 4

D O 3 - 3

D O 3 - 4

“A problem well stated

is a problem half solved.”

—John Dewey

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CHAPTER 3 Solving Problems 93

Tool Kit 3.1 Stakeholder Analysis Stakeholder analysis is an essential tool for any problem-solving endeavor. It is also a “living” document, mean- ing that stakeholders require constant attention while solving a problem. Thus, a careful analysis will help you get an understanding of how the decision impacts different groups of people, who has the biggest stake and most power, and which stakeholders are likely to support or resist potential solutions to the problem.

1. Identify Key Stakeholders. Create a chart of primary stakeholders —individuals or groups that have direct authority or economic infl uence over the problem—and secondary stakeholders —individuals or groups that might be affected indirectly by the problem.

2. Prioritize Your Stakeholders. Using a simple 2  3  2 matrix, with the dimensions of Stake and Power, clas- sify (plot) each stakeholder to get a graphic representation of who your most important stakeholders to involve in the process are. For example, those stakeholders who have a high stake and a lot of power or infl uence should be your top priority. They should be involved in every step of the PADIL process.

3. Examine Support/Resistance. Once you’ve begun defi ning the problem and generating solutions, it’s helpful to determine the degree of support or resistance. Talk to your stakeholders, describe the problem as it has been framed, and talk about potential solutions. Gauge their relative support or resistance for how the problem has been defi ned and framed.

MANAGER’S TOOL KIT

Stakeholder Analysis

Stakeholder Name

Strongly Against

Moderately Against Neutral

Moderately Supportive

Strongly Supportive

MANAGEMENT LIVE 3.3

Solving the Wrong Problem Precisely20 Examples abound of solving the wrong problem precisely. One compelling example is the story of the Make-A- Wish Foundation, a fi rst-rate nonprofi t with passion. Its sole mission is to fi nd ways to grant dreams and wishes to terminally ill children. In 1996, the organization made headlines as it attempted to fulfi ll the wish of a 17-year-old boy named Erik. Erik’s dream was to kill a Kodiak bear in the wild and display the skin in front of the fi replace. To fulfi ll the wish, the foundation enlisted the Safari Club International to purchase all the hunting equipment and make the dream happen. With outstanding coordination, the Safari Club and Make-A-Wish fulfi lled Erik’s wish. Unfortunately, the decision to grant this wish had some unforeseen consequences, namely, outraging every ani- mal activist group in the country. Newspapers were fl ooded with bad press about the foundation’s inability to make good decisions, tarnishing the group’s reputation. The foundation solved the problem of “fi nding a way to make Erik’s wish come true” quite precisely because they viewed the problem simply as “granting the wish.” In reality, the problem was much more complex and required a full examination of all those potentially affected by this solution, namely, the key stakeholders.

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Determining Whom to Involve

One of the more challenging issues you will face in problem solving is determining who owns a particular problem—that is, who should be primarily accountable for solving the problem. For example, it is common for a manager to mistakenly dele- gate problems to an employee or team when the manager is actually the most appro- priate person to solve the problem. Equally common, managers often attempt to solve a problem on their own when employee input or actual delegation is required.

Although research shows getting others involved in problem solving usually results in better decisions, it does not mean others should always make the fi nal decision. In other words, sometimes a manager just needs input from employees (a voice not a vote) and that is the extent of their involvement. In other cases, del- egating the decision to those most closely involved is appropriate. As noted ear- lier, a common trap is to make a habit of solving employee problems in isolation.

One useful tool for helping gauge the appropriate level of involvement in problem solving is that developed by Victor Vroom and Phillip Yetton. 21 Those authors note that a decision-maker could involve others on a broad continuum ranging from no involvement to full employee delegation. As seen in Figure 3.5 , this continuum represents fi ve key participation approaches: decide, consult individually, consult group, facilitate group, delegate to group.

FIGURE 3.5 Vroom and Yetton’s Problem-Solving Approaches 22

Reprinted from Organizational Dynamics, Vol. 28, No. 4, by V. H. Vroom, “Leadership and the Decision Making Process,” pp. 82–94. Copyright © 1969, with permission from Elsevier.

Manager-Driven Problem Solving

Employee-Driven Problem Solving

Decide Consult Individually Consult Group Facilitate Group Delegate to Group

Manager makes the decision alone and announces it to employees.

Manager presents the problem to individual employees and uses input to make the decision.

Manager presents the problem to all employees in manager’s group and uses group’s input to make the decision.

Manager presents the problem to group and acts as a facilitator to help define the problem. Manager acts as a peer on the problem-solving team.

Manager gives problem to employees and permits employees to decide using an appropriate decision-making model. Manager provides necessary resources to ensure the group’s success.

Thus, you have fi ve approaches for engaging (or disengaging) in the problem-solving process. The model goes one step further, however, in helping you decide which of the fi ve approaches will be most useful given the problem you are facing. The framework identifi es seven factors that must be addressed before you decide which approach is best. These factors can be framed as questions to be answered, though not all factors will be present in every problem situation. 23

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CHAPTER 3 Solving Problems 95

• Decision Signifi cance —The signifi cance of the decision to the success of the unit/organization.

• Importance of Commitment —The importance of employee commitment to the decision.

• Leader’s Expertise —A manager’s knowledge or expertise regarding the problem.

• Likelihood of Commitment —The likelihood that employees would commit themselves to a decision made by the manager alone.

• Group Support —The degree to which employees support the unit or organization’s stake in the problem.

• Group Expertise —The degree to which the group of employees has knowledge or expertise regarding the problem.

• Group Competence —The employees’ abilities to work together in solving the problem.

Using your evaluation of the seven factors in simple high (H) or low (L) terms, you can create a fl owchart (see Figure 3.6 ) that will yield the most effective participa- tion approach. Keep in mind, this is a highly prescriptive approach and certainly cannot take into account every possible scenario. However, Vroom and his col- leagues have demonstrated in multiple studies that managers using this method had a success rate of 62 percent versus a 37 percent success rate for managers who did not use the method. 24 Thus, even though it may not take into account every possible factor, it seems to do a good job at capturing the most important factors.

Reprinted from Organizational Dynamics, Vol. 28, No. 4, by V. H. Vroom, “Leadership and the Decision Making Process,” pp. 82–94. Copyright © 1969, with permission from Elsevier.

FIGURE 3.6 Vroom Participation Decision Tree

Time-Driven Model

Decide

Decide

Decide

Decide

Delegate

Delegate

Consult (Group)

Facilitate

Consult (Individually)

Consult (Individually)

Consult (Group)

Facilitate

Facilitate

Facilitate

H

L

H

L

L

H

H

L

L

H

H - - -

- -

- -

- - -

- - -

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-

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--

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-

L

L L

L

L

L

L

L

L

L

L

L

L

L

L

L

H H

H

HH

H

H

H

H

H

H

H

H

H

H

D e ci

si o

n S ig

n ifi

ca n ce

Im p

o rt

an ce

o f

C o

m m

it m

e n t

Le ad

e r'

s E

xp e rt

is e

Li ke

lih o

o d

o f

C o

m m

it m

e n t

G ro

u p

S u p

p o

rt G

ro u p

E xp

e rt

is e

Te am

C o

m p

e te

n ce

P R O B L E M S T A T E M E N T

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PART ONE Personal Skills96

Framing the Problem Correctly

Before you begin to solve any problem, you must learn to frame the problem cor- rectly. This is the essence of solving the right problem precisely. Strong evidence suggests the way in which a problem is stated determines the quantity and qual- ity of solutions generated. 25 Consider the following problem:

The parking lot outside an offi ce building is jammed with workers’ cars. Management decides to tackle the problem so they convene a committee with instructions to devise different ways to redesign the parking lot to hold more cars. The work group does its job, coming up with six different methods for increasing the lot’s capacity. 26

The problem defi ned by management in this case is “to redesign the parking lot to hold more cars.” Has the real problem been framed correctly? No! Manage- ment didn’t charge the work group with solving the problem (the jammed park- ing lot), but rather gave them a solution (redesign the lot) and asked for different methods to implement that solution. Further, the real problem as framed cor- rectly would be, “The parking lot is jammed with cars,” and a statement of why this is a problem, perhaps “Thus, it can’t accommodate all of our employees who drive to work.” Framed this way, the work group is free to consider all sorts of potential solutions, which may include expanding the parking lot, but could also include providing benefi ts for taking public transportation or carpool programs.

Framing problems correctly is diffi cult since our immediate need is to begin solving the problem. But the way in which a problem is framed can lead to dras- tically different actions with varied consequences. 27 Consider some research that asked participants either “Do you get headaches frequently, and if so, how often?” or “Do you get headaches occasionally, and if so, how often?” The words “frequently” versus “occasionally” are the only difference in these statements. In this study, participants asked the fi rst question responded with an average of 2.2 headaches per week ( frequently ), whereas participants asked the second question reported 0.7 headaches per week ( occasionally ). A simple word change in how a problem statement is phrased can lead people to arrive at very different conclu- sions about the nature of the problem.

When you start to examine problem framing, you will notice the tendency for people to generally frame problems in “either–or” terms. This tendency has been termed the black or white fallacy, which assumes our choices are clear and lim- ited to two (it’s either black or white), when in reality there may be many other choices (shades of gray). Sometimes people make this mistake unconsciously because it does not occur to them that they have other choices. Other times they do it consciously for manipulative purposes—for example, “If I want you to do A, I can increase your odds of doing it by convincing you your only other alternative is B, which is clearly unacceptable.”

Let’s look at another example of how framing problems is tricky. In a research study, 28 one group of participants read the following fi rst scenario and another group read the second:

1. The government is preparing to combat a rare disease expected to take 600 lives. Two alternative programs to combat the disease have been pro- posed, each of which, scientists believe, will have certain consequences. Program A will save 200 people if adopted. Program B has a one-third chance of saving all 600, but a two-thirds chance of saving no one. Which program do you prefer?

2. The government is preparing to combat a rare disease expected to take 600 lives. Two alternative programs to combat the disease have been pro- posed, each of which, scientists believe, will have certain consequences. Through Program A, 400 people would die if adopted. For Program B, there is a one-third chance that no one would die, but a two-thirds chance that all 600 would die. Which program do you prefer?

Practice this! Go to www.baldwin2e.com

“If you’re seeking a creative

answer to your problem, you

must first give sufficient attention

to understanding what

the problem is.”

—Gerard Nierenberg

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CHAPTER 3 Solving Problems 97

Both scenarios are exactly the same, that is, they are logically equivalent. In scenario 1, the problem is framed in terms of lives saved, whereas in scenario 2 the problem is framed in terms of lives lost. This simple change leads participants to avoid risk and heavily endorse program A (72 percent) in the “lives saved” frame and largely seek risk by selecting program B (78 percent) in the “lives lost” frame (see Figure 3.7 ). Took Kit 3.2 offers some easy methods to examine prob- lem frames in different ways.

Thinking Systemically

No discussion of solving the right problem is complete without a basic under- standing of systems and systems thinking. A system is a perceived whole whose elements “hang together” because they continually affect each other over time

Tool Kit 3.2 Methods for Reframing Problems Here are four simple methods that will help you to view problems differently.

1. Paraphrase: Restate in your own words what someone else has stated.

Initial: How can we reduce our shipping delays? Reframe: How can we keep shipping delays from increasing?

2. 180 8 Turnaround: Simply turn the problem around.

Initial: How can we encourage students to study for exams? Reframe: How can we discourage students from studying for exams?

3. Broaden It: Reframe the problem with a broader frame of reference.

Initial: Should we expand our product line in China? Reframe: How can we achieve increased fi nancial success in China?

4. Redirect the Problem: Change the actual focus of the problem.

Initial: How can we increase our revenue? Reframe: How can we decrease our costs?

MANAGER’S TOOL KIT

0

10

20

30

40

50

60

70

80

90

1 2 Positive Frame “Lives Saved”

Negative Frame “Lives Lost”

P e rc

e n ta

g e P

re fe

rr in

g O

u tc

o m

e

Avoid Risk

Seek Risk

FIGURE 3.7 Framing Effects and Risk

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PART ONE Personal Skills98

and operate toward a common purpose. 29 The human body is a great example of a system. When you see the doctor because your stomach hurts, the doctor examines other areas of your body and takes your temperature, blood pressure, and pulse. Why is that?

It is because the stomach is part of a larger bodily system. Thus, your doc- tor is attempting to fi nd the root cause of your stomach problem, which may have nothing to do with your stomach at all, but rather be a problem with your pancreas that contributes to stomach pain or sore back muscles creating pain that feels like it’s coming from your stomach. Effective problem solving almost always demands attention to a larger system and uncovering the root cause(s) (for example, the pancreas) whereas simply treating the symptoms (stomach pain) will not solve the problem adequately.

Organizations are elaborate systems and contain thousands of interrelated parts, some of which are more obvious than others. All systems express what is known as systemic structure or a pattern of interrelationships among the sys- tem components. The challenge is symptoms are always much more visible than their underlying systemic structure. Yet this underlying structure is what holds the promise for real problem solving.

So a systems approach—“How will this change affect other things?”—is criti- cal to being effective. A helpful visual is to think of system structure as being part of an iceberg. Icebergs exist above and below the water, meaning part of the ice- berg is quite visible, while another part is completely concealed (see Figure 3.8 ).

At the tip of the iceberg are events in the system. Turnover has increased, sales are down, or orders are delayed are all examples of events that take place in an organizational system. Problems solved at the event level tend to be short- lived and do nothing to actually address the real problem. For example, if turn- over is high, we might institute a new bonus system, hoping to retain employees. But if the real reason turnover is high has nothing to do with the pay system, it is unlikely to work.

Working our way toward the water are patterns of behavior or trends. That means examining the problem by seeking to understand the overall pattern that has persisted over time. For example, as we plot data for turnover, we might fi nd

“The significant problems we face

cannot be solved at the same

level of thinking we were at when

we created them.”

—Albert Einstein

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CHAPTER 3 Solving Problems 99

turnover is always highest in one particular month out of the year when the com- petition tends to seek new talent. Thinking at the trend level, as opposed to the event level, helps us put the most recent events in context.

Finally, under the water is the systemic structure. The systemic structure rep- resents the most powerful information because it focuses on the actual cause of the patterns of behavior, which then explain the events. If you really want to solve a problem, you must solve the right problem by getting to the systemic structure.

One reason people have trouble thinking systemically is we are taught to view the world in linear, rather than nonlinear terms. Purely linear thinking is a bit of a fallacy in that it rests on the assumption that present trends will continue in the same direction and pace (for example, when you retire, a Toyota Prius will cost $209,000 and a Big Mac $25). Strategy plans often fail because strategists assume the world as we know it will not change much and that current trends are permanent. Perhaps the most common example of linear management think- ing is that companies with a hot new product overexpand their capacity only to fi nd themselves out of luck when demand softens.

Let’s view another example using the iceberg approach. Suppose a fi re breaks out in your area. This is an event. If you respond by putting the fi re out, you are simply reacting. In other words, you’ve not done anything that would prevent new fi res. If, however, you not only extinguish the fi re but study the location of fi res in your area, you are paying attention to patterns. For example, you might notice certain neighborhoods incur more fi res than others. One response would be to adapt to this pattern by adding more fi re houses in those areas. What if, however, you examined the systems —which might include smoke detector dis- tribution and the building material used—that sustain the pattern’s fi res? That might lead you to build new fi re alarm systems and establish new safety codes. Using this approach, you are getting to the bottom of preventing new fi res. 30

Why do most communities respond to an increase in fi res by hiring more fi re personnel? The answer is people often solve problems based on faulty thinking and rarely identify the systemic structures at work. To identify these systemic structures requires uncovering one’s assumptions (discovering what’s below the surface) or our mental models about the systemic structure. Mental models are the prevailing assumptions, beliefs, and values that sustain current systems. These habits of thought enable us to ignore valid data, despite the fact that those

FIGURE 3.8 The Systems-Approach Iceberg EventsWhat just

happened?

Systemic Structure What are the forces at play

that maintain those patterns/trends?

Patterns/Trends What’s been happening?

Have we been here before?

Mental Models What elements in my/our

thinking allows this to persist? How am I/are we perpetuating

this structure?

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PART ONE Personal Skills100

data are essential to solving the problem. In addition, we protect and preserve these mental models by making them “undiscussable.” That is, they become ways of being in organizations. So even if our thinking is faulty, we don’t question it or examine it. If you’ve ever heard, “That’s just the way its done,” or “We have an understanding about that,” that’s a clue a mental model may be contributing to the problem.

Learning how to bring mental models to the surface or challenge them is important to good problem solving. The best way to learn this skill is by under- standing how to ask the right questions about a problem—that is, developing inquiry skills. Inquiry skills allow you to examine your own mental models as well as others. For example, let’s say you’re trying to solve the problem of dropped calls in your customer service center. You seek your employees’ opinion by asking the following question: “Why are there so many dropped calls in the service center?” You’re likely to get great responses, but how will you know what the real problem is? You won’t unless you attempt to fi nd the root cause. That is, when your employees respond with reasons, your response should not be, “OK, thank you,” but should be to dig deeper. These question stems can help you dig deeper toward the root cause:

• What leads you to believe that is the case?

• What conditions exist that allow this to occur?

• Can you tell me more?

• What have you seen that may contribute to this problem?

• Can you help me understand your thinking?

• What do we assume to be true?

Inquiry skills are aimed at understanding people’s mental models. This includes examining your own mental models, including asking “What is my role in this problem?” and “What about my behavior allows this problem to persist?” You can easily delude yourself into thinking the problem is out there when in fact it may be closer to home than you think!

Tools for Understanding the Problem Scope

Some problems have a very well-defi ned scope, while others are quite broad. Your job is to determine the boundaries of your problem—that is, determining what is truly germane to your problem and what falls outside the realm of the problem. With most problems, potential causes and solutions are infi nite. Your job is to narrow the potential causes down and move on to the next step in the PADIL process— alternatives. We discuss various tools for helping you under- stand the problem scope. You can use these tools on your own, but they work best when you have a few key stakeholders working with you. If you engage in these exercises with a team, keep in mind your team members are likely to cen- sor their comments about problems if they think you won’t want to hear them. Don’t kick off the exercises by offering your opinion fi rst; the group will likely conform to it. Let others go fi rst.

Affi nity Diagram. The affi nity (similarity) diagram is an idea generation method that allows you to sort the major aspects of the problem into themes or catego- ries. The categories will help when you begin to gather data about the problem and research alternatives. The following steps outline how to create an affi nity diagram.

1. Write the problem statement (one you’ve framed well) on a fl ip chart or board. Underneath the problem, write the phrase, “What are the possible causes of it?”

“He who asks a question may be

a fool for five minutes, but he who

never asks a question remains a

fool forever.”

—Tom Connelly

“It’s not that I’m so smart; it’s just

that I stay with problems longer.”

—Albert Einstein

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CHAPTER 3 Solving Problems 101

2. Using sticky notes, allow each person to write as many potential causes of the problem as possible, one per sticky note, and place them on the board or fl ip chart. Do not evaluate the merit of each person’s idea.

3. Once all the ideas are posted, begin to look for similarities in the ideas. Group the similar notes together and label them according to the category they represent. For example, “These fi ve seem to deal with our ‘Delivery Process’ and these three with our ‘Customer Service Structure.’” You now have some ideas for where to begin your data collection.

Is / Is Not. This simple method determines your problem’s boundaries by describing aspects that are part of the problem and those that are not. Use the following steps as a guideline.

1. On a piece of paper or fl ip chart, write the problem statement.

2. Draw a line down the middle. On one side put the word “Is” and on the other the words “Is Not.” Down the left-hand side of the paper, write the words “what,” “who,” “when,” and “where.”

3. Answer the questions. What is the crux of the problem; what is not the crux of the problem? Who is involved with this problem; who is not involved? When is the problem a problem; when is it not a problem? Where is the problem appearing most; where is it not appearing most?

Graphic Displays. Sometimes, a picture is worth a thousand words. Taking what you know about the problem so far and graphing it in some meaningful way can be incredibly helpful. A histogram or bar chart allows for the display of data categories (on the X axis) tracked against some important standard (on the Y axis). For example, type of part manufactured ( X axis) and the number of parts per type made each hour ( Y axis). A scatter plot can also be useful. The scatter plot demonstrates the relationship between two variables. For instance, you might track students’ test grades on one axis ( Y ) and student absences on the other axis ( X ) to see if there is some type of relationship between test grades and class attendance. For instance, we might expect to fi nd that, as absences decrease, test grades increase.

One of the most powerful graphic displays is known as a behavior-over-time chart, or BOT. In order to create a BOT, you need to have been collecting data for some given time period. Let’s say you regularly track customer service behaviors (for example, problems solved in fi rst call, number of calls handled per hour, and so on). As you plot these behaviors over time, you may start to see patterns emerge. For example, you may notice that during two months in the year the call volume skyrockets. As you piece this information together with other data you routinely collect, you also note an increase in employee absenteeism that cor- responds with those spikes. Problem-solving experts agree certain patterns that appear in BOTs can help to identify a systemic problem, one not likely to respond to a quick fi x. 31 These include:

• Increases that level off

• Steeply rising increases

• Steeply falling decreases

• “Boom and bust” cycles (such as up- and downswings)

In Tool Kit 3.3, we offer another graphic display method, known as Pareto graphing, to help identify the most critical components of a problem.

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PART ONE Personal Skills102

Generate Creative Alternatives

Hopefully, the process of framing the problem will lead you to think about many potential solutions to the problem. Research shows that generating multiple alternatives to problems results in higher-quality solutions. And the key to doing so is fi nding ways to generate as many creative alternatives as possible. Let’s examine the following scenario:

A building manager receives several complaints about the long wait times for the building’s elevator. He calls a consultant who recommends three alternatives: (1) build new elevators, (2) space out the elevators between fl oors, or (3) make the ele- vators faster. The manager thinks these solutions are good, but costly. The manager then consults a psychologist, who recommends giving people something to do while they wait. The manager installs mirrors by the elevators and the complaints stop.

The alternative proposed by the psychologist was not only cheap but incred- ibly effective; people simply occupied their time looking at themselves. Would you have thought of that? We certainly didn’t and herein lies the quandary: Left to our own thinking, we rarely arrive at truly creative and unique alternatives to prob- lems. Most of the time, our alternative solutions look awfully familiar and offer only slight improvements (What should we do this weekend? Well, what did we

“The key to having a good idea is

to have lots of ideas.”

—Linus Pauling

Tool Kit 3.3 Pareto Graphing Sometimes, in attempting to solve a problem, you can’t solve the whole thing, yet solving one component still would make a signifi cant improvement. Applying the Pareto principle, 80 percent of the value to be gained is likely to be accomplished by solving 20 percent of the problem. In other words, some things are just much more important than others. If you could fi x the one or two major problem areas, you’d be likely to eradicate over three-quarters of the problem. For that reason, the Pareto principle has become known as the 80/20 rule. Using this principle can help you quickly isolate where you’d like to spend your problem-solving efforts.

For example, professors sometimes receive poorly written student papers. Yet it’s often diffi cult to determine where to spend time helping students improve their writing, particularly when writing is not the course’s primary intent. Using the Pareto principle, a professor could quickly isolate the major source of her students’ writing problems. While grading an assignment, she could track the following information in all 40 papers she receives: grammar, punctuation, spelling, and typing/computer errors. After compiling the data, she could then create a chart like the following:

MANAGER’S TOOL KIT

Problem # of Errors % of Total Cumulative %

Grammar 47 44 44

Punctuation 28 26 70

Spelling 21 19 89

Typing/Computer 12 11 100

Total 108 100

Looking at the chart, she would easily see the largest problem by far is grammar. In addition, punctuation causes problems as well. Even if the professor chose only to deal with the grammatical errors of her students, she would drastically improve their writing skills. This is only evident after charting the data.

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CHAPTER 3 Solving Problems 103

do last weekend?). Moreover, we often trust the fi rst solution out of the box. 32 We don’t question whether other, perhaps better, solutions exist. Say that a recruiter calls you and offers you a job more attractive than your current one. Would you take the job? Most people will compare their current job with the new offer and arrive at an emphatic “Yes! Where do I sign up?” Yet if you’re going to take the step of leaving your current job, why limit yourself to one alternative, the one pre- sented by the recruiter? Wouldn’t you want to explore other possible job opportu- nities that could be even more attractive? 33

Brainstorming

Another key process issue is idea generation. While it may seem contradictory, good brainstorming sessions are more likely to result from a disciplined proto- col (see Management Live 3.4 on IDEO’s brainstorming rules). In an effective brainstorming session, the group sits around a table with a fl ip chart or some way to visibly present the input. The brainstorming facilitator states the prob- lem in a clear manner so all participants understand it. Members then “free- wheel” (without limiting themselves) as many alternatives as they can in a given length of time. No criticism is allowed, and all alternatives are recorded for later

MANAGEMENT LIVE 3.4

Brainstorming at IDEO The following is a list of brainstorming techniques used by IDEO, a consulting fi rm noted for its creative ideas and client list of major companies. IDEO staff recommends setting a 20- to 30-minute time limit on your brainstorming and appointing one team member to make sure the team honors these rules:

1. Defer Judgment. Don’t dismiss any ideas. This will be diffi cult for a group of analytical types who will instantly want to talk about what is wrong with the idea and why it wouldn’t work. But nothing shuts down a brainstorming session like criticism.

2. Build on the Ideas of Others. No “buts,” only “ands.”

3. Encourage Wild Ideas. Embrace the most out-of-the-box notions because they can be the key to solutions. Every idea is a good idea. These ideas may not ultimately be adopted, but might trigger other ideas.

4. Go for Quantity. Aim for as many new ideas as possible. In a good session, up to 50 ideas are generated in 30 minutes.

5. Be Visual and Auditory. Use yellow, red, and blue markers to write on big 30-inch by 25-inch sticky notes that are put on the wall. This is important because reading others’ ideas will spur your thinking. As you write your idea, say it out loud for everyone to hear.

6. Stay Focused on the Topic. Always keep the discussion on target. Your facilitator will help with this. If there is a question about whether something should be included on the wall, put it up there.

7. One Conversation at a Time. No interrupting, no dismissing, no disrespect, and no rudeness.

After the 30-minute brainstorming session, go to the wall and have the team attempt to group the ideas. Pre- cision isn’t as important as establishing general categories. Discard identical ideas and pair up ideas that are simi- lar. Next, discuss the ideas the team has come up with, and be sure to discuss what might be interesting about an idea before the team goes into a criticism mode. New ideas may still be popping up. Write down these additional ideas and get them up on the wall. Consider how ideas may be combined to create an even better solution.

The team may then have a long list of ideas and need to narrow them down to a more manageable number for further development. Use a multivote system to narrow the list to three to fi ve items.

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PART ONE Personal Skills104

discussion and analysis. Judgments of even the most bizarre suggestions are withheld until later because one idea can stimulate others. Disallowing criticism thus encourages group members to “think the unusual.”

Brainwriting

Organizations love brainstorming, and the prevailing assumption is it works in gen- erating many creative ideas. So companies all across the country place people in conference rooms and tell them, “Be creative; solve our problems.” Unfortunately, recent syntheses of research on brainstorming suggest in some cases brainstorm- ing sessions are rendered ineffective because of problems related to group dynam- ics in which people aren’t able to defer judgment, can be critical of others, and usually don’t “let it all hang out” toward solving the problem. 34 Indeed, one meta- analytic study found that involving a team or group of people actually produced far fewer ideas than the same number of individuals generating ideas on their own.

With that in mind, a modest variant of brainstorming called brainwriting has emerged as the superior method for generating the highest volume of creative ideas. 35 Using the same rules as brainstorming, brainwriting allows participants time to generate ideas on their own, recording them but not sharing them with the group initially. Then participants in a round-robin format read off their ideas until all alternatives have been presented and people can then build upon them. There are several ways to improve the quantity and quality of the alternatives presented: 36

• Diversify Participants. Make sure the people involved in brainstorming represent diverse perspectives on the topic—your key stakeholders and even some outsiders (customers, suppliers) who aren’t familiar with your particular problems. Research shows diverse groups perform better than nondiverse groups on creative problem-solving tasks. 37

• Use Metaphors and Analogies. When a car dealership wanted to increase the number of people walking in the door by creating a more pleasurable shopping experience, they focused on pleasurable things such as food. Using food as a metaphor they agreed that chocolate (smooth, sweet, comforting) made for a good metaphor to focus on delivering ser- vices that went smoothly and were sweet and comforting, as opposed to aggressive. 38 The popular potato chips Pringles were the result of an ana- logical process. The problem was potato chips required too much shelf space, but packing them tightly destroyed them. The manufacturer used the analogy of dried leaves (noting similar properties to potato chips) and showed that when leaves were slightly damp, they could be stacked with- out losing their shapes, hence Pringles.

• Performance Standards and Feedback. Research shows a group of problem solvers can increase the number of ideas generated by setting high performance standards, as long as they are not impossible. In addi- tion, providing feedback on how the brainwriting is going is central. Sim- ply stop every now and then and gauge the number of ideas generated and let people know whether they are ahead or behind the curve.

• Assume a “Perfect World.” Key to generating really creative alterna- tives is to encourage people to simply assume there are no constraints to solving a problem. What would you wish for if you could get it? What would a perfect world look like? 39

Benchmarking

A popular form of generating alternatives known as benchmarking is used in approximately one-quarter of organizational problem-solving scenarios. 40 In benchmarking, organizational representatives trying to solve a problem go to visit

“All it takes is one idea to solve

an impossible problem.”

—Robert H. Schuller

“You don’t need to necessarily

have any good ideas; you just

need to be able to recognize

them.”

—Unknown

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(either literally or fi guratively) other organizations thought to have successfully solved the problem or a similar one. During the visit, problem solvers generate ideas that might work in their own organization. The knee-jerk reaction of most manag- ers is to try to visit others in the same industry that might have some great practices to share. However, benchmarking seems to be most effective for generating ideas when managers visit organizations that specialize in the particular problem area, regardless of the industry. For example, a bank that wants to improve customer ser- vice would often benefi t more by visiting the Ritz-Carlton or Nordstrom to generate new ideas rather than visiting another fi nancial services organization.

Although benchmarking can be a good starting point and impetus for change, it is hardly a foolproof means of generating alternatives and sometimes even leads to decision failures. For example, problem solvers can be inclined to rush to implement the exact process of the benchmarked company assuming it will work similarly in their organization. It falls short when problem solvers fail to realize their problem is truly different than the one addressed by the benchmark company and that the new solution doesn’t quite work in their culture. In addi- tion, people often have strong negative reactions to, and are inclined to resist, ideas not invented in, or derived from, their own organizations.

Once alternatives have been generated, how will you know you’ve got good ones to choose from? Good alternatives will have the following characteristics: 41

• Postponed Evaluation. The alternatives proposed were all offered without any evaluative components. No one qualifi ed them as “good” or “feasible”; they were simply offered as potential alternatives.

• Stakeholder Involvement. The right mix of people had opportunities to look at the problem and offer their take. A well-executed decision will fail if important others don’t have input.

• Organizational Focus. Great alternatives are consistent with the goals of the organization. Many alternatives may be proposed to fi x a problem, but if they violate the organization’s values or are inconsistent with its strategic direction, they will likely lead to failure.

• Time Implications. The alternatives are not quick fi xes or Band-Aids but real solutions. They focus on short- and long-term answers.

• Effective. The key litmus test of a good alternative is it addresses the actual problem, not something else or even a tangentially related problem.

Decide on a Solution

After the problem has been defi ned and the alternatives generated, you’ll prob- ably want to collect more information about the alternatives. In fact, no manager worth her salt would ever make a decision without knowing a few key factors, such as (1) How much would implementing the solution cost? (2) Who would be involved? (3) Who would be affected? (4) How much time would it take to imple- ment? Put simply, is the alternative feasible and effective, or can it be done given our resources (or with a reasonable resource stretch) and will it actually solve the problem?

Invariably, managers will use one of two approaches to collect this type of information about their alternatives. Managers under time constraints and pres- sure to solve a problem will seek out very little information and seek only to con- fi rm what they think they already know about the problem. Other managers, in their desire to reduce the uncertainty associated with a problem, will conduct an endless search for information about each potential alternative, so much so they become paralyzed by the mass of data they accumulate. Neither case is ideal.

“I am quick to admit that I do not

have all of the answers. So I am

going to listen. But shortly after I

listen, the second piece is to pull

the trigger. I have all the input, and

here is what we are going to do.

People need closure on a deci-

sion. If you listen and then noodle

on it, people get confused, and

that’s not effective leadership.”

—Terry Lundgren, CEO, Federated

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PART ONE Personal Skills106

Some research now shows great problem solvers know when to say when. One such study found that, as the amount of information available increases, so does one’s confi dence about one’s ability to make the right decision. Unfortunately, decision accuracy does not increase proportional to increases in information or one’s confi dence (as seen in Figure 3.9 ). 42

We’ve said we’d present a “management truth” when it exists and here is one: You will always feel like you don’t have enough information. “If only I knew X, I would feel better.” You can fi nd some comfort in the fact that having “more” information won’t improve your chances of making the right decision. Seek out a handful of critically relevant items and then go with them. Otherwise, you will simply delude yourself into thinking that more data will make the decision easier. You will be more familiar with the problem, which makes the problem appear less ambiguous, but in reality the nature of the problem and its potential solu- tions won’t change.

Narrowing Alternatives Tools

One of the most diffi cult things to do in evaluating alternatives is to narrow your choices. Fortunately, various tools are at your disposal that can help you evaluate the potential of each alternative and quickly narrow them to the few best alter- natives. Key to almost all narrowing tools is choosing your criteria carefully. On what basis will you decide which alternative is most attractive? You don’t have to identify every single criterion for making the choice, just the big ones.

For example, if you were considering two different job offers, what crite- ria would be most important? Perhaps salary, work schedule, benefi ts, and work environment would be the most important. You might deem other criteria like commute time, while important, less critical. Know what criteria are most criti- cal, and then use them to help you narrow the alternatives.

Alternatives Table. The most basic decision tool, then, is to explicitly state the consequences in one table where comparisons can be made easily. Let’s continue with our job example. FIGURE 3.9

Accuracy, Confi dence, and Amount of Information

0

5

10

15

20

25

30

35

5 10 20 40

Items of Information Available

P e rf

o rm

an ce

( %

)

Accuracy

Confidence

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CHAPTER 3 Solving Problems 107

As can be seen in Table 3.1 , we have simply listed our most important decision criteria on the left side of the table and the job alternatives across the top. Then, in simple terms we have listed all the information about each alternative. The beauty of this table is you can quickly see the trade-offs. Job 1 pays less, but it has good benefi ts and offers a great lifestyle, whereas Job 4 pays more, has good benefi ts, but work will be your life. You might be inclined to ask, “Why do I need this hokey table; can’t I simply do these comparisons in my head?” Here again is where the non-obvious traps of problem solving cause diffi culties. According to research, few people can compare even a short list of alternatives in their head effectively 43 and end up focusing or giving too much weight to one particular alternative.

Weighted Ranking. If you’ve done a great job at generating alternatives and you’re facing 25 interesting ideas, you’ll probably want to narrow this list rather quickly. Weighted ranking allows you to do this quite nicely. First, in a table, list the criteria down the left side of the fi rst column. Next, compare each criterion with the next and make a tick mark beside the criterion in each pairing you believe to be more important. That is, compare all criteria against each other so you end up with a rank ordering of the most to least important criteria. In other words, count the tick marks next to each criterion and you’ve got your ranking for your criteria (high numbers are ranked as most important). This captures reality as some criteria will naturally carry more weight (be more important) than others.

Second, list your alternatives across the top row of the table. Third, on each of your criteria, rate every alternative on some scale, such as 1 through 10 where 1 is very poor and 10 is outstanding. It doesn’t matter what scale you use, just be consistent. Finally, multiply your rank ordering by your rating of each alternative. Let’s look at an example in which you’re determining the best mode of transportation for your vacation ( Table 3.2 ).

Alternatives

Criteria Job 1 Job 2 Job 3 Job 4

Annual Salary $38,000 $42,000 $41,000 $46,000

Work Schedule 38 hours/week 40 hours/week 501 hours/week 601 hours/week

Benefits Medical, dental, 401(k)

Medical, dental Medical, company car

Medical, dental, 401(k), concierge service

Work Environment Cubicle, relaxed Offi ce, relaxed Travel, fl exible, relaxed

Travel, intense

TABLE 3.1 Alternatives Table

TABLE 3.2 Weighted Ranking Example

Criteria Rank Ordering Train Car Plane Bicycle Teleportation

Speed 2 2 3 6 5 12 2 3 5 5 10 2 3 10 5 20 3 3 2 5 6 2 3 10 5 20

Safety 2 2 3 5 5 10 2 3 3 5  6 2 3 9 5 18 2 3 1 5 2 2 3 1 5  2

Cost 1 1 3 7 5  7 1 3 9 5  9 1 3 5 5  5 1 3 2 5 2 1 3 1 5  1

Reliability 1 1 3 6 5  6 1 3 7 5  7 1 3 6 5  6 1 3 1 5 1 1 3 1 5  1

Totals 35 32 49 11 24

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As can be seen in Table 3.2 , the “airplane” satisfi es our decision criteria the best. Interestingly, teleportation is better than riding a bike—at least once it’s invented (Beam me to South Beach, Scottie).

Paralyzed by Choices

Organizational systems display what is known as equifi nality, a condition in which different initial conditions lead to similar effects. In other words, not all roads lead to Rome, but many do. Sometimes the best way to solve a problem is to select any one of your fi nal solutions. It may not be the perfect solution or even the optimal one, but it is likely to jump-start your problem solving. Using this logic, attempt to choose the solution that will provide the greatest payoff (not always fi nancial) or leverage. Remember, systems are comprised of many inter- related parts. Your fi nal solution likely will trigger reactions in the system that provide feedback about whether you’re on the right track. That doesn’t mean you should just start with any old solution; rather, you can breathe easier knowing that, when you’ve narrowed your choices to a few strong, well-crafted solutions, you are likely to make an impact.

One important technique to help illuminate trade-offs is known as the devil’s advocate method, which increases debate and explores a problem from all angles. 44 This method can be accomplished with a group of people or with individuals. Either way, you start by clearly articulating the problem and your favored alternative solution (the one you’re “leaning” toward). Assign someone (co-worker, key customer, experienced employee) to play the role of devil’s advo- cate. Your instructions to this person are simple: to challenge the idea, provide a scathing critique of the proposal, poke holes in the logic, and question the assumptions behind it. The devil’s advocate will not only help you think through previous blind spots in your solution but will also help you anticipate conse- quences. Again, no decision will be perfect, but the more problems you can anticipate up front, the better you can prepare as you go forward and implement the decision.

Once you’ve made your decision, state the solution plainly and succinctly. You should be able to explain the problem and the solution in less than 30 seconds. If you can’t, others probably won’t understand it either. A simple method for doing this is to follow this template: (1) state the problem, (2) state the assumed reason or cause, (3) state the proposed solution, and (4) describe what the solution will do and for whom. For example:

• Problem: Customers are complaining about a long wait time at the elevators.

• Reason: The elevators are not signifi cantly slow; customers are just bored waiting.

• Solution: Install video screens with CNN and other news channels by elevators.

• Outcome: Video screens will preoccupy customers with something other than the elevator, lessen complaints, and increase management’s time to devote to other problems. They also have the additional benefi t of keep- ing customers informed about world events!

Make the Decision

The reality is that all decisions require trade-offs. By defi nition, when you decide on one course of action, you will eliminate others. You can’t do everything. You’ll likely fi nd that, when you narrow your alternatives down to only a few, each will have pros and cons. One might cost less, but take much longer to implement

“Be willing to make decisions.

That’s the most important quality

in a good leader. Don’t fall victim

to what I call the “ready-aim-aim-

aim-aim syndrome.” You must be

willing to fire.”

—George S. Patton

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than another, whereas another alternative may maximize use of funding and time, but is in direct opposition to top management’s wishes. Nothing is perfect, but don’t panic.

Inherent to all decisions is the issue of risk and perceptions of fairness. Although you can produce elegant mathematical calculations, algorithms, and probability charts for any decision to represent how much risk is involved, there is always an element of personal perception and judgment. 45 Risk usually pres- ents itself in a few different forms, leading people to make different judgments about how much risk is involved.

First, risk presents itself in terms of dread, or circumstances in which people feel they have no control or infl uence. Terrorism is a prime example of such forms of risk. Second, risk often appears as unknown, whereby people assume consequences truly are unknown. The risks involved in mapping the human genome, for instance, remain largely unknown at this time. Third, risk presents itself differently depending on the sheer number of people exposed to a given risk. For example, if a single case of a rare disease is found in your town, you are less likely to see it as a high risk compared to an outbreak where 1 in 3 have con- tracted the disease. Thus, the manner in which risk presents itself leads people to assess their risk exposure quite differently.

In addition, numerous traps are involved in people’s assessment of risk. For example, research shows that, all things being equal, people are more likely to view positive outcomes as more probable than negative outcomes. In one study, students on average stated that, compared to their peers, they were 15 percent more likely to have positive life events and 20 percent less likely to experience negative life events. That is, although the “objective” risk generally does not change, we believe that for us nature, risk, or chance behaves differently. What does this mean for you? You should attempt to calculate risks objectively but also recognize others will likely view the numbers and the meaning of the risk differ- ently than you.

Implement

As if making the decision were not diffi cult enough, you must then imple- ment the solution. This chapter is primarily about solving the problem, meaning determining the most appropriate solution. Executing any change in an organization is itself a complex process, one you will read about more fully in Chapter 10 on implementing change. However, a few points deserve mention here.

First, implementing a solution invariably involves others—your stakehold- ers. That means before you “just do it” you should revisit your stakeholder analy- sis and discuss with your key stakeholders the best way to roll out your solution. Second, implementation doesn’t have to happen all at once. Sometimes the best way to execute a decision is to attain small wins. The concept of small wins is a simple but powerful notion of splitting an implementation plan into many steps. Each step is considered a mini-project, and momentum is gained. In this way, you can demonstrate to others your solution has merit, without dumping the whole solution in their lap at one time.

Third, while implementing a solution, many problem solvers unfortu- nately fi nd they underestimated the problem’s scope or defi ned the problem incorrectly. Although underestimating is discouraging, nothing is gained by staying the course simply to be perceived as consistent or confi dent in the solution. In the course of implementation, if you uncover signifi cant informa- tion indicating you’ve solved the wrong problem, stop the implementation. Many managers have been burned by implementing solutions they knew were

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PART ONE Personal Skills110

incorrect but forging ahead even with this knowledge. Retreating so far along in the process will cause pain in the short term, but in the long term you will have acted appropriately.

Learn and Seek Feedback

Have you ever made the same mistake twice? Do you remember saying to your- self, “I’ll never do that again,” and lo and behold, you do it again? Harvard’s Chris Argyris observes that everyone fails, but truly successful people view the failure as an opportunity to learn or to have a “productive failure.” 46 In addition, he notes that most professionals are defensive of their failures and rarely examine their successes. In that sense, very little learning takes place after implementing a decision that will help a manager repeat the success or avoid the failure of the problem-solving process.

So the fi rst step in the post-implementation phase of problem solving is to attempt to determine whether the decision was truly successful and continues to be the right solution. That is, the problem should be solved in the way you have defi ned it. Luckily, because you presumably have already defi ned success in the early stages of the problem-solving process, you have the basics of what’s needed. In the elevator problem, for example, we stated we had hoped our solution would lower customer complaints and increase management’s time. Clearly, these mea- surements are easy to take and should be done periodically to ensure your deci- sion continues to be the right one.

“Punishing honest mistakes stifles

creativity. I want people moving

and shaking the earth and they’re

going to make mistakes.”

—Ross Perot

“A man who has committed

a mistake and doesn’t correct it is

committing another mistake.”

—Confucius

MANAGEMENT LIVE 3.5

After Action Review (AAR)47 One business buzzword— knowledge management —has received a lot of recent attention. The basic idea is that organizations and managers tend to repeat poor decisions. Using knowledge management, managers can attempt to build a database of these poor decisions and learn from them so as to not make the same mistakes in the future. This is much easier said than done as politics and turf battles take precedent and managers feel reluctant to take accountability for poor decisions. An outstanding tool known as after action review (AAR) has been developed, however, in which the sole purpose is to learn from mistakes and dilute the political atmosphere.

The AAR was created in the military to review the results of a military exercise immediately after the exer- cise was completed. To do so, the military exposes every aspect of the exercise to a thorough review of what went well and what did not. This includes an examination of everyone’s role in the exercises, including the unit’s highest leaders. When a private feels his commanding offi cer failed to provide information in time, for example, the private reports this information as part of the AAR—a rare opportunity to question commanding offi cers. Tool Kit 3.4 describes a basic AAR plan.

Beyond these primary points of learning, you should also return to your stakeholders once again and col- lect information about their perceptions of the problem and the solution. We want to know whether or not the fi nal implementation has satisfi ed stakeholders, but also whether or not the stakeholders were pleased with the process. Did they feel included in the process? Were their voices heard throughout? Completing another brief stockholder analysis is helpful as you look forward to solving other problems in the future. You will know what people like and dislike and the degree to which they wish to be included. In Took Kit 3.4, we offer a basic method for conducting AAR.

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Tool Kit 3.4 After Action Review The basic premise of the after action review (AAR) is simple. Each problem-solving effort should be thoroughly reviewed on several factors, including answering these key questions:

• What did we intend to accomplish in solving this problem?

• What was actually realized?

• Is there a gap between what we intended and what actually happened?

• If so, what is causing that gap? Why didn’t the solution solve the problem?

• What were the strengths involved in this process, and how can they be repeated in the future?

• What were the weaknesses involved in this process, and how can they be improved or avoided in the future?

The AAR is not simply a postmortem in which positives and negatives are listed; rather, it involves serious conversations with stakeholders about the impact of the solution and an examination of what to do to improve the problem-solving process in the future.

MANAGER’S TOOL KIT

CASE CONCLUDED

ChallengePost is a privately funded startup fi rm based in New York City. The company enables indi- viduals and organizations to challenge the public to solve problems and to build communities of people around common goals. ChallengePost contends that challenges are a uniquely powerful source of new ideas and discovery and are effective across a range of problems, from the grandest science and engi- neering challenges, such as advancing space travel, to more organization-specifi c goals, such as new software applications or persuasive marketing cam- paigns. Recent posts at ChallengePost have included making the Edinburgh Festivals even more amazing, developing healthier school lunch programs, and creating more economical home energy use. Public challenges tap the wisdom of the public and enlist talent outside an organization and from other disci- plines, often leading to solutions from unexpected sources. One inspiration for ChallengePost was the 1919 challenge issued by New York City hotel owner Raymond Orteig, who offered a $25,000 prize for the fi rst nonstop transatlantic fl ight between New York and Paris. Charles Lindbergh, who was rela- tively unknown, won the prize with his famous fl ight in the Spirit of St. Louis. This inspired the Ansari X

> PRIZE 80 years later, which offered $10 million for two launches of the fi rst privately funded, reusable spacecraft. More recently, the $1 million Netfl ix Prize sought software to improve the accuracy of predic- tions about how much someone will enjoy a movie based on his or her movie preferences and ratings. A multinational team beat out thousands of other teams from over 180 countries to capture the prize.

Compelling challenges lead participants to invest substantial time, and sometimes capital, in develop- ing solutions. The nine teams that competed for the $25,000 Orteig Prize spent $400,000 trying to com- plete the fi rst transatlantic fl ight. The $10  million Ansari X PRIZE led to an estimated $100 million investment in spacecraft technology. ChallengePost has powered numerous challenges where the value of submissions created was estimated at 100 to 200 times the prize money. However, challenge partici- pants are motivated not only by prizes, but also by a shared interest in the goal, altruism, the joy of prob- lem solving, and their own competitive spirit.

ChallengePost provides the tools needed to pub- lish a challenge online, promote it, build community around the challenge, and evaluate submissions. The rules for publishing challenges are straightforward

(continued)

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PART ONE Personal Skills112

> and include: (1) Challenges must clearly defi ne suc- cess. The defi nition of success must be certifi able by a third party like us or the general public. (2) You must have some skin in the game. Every challenge must be seeded with at least $100. You can use a credit card, and no money will be charged unless the challenge is solved. (3) The challenge must have a deliverable that is viewable by the public. If it’s a video, it should be online. If it’s software, it should be downloadable. The web platform is geared toward bringing in everyday citizens, not just skilled solvers. This citizen engagement provides the social rewards that are important in recruiting and motivating potential entrants. Once a challenge is created, other people can follow the challenge and join the discus- sion, or even enter their submission to the challenge.

Questions

1. Given that there is usually no more than a mod- est (and often no) fi nancial award for personal

contributions to a crowdsourced challenge, why are smart and capable “strangers” so willing to contribute?

2. Under what circumstances are crowdsourced solutions likely to be better than individual ones? Where might they be less effective? What accounts for the “wisdom of crowds”?

3. What limitations do you foresee in ChallengePost as a means of solving big challenges?

4. Would you be inclined to post a new business startup idea on ChallengePost? Why or why not?

5. Come up with a challenge the world should know about. That is, working with your class team, identify a big challenge that you think would be well suited to ChallengePost—and one in which you would be very much intrigued by the crowd responses.

Sources: http://en.wikipedia.org/wiki/Threadless and Challenge Post, http://challengepost.com/about .

Concluding Note

Problem solving is tough, and good decisions never guarantee good outcomes. Yet, as we have attempted to show throughout this chapter, being conscious of common biases and taking careful consideration of how to go about solving a problem can greatly increase your odds of good outcomes. As the old adage goes, “If all you have is a hammer, everything looks like a nail.” We rarely know with certainty the outcome of our decisions. Thus, it’s important to have a toolbox of frameworks or ways of thinking about problems that can facilitate clear judgment and maximize to the best of our ability the outcomes of the choices we make.

CASE CONCLUDED (continued )

KEY TERMS

after action review 110 anchoring and adjustment 86 availability bias 84 benchmarking 104 black or white fallacy 96 bounded rationality 91 brainwriting 104 confi rmation bias 87 devil’s advocate 108

equifi nality 108 escalation of commitment 88 fundamental attribution error 83 hasty generalization fallacy 85 histogram 101 inquiry skills 100 intuition 81 ladder of inference 82 mental models 99

overconfi dence bias 87 PADIL 91 representative bias 84 satisfi cing 91 self-serving bias 83 small wins 109 stakeholder 92 system 97 systemic structure 98

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CHAPTER 3 Solving Problems 113

When Dr. Ross Fletcher visits patients at the Washington, DC, Veterans’ Administration Hospital, he knows he should fi rst cleanse his hands. A quick rub with an alcohol-foam dis- infectant can help prevent the spread of bacterial infections. Those kill tens of thousands of hospital patients every year. Most health care providers know they should follow the hand-cleansing procedure, but they don’t always do it. Fletcher says the VA decided to change that. “When we fi rst started this program, we noticed that about 40 percent of the time hand cleans- ing occurred satisfactorily. More recently, it’s been more well into the 80 percent range and we hope to get it close to 100 percent, so that any patient requiring hand cleansing will have that happen. What we’ve noticed in addition is that using the alcohol foam cleansing agent, we’ve been able to further reduce, over just simple hand washing, the incidence of very serious antibiotic resistant infections.”

The VA managed to double the rate of hand cleansing in the sim- plest of ways—for instance, by putting disinfectant dispensers on the walls of patients’ rooms. It’s a small change that saves both money and lives, and it’s just the sort of measure called for in a blockbuster report by the Institute of Medicine. Titled “To Err Is Human,” the report estimated that avoidable errors in U.S. hospitals were killing 44,000 to 98,000 Americans a year. They were injuring thousands more. The report

> >CASE Using Systems Thinking to Prevent Medical Errors at the VA Hospital 48

said that was the equivalent of a jumbo jet crashing every day.

If there’s good news, say these safety experts, it’s that despite the lack of national commitment, some health systems like the VA are tak- ing steps to solve problems. Dr. Jonathan Perlin, who heads the VA health system, acknowledges that was not always the case. “It’s fair to say that historically, the VA’s reputa- tion was not—was not perfect and we realized we needed to change and what we saw was that we needed to improve safety, improve quality, and improve the compas- sion with which we delivered care.”

Applying Aviation Safety Tech- niques to Health Care

To lead its own campaign against medical errors, the VA picked phy- sician and former astronaut James Bagian. Among other things, Bagian had helped to investigate space shuttle disasters at NASA. He thought aviation and aerospace had plenty to teach health care. Bagian noted that “an air-mail pilot back in the ‘30s had a life expectancy on the job of three to four years. And it wasn’t until the ‘50s that aviation really started looking and saying, we can’t just keep building more planes when we crash them.”

So aviation developed a systems approach to improving safety. That includes an emphasis on teamwork and fi xed procedures; those prevent airline crews from making mistakes, or provide a backstop to thwart crashes in the event that errors occur. As Bagian remarked, “It was understanding, we standardize. It’s not like everybody has their own lit- tle way they want to fl y the plane. We said, there are certain ways to do it; that we use checklists for cer- tain things; that, you know, you take away certain latitudes.”

Bagian says applying systems- thinking to VA health care started with a similar cultural change. Rather than burying mistakes or punishing people involved in them, the VA had to actively seek them out. Borrowing another leaf from airline safety, VA personnel are now required to report any adverse events through an internal compu- terized reporting system. They’re also required to report so-called “near-misses” or “close calls”— instances when something danger- ous almost happens to patients but doesn’t.

Dr. Bagian says that “close calls happen anywhere from 10 to 200 times more frequently than the event they’re the precursor of.

(continued)

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SELECT MANAGE WHAT? DEBRIEFS

Defi ning and Structuring a Vague Problem: Debrief As noted in the text, a problem well framed is half solved and thus this is perhaps the most fundamental of all decision-making skills. Moreover, problem structuring is often characterized by recurring mistakes such as framing the problem too narrowly, picking the wrong stakeholders, failing to think systemically, and too little reliance on facts.

This call center problem seems particularly ripe for those “not to dos,” and indeed, several are already hap- pening. So one good way to most effectively defi ne and structure this problem is to consciously invert those com- mon errors into appropriate problem-structuring strategies.

Start by framing the problem(s) broadly. From the limited information provided, it seems as if this problem has already been framed as a customer service representative motivation problem. That may well be some or all

So you can think of for every incor- rect surgery that’s done, there’s anywhere from 10 to 200 that almost happened. Why not learn from those?” VA safety experts ana- lyze these reports and then launch a so-called root-cause analysis. That’s when a small team is assembled to probe the chain of factors leading up to a given adverse event.

For example, take the problem of operating on the wrong side of the patient’s body. It’s surprisingly common throughout U.S. hospitals, especially when surgery involves a part that the body has two of, like eyes or kidneys. To avoid wrong- site surgery, a national hospital oversight body, the Joint Commis- sion for Accreditation of Healthcare Organizations, now requires that the correct surgical site be clearly marked. But Bagian says that when VA performed root-cause analy- sis, it discovered an even bigger problem: “We found that 44 per- cent of incorrect surgeries—that’s what we call them; we don’t call them wrong-sited, because that’s

not right—44 percent were left/ right foul-ups; 36 percent were the wrong patient. The reason they did the wrong knee was they thought I was you.”

The solution was to adopt a pro- tocol in which each patient to be operated on fi rst identifi es him- self by name, birth date, and Social Security number. Bagian says that when these procedures have been followed at the VA, they’ve drasti- cally reduced wrong-site or wrong- person surgery. The VA is the fi rst large health system in the nation to replace paper charts with this fully electronic record. The VA spent more than a billion dollars develop- ing the record, but it now costs just $78 per patient per year to oper- ate, and Perlin says it produces a huge safety payoff. For example, once a prescription order is checked against the electronic health record, it’s routed to the hospital pharmacy, where medication is labeled with the patient’s name and a unique bar code. That’s an innovation dreamed up by a VA nurse who saw

the bar-coding technology in use at a car rental agency and suggested it could be adapted by the VA.

With the exception of the costly step of converting to electronic health records, most of these changes have come cheaply. They amount to ten cents for every $100 the VA spends on delivering medi- cal care. A new report from the government accountability offi ce, Congress’s watchdog arm, gives the VA generally high marks for its safety initiatives.

Discussion Questions

1. Why don’t doctors wash their hands with 100 percent compliance?

2. What problem-solving biases are being enacted in hospitals across the country where medi- cal errors persist? How does the VA’s approach overcome some of those biases?

3. What did it take to ultimately solve the problem of wrong- sited surgery? Why was marking the side of the surgical site only marginally effective?

(continued)

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CHAPTER 3 Solving Problems 115

of the issue—but you cannot know this yet. It seems entirely plausible that the below-average ratings could also be attributable to the training and ability of your reps, or technology, or call volume, or differences in your cus- tomer base, or some external events. Without more data, do not immediately attribute the problem here to the motivation of your reps.

Get all the facts and information you can. The only real data you currently have are that your group’s overall customer service ratings are below average in the fi rm and some anecdotal accounts of what other managers are doing (or not doing) with respect to motivational inducements for their people. Before jumping to solutions, you need to know much more. For example, what is the variance in your ratings (maybe your ratings are generally high but just one or two people are bringing them down) and trends (is your overall average trending down or up or staying constant?), and are there any differences in your employee characteristics or in external variables such as call volume or technology capability or customer pools that might infl uence ratings?

In pursuit of defi ning and structuring this problem, it will be key to involve the right people. In this case, you have already talked to other managers (a good start) but it would seem appropriate here to gather information from your representatives and from some select customers as well. There may also be key managers from other functions in the fi rm who could own and help resolve the problem.

As you can hopefully see, what may seem like a simple little challenge on the surface may well take a fairly comprehensive approach to actually resolve. Effectively defi ning and structuring the problem at the outset will be key to such resolution.

Avoiding Common Decision Errors: Debrief a. Are more deaths attributable to sharks or falling airplane parts?

Availability Bias. Most people in this situation say sharks (or at least believe it is sharks but may say airplane parts to avoid being tricked). This is what’s known as the availability bias. This bias clouds our judgment because things that are more readily available to us (that is, they can be more easily brought to mind) are likely to be interpreted as more frequent or important. A single shark attack gets extraordinary news coverage, but a falling airplane part might get none. When solving a problem, we often choose solutions we’ve heard about in the belief that if we’ve heard about them, they’ll work. Marketing fi rms know this well, which explains why they want their products frequently on your mind.

b. Estimates of the products of two identical number strings are presented in inverted order.

Anchoring and Adjustment Bias. People tend to make far higher estimates with the fi rst set of numbers than the second—though multiplication is reciprocal and thus the correct answer in both cases is 40,320. Research suggests that this occurs because we are prone to bias our estimates in favor of early information or “anchors.” That is, different starting points lead to different end results. Once you have 8 3 7 in your mind and you look at the multiplication to follow, you quickly estimate a much higher number than if you started with 1 3 2. Be wary of how much initial anchoring can infl uence your ultimate decisions.

c. Do you stand a better chance of winning with a slot machine that has not paid off recently?

Representativeness Bias. Most people are quick to opt for the machine that has not paid off but the odds of winning are identical. A common bias is to assume that when a sequence appears non-random it must actu- ally be non-random. But if you won the lottery, would you play different numbers? If you fl ipped a coin 9 times in a row and it was heads, are you due for a tails on the 10th toss? Of course not, but this bias seduces us with great regularity. Representativeness bias has also been termed the “gambler’s fallacy” because too many gam- blers truly believe that each coin fl ip, pull of the slot machine, or new deal of the cards is somehow connected to previous actions. The coin, the slot machine, and the deck have no memory, yet it is common to assume that the probabilities of future outcomes must somehow increase or decrease to offset or “compensate for” earlier outcomes.

d. Which card(s) should you turn over to determine the existence of the rule?

Confi rmation Bias. Few people typically solve this correctly because it requires the search for disconfi rming, rather than confi rming, information. The confi rmation bias represents the tendency to collect evidence that sup- ports rather than negates our intuition. In solving problems, one of the most insidious traps is the gathering of data that seek to confi rm our preconceived notions but to exclude data that might disconfi rm them.

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PART ONE Personal Skills116

e. Which is farther north, New York or Rome?

Overconfi dence Bias. Most people say New York and accompany their response with a very high confi dence rating. Indeed, it is not uncommon for people to say they are 100 percent sure that New York is farther north—but it is not. Rome is north of New York (we suspect you still do not believe this—so go look at a globe). Being confi - dent is a great thing—it allows people to approach diffi cult situations with courage and determination. Unfortu- nately, most of us are overconfi dent in our decision-making style. In fact, some research has shown that there is virtually no relationship between one’s confi dence level about being right and actually being right. That is, people often exude confi dence about their opinions—but confi dence doesn’t make them any more accurate. Seek data whenever possible and do not let overconfi dence sabotage your decision effectiveness.

f. Should you sell the stock?

Escalation of Commitment. Most people in this situation will not sell, somehow believing that prior decisions bind them to staying the course even though any prior decisions are essentially irrelevant here—it should be the future gain/loss that is of sole importance. This bias is known as escalation of commitment. This bias reveals that people are likely to continue to invest additional resources (that is, time, money, and so on) in failing courses of action even though no foreseeable payoff is evident. The phrase “throwing good money after bad” is the essence of esca- lation of commitment. Escalation is prevalent for a number of reasons. First, we don’t want to admit that our earlier decisions were not the right ones, so we “stay the course.” Second, we don’t want to appear inconsistent or “irratio- nal” so we continue to hope for the best even though data simply don’t justify such a response. Third, in many situa- tions, changing course might be seen as “giving up” rather than fi ghting onward—and nobody wants to be a quitter.

Learning from Past Decisions: Debrief The unfortunate reality is that organizations and managers tend to repeat poor decisions. Everyone fails on occa- sion, but truly successful people view the failure as an opportunity to learn or to have a “productive failure.” In addition, too many of us are defensive of our failures and also fail to closely examine our successes. In such cases, very little learning takes place after implementing a decision that will help a manager repeat the success or avoid the failure of the problem-solving process.

In this case, your goal is to try to be as successful as you can in year one, but given that you have not done this before it is likely it will not be a perfect execution. As noted earlier, the real key, then, is to learn from what happens this year, so you can repeat those things and avoid repeating any mistakes. An outstanding tool for this very purpose is known as an after action review (AAR). The basic premise of AAR is simple. Each problem-solving effort should be thoroughly reviewed by judging several factors, which include answering these key questions:

• What did we intend to accomplish with this initiative? (What were the goals/objectives?)

• What was actually realized?

• Is there a gap between what we intended and what actually happened?

• If so, what is causing that gap? Why didn’t the solution solve the problem?

• What were the strengths involved in this process, and how can they be repeated in the future?

• What were the weaknesses involved in this process, and how can they be improved or avoided in the future?

Beyond these primary points of learning, you should also return to your stakeholders once again and collect informa- tion about their perceptions of the problem and the solution. We want to know whether or not the fi nal implemen- tation has satisfi ed stakeholders, but also whether or not the stakeholders were pleased with the process. Did they feel included in the process? Were their voices heard throughout? Completing another brief stockholder analysis is helpful as you look forward to solving other problems in the future. You will know what people like and dislike and the degree to which they wish to be included. In Took Kit 3.4, we offer a basic method for conducting AAR.

The AAR is not simply a postmortem in which positives and negatives are listed; rather, it involves serious conversations with stakeholders about the impact of the solution and an examination of what to do to improve the problem-solving process in the future.

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v

118

O B J E C T I V E S

PART ONE PERSONAL SKILLS

KO 4-1 Recognize the ethical implications of a problem.

KO 4-2 Describe the concept of moral intensity.

KO 4-3 Explain the key differences between ethical perspectives.

KO 4-4 Describe different forms of fairness rules and when to apply them in the workplace.

KO 4-5 Describe and differentiate three types of organizational justice.

4 Making Ethical Decisions

KNOWING DOING

“I think if you look at people,

whether in business or govern-

ment, who haven’t had any moral

compass, who’ve just changed

to say whatever they thought

the popular thing was, in the end

they’re losers.”

— Michael Bloomberg ,

New York City Mayor

After reading this chapter, you should be able to:

DO 4-1 Use decision rules to help you solve right-versus-right problems.

DO 4-2 Interpret what form of moral inten- sity is infl uencing a decision.

DO 4-3 Use the ethical decision-making steps to guide an ethical decision.

DO 4-4 Use moral imagination and “quick tests” to make a diffi cult ethical decision.

DO 4-5 Demonstrate competence in navi- gating common ethical situations.

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119

> > Case: Truthy

S ince young voters discov- ered they could “friend” Barack Obama on Face-

book during the 2008 elec- tion, social media has become ingrained in the way we think about political campaigns. Many see it as the key to a new type of politics, whereby campaigns and candidates can better engage citi- zens, facilitate grassroots organiza- tions, and craft legislation with the direct input of a tweeting electorate. The result, optimists argue, will be a sort of “digital democracy,” defi ned by a closer, more coherent relation- ship between elected offi cials and their constituents, and where genu- ine comments and discourse, unfi l- tered by spin doctors in the national media, can thrive.

But social media, like any tool, can be used to erode democratic practices as well. For example, a few days before the special election in Massachusetts to fi ll the Senate seat

formerly held by the late Edward Kennedy, the American Future Fund (AFF) conducted a “Twitter- bomb” campaign against Attorney General Martha Coakley, one of the candidates for the position. The AFF set up nine anonymous Twitter accounts in the early morning hours prior to the election that sent hun- dreds of tweets to other infl uential Twitter accounts around the state accusing Martha Coakley of taking money from health insurance lob- byists and providing links to anony- mous websites containing further details. This sudden spike in tweet- ing caused the attacks on Coak- ley to turn up in Google searches for her name, effectively gaming

Google’s real-time search functions. The approach is not partisan or lim- ited to particular parties, but it has been employed to some extent by all political groups.

1. Why is social media such a pow- erful way to engage in ethically questionable behavior?

2. Beyond politics, in what other arenas has social media been used in what you would consider to be unethical ways?

3. Given the Internet is predicated on the notion of open, uncen- sored, and unfi ltered input, how might unethical behavior in social media be managed?

THE ANTI-SOCIAL SIDE OF SOCIAL MEDIA

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1. Making a Diffi cult Ethical Choice You have worked for your boss for fi ve years, and he has become a trusted mentor for you in the fi rm. Indeed, there is no one in the fi rm toward whom you feel more respect or loyalty. You just met with him and, due to an unforeseen market downturn, he let you know of a proposed layoff that will affect one of the three people who report to you (Joe). Because the decision has not been announced, and it will surely send shockwaves through the fi rm, he asked that you absolutely not tell any of your subordinates. In fact, concerned the information might get prematurely leaked, he even says, “It is critically important that no one know. Can I count on you?” You agreed emphatically that he could. Unfortunately, that evening you see Joe, who coaches a little league team with you. He tells you he and his wife have been accepted into an adoption process for a new child and he wanted to share his joy with you. He also has heard rumors of a layoff and says, sort of jokingly, “I am not going to be laid off, am I? We could never afford to take care of a new child without my income.”

What should you do? Is this an ethical issue? You are forced to choose between loyalty and your expressed promise on one hand, and your sense of caring and honesty toward Joe (and his potential new child) on the other. What factors will you consider in your decision? On what basis would you justify the ethics of your decision?

2. You Be the Ethicist Author Randy Cohen serves as The Ethicist for The New York Times Sunday Magazine. He frequently poses ethical dilemmas to his readers and an adapted set of those (and similar themes) are listed next. Respond to each of the following scenarios, being sure to identify the ethical frame (utilitarian, universalism, or virtuous person) you are using as the rationale for your response.

a. Is it ethical to buy a sweater to use for a family picture and then return it for a refund?

b. Is it ethical to download a song from the Internet without paying for it given that (a) you would not have downloaded it if you had to pay, (b) you have no money and the artist and record label (or Apple, Inc.) are beyond wealthy, (c) you are actually promoting the artist by listening to and sharing your impressions with others.

c. How much is a cat worth? Your affectionate and obedient cat needs a procedure that will cost a few hundred dollars. Your instinct is to pay for what she needs, but you can’t help thinking it’s wrong. Wouldn’t the cash be better spent on sick humans?

d. Can you ethically round off your 2.958 GPA to 3.0 when using it on your resumé?

e. Is it OK to take those hotel shampoos and soaps and give them to homeless shelters?

f. Should you tell on someone you observe researching bomb-making on the Internet? Or on a friend having a too- friendly dinner with a woman who is not his wife?

g. Is it ethical to buy cheap seats to a baseball game you know will be sparsely attended and then sneak down and sit in the expensive seats? Similarly, is it ethical to grab open fi rst-class seats (once everyone is on board and in their pur- chased seats) when you only paid for coach?

h. Is it ethical for a homeless mother to steal a loaf of bread to feed her starving child?

i. If you scored the wrong answer on a test, and the instructor marked it correct and you very honestly let him know, is it ethical for the instructor to let you keep the points and reward your honesty?

3. Creating a Culture That People View as Fair You are a relatively new manager and times are tough at your fi rm. You know you are going to have to make some really tough decisions regarding promotions, job assignments, bonuses, and even who gets laid off and who stays. When you took your new management position two years ago, the fi rm was booming, and with ample resources to work with you thought to your- self that you would just give everyone the same rewards and schedules and anything you controlled and that would solve the problem. But now resources are scarce and you are worried that if people view your decisions as unfair you will run the risk of destroying your positive culture and even losing key people. If your goal is to create a fair workplace that is also a productive one, what should you do? What types of standards would you put in place and then how would you decide “who gets what”?

4. Being a Responsible Whistle-Blower As a manager in your fi rm, you have become disturbed with some of the claims that are being made (by people in your mar- keting and sales group) about some of your products. Although you often work with that department, you are employed in a different function and not sure if you should “stick your nose” into that area. Moreover, although you feel something of an ethical obligation to ensure that no customers are harmed by false information, you also are very concerned that blowing the whistle in this case could prompt serious repercussions and potentially be detrimental to your career, cause the loss of trust and friends in the fi rm, and even impact your family.

MANAGE WHAT?

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CHAPTER 4 Making Ethical Decisions 121

Introduction Most discussions of ethics, particularly directed at young people, have an idealis- tic tone. For example, it is common to hear platitudes like “Good ethics pays” and “Ethics is good business.” Unfortunately (and disturbingly), any casual observer of business these days knows that behaving unethically can “pay off” as well, and ethical behavior can often result in a loss of business or desired outcomes. Further, traditional conceptions of right and wrong are often blurred in orga- nizational life. Consider that a recent survey of 111 executives found that 52 to 90 percent of executives agreed that behaving unethically was appropriate when (1) performance contingencies demand otherwise, (2) it is necessary to get the job done, (3) unfair or overly restrictive performance standards exist, and (4) it would be necessary to avoid negatively affecting the organization. 1 Most frighten- ing was that 56 percent of those surveyed indicated managers who bend rules are more effective than managers who do not. This is hardly encouraging news when many of these same companies are also claiming that they act with the “highest moral standards.”

A few other statistics may hit closer to home. In a major study of 6,000 stu- dents on 31 campuses in the United States, researchers found the data presented in Figure 4.1 . 2

Roughly two-thirds of students in this research admitted to cheating at least once as an undergraduate. When asked why, students cited pressures and

“The first of all moral obligations is

to think clearly.”

— Michael Novak

• It’s easy to be ethical. The truth is that it’s downright diffi cult to be ethical. In fact, by defi nition, merely determining that you are facing an ethical dilemma (that is, the fi rst step in solving it) is a complex process. Ethical dilemmas don’t come with fl ags waving, “Look at me. I’m an ethical issue.”

• Unethical behavior is simply a problem of “bad apples.” Even people that most of us would judge as having strong ethical values make unethical decisions. The truth is that much of our behavior is guided by watching others and simply following their lead. When your boss rounds up his expense reports, you rightfully assume that it’s “okay” to do the same for yours. Does this make you a bad apple? No, but your behavior is likely unethical.

• Ethics can be managed with codes of conduct. Research shows that formal codes of conduct can have a positive infl uence on ethical behavior in organizations. Yet, in order for them to have such an effect, they must be part of a larger coordinated part of the organization that supports ethical conduct every day. 4 In other words, if a senior manager is found to be in violation of the code of conduct and he is not punished in accordance with the policy, it sends the very real message that the code of ethics can be practically ignored.

• People are less ethical than they used to be. Incidents of unethical behavior haven’t changed much for centuries. What has changed is the pace of organizational life and the access to information via technology that has lent a new creativity to acting in unethical ways!

• Managing ethics is not my problem. Like it or not, ethical issues are with us every day and each decision you make as a manager holds the potential for ethical issues to arise.

MYTHS 4.1 Ethical Decision-Making Myths 3 ? ?

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PART ONE Personal Skills122

FIGURE 4.1 College Student Actions

Collaborated on assignments requiring individual work

Turned in work done by another

Falsified a bibliography

Plagiarized

Copied material without footnoting

Used crib notes

Helped another student cheat

Copied from another student

% of Students

5 3510 40 45 50 55 600 15 20 25 30

competition related to graduate school admissions. Researchers also collected information about the students’ future career choices. The lowest number of admitted cheaters (57 percent) was found in students planning on pursuing education-related professions. The numbers rise from there, including medicine (68 percent admitted cheating), government (66 percent), engineers (71 percent), and future MBAs (76 percent). Students also indicated cheating was a relatively harmless crime. Of course, as ethics author Rushworth Kidder points out, cheat- ing really isn’t so harmless: 5

You have only to ask who engineered the bridge you are about to cross, or where your doctor got his or her training, to begin questioning whether a widespread propensity for cheating among professionals—and the consequent danger of unleashing into the world a cadre of individuals who don’t know what they are doing—is in fact a “victim- less crime.”

While it may seem that one small act of cheating may not be such a big deal, when you consider the ramifi cations of a professional culture based on cheating, the act becomes highly objectionable. Think of it this way, if you knew your heart surgeon cheated her way through medical school, would you be eager to let her perform a triple bypass?

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CHAPTER 4 Making Ethical Decisions 123

The lesson here is that ethics is synonymous with behavior and all behav- ior has consequences. Although ethical philosophy implies that we must “think before we act,” we are not judged on our thinking but on our actual behavior. Even if you have good intentions, nobody will see your intentions, only your behavior and its consequences. Consider the Make-A-Wish foundation’s dilemma in letting a terminally ill boy kill a Kodiak bear (see Chapter 3, Management Live 3.3). Management’s intentions were beautifully aligned with the organization’s values and yet their behavior resulted in a poor outcome. Unfortunately, ethical behavior is almost never simple or easy, and it is often not self-evident (and no shared consensus exists) what the most ethical action is in any given situation. There are no ethical switches that we can turn on or off, and simply stating that “I am an ethical person” provides nothing to substantiate that claim.

While the situation sounds rather bleak when it comes to ethics, there is a great deal of work being done in the fi eld, and some of this work provides us with important guidelines that we can use to guide our behavior. According to the Josephson Institute, a center dedicated to the study and practice of ethics, ethical behavior is multidimensional, and the most ethical people act in ways that refl ect ethical commitment, consciousness, and competency.

Ethics: Making the Tough Choices

If you choose to strive toward ethical decisions and behavior, it will require your ethical commitment. Ethical commitment refers to your level of dedication or desire to do what is right even in the face of potentially harmful personal reper- cussions. This requires a healthy dose of courage and integrity (or the adherence to an ethical code or standard) to make decisions that may be unpopular or go against the prevailing culture. How do you want to live your life? What do you want to be remembered for? What values are worth fi ghting for? What kind of relationships do you want to have? Do you want to be known as someone who will take a stand for what they believe is right? It has been and always will be quite challenging to be an ethical person. Ethical commitment is about accepting that challenge.

Solving problems ethically also requires an ethical consciousness in which you develop an ability to understand the ramifi cations of choosing less ethical courses of action. Unlike the student who believes that cheating doesn’t hurt anyone else, students with an ethical consciousness understand the far-reaching implications of such behavior. Those who are ethically conscious make them- selves aware of the implications of their actions and are not oblivious to the many ethical concerns around us.

Finally, a third dimension of ethical behavior is ethical competency, which involves a thoughtful consideration of ethics in each stage of the problem-solving process. There are no easy ways to ascertain the most ethical choice in a given situation, but there are very useful models for framing and dissecting ethical dilemmas. Whether defi ning a problem, generating alternatives, or making a decision, ethically competent people consider such models in their choices.

Recognizing Ethical Issues

Ethics may be defi ned as “the principles, norms and standards of conduct gov- erning an individual or group.” 6 As we noted in the myths of ethical decision making, ethical decisions are far from “easy.” Perhaps the most diffi cult challenge in making ethical decisions is recognizing that one is facing an ethical dilemma in the fi rst place. As researchers Linda Trevino and Mike Brown have noted, the

“Obviously everyone wants to

be successful, but I want to be

looked back on as being very

innovative, very trusted and ethical

and ultimately making a big differ-

ence in the world.”

— Sergey Brin , Google founder

KO 4 - 1

KO 4 - 2

D O 4 - 1

D O 4 - 2

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notion that “it’s easy to be ethical” presumes that people know when they are fac- ing an ethical dilemma and, with such understanding, make the “right choice.” 7 The opposite is almost always true—ethical decisions rarely come with red fl ags waving that call out to you, “Hey, I’m an ethical issue! Think about me in moral terms!” Consider an employee who is asked to sign a document for her boss. This employee is likely to see this as a simple act that any “good” employee should do. Yet what if this employee failed to recognize this as a request to “forge” legal documents?

Most problems you face do have ethical or moral implications—whether you consider them or not. Some problems, however, seem to be more eas- ily identifi able as having ethical implications—that is, we sense the tension or dilemma immediately. In fact, dilemmas often (not always) present themselves not as “right versus wrong” but as “right versus right” (or perhaps “wrong versus wrong”). 8 That is, ethical dilemmas, the really tough choices, often don’t involve clearly right and wrong alternatives, but rather two alternatives that may both have merit. Consider tough issues like what to do with differing abilities in youth sports or academics or views on how to spend disposable income.

• It is right to give all little league players equal playing time, and it is also right to fi eld the best team possible.

• It is right to help out a struggling fellow student by letting him see your homework, and it is right to keep your homework proprietary.

• It is right to give money to those living in poverty, and it is right to save money for your family.

These types of dilemmas are what might be termed “right versus right” sce- narios and are discussed next.

Right-vs.-Right Scenarios

“Right-versus-right” scenarios are the most perplexing of ethical dilemmas. According to Kidder, these dilemmas can be boiled down to a few major themes. With truth-versus-loyalty dilemmas, the struggle is between providing information about some objective truth versus compromising one’s loyalty to others. For exam- ple, when a patient discloses to a doctor that she is likely to commit suicide, the doctor is ethically obligated to breach patient confi dentiality, thus compromising trustworthiness or loyalty in the doctor–patient relationship. Not all truth-versus- loyalty situations are so clear. Managers often face such dilemmas when caught between the confi dence of a senior manager (“Don’t announce the pay cuts.”) and an employee who wants to know particular information (“Will there be layoffs?”).

A second major theme is individual versus community. The needs of individu- als such as confi dentiality or privacy often clash with those of the community. Terrorism has brought this dilemma clearly to the forefront with governments attempting to preserve individual rights and needs while also understanding the greater good of the community. Much of the controversy surrounding the con- duct of airport security personnel has been related to this very issue.

A third category of dilemmas is short-term versus long-term, which involves the clash between living in the present versus thinking about the future. Invest- ing fi nancially for the future, for example, often clashes with enjoying the pres- ent. Finally, a fourth theme has to do with justice versus mercy. Professors who catch a student cheating face this very problem. On one hand, students who cheat deserve a punishment commensurate with their behavior. On the other hand, students are human and sometimes make bad choices and deserve our compassion to help avoid such mistakes in the future. These themes play out every day. As you explore ethical dilemmas, try to identify the theme at play, and it will help you understand the issues more clearly.

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CHAPTER 4 Making Ethical Decisions 125

Moral Intensity

As you know by now, human bias often leads to poor judgment. Judging ethical dilemmas is not different. The framing of an ethical dilemma, for example, leads to very different judgments of what to do. For example, to what extent would you agree with the following claim: “People who download music from the Inter- net without paying for it are unethical.” What if we state it slightly differently: “People who steal music from the Internet without paying for it are unethical.” Is downloading without permission different from stealing without permission? Not really, but people see stealing as clearly wrong and downloading as more acceptable. The way in which we perceive ethical dilemmas depends heavily on the moral intensity the issue possesses. That is, something in the context or situation of how an ethical dilemma is perceived leads people to endorse the situ- ation as unethical. Yet the same situation with less intensity would not lead peo- ple to see it as unethical. Consider the following scenario known as the Switch Dilemma:

A trolley is running out of control down a track. In its path are fi ve people who have been tied to the track. Fortunately, you can fl ip a switch, which will lead the trolley down a different track to safety. Unfortunately, there is a single person tied to that alternative track. Do you fl ip the switch?”

Now consider a similar scenario known as the Footbridge Dilemma:

A trolley is hurtling down a track toward fi ve people. You are on a bridge under which it will pass, and you can stop it by dropping a heavy weight in front of it. As it happens, there is a very heavy man next to you—your only way to stop the trolley is to push him over the bridge and onto the track, killing him to save fi ve. Do you push the man?”

The consequence in both these scenarios is the exact same—one person is killed in order to save fi ve others. Yet, in a recent study, researchers found that while some 90 percent of study participants said they would “fl ip the switch,” only 30 percent stated they would “push the man.” 9 Despite the consequence that fi ve people would die, the proximity or nearness one had to the heavy man made the decision to kill him seem highly unethical, while fl ipping a switch felt far removed from killing the person on the track. This is a perfect example of how the intensity of a situation can alter the way people process ethical dilemmas. Researcher Thomas Jones identifi ed six ways in which ethi- cal issues are perceived as more or less intense and therefore as more ethical or unethical. 10

1. Magnitude of Consequences. The sum of the cost-benefi t to the object of the action in question. For example, an action that causes the death of a human being is of greater magnitude of consequence than an act that causes a person to suffer a minor injury. This is often how people will judge whether an act was “bad enough” to be considered unethical.

2. Social Consensus of Evil/Good. The amount of social agreement toward the action. For example, many believe it far more unethical to bribe a customs offi cial in Texas than a customs offi cial in Mexico. Both involve bribery, but what is considered unethical in one situation may be less so in others.

3. Probability of Harm/Benefi t. The likelihood that the act in question will actually happen and produce the predicted harm/benefi t. For exam- ple, selling a gun to a known armed robber has a greater probability of harm than selling a gun to a law-abiding citizen. We immediately under- estimate the probability that a law-abiding citizen will do harm and over- estimate the probability that the known armed robber won’t.

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4. Temporal Immediacy. The time between the act and the onset of the consequences. For example, reducing the retirement benefi ts of current retirees has a greater temporal immediacy than reducing the retirement benefi ts of current employees who are between the ages of 40 and 50. We tend to perceive decisions that affect us today as less ethical, whereas we view decisions in which the consequences are delayed in time as more acceptable since people might have time to recover from the decision.

5. Proximity. The feeling of nearness (psychologically or physically) that people have to the object of the action. For example, layoffs in your own work unit have greater issue intensity than layoffs in another part of the company. Layoffs are never easy, but we have less trouble endorsing a lay- off as ethical when it doesn’t hit as close to home.

6. Concentration of Effect. The magnitude of the action on those involved. For example, denying coverage to 10 people with claims of $100,000 each has a greater concentration of effect than denying coverage to 100,000 people with claims of $10 each. No one wants to lose $10, but it’s not likely to change your life signifi cantly. On the other hand, losing $100,000 would force many people to make some very tough fi nancial choices. People perceive a highly concentrated effect like this as unethical.

As can be seen from the six issue intensity types just discussed, the very nature of a situation can easily change your perspective on what you judge to be ethical versus unethical.

Ethics and the Law

With centuries of philosophers, religions, and courts of law considering issues of right or wrong, one would think that progressive communities would have fi g- ured out ethics by now and that legal standards would encompass the collection

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of ethical standards. Unfortunately, legal norms and ethical norms are not identi- cal, nor do they always agree. Some ethical requirements, such as treating one’s employees fairly, are not legally required, though they may be ethically war- ranted. Conversely, some actions that can be legally allowed, such as fi ring an employee for no reason, would fail ethical standards. For this reason, we might consider the law to be a “fl oor” with respect to ethics, certainly not a ceiling. There are at least fi ve important reasons why the law may not align with ethics in organizations.

First, consider how slowly law often changes. Just because segregation was legal in the fi rst half of the 20th century didn’t mean it was the “right” thing to do. Thus, holding that obedience to the law is suffi cient to fulfi ll one’s ethical duties raises the question of whether or not the law itself is ethical. Dramatic examples from history, Nazi Germany and apartheid South Africa being the most obvious, demonstrate that one’s ethical responsibility may run counter to the law. On a more practical level, this question can have signifi cant implications in a global economy in which businesses operate in countries with legal systems different from their home country. Some countries make child labor or sexual discrimination legal, but businesses that choose to adopt such practices do not escape ethical responsibility for doing so. From an ethi- cal perspective, you do not forgo your ethical responsibilities by a blind obedi- ence to the law.

Second, societies that value individual freedom will be reluctant to legally require more than just an ethical minimum. Such societies will seek legally to prohibit the most serious ethical harm, but they will not legally require acts of charity, common decency, and personal integrity that may otherwise comprise the social fabric of a developed culture. The law can be an effi cient mechanism to prevent serious harm, but it is not very effective at promoting “good.” Even if it were, the cost in human freedom of legally requiring such things as personal integrity would be too high. Imagine a society that legally required parents to love their children, or even a law prohibiting lying.

Third, on a more practical level, telling business that its ethical responsibili- ties end with obedience to the law is just inviting more and more legal regulation. Consider the diffi culty of trying to create laws to cover each and every possible business challenge; the task would require such specifi city that the number of regulated areas would become unmanageable. Additionally, it was the failure of personal ethics among such companies as Enron and WorldCom, after all, which led to the creation of the Sarbanes-Oxley Act and many other legal reforms. If business restricts its ethical responsibilities to obedience to the law, it should not be surprised to fi nd a new wave of government regulations that require what were formerly voluntary actions.

Fourth, the law cannot possibly anticipate every new dilemma facing con- temporary business, because so often there may not be a regulation for the par- ticular dilemma confronting a business leader. For example, when workplace e-mail was in its infancy, there were not yet laws regarding who actually owned the e-mail transmissions, the employee or the employer. As a result, one had no choice but to rely on the ethical decision-making processes of those in power to respect the appropriate boundaries of employee privacy while also adequately managing the workplace. When new quandaries arise, one must be able to rely on ethics since the law might not yet—or might never—provide a solution.

Fifth, the perspective that compliance is enough relies on a misleading understanding of law. To say that all a business needs to do is obey the law sug- gests that laws are clear-cut unambiguous rules that can be easily applied. This rule model of law is very common, but not very accurate. Remember, if the law was clear and unambiguous, there wouldn’t be much of a role for lawyers and courts!

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Six Steps to Making an Ethical Decision

Many evidence-based frameworks exist to guide you in ethical decision making. As you might imagine, however, there is considerable overlap and consensus about the key elements of the process. In the following, we describe six key steps that refl ect these critical elements. In order to help you work through an ethi- cal decision, we refer back to the fi rst Manage What? (or the “Joe Case”) used throughout this section. If you haven’t read this short dilemma, please do so prior to reading this section. 11

Step 1: Gather the Facts

Before you can apply any ethical framework, you need to gather as many relevant facts in the situation as possible. Sometimes the “cause” of the ethical dilemma you face is simply that your “facts” are incongruent with someone else’s “facts.” Put simply, what appears to be an ethical dilemma may more aptly be a disagreement or difference in perception about the facts. Thus, it is imperative that you act like a journalist might and start not by drawing conclusions or developing a response, but by understanding the basic facts of a given situation. Who is involved? Is there anyone involved who isn’t apparent (in other words, that is operating behind the scenes)? How did this situation come to be? Have I (the organization or others) been in this situation before? Is this situation the consequence of previous deci- sions? Is this an issue over which I have direct control? These types of questions can help you make sure you’re working with a reasonable set of objective facts.

According to business ethicist Laura Hartman, an ethical decision is one that is made with a determination of the facts. As such, Dr. Hartman suggests that “a person who acts in a way that is based upon careful consideration of the facts has acted in a more ethically responsible way than a person who acts with- out deliberation.” 12 Thus, the mere act of getting as much information about the situation before acting is likely to improve your chances of making the right call.

Step 2: Define the Ethical Issues

Once you’ve got the basic facts of any particular dilemma, the next step is to use those facts to help you sort through the primary ethical issues involved. The chal- lenge here is to withhold our natural tendency to determine a quick or knee-jerk solution based upon the facts we’ve gathered and expose those facts to a system- atic review. Enter ethical theory. Ethical theories are attempts to provide systematic answers to ethical dilemmas by providing rational justifi cation for why we should act or decide a particular way. Ethical theories may be divided into two categories: teleological and deontological. 13 The distinction between the two is that teleologi- cal theories determine the ethics of an act by looking to the probable outcome or consequences of the decision (the ends), while deontological theories determine the ethics of an act by looking to the process of the decision (the means) and are based on concepts of universal principles or rights. In the following, we introduce the primary teleological (that is, utilitarianism) and deontological (or, universalism) theories that can help defi ne ethical issues. Importantly, there is no one best theory. In fact, all perspectives have strengths and weaknesses, which means that we can- not evaluate an ethical dilemma using one perspective, but must subject the facts we collect to multiple perspectives in order to more fully understand our real choices.

Utilitarianism

The theory most representative of the teleological approach is utilitarianism, which directs us to make decisions based on the greatest “good” for the greatest

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number. The origins of this direction come from the description that, as humans, we seek benefi ts over costs, pleasures over pains, and that this is a good thing to do because pains/harm are “bad.” This leads to a normative principle (or a “should”) that we ought to create a balance of pleasures over pains, so the high- est good is to create the greatest good for the greatest number, or minimally, to reduce harm. The most basic form of utilitarian analysis is cost-benefi t analysis where one measures the costs and benefi ts of a given decision and follows the decision that provides for the greatest overall gain. According to utilitarianism, ethical decisions are therefore determined by their end results. No act is ever right or wrong in all cases in every situation. It will always depend on the end results of that particular decision. For example, lying in a marketing campaign is neither right nor wrong in itself, according to utilitarians. There might be situations in which lying will produce greater overall good than telling the truth (for example, lying about having knowledge of individuals in a witness protection program).

Utilitarianism is the most popular perspective invoked in organizations, usually in the form of a cost-benefi t analysis. It’s viewed as a strong and powerful theory because it is liberal; it appeals to no authority in resolving differences of opinion— in fact, differences of opinion are irrelevant except for when they create a majority or minority. It is also able to describe much of the process of human decision mak- ing, and its process seems “natural” and well suited to many decisions. Further, using a utilitarian approach is quite egalitarian in that no one person’s “good” is valued more than another’s. Unlike many approaches, utilitarianism is also very easy to apply and helps people focus on the potential outcomes of their decisions.

Yet, while utilitarianism is superfi cially easy to apply (majority rule, profi t/loss statements, and so on), there remain complexities. For instance, if an action would render one person exquisitely happy and three people moderately unhappy, does the happiness of that one outweigh the unhappiness of the three? How do we mea- sure happiness? Further, when the majority rules, who protects the minority? Who ensures that a minority voice is heard (or if it even should be heard), and who ensures that new opinions are expressed so that intellectual growth is possible? One of the more serious shortcomings of the utilitarianism perspective is that some decision-makers may reach different conclusions about what is considered “good.”

Consider the ethical and political controversy that arose in recent years regarding the treatment of hundreds of prisoners captured during the fi ghting in Afghanistan and Iraq. The U.S. government argued that these were dangerous individuals who posed a signifi cant threat to the United States and that this threat justifi ed the treatment they received. Government attorneys even argued that because these individuals were not members of the military of a recognized coun- try, they were not protected by international law and prohibitions against torture. Thus, the government argued that they were justifi ed in using severe treatment that bordered on torture to extract information from these prisoners if this infor- mation could prevent future attacks on the United States. Yet critics argued that some actions, torture among them, are so unethical that they should never be used, even if the result was lost opportunity to prevent attacks. Many argued that all people, even terrorists, deserve fundamental rights of a trial, legal representa- tion, and due process. Do the ends of preventing attacks on the United States ever, under any circumstances, justify the means of torture? It would appear that a utilitarianism perspective may not help us work through this dilemma very well.

Considering our Manage What? scenario regarding how to deal with Joe, a utilitarian is likely to focus on the consequences of telling Joe about the layoff. Although Joe might benefi t, on par, a utilitarian would probably fi nd far more harmful consequences in telling Joe the truth. For example, as Joe’s manager, you’re putting your own job on the line. In addition, telling Joe would likely send reverberations throughout the fi rm, lowering productivity and causing undue anxiety among employees about who will or will not be out of a job. Further, if the plan doesn’t go through, the loss of trust and so forth is likely to be fairly large.

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FIGURE 4.2 Relation Between the Decision-Making Approach to the Trolley Problem and Testosterone

MANAGEMENT LIVE 4.1

The Biology of Ethical Decision Making For centuries, philosophers have wrestled with how people should make a moral decision. New research in the area of neuroscience and biology, however, is now exploring not how people should make such decisions, but rather how people actually make ethical decisions. One new area of study is that of behavioral endocrinology, which attempts to link biological bases in human beings to certain forms of decision making. A recent study by Dana Carney and Malia Mason linked testosterone levels to moral judgments. 14 Previous research had suggested that testosterone is associated with diminished sensitivity to emotional signals, which cause people to have empa- thy or to make choices that would suggest concern for others. First, the researchers measured testosterone levels in 117 graduate students (32 of which were female) by collecting saliva samples from each participant. Next, they asked participants to respond yes or no to the “switch and footbridge” trolley dilemmas discussed previously in this chapter. The researchers found that three types of decision making emerged: (1) intransigent utilitarians who always endorsed trading one life to save fi ve (39 participants); (2) fair-weather utilitarians who gave a utilitar- ian response to the switch dilemma but not for the footbridge dilemma (66 participants); and (3) avoiders, who refrained from getting involved in either case (12 participants). Figure 4.2 shows the results for these three groups based on the average testosterone levels in the group.

The researchers found that individuals who always endorsed sacrifi cing one life to save fi ve had signifi cantly higher levels of testosterone. That is, regardless of the situation (fl ipping a switch or pushing a man on the tracks to stop the trolley) these intransigent utilitarians justify their decisions by the ends (saving lives) over the means. Looking just at the responses to the “push the man” scenario, those willing to push versus not push displayed consistently higher levels of testosterone. Carney and Malia conclude that “.  .  . high testosterone individuals appear willing to endorse a tough and costly decision, provided it promotes the greater good. . . . A heightened focus on outcomes and disregard for the cost of pursuit may help explain why individuals high in testosterone have more success on Wall Street and in other contexts where success requires insensitivity to some of the more immediate consequences of one’s actions.”

In all, this study highlights the notion that on top of thinking about ethical decisions, human beings may be predisposed to behave in ways of which they are not entirely aware. This makes exposing dilemmas to multiple ethical lenses even more important so as to ensure that a decision is based on sound logic and judgment and not simply our biological instincts.

40 Intransigent Utilitarians

Decision - Making Approach to the Trolley Problem

R a w

M e a n T

e st

o st

e ro

n e S

co re

Fair-Weather Utilitarians

Avoiders

60

80

100

120

Error bars are 95 percent confi dence intervals (CI); intransigent utilitarians are highest on testosterone.

Source: Carney, D. R., and Mason, M. F. (2010). Decision-making and testosterone: When the ends justify the means. Journal of Experimental Social Psychology, 46, 668–671.

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Universalism

Making decisions based upon the end results certainly should be a part of responsible ethical decision making. However, you might suggest that some deci- sions should be a matter of principle, not consequences. Yet how do we know which principles we should follow and how do we decide when a principle should trump truly benefi cial consequences? Deontological ethical theories help us think about the details of such questions. Decision making within a business context will involve many situations in which one ought to follow legal rules even when the consequences seem undesirable. Other rules come from various institutions in which we participate, or from various roles that we fi ll in society. A referee in a sporting event has the duty to enforce the rules fairly, even when it would be easier not to do so. Similar rule-based duties follow from our roles as friends (do not gossip about your friends), family members (do your chores at home), students (do not plagiarize), church members (contribute to the church’s upkeep), citizens (vote), and good neighbors (do not operate your lawn mower before 8 a.m.). The classic deontological perspective is that of universalism or a consideration of whether a decision would be acceptable if everyone in every situation made the same decision.

This perspective was put forth by German philosopher Immanuel Kant (1724–1804), who believed that the rightness of rules, rather than consequences, is how an ethical dilemma ought to be resolved. Accordingly, the rightness of an act depends little (or, in Kant’s view, not at all) on the results of the act. Thus, the student who refuses to cheat on exams is ethical if her or his decision springs from a universal duty, but morally unworthy if the decision is merely one born of self-interest, such as the fear of being caught. To identify these universal duties, Kant developed the categorical imperative, the notion that each of us should act on only those principles that she or he would identify as universal laws to be applied to everyone. Universalism says that, in reaching a decision, we should consider whether it would be acceptable if everyone in every situation made this same decision—“Act only according to that maxim whereby you can at the same time will that it should become a universal law,” writes Kant.

The origins of this principle are based on our sense that—as humans—some things are simply “the right thing to do.” Kant suggests that this is uniquely human. So, when we make choices, we do so in terms of that which we can control—and that is the source of morality for Kant. This concept is similar to a parent scolding a child about to steal candy from another child, “How would you feel if everyone stole candy from their friends?” Or it may remind you of the Golden Rule, directing you to treat others only as you would have them treat you. In sum, applying universalism entails two questions: (1) Would it be all right for everyone to make the decision you are about to make, and (2) would this decision infringe on any universal rights, such as those that originate in religious doctrine or from other fundamental principles?

Universalism carries with it the strength of refl ecting collective logic that is consistent from situation to situation and not based on an arbitrary analysis of impact. Further, Kant contended that above anything else, people ought to respect the dignity of each individual human being, no matter what the con- sequences. Clearly, this is a much more motivational or inspirational approach than utilitarianism, which can seem “cold” or impersonal. At the same time, fi nd- ing “universal principles” upon which to base decisions is not easy, particularly when such principles or rights confl ict (for example, doing the right thing that results in hurting people, the earth, animals, and so on).

With respect to dealing with Joe, we suspect that a universalist might see the right to information concerning one’s self, health, or well-being as a universal

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right. In this case, the universalist might suggest that it’s not the results that mat- ter here but respect for Joe’s dignity that is the issue. To knowingly withhold such critical information from Joe would be subversive and violate his basic human rights.

Virtue Ethics

A third perspective is that of virtue ethics—this is neither teleological nor deontological but rather emphasizes the affective side of peoples’ character. Virtue ethics recognizes that our motivations—our interests, wants, desires— are not the sorts of things we choose anew each morning. Instead, human beings act in and from character. By adulthood, these character traits are typically deeply ingrained and conditioned within us. Virtue ethics can offer us a more fully textured understanding of life within business. Rather than simply describing people as good or bad, right or wrong, an ethics of virtue encourages a fuller description. Faced with a diffi cult dilemma, we might ask what would a person with integrity do? What would an honest person say? Do I have the courage of my convictions? In other words, you might consider someone you believe to be virtuous and ask yourself what that person would do in this situation.

The major application of virtue ethics comes in the common tension between self-interest and ethical values. For example, should you act in a virtuous way if it is likely to have a negative impact on you (for example, loss of a substan- tial amount of money or personal reputation)? Virtue ethics suggests that the degree to which we are capable of acting for the well-being of others depends on a variety of factors such as our desires, our beliefs, our dispositions, and our values—in short, it depends on our character. If a person is caring, empathetic, charitable, and sympathetic, then the challenge of self-interest should be less of a factor in his or her decision-making process. Thus, virtue ethics encourages us to think about people who act in ways that embody such character.

Interestingly, scholars have long known that people do in fact differ in their ability to act in ways that might be consistent with a virtuous person. Researcher Lawrence Kohlberg has found that people develop moral reasoning capabilities from childhood through adulthood that have considerable impact on how they view and approach ethical dilemmas. Higher stages of moral reasoning rely on thinking that is not available to people at lower stages, and higher stages are thought to be morally advanced and consistent with principles of ethical theo- ries. According to Kohlberg’s research, however, very few adults are able to reach the highest levels of moral reasoning. This suggests that most of us can be striv- ing to develop an approach that is more selfl ess and caring. 15

To summarize Step 2, exposing the facts you’ve gathered to these different ethical lenses is likely to result in different conclusions about the nature of your dilemma. You might be inclined to be satisfi ed with applying one perspective— this is clearly a recipe that will limit the scope of possible decisions. We encourage you at this stage to “poll the crowd” by asking others how they see the dilemma and determine the perspective they are taking. Table 4.1 summarizes these major ethical perspectives.

Step 3: Identify the Affected Parties, Consequences, and Obligations

Regardless of the ethical perspective you adopt, all ethical decision making involves understanding who might be affected by your decision. This almost always requires you to exercise substantial “perspective-taking” or walking in

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TABLE 4.1 Summary of Three Major Ethical Theories

Theory Primary Focus Rule Clues You Are Using This Perspective

Utilitarianism Pleasure over pain (or benefi t over harm).

Do that which produces the greatest good for the greatest number.

• It’s wrong to impose personal values on other people.

• Results or consequences are all that count.

Universalism Individual and universal rights.

1. Never treat others as a means to an end.

2. Act only in such a way as it would be all right for all to act (that is, if it were a universal rule).

3. Do not infringe on others’ universal rights.

• I believe some principles can’t be sacrifi ced for anything.

• Fundamental right and wrong don’t change.

• The way in which something is done is more important than what is done.

• There are certain things I would never consider “right.”

Virtue Character traits that enable ethical behavior.

Actions that enhance human capacities are good; those that deter them are bad.

• People should act in ways meant to better the world.

• I will always hold myself to the highest standards or principles.

others’ shoes. Start by considering the primary stakeholders in the situation. In Chapter 3, we discussed how to conduct a stakeholder’s analysis. The same approach applies here as well.

Primary stakeholders are people who will be directly affected by any deci- sion you make. This means that although there are likely many people and institutions that might be ultimately affected, it’s best to start with those clos- est to the decision and work your way out toward secondary stakeholders. In many cases as a manager, you are likely to be a primary stakeholder in many employee-related decisions because your work as a manager is tied so strongly to your employees. Place yourself in each primary stakeholder’s position. Imag- ine how you would feel about any particular decision. If you do this earnestly, you will quickly fi nd that your perspective on the dilemma will change. What if you were Joe the employee? You’d probably want a straight answer from your boss—actually you might expect such an answer as consistent with your trusting relationship. What if you were your own boss? You’d want to know that infor- mation meant to be confi dential is safe with your employees. Importantly, Joe’s yet-to-be-adopted child is not a direct stakeholder. It certainly is true that he/she is affected, but it’s Joe, you, your employees, and your manager who are most directly affected because any decision serves to constrain future actions of these stakeholders.

Once you feel comfortable that you’ve identifi ed the affected parties, you next need to consider the consequences of any decision on each of the affected par- ties. This is a step that is easily “gamed” if you are not careful. Identify what consequences might reasonably occur to the affected party and avoid creating scenarios with a low probability of occurrence that serve to confuse the issues more. For example, a reasonable consequence of not telling Joe is that ultimately

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Joe will likely know that you had some privileged information that you chose not to share, which could strain your relationship in the future. It is not likely (given what you know about Joe) that Joe will go to the local newspaper and drum up a negative story about you or the organization.

As we’ve learned already, consequences often have a temporal nature to them. Some consequences will have a strong immediate impact and will dis- sipate rather quickly. Others may take time but will swell to a large impact in a year or two. Regardless, one must try to sort through the various consequences likely to occur immediately and in the future. Of course, not all consequences are seeable or intended. These unintended consequences are diffi cult to predict but can turn what is initially seen as the right thing to do into the conclusion that the decision was a complete failure. One area of such consequences might be ones that are largely symbolic in nature. For example, if you terminate an employee who has been underperforming and who is known for complaining a lot about management, this decision is likely to carry a strong symbolic consequence. That is, despite having strong justifi cation for the termination decision, other employ- ees who are not privy to the same performance data as you could easily interpret the decision as one based on the employee’s complaining (in other words, “You complain—you’re fi red”).

Finally, you must consider the various obligations you might have to the affected parties. Obligations are requirements or responsibilities one holds based upon his or her role, occupation, or position in life. For example, physicians have an obligation to treat people who have been critically injured regardless of their life circumstances. They therefore have the duty to not withhold treatment based upon their own personal biases or preferences. Although many professions (for example, lawyers, scientists, accountants, psychologists, and others) have exten- sive ethical guidelines that govern their practice, not all people have such neatly prescribed obligations, which makes assessing one’s obligations sometimes dif- fi cult. Virtue ethics plays a signifi cant role here. For example, do you believe that Joe’s boss has an obligation to tell the truth no matter what? If so, where does such an obligation originate? Certainly a person of great virtue might hold to such a claim, but is self-interest always the wrong choice? This is a diffi cult process, but it’s important to try to tease out what obligations you think govern each affected party.

An easy way to bring all the elements together from Step 4 is presented in Tool Kit 4.1, with the Joe case as a backdrop.

Step 4: Consider Your Integrity

Unfortunately, as with most decision making, people begin the process with a solution in mind and spend time rationalizing why that solution is ethical. In fact, people go to great lengths to justify their predetermined solution to an ethi- cal problem. Here is just a partial list of the most common rationalizations used to justify unethical behavior:

• If it’s legal, it’s ethical. The law stipulates what is minimally acceptable. Thus, the law is the fl oor for any ethical decision, not the ceiling. The law cannot take into account all the various potential impacts of any deci- sion; ethics does. As a general guideline, we always tell our students that just because it’s legal doesn’t mean it’s ethical.

• I was only trying to help. We can rationalize very easily that our behav- ior was for the good of someone else. So we withhold the truth from people and act as vigilantes, protecting others from information. This

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Tool Kit 4.1 Affected Parties, Consequences, and Obligations

Primary Stakeholders (Affected Parties)

Potential Consequences

Key Obligations Unknowns

Me Loss of trust with my boss if I tell Joe; potential harm to my career; loss of friendship with Joe.

To keep my word—to remain trustworthy; to be fair with my employees (not necessarily treat them based on equality); to ensure all employees’ rights are protected.

How my own career might be impacted long- term by any decision.

Boss My boss may be blamed for the information leak; his own career may suffer.

To remain loyal and credible; to encourage my boss to uphold basic employee rights.

What might happen to the boss or group as a result of the decision made.

Employees The fear of job loss now and in the future; the loss of a liked colleague; the fear of workload increases.

To reduce the potential harmful impact on Joe and the remaining employees; to avoid harm through rumors or by neglecting responsibilities.

Reactions upon hearing that the boss lied or that layoffs are imminent.

MANAGER’S TOOL KIT

type of behavior generally is not helpful to others but really is a means of avoiding diffi cult or uncomfortable situations.

• Everyone else does it. Just because you perceive that others behave unethically in no way transforms it into ethical behavior. Behaving ethi- cally takes courage, and bucking norms is often part of it.

• It’s owed to me. People often feel that, due to their hard work or fre- quent patronage or the like, certain rewards are owed them. This may be why offi ce supplies theft, personal copies at work, or Internet abuses on the job are so commonplace—people see it as a right owed to them.

• As long as I don’t gain. Behaving unethically for the greater good of the organization is no more ethical than stealing food for your family is legal. Personal gain is not the sole metric for determining ethical behavior; the impact of your behavior, regardless of who benefi ts, has far-reaching implications.

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These rationalizations often lead people to move in directions that are away from their better selves. Business ethicist Craig Johnson notes that three fac- tors are involved in disrupting peoples’ moral reasoning: insecurities, greed, and ego. 16 First, he suggests that people who have inner doubts are more likely to fall prey to others’ persuasive messages regarding certain behavior. Second, in a society that rewards people who take risks, greed is inevitable since many jobs are based upon a “winner takes all” model. Third, as substantial research sug- gests, people tend to believe they are above average in almost every domain of life, including ethics (see Chapter 3). Such overconfi dence unfortunately results in an infl ated ego—or a feeling that things will simply work out in your favor. Yet, as ethicist Dennis Moberg sees it:

.  .  .  not all corporate misdeeds are committed by bad people. In fact, a signifi cant number of unethical acts in business are the likely result of foibles and failings rather than selfi shness and greed. Put into certain kinds of situations, good people inadver- tently do bad things. . . . We must identify situational factors that keep people from doing their best and eliminate them whenever we can.

Moberg’s observations are well established by scholarly evidence on at least three fronts. First, it is well known that human beings follow psychologi- cal “scripts” that help us navigate our daily lives. We have scripts for how to order a meal at a restaurant, how to behave in a class, or how to talk to a cli- ent. When we encounter these very familiar situations, we go into “autopilot” mode—relying on our script to guide us. Although such scripts help us move through our day with ease, they also serve to block us from hearing, seeing, and sensing important information about the ethicality of the situation. It’s not sur- prising then that ethical violations go entirely unnoticed in an organization—not because people don’t care or they are complicit, but because they are blinded by their scripts.

Second, similar to the scripts we have in place, people generally follow others. Although “everyone’s doing it” isn’t a reason people readily admit as driving their actions, the power of group norms to guide behavior is well docu- mented. 17 Breaking norms is both uncomfortable and impractical for most. This is mostly true because formal and informal rewards are geared toward employees who go along. Further, people do what gets rewarded and avoid behaviors that do not have rewards associated. 18 Rarely are there rewards for breaking norms even if it would be a good thing for the organization. Third, when making decisions at work, personal responsibility is often diffused throughout the group or work unit. In a series of classic studies over many decades, researchers have found that, by and large, individuals are more likely to help those in need when they are alone. 19 In one such study, participants were asked to complete surveys sitting in one of two settings: a room by them- selves or in a group with others. 20 In both settings, while completing the sur- veys, smoke started to billow into the room under a door or through a vent. After a short period of time (four minutes or so) a majority of participants who were alone reported the smoke to the researcher. Yet less than 15 percent of people in the group settings reported the smoke. The lesson here is clear, that people are likely to interpret events as less important or urgent when others are present, thereby lowering their personal accountability for the outcome of such events.

The key point is that it’s very easy to say “Act with integrity”; however, myr- iad human tendencies and external forces stand in the way of our ability to make an ethical decision. So rather than assume that you’ll simply be able to do the right thing, you must put in place a system that allows you to continu- ally check your thinking against some more objective criteria. For instance, all

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CHAPTER 4 Making Ethical Decisions 137

great managers ask themselves the following questions before making the tough choice:

1. Is my action legal?

2. Am I behaving fairly?

3. Is my decision in line with my own values?

4. Will others be negatively impacted?

As an important step in the ethical process, employees may be faced with the situation where they fi nd that actions around them violate their own integrity and also harm others in the process. When cases like this occur, whistle-blowing is one way of bringing the issue to the attention of people who have the power to make changes. While whistle-blowing should not be considered a fi rst option, in some cases it is the last alternative but one that needs to be exercised. We have provided a basic whistle-blowing model in Tool Kit 4.2.

Step 5: Think Creatively About Actions

In Chapter 3, we discuss ways to broaden solution sets (for example, refram- ing the problem). Solving ethical problems requires a similar approach. As the term “ethical dilemma” suggests, we typically frame our ethical scenarios in

Tool Kit 4.2 The Last Resort: How to Blow the Whistle on Unethical Behavior 21 Research has shown that when people do in fact see unethical behavior at work, they aren’t necessarily inclined to report it or “blow the whistle.” Employees often fear retaliation or simply believe that blowing the whistle will simply be met with an apathetic response by management. Interestingly, however, some research has found that some people simply do not have the confi dence on how to best go about blowing the whistle. 22 This Tool Kit was designed to provide a model of when to “blow the whistle” and offer a logical process to guide you through that decision.

MANAGER’S TOOL KIT

Observer’s judgments:

Outcome: Perceived wrongdoing or

not

Outcome: Whistle-blowing

versus other action or inaction

Phase 2 cont’d 4) Are results satisfactory? If “no,” process repeated. If “yes,” process ends.

Phase1 1) Is the activity wrongdoing? 2) Does anyone have a

responsibility to act to stop it?

1) Is it my responsibility to act ? 2) Is action available to me that I believe will stop the wrong- doing? 3) What are expected costs and benefits of all courses of action (including no action)?

Phase 2 (if wrongdoing perceived)

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PART ONE Personal Skills138

either-or terms. We tell Joe or we don’t tell Joe. An easy way around this is to think in terms of the trilemma —“a third way forward, a middle ground between two seemingly implacable alternatives.” 23 In many cases, the third way is a compromise between two alternatives that are perceived as “lose–lose.” With respect to Joe, we might see the trilemma as a decision not about whether we should or shouldn’t tell Joe but how best to communicate to Joe that during turbulent times, all employees should have their resumés up to date and be prepared for reorganizations or layoffs. In this sense, we keep our promise to the boss, but send a clear message to Joe that now may not be the best time to go forward with the adoption since his salary is an infl uential element for his decision.

All of this suggests that to really solve an ethical dilemma creatively, you must learn to improve your moral imagination. Moral imagination is the ability to (1) step out of your situation and see the possible ethical problems present, (2) imagine other possibilities and alternatives, and (3) evaluate from an ethical standpoint the new possibilities you have envisioned. In other words, making the tough ethical decision is the same thing as solving a diffi cult problem. At some point, you must fl ex your ability to generate truly unique alternatives and offer possibilities beyond a single course of action. Moral imagination is this process as it is applied to solving problems ethically.

If managers making downsizing or layoff decisions use their moral imagina- tion, they would fi rst frame the problem differently. If the problem is framed as “Should we or shouldn’t we downsize?” then it will necessarily lead to one of two conclusions. But if the question is “How can we revitalize our fi nancial perfor- mance?” then moral imagination is free to run. Sometimes it is truly necessary to reduce the number of people on the payroll, but even then, morally imagina- tive managers understand there are some creative alternatives, including asking people to make sacrifi ces in pay and benefi ts, designing new ways to cut costs, and so on. In other words, there are creative ways to get to the bottom line that don’t involve purging an organization of its people. (See Management Live 4.2 for an example of moral imagination.)

MANAGEMENT LIVE 4.2

Moral Imagination at American Airlines 24 After 9/11, like most airlines, American Airlines was in deep fi nancial troubles. American’s union agreed to cut $1.8 billion in salary, benefi ts, and vacation. At the same time, CEO Don Carty secretly arranged for top execu- tives to receive millions of dollars in retention bonuses. As you can imagine, that didn’t fl y with employees or the unions, so exit Don Carty. Enter CEO Gerard Arpey, who thought slashing the way back to profi tability wouldn’t work. Arpey believed American could save millions by asking employees for creative alternatives. In monthly meetings with executives, employees began the process of describing ways to reduce expenses, and the execu- tives listened. For example, engine overhaul mechanics used to have to be strapped in a harness to repair the 11-foot engines, a time-consuming and diffi cult process. One employee suggested the engines be turned verti- cal and lowered onto the shop fl oor. They did it. Savings: 140/hours per airplane and millions of dollars. One employee fi gured out that seating passengers in the rear of a non-full plane changes the center of gravity and improves fuel consumption, again saving millions. A pilot fi gured out that, because of the 42 cents or more per gallon difference in gas prices between Los Angeles and Dallas, planes going to Los Angeles should carry enough fuel to get back to Dallas, an idea that saved the airline $50,000 a day. When these ideas were all implemented, it led to a total savings for American of $4 billion annually.

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CHAPTER 4 Making Ethical Decisions 139

Step 6: Check Your Instincts

When you fi nally arrive at a solution and select a course of action, you may want to subject your decision to some gut checks that will put your decision into perspective.

• The Wall Street Journal Test. Would I stand by my decision if it made the front page of The Wall Street Journal? Would I be embarrassed if oth- ers knew of the choice I had made?

• The Platinum Rule Test. Am I treating others in a way in which they would want to be treated?

• The Mom Test. Would I be proud to tell my mother of my decision?

• The Personal Gain Test. Is the opportunity to gain personally stand- ing in the way of my thinking? Have I given my personal gain too much weight?

• The Cost-Benefi t Test. Does my decision benefi t some to the detriment of others? Have I considered the true impact on others?

Fairness in the Workplace

When judging the fairness of decisions, three major factors often come into play: economics, equality, and justice.

Economics

Perhaps the most common ethical issues that arise in the economic domain relate to supply and demand. To illustrate, imagine you’re in downtown Seattle and it begins to rain heavily. You stop in a store and ask, “How much for that umbrella over there?” The clerk tells you $18. You look at the price tag that says $13 and immediately rebuke the clerk, but he doesn’t budge on the price and says take it or leave it. Is it ethical for the clerk to change the price? Economically speaking, the clerk made the right call. The demand is obviously higher for umbrellas when it’s raining and, thus, the market will support a higher price—great decision. Yet this practice violates most people’s sense of basic fairness. A research study 25 asked participants whether they believed raising the price in such a situation was fair or unfair; 82 percent responded it was unfair.

In this same vein, consider the following two scenarios from a research study:

1. A company is making a small profi t. It is located in a community experi- encing a recession with substantial unemployment but no infl ation. Many workers are anxious to work at the company. The company decides to decrease wages and salaries 7 percent this year.

2. A company is making a small profi t. It is located in a community expe- riencing a recession with substantial unemployment and infl ation of 12 percent. Many workers are anxious to work at the company. The com- pany decides to increase wages and salaries 5 percent this year.

In scenario 1, 62 percent of the study’s participants believed the organization’s behavior was unfair, compared to only 22 percent of participants in scenario 2. Factoring in infl ation, the two scenarios provide a net wage and salary of the exact same amount. Yet most people perceive any form of pay cut as unfair, while pay increases are seen as fair, despite the fact that the increase is being outpaced by infl ation. These studies make clear that even the most rational, economically based decisions will not be seen universally as fair by stakeholders.

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Equality

Consider the following scenario. You go out to buy a mattress. You lie on a num- ber of them and decide on the one you want. The price tag says $1,200. You approach the salesperson and say, “I’d like to buy that mattress. I’ll give you $800 for it.” He counters with $1,150, and you counter with $900. He counters again with $1,100 and you counter with $950. He pauses and says, “Look, it seems to me you want to buy this mattress, and I want to provide you with the best ser- vice possible. I assume we’re both reasonable people, so why don’t we just split the difference with $1,025.” Most people see this logic as fair, disregarding the fact that the split agreed upon is totally arbitrary. Had you started with a lower number or countered with lower numbers, and then split, you may have saved yourself a few hundred bucks.

People inherently see anything that seems like a 50-50 split as fair and ethi- cal. Many people have been exploited on these seemingly equality-driven splits. Decisions framed in terms of compromise and “middle ground” usually appeal to peoples’ need for equality—that is, to treat everything and everyone as equal. Just remember that equality doesn’t necessarily make a decision fair or ethical.

Justice

Consider this situation. Two of your employees are up for a promotion. Ted has been with you fi ve years and is seen by all as your second-in-command. Jim has been with you for about three years but is considered by many employees to be the most talented employee in your group. After an exhaustive process, you end up selecting Ted for the job. Your employees are outraged and confront you. “How could you hire Ted over Jim?” You respond, “He’s the right person for the job.” They say, “Well how do you know? Ted didn’t have to take the tests you gave Jim nor interview with you.” Stunned, you respond, “Well, I know Ted very well; I don’t know Jim as well.” In your eyes, the decision was very easy. Ted’s demon- strated track record and loyalty to you won the day. In employees’ eyes, Ted was given preferential treatment. At the heart of many issues that concern ethics and fairness are perceptions of justice. Justice perceptions are so important to effec- tive ethical management that we devote the next section to understanding and managing justice perceptions.

Managing Justice Perceptions

Organizational justice perceptions are simply the beliefs people hold about the fairness of their organization and manager. Justice judgments can be categorized into three forms: distributive justice (outcomes), procedural justice (process), and interactional justice (personal treatment).

Distributive Justice

Distributive justice is perceived when people view fairness of a particular out- come. Consider a simple decision to give Tim a bonus and not Bill. As a manager, you no doubt have good logic for such a choice. Yet Bill, who occupies the same job, will likely ask questions about whether or not such a bonus is fairly distrib- uted. More specifi cally, Bill will likely compare his efforts and results to Tim’s. If Bill perceives discrepancies, he is likely to believe that you haven’t allocated such resources appropriately. “So what,” you might say, “I’m the manager and it’s left to my discretion how best to allocate rewards.” You are correct; however, even if

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CHAPTER 4 Making Ethical Decisions 141

your intention is good and you believe you’ve made a solid choice, Bill may still see it as unfair. The problem here is that when Bill believes that you have been distributively unjust, he is likely to lower his performance and withhold extra effort beyond what the job requires. In addition, he’s likely to have lower job satisfaction, decreased commitment to the organization, and is far more likely to quit. 26 If Bill is a solid employee (even if he’s simply meeting his goals, not exceeding them), the perception Bill holds about your distributive fairness as a manager is going to be costly.

Thus, great managers realize that different situations call for different types of distributive justice. In a reward situation, people are likely to examine the out- come of a decision’s impact on equity. That is, were the resources distributed with respect to people’s contributions rather than favoritism or other preferences? In performance situations, managers should be very clear and transparent with employees regarding how rewards and privileges are obtained and what level of performance is necessary to obtain them. To the extent to which this can be spelled out clearly, the more likely it is that employees are able to accept the dis- tribution of resources and see such decisions as fair.

In some managerial situations, people will evaluate distributive justice based upon equality, where resources are distributed so each person gets the same outcome, regardless of their contributions. A classic example of where people invoke equality as a determination for distributive justice is the case of distrib- uting medical benefi ts. People universally see that all those employed by the organization deserve access to the same health plans, regardless of the job they perform or their contributions to the organization. Likewise, people view access to grievance procedures or necessary physical accommodations as things that should be distributed equally.

Finally, people often evaluate distributive justice based on need, or examining whether resources are distributed to the person who needs them the most, as in distributing food to the disadvantaged. Consider the diffi cult decisions fi nancial aid staff must make in determining how best to allocate scholarships based upon need. Should scholarships go only to those whose income (or parents’ income) is below a certain level? What about the student who exceeds the threshold but only because she works two jobs and 50 hours a week versus the student who is not working but has a similar economic status? Considering instances of need in the workplace is littered with landmines and very hotly charged issues. This is perhaps why most managers try to distribute resources based upon equity. Yet we would argue that managers must often consider need to be perceived as fair. What about the small business employee, who just lost a spouse, has no savings and no vacation days left (because she put all of her resources toward taking care of her spouse). Should you give her time off with or without pay? Policy might say you should not pay her; a needs-based distributive justice perspective would probably endorse giving some portion of her time off as paid.

Procedural Justice

Procedural justice occurs when the process used to determine the outcome is perceived as fair. Returning to our employees Bill and Tim, Bill might consider his not receiving a raise as unfair if he thinks the process taken to arrive at the decision was somehow skewed. For example, let’s say that in determining who would get the bonus, you asked Tim to determine the goals he was to achieve while you personally assigned them to Bill. Bill is likely to see you as being pro- cedurally unfair by not giving him the same voice or say in the process. Several conditions lead people to perceive justice in a process. For example, people want to be able to have a say or voice in any decision that might affect them. People also want to be treated with consistency over time. Further, people want to know

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that managers and those with power in an organization are suspending their personal biases and relying on objective data to the best possible extent. Finally, procedural justice is perceived when people are presented with a mechanism for correcting perceived errors or poor decisions. For instance, when a student is accused of plagiarizing, it is only procedurally fair he be able to appeal such a claim.

Although as a manager you should strive to establish procedural justice in your day-to-day management processes, it appears that managing perceptions of procedural justice is most important in situations where the favorability of outcomes is poor. For example, in one study, 147 employees were told that they were about to be laid off from their manufacturing jobs. 27 They were surveyed two months after they found out they were told about the layoff, but one month before they actually stopped working. Clearly, no employee is going to view a layoff as a highly positive event. So the researchers instead evaluated employ- ees’ perceptions of favorability of the layoff by asking the employees to consider how much other support they had regarding the layoff. For example, they asked about employee perceptions of unemployment insurance, severance pay, com- pany help with fi nding another job, and so forth. Then the researchers asked employees about their reactions to the organization by asking whether or not they would, despite everything that had happened, be “proud to tell others” they worked there, or if they had little “problem recommending” the organization to a friend or relative.

As can be seen in Figure 4.3 , a very interesting relationship emerges. Specifi - cally, when the outcome is seen as highly favorable, employees may hold positive attitudes or reactions toward the organization despite the layoff. That is, when employees believed that the organization was doing all it could to support them through the layoff, they maintained favorable views of the company, regardless of their procedural justice perceptions. However, when employees viewed the out- come favorability as low, reactions to this low favorability were greatly enhanced by perceptions of procedural justice. The message from this study and others like it is clear: Procedural justice matters most in situations of low outcome favor- ability. When there are going to be large discrepancies in employee outcomes, for example, people will maintain their perceptions of fairness regardless of the outcome for them if procedural justice is maintained. Said differently, for most people, “the means justify the ends,” and even if the outcome is unfavorable, people will still react well if the procedure was fair. See Tool Kit 4.3 for ways to strengthen procedural justice perceptions.

FIGURE 4.3 When Does Procedural Justice Matter Most? 28

Low Procedural Justice

Low

Favorable

Unfavorable

High Outcome Favorability

R e ac

ti o

n s

to O

rg an

iz at

io n

High Procedural Justice

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Tool Kit 4.3 Methods for Increasing Procedural Justice 29

MANAGER’S TOOL KIT

Action Description Positive Example

Allow for participation in decision making.

Give people a voice or a “say” in how decisions that affect them directly are determined.

Allow employees the opportunity to “sign off” on a set of goals for the year and to make revisions when presented with evidence to do so.

Apply rules consistently. Rule violations are likely to be seen as procedurally unfair if such a violation impacts one person more than another. Remember, sometimes the rule to apply is based on equity. Being consistent doesn’t mean being equal, but rather a consistent application of the rule.

Use the same data collection method and standards to evaluate employee performance for the same job.

Create mechanisms for appeals and correct inaccurate information.

Mistakes happen, and when they do, employees want to be able to have a way of appealing such a mistake, or disputing information that is objectively inaccurate.

A manager misses a critical sale by an employee and does not count it toward her overall sales revenue, on which 50 percent of her bonus is based. The manager, however, gives employees the opportunity to petition him in writing if an employee believes that a mistake was made in calculating revenue.

Suppress all personal biases. Nothing erodes procedural justice faster than a belief that despite clear standards in place, a manager is using personal preferences as a criterion for making decisions.

In order to determine who is nominated for an elite project team working on a high-profi le product rollout, a manager uses transparent criteria and makes them public or shares them with a colleague to thwart the presence of personal preferences.

Interactional Justice

Interactional justice is comprised of two important fairness perceptions: inter- personal treatment and informational adequacy. Simply speaking, when a man- ager is seen as treating others with respect and explaining the rationale behind decisions adequately, she or he is likely to be seen as fair. Interpersonal treatment

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MANAGEMENT LIVE 4.3

Downsizing: Competitive Strategy or Decision-Making Malpractice? Overall, research has found that downsizing —terminating large numbers of employees to recapture losses or gain some form of competitive advantage—does not work. 30 That is, it doesn’t accomplish what people say it’s supposed to accomplish. Companies downsize as the result of a simple economic formula that says there are two ways to profi t, one through costs and one through revenues. For most companies, cutting costs seems a heck of a lot easier than increasing revenues, and payroll expenses tend to be a very large expense. So when companies feel the pinch, they start shaving the biggest expense—people. Yet signifi cant research has shown organizations rarely achieve the level of profi tability they once had prior to downsizing. In fact, successful companies don’t cut their way to success but grow their way to fi nancial performance. Further, the research shows that many companies aren’t downsizing because they are in real fi nancial straits, but rather are looking for a quick boost in their quarterly earnings and stock price. Armed with this knowledge, would you say downsizing is an ethical choice? Consultants often frame downsizing as a necessary evil or a tough business decision—that is, it is entirely removed from ethics. Downsizing discussions are perfect places to increase your moral imagination. It’s fairly clear you won’t ever be able to cut your way to organizational growth.

Researcher Wayne Cascio suggests a few key actions to improve the ethicality of downsizing decisions. 31

First he suggests that organizations be clear about short- and long-term goals. Ask questions such as, “What do our customers expect from us and how will downsizing help us meet those expectations?” Second, use downsizing as a last resort only. Companies often restructure because they see others doing it and assume that their shareholders will expect similar actions. Of course, this frames the dilemma as “downsize or don’t compete.” When framed in this way, there really isn’t a choice is there? The trilemma here is to consider alter- native approaches to reducing costs. A reduction in head-count is indeed a very fast way to reduce costs; how- ever, a more creative approach would be to consider actions such as delaying new-hire start dates, reducing perks, revoking job offers, freezing salaries and promotions, and asking all employees to take unpaid vacations over time. Third, make communication open and honest. As you already know from the research on procedural and interactional justice, people can handle adversity; they can’t handle leaders lying, deceiving, or acting in any way that would undermine their own well-being. Fourth, if layoffs must occur, don’t forget to pay attention to the survivors. The effects on those who remain after a signifi cant layoff can be just as damaging as the effect on those who left. Cascio notes that most organizations underestimate the emotional damage that survivors suffer, which includes increased stress, burnout, and uncertainty. Survivors will be hypercritical of perceived justice and ask themselves routinely whether it makes sense for them to stay as well. Not surprisingly, a recent study found that for every half of 1 percent reduction in the workforce, an organization can expect another wave of voluntary turnover in the realm of fi ve times the number of employees initially let go. This means that for most organizations, not paying attention to the needs of survivors will continue to be a very costly endeavor. 32

includes treating people with dignity and value by refraining from improper remarks and establishing a collegial relationship. Informational adequacy is per- ceived when people believe they have been given the whole story and that manag- ers are not purposely or strategically withholding information that might affect employees. Further, interactional justice is often perceived when people believe that the information used to make a decision was fair.

Consider how you would feel if your boss told you that you and your fellow employees are going to have to take a 20 percent pay cut indefi nitely due to the current performance of the company. When you ask your manager why this is

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CHAPTER 4 Making Ethical Decisions 145

happening, she says “This was a corporate decision; I had nothing to do with it,” and walks away. Your manager could have easily raised your perceptions of fair- ness by engaging in a bit of interactional justice. First, she should have stopped and talked with you, knowing full well that a pay cut of any type is not likely to be received positively. In doing so, she would have demonstrated that she respects you as a human being and that you are valued, despite the fact that the company has to take such measures. Second, she should have provided much more infor- mation about the pay cut. For instance, she could have explained that the organi- zation looked at future orders or new business trends, coupled with the economy, and decided that it was headed for serious fi nancial problems. Further, she could have added that the decision to cut pay was taken with the intent of not laying off a single employee. These simple steps would likely make a signifi cant difference in your fairness perceptions of your manager.

If you’re thinking that interactional justice may just be a little too “soft” or “touchy feely” for you to handle, it’s instructive to understand how such fairness perceptions can impact the bottom line. One research study across 97 hotels (over 4,500 employees) showed that employees who felt as if they were unfairly treated were signifi cantly more likely to quit and were associated with lower levels of customer satisfaction. 33 The impact of these two outcomes combined can result in a substantial loss of business and loyalty, particularly in the hospi- tality industry where competition is fi erce (see Management Live 7.3 for another example). The point here is that while managing interactional justice percep- tions may seem like soft practice, its negative consequences can hit an orga- nization hard, which has potential harmful effects on your own success as a manager.

MANAGEMENT LIVE 4.4

The Ethics of Executive Compensation How much more should the people in the top of an organization earn over the people at the bottom? The ques- tion can be approached in many ways. For example, we might take a moralistic approach and argue for certain rights or living wages. We might suggest an answer more consistent with capitalism and survival of the fi ttest. Or we might examine the business case, which a recent study set out to do. In particular, the study examined the ratios of the top-to-bottom level of pay in organizations and looked at performance metrics for both individuals and organizations. Results showed that, as organizations increase the disparity between the top and bottom, both individual and organizational performance decreases. In other words, people at the top may perform bet- ter, but people at the bottom (of which there are many more, explaining the overall decline in the organization’s performance) perform worse. 34 Given these fi ndings, it is diffi cult to justify the large dispersion between the top and bottom—it just doesn’t make good business sense. Yet U.S. corporations are leading the way (almost twice as much) among the most industrialized countries in pay dispersion. A wide disparity in wages from top to bot- tom can be particularly damaging to the morale of the workforce when senior executive wages are not tied to the overall performance of the fi rm. Further, as executive pay has generally increased over time, consistent with corporate profi ts, employee pay of the average worker has remained relatively fl at. Thus, even when organiza- tions are doing well, the opportunity to reward all individuals for such success is generally missed. You might suggest, however, that since the great recession of 2008 began, organizations have reexamined such policies in light of increasing scrutiny of public corporations and the substantial number of layoffs that have occurred since 2008. Yet, as a recent report details, more than three-quarters of these layoffs took place at just 50 fi rms: “Of the 50 top corporate layoff leaders, 72 percent ended last year in the black. CEOs at these 50 major fi rms that have

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Source: Economic Policy Institute (2011). More compensation heading to the very top. The State of Working America. Washington, D.C.: Economic Policy Institute. August 28, 2011, http://www .stateofworkingamerica.org/articles/view/9

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Navigating Common Managerial Ethical Situations

36

Although we’d like to be able to prepare you for every single ethical situation you will face in the workplace, we obviously can’t anticipate everything you’re likely to face with respect to ethics. There are, however, some very common situations that are managerial lightning rods for ethical traps. These situations include work assignments and opportunities, terminations, performance management, harassment, and work/family issues.

Work Assignments and Opportunities

One of your primary responsibilities as a manager is to coordinate work among your staff. In doing so it is inevitable that some employees will be given assignments that are more preferable. These attractive assignments could be better because they involve nice locations or travel, established customers, or they could repre- sent signifi cantly better success opportunities in the form of achieving results or acquiring new skills. How will you decide who gets these types of assignments? Will you always select your best-performing employee? Is your best employee a good employee because she always gets these assignments? How will others on your staff

D O 4 - 5

laid off the most workers since the onset of the economic crisis took home nearly $12 million each on average in 2009, 42 percent more than the average compensation that went to S&P 500 CEOs.” 35 Whichever lens you might apply to examine this issue, it’s clear that excessive CEO pay is diffi cult to justify from public perception to the organizational bottom line.

Ratio of Average CEO Total Direct Compensation to Average Production Worker Compensation, 1965–2009

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CHAPTER 4 Making Ethical Decisions 147

perceive the decision process you used to make these assignments? The trap here is to assume that people will always see these assignments as equitably distrib- uted, based solely on merit or some standardized process. To the contrary, people are likely to see much of this as based on personal bias and preference for a cer- tain “type” of employee. The key is to remember that management is about getting things done through others. By not distributing such assignments in a more egali- tarian fashion, you run the risk of quickly diminishing your staff to a small number of “doers” and a large number of employees who withhold their extra effort.

Performance Evaluation

Performance evaluations represent a minefi eld of ethical traps. If you really want to encourage unethical behavior, simply focus your performance evaluations on results only. As we describe in depth in Chapter 7, fair performance evalua- tions take into account the process people use on the way to their results. This is much easier said than done, however. What happens when your best-performing employee happens to be a real jerk? He treats everyone—customers, staff, and you—with utter contempt and disrespect, but for whatever reason is able to get results. It would be easy to simply fi nd a place for him to hide out, thereby ignoring his behavior. To do so will send the clear message to others that you will tolerate counterproductive behavior as long as results are strong. Another trap in perfor- mance evaluation is to ignore, or worse, to deny opportunities for employees to have a voice or say in their evaluation process. A large meta-analysis showed that people are far more likely to see their manager as fair and just when they are given opportunities to participate in the evaluation process. 37 In fact, one of the stron- gest fi ndings of the study was that managers are more likely to be seen as fair when they simply express value in hearing an employee’s perspective on his/her perfor- mance. Further, the study showed increased fairness perceptions when managers actually implement aspects of the employee’s voice in the process, such as taking into account the employee’s perspective of a particular performance incident, or adding an additional evaluation criterion the employee deems as important.

Punishment and Discipline

Great managers don’t like having to punish or discipline employees. Unfortu- nately, sometimes employee behavior does require it. The primary circum- stances under which punishment or disciplinary action should be used include safety violations that endanger self or others, legal infractions, major policy violations, and counterproductive behavior such as abuse of resources (that is, theft, excesses on an expense account, and so on). The ethical traps here revolve mainly around how punishment is used and the severity of the punishment. Fir- ing an employee for making a clerical error would be met with suspicion and contempt by most employees who might assume you were simply looking for any reason to fi re the employee. Of course, such suspicion is likely to promote worry about who might be next and will serve to severely limit creativity out of fear of making mistakes. Perhaps the best way to avoid the ethical trap involved in punishment is twofold. First, make clear to all employees the circumstances under which you will move toward disciplinary action. Give them concrete examples of behavior and the likely corresponding punishment. For instance, “I expect that you will not intentionally fudge your expense reports. If you are found violating this, I will give you a warning and write a disciplinary action in your personnel fi le. A second infraction will move toward loss of pay and poten- tially termination.”

Second, when an employee does actually engage in punishable behavior, you must then follow through and pursue disciplinary action. One reason for this is

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that if you say that the behavior is unacceptable and punishable and do not fol- low through, you will—through your passive acceptance of the behavior—rein- force it. Further, when you punish contingent upon the unethical behavior, you actually reinforce trust with employees. One recent study found that the trust between employee and manager is only diminished when managers punish non- contingently (in other words, the punishment is not tied to any particular viola- tion or behavior). 38 That is, employees like to know the rules of the game and whether you follow through with the punishment you prescribed for the offense. If so, then employees appear to both expect and accept their punishment much more readily than if it seems mostly random. The bottom line on punishment is that it should be used sparingly so that when employed it will serve to send the appropriate message about the repercussions of unethical behavior.

Harassment

Let’s say an employee comes to see you in your offi ce and immediately starts com- plaining about a co-worker who is bullying her and making inappropriate remarks about her physical appearance. What would you say to this employee? What if this employee had a history of being just overly sensitive to many work-related issues? Might you be tempted to ignore her complaints? The minute you ignore such complaints or look to make excuses for her co-worker, you have fallen into a critical ethical trap. Harassment of any kind, including sexual harassment, has the potential to derail even the most successful managers for a number of reasons.

First, under federal law, individual managers can be held liable for their com- plicity in allowing harassment to occur in their work group. Thus, managers (not just companies) can be sued for compensatory damages. Second, multiple meta- analyses have shown that harassment at work has extremely toxic effects not just for the victim but for those who work with the victim as well. For example, one large-scale study shows that victims of workplace harassment are much more likely to retaliate against the organization in counterproductive behaviors and are more likely to experience burnout, anxiety, depression, and serious illness (both mental and physical). 39 Further, some studies have shown that harassment is associated with decreases in work group productivity. 40 The point here is that regardless of your ethical perspective, harassment is bad for everyone. Clear ethical consider- ations exist regarding the dignity and rights of human beings (universalism) and clearly the harms outweigh the benefi ts for organizations (for example, turnover costs, benefi t claims, and so on) and for individuals alike. Thus, any competent manager should take all complaints of harassment seriously and shouldn’t depend solely on his/her human resources department or others to “handle it.”

Family and Personal Issues

Consider the scenario involving an employee who consistently leaves work early in order to pick up her kids at a day care center that has strict policies about being on time for pick-up. On the one hand, as a manager you want to be com- passionate and want this employee to know that performance is what you care about, not necessarily face-time. On the other hand, this employee’s co-workers see it as unfair that just because she has kids in day care, she is allowed to leave early. These types of issues have the potential to bring about ethical dilemmas for managers regarding how to best manage justice in the workplace. What is clear is that the nature and composition of the workforce has changed so drastically that all of your employees are likely to feel signifi cant strain in coordinating their work demands with life outside of work. For example, the percentage of dual career couples aged 18–64 increased from 36 percent of the American population

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CHAPTER 4 Making Ethical Decisions 149

in 1970 to 60 percent in 2000. Single-parent households increased from 11 to 24 percent, and over 55 percent of the workforce has elder care responsibilities. 41

Regardless of the type of family situation, signifi cant numbers of employees struggle on a daily basis to balance their family responsibilities with their jobs. Moreover, this work–family confl ict is likely to have a mostly negative infl uence on employees. For example, research has shown that when work–family confl ict is present, people are more likely to burn out on the job, dislike their jobs, look for other work or quit, and likely will experience poorer health such as depres- sion or somatic complaints. 42 Given these potential outcomes, it’s in a manager’s best interest to care about and actively respond to an employee’s work–life confl ict issues. Should you always accommodate employee requests as they relate to work– family confl ict? The knee-jerk response of most managers is to establish a fi rm policy about such requests and treat everyone equally. Unfortunately, this is an area where context matters, and to establish a strict policy that is applied blindly to all situations, while simplifying things, is not likely to engender feelings of fairness.

What you should do is be transparent with employees about how such deci- sions are made. First, state your expectations about the requirements of each employee’s job. For some jobs, being at work is imperative, in order to maintain availability to customers, for example. Other jobs don’t require that work be com- pleted at the place of business. Second, once you’ve communicated expectations about work time, indicate to employees how you evaluate requests made for accommodation. Some research suggests that increasing fl exible work schedules reduces the amount of work–life confl ict that employees experience. Yet too much telecommuting (for instance, more than 2.5 days a week) harms relationships with co-workers who may feel like their telecommuting colleague is taking advantage of the situation. 43 Again, it makes little sense to draw up a one-size-fi ts-all policy. For some employees, working from home more will make sense—for others, it won’t. The key is to communicate to the rest of your staff the reasons for differ- ent work arrangements and how you arrived at the decision. Third, make it clear to employees that accommodations are not “free passes,” only the ability to shift their work arrangements. Thus, you ought to communicate to employees that it is their responsibility for demonstrating the ability to get work done with increased autonomy and that taking advantage of accommodations won’t be tolerated.

CASE CONCLUDED

One outgrowth of the Internet is the use of memes, which are viral ideas propagated through the World Wide Web. A meme may take the form of a hyper- link, video, picture, website, or just a word or phrase. Memes may spread from person to person via social networks, blogs, direct e-mail, news sources, or other web-based services. Memes are used legitimately by public relations and marketing professionals as an inexpensive vehicle for viral marketing and for creat- ing “ buzz ” about a product or service. For example, fi lm studios use Internet memes to create interest in movies that would otherwise not generate posi- tive publicity among critics. The 2006 fi lm Snakes on a Plane generated much publicity via this method. Internet memes can evolve and spread extremely

> rapidly, sometimes reaching worldwide popularity and vanishing within a few days. They are also seen as a way to create an image of cleverness or trendiness.

The rapid growth and impact of memes—particularly dishonest or illicit ones—has caught the attention of researchers and practicing marketers alike. Focused explicitly on the political arena, TRUTHY is a project founded by Filippo Menczer of Indiana University, and is devoted to tracking the spread of memes online. TRUTHY is named after popular TV personal- ity Stephen Colbert and his playful notion of “truthi- ness,” which is a “truth” that a person claims to know intuitively without regard to evidence, logic, intellec- tual examination, or facts. The TRUTHY team uses an algorithm based on election-specifi c keywords and

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Concluding Note

Ethical decision making is tough, and being ethical is never easy. The most criti- cal element will always be your personal dedication and the commitment to do what is right. However, because what is right is not always crystal clear, it is important to have a toolbox of frameworks or ways of thinking about ethical dilemmas that can facilitate clear thinking and ultimately ethical choices.

KEY TERMS

categorical imperative 131 deontological 128 distributive justice 140

downsizing 144 ethical commitment 123 ethical competency 123

ethical consciousness 123 ethics 123 integrity 123

mood indicators to follow political misinformation campaigns on Twitter. The TRUTHY team, inspired by the Massachusetts election, decided to track digital campaigns during election years.

“We have a 90 percent success rate at tracking abnormal behavior on social networks, and it hap- pens frequently,” says Menczer. “People are being manipulated without realizing it because a dishonest or inaccurate meme can be given instant global pop- ularity by a high search engine ranking, in turn per- petuating a falsehood. If you think about how much putting an ad on TV costs, for the same investment you could pay an army of people to post fake infor- mation and promote it through social networks . . .,” says Menczer, who, based on his research, antici- pates future manipulation of the Twittersphere for political gains. “It’s a form of information pollution. Spamming on social networks has very low cost and has the potential to infl uence a large amount of people . . .”

TRUTHY is one attempt to promote integrity and accountability in the social media sphere, where anonymity is still easy to maintain. “If anything, many of these actions are violations of Twitter terms of service . . . but so what? You can just make another account. There’s no accountability,” says Menczer. “I think it’s scary. It’s extremely easy to fabricate news and use these methods to manipulate the Web because people want to believe what they want to believe.”

> Questions

1. Social media seems like the ultimate open, egali- tarian, and democratic phenomenon. But what are some major ethical issues that can arise?

2. What are the ethics of online ratings like Face- book’s genesis “facematch,” which covertly obtained pictures and then asked observers to directly rate the comparative attractiveness of all the young women at a college?

3. Is it ethical to post a slam with no supporting evidence that is simply your passionate opinion? Conversely, is it ethical to just arbitrarily remove a slam from a rating site?

4. If you raised a large amount of money for charity, or got a good candidate elected via social media manipulation, do the ends justify the means?

5. In your opinion, is it ethical to: a. Post the statement, “Everybody vote for Kim as

our best employee”? b. Ask students to rate their college highly because it

will enhance the long-term value of their degrees? c. Ask employees to vote on which retail branch

of their company to keep open? d. Post the amount of individual United Way con-

tributions from everyone in your work group? From Jared Keller, “When Campaigns Manipulate Social Media,” The Atlantic Monthly, November 10, 2010. Copyright 2010, The Atlantic Media Co. as published in The Atlantic Monthly. Distributed by Tribune Media Services.

CASE CONCLUDED (continued )

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CHAPTER 4 Making Ethical Decisions 151

Headquartered in New Jersey, Merck & Co. is one of the larg- est pharmaceutical companies in the world. In 1978, Merck was about to lose patent pro- tection on its two best-selling prescription drugs. Because of this, Merck poured millions into the research and development of new medications, investing over $1 billion and resulting in the dis- covery of four potent medications. Although profi ts were important, the son of the founder of Merck, George W. Merck, said, “We try never to forget that medicine is for people. It is not for the profi ts. The profi ts follow, and if we have remembered that, they have never failed to appear. The better we have remembered that, the larger they have been.” This philosophy was at the core of Merck & Co.’s value sys- tem. Enter “river blindness.”

The disease onchocerciasis, known as “river blindness,” is caused by par- asitic worms that live in small black fl ies that breed in and about fast- moving rivers in developing countries in the Middle East, Africa, and Latin America. When a person is bitten by a fl y, the larvae of the worm can enter the person’s body and often grow to two feet long causing hor- rible growths on an infected person. The most severe problem over time, however, is that the larvae can cause blindness. In the late 1970s, the World Health Organization estimated

CASE Merck & Co. and River Blindness 44

> >

that more than 300,000 people were blind because of the disease, and another 18 million were infected. In 1978, the disease had no cure and although there were two drugs that could kill the parasite, both had seri- ous, even fatal, side effects. To make matters worse, the fl ies had built up immunity to the chemical sprays used to try to combat them. Merck’s Ethical Quandary

Since it takes roughly $200 million in research and approximately 12 years to bring the average drug successfully to market, the deci- sion to pursue drug research is complex. Since resources are fi nite, research dollars are spent on drugs that hold the most promise— that is, in their potential to make money and alleviate human suffer- ing. More complicated is what to do about rare diseases affecting relatively few individuals where the investment is never likely to be recovered. The problem with developing a drug to combat river blindness was not that there weren’t enough people to justify the investment, but rather that the disease affl icted individuals in the

poorest parts of the world. Thus, those suffering from the disease were not likely to be able to pur- chase the medication.

In 1978, Merck was testing a drug for animals called “ivermec- tin” to see if it could effectively kill parasites and worms. During this clinical testing, Merck discovered that the drug killed a parasite in horses that was very similar to the worm that caused river blindness in humans. This, therefore, was Merck’s dilemma: company scien- tists were encouraging the fi rm to invest further research to determine if the drug could be adapted for safe use with humans.

Discussion Questions

1. Should Merck pursue investment toward curing river blindness? Why or why not?

2. Who are the key stakeholders in this case upon which you might base your decision?

3. What are the potential costs/ benefi ts of this decision?

4. Compare how a strict universal- ist versus a strict utilitarian might view this dilemma.

interactional justice 143 moral imagination 138 moral intensity 125

procedural justice 141 teleological 128 universalism 131

utilitarianism 129 virtue ethics 132 whistle-blowing 137

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SELECT MANAGE WHAT? DEBRIEFS

Making a Diffi cult Ethical Choice: Debrief Most ethical choices present themselves not as “right versus wrong” but as “right versus right.” That is, the really tough choices don’t involve clearly right and wrong alternatives, but rather two alternatives that may both have merit. This situation is one of those and is a case of trust/loyalty versus truth/honesty. On one hand, you have the virtues of trust and promises kept and avoiding unproductive rumor spreading. On the other, you have your loy- alty to a friend and the potential well-being of a young child and your own integrity in being honest.

The fact that they arise as ethical dilemmas means there are no simple or storybook answers. And always the most important aspect of ethical behavior is commitment—your personal intention to do what you think is most right. In the absence of that, no amount of behavioral expertise will suffi ce. However, presuming such commitment, there are a few strategies that have been shown to be helpful in making choices in these situations.

First, try to invoke some moral imagination, which involves avoiding seeing the choice set with just two alternatives (black or white). Although it may initially seem as if there are only two choices, it is often the case that many other creative alternatives can be generated. In this case, for example, you might go back to your boss and tell him your dilemma and see if there are ways you could get the word to your friend without feared consequences.

Second, it may help to consider several other features, including the magnitude of consequences each way, the probability of harm/benefi t and temporal immediacy. Put more simply: What will be the comparative harm to each party? What is the likelihood that the act in question will actually happen and that it will produce the pre- dicted harm/benefi t? What is the time between the act and the onset of the consequences?

Third, in Tool Kit 4.1, we present a method for deconstructing the potential consequences, key obligations, and unknowns about the ethical dilemma. It is always a good idea to ask at least four questions before deciding on a course of action: (1) Is my action legal? (2) Am I behaving fairly? (3) Is my decision in line with my own values? (4) Will others be negatively impacted? Beyond these key questions, you may want to subject your decision to the following “gut checks” to keep your choice in perspective:

The Wall Street Journal Test —Would I stand by my decision if it made the front page of The WSJ? Would I be embarrassed that others knew the choice I made?

The Platinum Rule Test —Am I treating others in a way in which they would want to be treated? The Mom Test —Would I be proud to tell my mother of my decision? The Personal Gain Test —Is the opportunity to gain personally standing in the way of my thinking? Have I given my personal gain too much weight?

The Cost/Benefi t Test —Does my decision benefi t some to the detriment of others? Have I considered the true impact on others?

In the end, it comes down to a deep look inside, and a driving commitment toward making the choice you feel is most appropriate. As you will learn when you ultimately face this type of dilemma for real, ethical decision making is a lot easier to talk about than to do.

You Be the Ethicist: Debrief Before offering some thoughts on the most ethical responses, two notes are in order. First, as Cohen and many others rightly note, there is not just one set of ethics. Different frames, models, contexts, and even cultures often suggest different responses—so offering “answers” to ethical dilemmas is always dicey and you should be aware of that. In this regard, just because something is against the law (for example, smoking marijuana to alleviate the pain of certain diseases) doesn’t make it unethical. The opposite is also true. It is perfectly legal to spend thou- sands of dollars pampering your pet, but is that “proper” conduct while there’s a family living in a station wagon just a few blocks away?

Second, to really address an ethical dilemma creatively, you must learn to improve your moral imagination. Moral imagination is the ability to (1) step out of your situation and see the possible ethical problems present,

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(2) imagine other possibilities and alternatives, and (3) evaluate from an ethical standpoint the new possibilities you have envisioned. In other words, making the tough ethical decision is the same thing as solving a diffi cult problem. It is common to think of only two choices, and this is known as the black or white fallacy (the choice is either black or white). Perhaps the single best advice for ethical decision making is to avoid that fallacy and aim to generate other possibilities beyond a single course of action.

a. Is it ethical to buy a sweater to use for a family picture and then return it for a refund? In a word, no. It involves inten- tional misrepresentation and the garment is lessened in value and at risk of wear and damage. It is hard to justify this on any conventional ethical grounds.

b. Is it ethical to download a song from the Internet without paying for it, given that (a) you would not have down- loaded it if you had to pay, (b) you have no money and the artist and record label (or Apple) are beyond wealthy, and (c) you are actually promoting the artist by listening to and sharing your impressions with others. Again, no, and all the other information is irrelevant in this context. You are in essence taking someone else’s work and property for no return. From a utilitarian frame, if everyone did that over time there would be no record business. From a universal- ism frame, it is stealing. From a virtuous person framework, would you want someone taking your work for nothing?

c. How much is a cat worth? Your affectionate and obedient cat needs a procedure that will cost a few hundred dollars. Your instinct is to pay for what she needs, but you can’t help thinking it’s wrong. Wouldn’t the cash be better spent on sick humans? If you pose the question that way—cat care or human care?—most people would say the answer is easy—although most cats would disagree. However, this amounts to a false equivalency. That is, the money you spend at the vet need not reduce what you would donate to help sick people. It could just as easily come from your vacation fund or your coffee money. It would be troubling if you ignored the needs of people around you in order to treat your cat, but not if you merely sacrifi ced a weekend in Vegas. In short, in so far as you are able, care for your cat and help your fellow humans.

d. Can you ethically round off your 2.958 GPA to 3.0? From a universalism frame, probably not—it is misrepresentation, albeit minor. However, given that it is well known that resumés are a personal commercial and the standard conven- tion is to round up from .5 or higher, a virtuous person could sleep well with that adjustment.

e. Is it OK to steal those hotel shampoos and soaps and give them to homeless shelters? Here again, framed as “steal- ing” the shampoos and soaps, most people would say no. However, if you are just using those allocated to your own room, which you ostensibly paid for, then it sounds like a nobler alternative than just popping them in your own cos- metic bag or simply throwing them out.

f. Should you tell on someone you observe researching bomb-making on the Internet? Or a friend having a too-friendly dinner with a woman who is not his wife. As discussed in a following scenario in this chapter, when and how to “blow the whistle” is an extraordinarily delicate matter. Generally speaking, unless you have witnessed or suspect real physi- cal damage (for example, child or spousal abuse) or have confi rmed a regular pattern of harmful events, it is probably best to opt for the respect of privacy.

g. Is it ethical to buy cheap seats to a baseball game you know will be sparsely attended and then sneak down and sit in the expensive seats? Similarly, is it ethical to grab open fi rst-class seats (once everyone is on board and in their pur- chased seats) when you paid only for coach? This is one that varies across ethical frames. Universalism would dictate that you may not opt for seats of a higher value than what you paid for—that is dishonest and deceives the provider. From a utilitarian framework, it would be problematic if everyone did that and would make for funny seating arrangements. However, provided that you take advantage of no services for which you did not pay (for example, complimentary soft drinks and so on) then it is possible for a virtuous person to frame the move in an ethical way. The seats were unused, no value was extracted, and the team gets fans closer to the action and more supportive. In some ways, it seems petty to deny folks that opportunity. Roughly the same calculus would apply to the fi rst-class seats on an airplane.

h. Is it ethical for a homeless mother to steal a loaf of bread to feed her starving child? This is an example where moral imagination comes into play—there must be some way we can arrange it so the young woman does not have to “steal” food for her child. From a universalism framework, human harm trumps dishonesty, so the child’s welfare could justify the act.

i. If you scored the wrong answer on a test, and the instructor marked it correct, and you very honestly let him know, is it ethical for the instructor to let you keep the points and reward your honesty? The ethical choice here is to lower the grade to what the student actually earned. Some teachers take the contrary position: Their error raised a stu- dent’s hopes, so the extra points compensate him for his disappointment and reward him for his honesty. That would be fi ne if he were the only student in the class. However, this benefi ts one student at the expense of all the others. What’s more, the class will resent not only the student who received an unearned credit but also the teacher who

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granted it, undermining the sense of the classroom as a place where justice prevails. In addition, it teaches not the virtue of honesty but its utility: Speak up only when it’s to your advantage.

Being a Responsible Whistle-Blower: Debrief This is one of the most critically important Manage What? scenarios because one of the most diffi cult situations any employee will ever encounter is to see or suspect that colleagues have violated ethical standards. It is easy to fi nd excuses to do nothing, but someone who witnesses misconduct (particularly that with potential for human harm) has an obligation to act. Unfortunately, too few of us actually do. A recent study found that while roughly half of corporate employees witness signifi cant misconduct on the job, over 40 percent never act on their knowledge. The two barriers most frequently cited are the belief that bearing witness will not make a difference and the fear of retaliation.

So should a responsible person blow the whistle when he or she suspects misconduct? It depends on several factors and a would-be whistle-blower should be very thoughtful before proceeding. In the following, we briefl y describe a set of considerations and guidelines related to both whether to report misconduct and how to go about it responsibly once you have deemed it necessary to do so.

1. Only blow the whistle in good faith. Good faith whistle-blowers are those who report in good conscience and are not doing it out of some sense of animosity or maliciousness or retaliation. So, fi rst consider your own motives in coming forward with allegations of wrongdoing—if they are not solely related to the miscon- duct and its implications then stop right there.

2. Consider alternative explanations (especially that you might be wrong). All of the following guidelines are based on this one. That is, at every juncture consider seriously the fact that your perceptions of the situation may be mistaken. Actively seek and remain open to information that provides an alternative explanation to your own.

3. Ask questions before making charges. Before charging anyone with anything, it is good to pose your con- cerns as questions, allowing for the fact that you might have misunderstood or misinterpreted the situation. Some common mistakes are the failure to consult with loved ones affected by the decision or to carefully test the water for solidarity and support among peers. Whistle-blowers also often don’t give their company a chance to do the right thing before breaking ranks, which can help the company sustain plausible deniabil- ity when the case goes to court.

4. Determine what documentation supports your allegations. Given the potentially serious personal conse- quences at risk, you desperately want to avoid a “he said, she said” type of scenario. So the more you can keep the focus on factual matters with documentation, the better off you will be. All too often the personal- ity of the whistle-blower becomes the issue in these matters instead of the factual issues.

5. Assess your goals. What are you seeking from this situation? What would it take to make you feel comfort- able that it has been adequately resolved? How will you know when you have achieved your goals. Long before you “go public” with allegations, it is critical to know what you personally seek from the situation (see guideline #1). These situations can escalate very quickly and being crystal clear on your own motives can help you navigate the best path.

6. Seek advice and listen to it. It is always good to talk confi dentially with someone you trust and to help determine how and with whom to proceed. Do not go it alone and (regarding guideline #2 earlier) remain open to other opinions and issues you may have missed or misunderstood.

7. Understand existing protocol in your organization. Know before you take any public steps what procedures are typically followed in your fi rm for this type of charge. If it exists, get a copy of the relevant policies and be sure you know the answer to questions like: Are you required to submit something in writing? Who will be informed of the charges you make? Is confi dentiality protected? Will you be kept informed of case prog- ress? And so on. Know the answers to those questions before you ever start to blow the whistle.

It is worth noting that organizations can and do retaliate against whistle-blowers, and so the act should never be taken lightly. However, it is possible to be a responsible whistle-blower and still have a career, but it takes a combination of discipline, openness, good faith, and adherence to the guidelines proposed here.

(continued)

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156

O B J E C T I V E S

PART TWO INTERPERSONAL SKILLS

KO 5-1 Explain how the curse of knowledge creates a barrier to effective communication.

KO 5-2 Describe the fundamental elements of persuasion.

KO 5-3 Describe the key elements in making a communication “sticky.”

KO 5-4 Articulate methods for over- coming common weaknesses in presentations.

KO 5-5 Explain the barriers to active listening.

KO 5-6 Describe the strategies for listening more effectively.

5 Communication

KNOWING DOING

“There is no greater differentia-

tor among business people than

the ability to communicate. Most

everyone thinks he or she is a

good communicator, but precious

few really are. If you are truly seri-

ous about setting yourself apart,

devote yourself to improving your

ability to communicate, not just

in giving formal presentations but

in working face to face with your

boss, associates and customers.”

— Thomas Lillis, President,

Magellan Business Partners

After reading this chapter, you should be able to:

DO 5-1 Create a persuasive message that communicates personal credibility and evidence, while arousing people’s emotions.

DO 5-2 Deliver a presentation that incorpo- rates strategy, structure, support, style, and supplements.

DO 5-3 Choose the appropriate media for communication in various speaking circumstances.

DO 5-4 Communicate your wishes using empathy and unambiguous statements.

DO 5-5 Actively listen to gain shared understanding.

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> > Case: Tableau

W ith the increased emphasis on data- driven solutions, and

with no one having the time to produce time-intensive graphics, today’s PowerPoint presentations struggle to engage audiences and communicate information in compelling or effi cient ways. Fortunately, a new fi eld known as data visualization is transforming how we see, work, and present data. Tableau Software is one leading data visualization example that has caught fi re in leading consulting com- panies and progressive organizations worldwide.

The company has carved out a particular niche with media organiza- tions, which use Tableau software to enable their readers to play with data in uniquely interactive ways. That is, Tableau does not just “show” the

data but allows observers to person- ally interact with and manipulate the data in ways that enable them to learn what they desire. One impres- sive recent example is a data visu- alization on CNN Money, showing where mortgage foreclosures were happening in 2010. Users could drag their mouse over a certain part of the country to view just the data from that area. Further analysis is possible using drag-and-drop controls and the small menu at the bottom of the chart.

The fundamental idea is the cus- tomization of data presentations that help observers become more engaged with the information and dive deeper into data if they wish.

1. What makes certain data and infor- mation stick with you while most is either ignored or quickly forgotten?

2. What common communication failings does Tableau help over- come? Why do you think it has caught on so quickly and has such passionate users in today’s corporate world?

3. Is using a tool like Tableau consid- erably harder or more complicated than just presenting raw data?

4. What concerns might you have about the effective use of Tableau?

INTERACTIVE PICTURES, NOT WORDS, RULE THE COMMUNICATION WORLD TODAY

UNITED STATES

TTTTTTTTTTTTSTUNNUNNUNNNNNNUNNNNNUNNUNUNUUUUUUUUUUUUSSSSSSSSSSSSSSSSSSSSTSTTTTTTTTTTTTTSTTTTTTT0.0%

Foreclosure Rate Total Number of Foreclosure Filings

11

20,000 59,293

40,0003.5%

Miami, FL Orlando, FL

Bakersfield, CA Vallejo, CA

Phoenix, AZ Merced, CA

Stockton, CA Riverside, CA

Cape Coral, FL Modesto, CA

Las Vegas, NV

Foreclosure Rates for 206 Metro Areas

1st Quarter 2010 Foreclosures

Foreclosure Rate0% 1% 2% 3% 4%

Sources: Map data © OpenStreetMap contributors, CC-BY-SA. Graph data pro- vided by Realty Trac.

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1. Selling an Idea to Your Boss You are the assistant manager of a restaurant and believe that the restaurant is long overdue to adopt a more proactive stance with electronic marketing, such as an informative web page, online ordering and reservations, and some limited marketing via Facebook and Groupon. Unfortunately, your boss is a traditionalist and, while progressive in many respects, is a bit “old school” and skeptical on the ultimate usefulness of e-marketing. He not only does not see the potential, but fi nds such new tools to be “faddish” and superfi cial. How would you go about selling your boss on your idea? What will it take to get your idea legitimately considered? What common traps just create greater resistance and should be avoided? What mistakes do young people often make in trying to “sell up” in this type of situation?

2. The Elevator Pitch: Making Your Case in a Very Short Time You manage a team of writers for the local newspaper. Your staff is hard working and very willing to put in long hours to make deadlines, but they have to work with electronic equipment that is outdated and commonly crashes. While you recognize that other departments at the paper do similar work and have similar needs, you feel your team needs a little more than their standard allocation for upgrades in this year’s budget. You mention this problem in a meeting with your boss, and she replies, “Well, your timing is perfect. I’m on my way to a budget meeting upstairs on the 18 th fl oor. Why don’t you take the elevator with me and give me what I need to present to the budget committee, and I’ll see if I can convince them to increase your allocation.”

What key strategies should you follow in creating and delivering your pitch? Are there any “must-dos” you should con- sider if you want to be persuasive? What common mistakes should you try to avoid?

3. Fixing a Typically Bad PowerPoint Presentation You were asked by your boss to research and prepare a presentation on using social media for internal communications in your fi rm. You put together what you thought was a solid PowerPoint presentation of the existing data and the important issues for your fi rm. After a practice run for your boss and a couple of her colleagues, however, they spend 20 minutes giving you frank feedback which included comments like, “Nice slides but it was kind of long and boring,” “It was a lot of good bullet points, but didn’t have much punch,” “It was often hard to see where you were going,” and “Forget the jazzy PowerPoint features and just cut to the chase.” One even said, “With all due respect, I felt like I was undergoing death by PowerPoint.”

How would you proceed in trying to “fi x” this presentation? Are there any guidelines you would follow to avoid the kind of comments you evoked in your practice run? Similarly, given that so many presentations end up just as yours has, what are some of the traps that seem to consistently make their way into such presentations, and probably did in yours?

4. Actively Listen to Understand a Problem You work in the customer service department of a software manufacturer. You have already received a number of complaints regarding a product designed to help young people make their own home video productions. Now you are about to meet with a waiting customer who has had problems trying to use the product with his son. You are a bit annoyed in that you sus- pect that this guy either does not have the suffi cient hardware capacity or is not using the product correctly, which is usually the case.

What traps or barriers could get in the way of really listening to this customer? What type of active listening would be warranted here—what strategies would you use? This could be a good chance to gather information that would be very useful to your marketing group. How do you make sure you engage this customer and truly listen and consider his perspective?

MANAGE WHAT?

Introduction

It’s probably trite, but we’ll say it: Communication skills are central to success in every kind of organization. Not surprisingly, those who become successful man- agers are the people who can best transmit their views, ideas, and enthusiasm to others. This is because good communicators inspire confi dence in others and are perceived as having more credible ideas than people with weaker commu- nication skills, whether or not their ideas are actually better. 1 In contrast, more careers are derailed, and managers fi red, because of poor communication skills

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CHAPTER 5 Communication 159

than for lack of any other competency. Surveys of recruiters who hire college graduates repeatedly show that communication skills are the most recurring defi ciency in such graduates. 2

Communication affects almost every aspect of managerial behavior. To moti- vate, give feedback, work in teams, negotiate, and lead change all require effec- tive communication skills. Research also shows a strong positive link between a leader’s communication ability and worker innovativeness. 3 That is, the better a manager communicates with employees, the more likely those people are to come up with new and creative ideas to help the organization. In short, to be an effective manager, you must be an effective communicator.

Unfortunately, many barriers exist to developing superior communication skills. We frequently hear comments like, “It’s all common sense; I know how to communicate well” or “Great communication can’t be taught; you either have it or you don’t,” or “With technology today, it’s not that important.” The truth is that effective communication is hardly elementary or common (and the exis- tence of so many ineffective and fearful communicators attests to that), there are specifi c and concrete principles and techniques that can certainly be learned and refi ned, and the importance of communication has never been higher.

So what is communication? Figure  5.1 presents a traditional model of the communication process. While straightforward in appearance, a model of the pro- cess is useful in that it highlights that communication success and failure is mul- tidimensional (not just one event or element), and thus dependent on several links in a chain. For example, an intended communication from a source may not be what is ultimately heard by the receiver because of an ill-conceived message, faulty transmission, noise (distractions) in the system, or selective perception on the part of the receiver. The model can be a good starting point in designing a communica- tion strategy or diagnosing the specifi c cause(s) of a communication breakdown.

Perhaps the most defi ning feature of communication is sharing information with other people. While many textbook discussions of communication focus exclusively on formal presentations and speeches, managers are far more commonly commu- nicating in small meetings with teams or bosses or associates. So in this chapter the focus is not just how to give a good speech but rather the broader concept of sharing information with other people. How do you craft and deliver a persuasive message? What are the elements of a successful presentation? How can you more actively listen and overcome the traps and barriers that get in the way of understanding?

“At its heart, communication is

speaking so other people will

listen, and listening so other

people will speak.”

— Anonymous

Practice this! Go to www.baldwin2e.com

FIGURE 5.1 Model of the Communication Process

Sender Transmit message

Transmit feedback

Receive encoded message

Encode feedback

Decode message

Form feedback

Decode feedback

Receive encoded feedback

Receiver

Form message

Encode message

Noise

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PART TWO Interpersonal Skills160

Creating Persuasive and Sticky Messages

Overcoming the Curse of Knowledge

Everyone knows communication is important, and presumably everyone would like to be a good communicator. The preceding communication model is simple and the principles are straightforward. Why then are tales of poor communica- tion and presentation breakdowns virtually everywhere in organizational life? Who among us has not heard complaints that “the goal was poorly communi- cated,” the members of a team are not communicating well, the professor knew his subject but could not communicate it well, and on and on. The reason is because the barriers to communication are many and insidious. And the fi rst step to becoming a better communicator is to be acutely aware of where com- munication so often fails and to try to avoid such failure in your own contexts.

KO 5 - 1

KO 5 - 3

KO 5 - 2

D O 5 - 1

• If you have a strong case, everyone will be convinced. Many attorneys often wish this were true, but they quickly realize people are moved not just by evidence, but by who presents that evidence and how it is presented. Moreover, a single well-told story or anecdote can often be as effective as a pile of hard evidence.

• If communicated enough times, your communications are effective. Too many presentations are boring and miss their mark. Most messages are forgettable and do not stick with the listener. Many of us have a hard time staying focused and presenting the information our boss needs to make a good decision. Indeed, communication is consistently rated as among the biggest management weaknesses in organizations today.

• Words mean what they mean. I love French toast. I also love my spouse. Clearly, words carry different meanings. Ensuring mutual understanding is the primary challenge of communication. Words that mean one thing to you may mean something else to your listener.

• PowerPoint presentations are always the best way to persuade. Slides provide continuity and structure to a message, can be changed easily, and can refl ect creativity. However, with the now widespread use of PowerPoint and similar software, too many slide shows become one-way information dumps, are scripted and infl exible, and do not connect with the audience’s needs. Before choosing PowerPoint (or any other presentation program), be sure it is the best medium for accomplishing your objectives.

• Being assertive means being a jerk. Real assertive communication is not being hostile or aggressive. When you are assertive, you stand up for your (or someone else’s) rights without hurting or diminishing anyone else.

• Listening is a passive activity. Hearing is a passive activity, but research shows we ultimately fail to listen to the majority of what we hear. Good listening is hard work and an active, not a passive, skill.

MYTHS 5.1 Communication Myths ? ?

As with many management skills, communication is an area associated with a number of misperceptions or myths. We identify a few of the most common of those next.

“Be a good listener. Your ears will

never get you in trouble.”

— Frank Tyger

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CHAPTER 5 Communication 161

Imagine that you are telling your boss about a new iPhone app, who you follow on Twitter, and your hope that you will soon surpass 500 Facebook friends. Or perhaps you are an American working in Bangalore and are complaining to your Indian boss about the wisdom of a recent baseball trade. You swing your hands wildly and get quite animated while your boss patiently listens and nods. Later, you overhear him telling another associate that he often has no idea what you are talking about and that you don’t seem very smart. You may shake your head, laugh at him, or even consider him to be unbelievably ignorant. From a communication standpoint, however, the real problem is you. That is, you just got cursed by your own knowledge.

Similarly, have you ever been in a presentation where the speaker was obvi- ously an expert but she just couldn’t convey her ideas to the audience— leaving them confused and uninspired? She too was cursed by her own knowledge. Supremely gifted golfers, baseball hitters, and dancers often make ineffective coaches —because their own knowledge and skill makes it so diffi cult for them to take the perspective of a beginner, leading to frustration on the part of the expert and the beginner alike.

The curse of knowledge is the tendency for an informed knowledgeable person to not be able to communicate that knowledge to others. Put another way, when we know something well it is easy to forget how it feels to not know it. Research has shown that we generally overestimate the overlap between our own knowledge base and that of others. 4 A whole host of communication breakdowns stem from the curse of knowledge and it is diffi cult to avoid. After all, you cannot simply unlearn what you already know. Our knowledge has “cursed” us and it becomes diffi cult for us to readily re-create our listeners’ state of mind. Management Live 5.1 is a powerful illustration of the curse of knowledge and that phenomenon occurs every day across organizations. The tune playing in the message sender’s head is one that the recipient simply cannot hear. Fortunately, there are two proven strate- gies for beating the curse: (1) analyze and know your audience, and (2) transform your messages so they embody the critical elements of persuasion and “stickiness.”

Practice this! Go to www.baldwin2e.com

MANAGEMENT LIVE 5.1

Tappers and Listeners—The Curse of Knowledge Stanford University researcher Elizabeth Newton conducted an experiment in which she assigned people to one of two roles: “tappers” or “listeners.” 5 Tappers received a list of 25 well-known songs (for example, “Happy Birth- day” and “The Star-Spangled Banner”). Each tapper was asked to pick a song and tap out the rhythm by knock- ing on a table. The listener’s job was to guess the song, based on the rhythm being tapped. It turned out that the listener’s job was quite diffi cult. Over the course of Newton’s experiment, 120 songs were tapped out. Listeners guessed only 3 out of 120 songs correctly (or 2.5 percent).

What was even more interesting, however, was that before the listeners guessed the name of the song, Newton asked the tappers to predict the odds that the listeners would guess correctly. They predicted that the listeners would correctly guess 50 percent of the songs. In fact the tappers got their message across 1 time in 40, but they thought they would get their message across 1 time in 2. How can that possibly be? When a tapper taps, she is hearing the song in her head. Go ahead and try it for yourself—tap out “The Star-Spangled Banner.” It’s impossible to avoid hearing the tune in your head. Meanwhile, the listeners can’t hear that tune—all they can hear is a bunch of disconnected taps, like a kind of bizarre Morse code. In the experiment, tappers were frustrated at how hard the listeners seemed to be working to pick up the tune. When a tapper tapped “The Star-Spangled Banner” and the listener enthusiastically guessed “Happy Birthday,” the expressions of disbelief on the tapper’s face were priceless. This is the curse of knowledge at work.

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PART TWO Interpersonal Skills162

Audience Analysis

The fi rst and most important rule of effective communication is to analyze your audience. In the discussions that follow regarding what persuades people to act, and what makes a message sticky, you will see time and again that it depends on your audience. And note that we use the term “audience” very broadly here to include, for example, an audience of one. So whether it is an auditorium full of people or a meeting with your boss, or a customer or peer, audience analy- sis is critical and always the fi rst step to achieving successful communication outcomes.

So, what can you learn about the people with whom you will be communicat- ing? What kinds of goals and objectives do they have? What will your audience care most about? The key to persuasion is to develop an argument that speaks to your listeners. They probably don’t want to hear about your issues or frustrations or problems—remember, this is not to persuade you. Your audience will always be more persuaded by issues that directly affect them. So, regardless of the situ- ation or limited time you may have to prepare, your fi rst task is to analyze your audience. In formal presentation contexts, it can often be useful to do some audi- ence analysis at the beginning of a presentation by directly asking your audience about their expectations and preferences. For face-to-face meetings, it is always wise to do a little research about the background and interests of your communi- cation recipient. However you choose to conduct your analysis, the fundamental lesson is to align your appeals with the values and beliefs of your audience, to “hit them where they live.”

Adam Hanft, a Manhattan-based consultant to small businesses, emphasizes the importance of audience analysis when helping his customers pitch new prod- ucts. He says: “I once had a client who had spent many years—and many mil- lions of dollars—creating a powerful database of historical fi nancial data. It was a signifi cant achievement, and the company, rightfully proud of having pulled it off, was eager to cast itself as the leading provider of historical data. I reminded the company of an important fact that had gotten lost in the process: Customers do not want data because they are historians. They use it to help predict what’s going to happen next. Armed with that insight, the client switched from selling the past to offering the future. Guess which one commands a higher price?” 6

The Fundamental Elements of Persuasion

As proof of how timeless some of the best practical ideas are, it was the Greek philosopher Aristotle who fi rst articulated the three fundamental elements of persuasion as ethos, pathos, and logos. Unfortunately, although known for cen- turies, most of us are not nearly as intentional about trying to infuse those three elements into our messages as we should be. The goal of communication is to persuade your audience that your ideas are valid and to act in ways you desire. Whether you are giving direction to your employees, presenting an idea to a cli- ent, or creating new marketing copy for your website, ethos, pathos, and logos are the keys to communicating your message and persuading others to do what you want them to do. In the following, we expand on those elements and illus- trate with strategies shown to enhance each of them.

Ethos: Building Personal Credibility

Ethos is an appeal to the authority and personal credibility of the speaker. We tend to believe people whom we respect and who we believe understand who we are and what we value. Ethos, then, requires affi rmative answers from your audience to questions such as: Does this person really know what she is talking

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CHAPTER 5 Communication 163

about? Why should I trust what he says? Who is this woman and what does she know about me? What background or experience or credentials does she have to make her believable?

Research has shown that ethos derives largely from your ability to establish a bond or relationship with your audience and how well you establish your creden- tials. You can enhance ethos by uncovering things you share with your audience and signaling that you are in many ways similar to them or that you at least inti- mately understand their interests, values, and context. Another way to enhance your ethos is by establishing your authority or expertise. Evidence shows that people believe, and are persuaded by, testimony from someone perceived to be an expert. People defer to others’ expertise in matters where they either lack suffi - cient knowledge or background to make an informed decision, or when the issue is simply too complex for them to properly analyze. 7

To capitalize on this, you might stylistically insert phrases into your message that use “I” or “we.” For example, “as an avid video gamer myself” or “in my own experience as a single parent . . .,” or “as expert snowboarders for the past decade, we see no reason why . . .” Note that no one will recognize you as an expert sim- ply because you are the one chosen to speak on a particular topic, so you need to go the extra step to prove your knowledge and skills. You don’t need to go over- board, toting around diplomas and other hyped credentials—in fact, usually the more subtle and indirect the better. Ideally, you can relate examples of your role in solving previous problems or explain research you have done that led to your conclusion. These personal disclosures should be made early in a presentation so your audience is primed to listen to your ultimate recommendations. 8

Pathos: Arousing Others’ Emotions

Pathos is an appeal to the audience’s emotions. Persuasive appeals that tug at your heartstrings, make you laugh, or even scare you are using pathos to arouse your emotions. Pathos is often stimulated via a demonstration that something is unfair or unjust. It can be in the form of passionate delivery, a simple claim, or a story. It is important to note that direct appeals to the reader to feel an emotion (for example, “You should be crying now”) are rarely effective. Instead, creating an emotion with words usually requires re-creating a scene or event that arouses

“What you do speaks so loudly

that I cannot hear what you say .”

— Ralph Waldo Emerson

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PART TWO Interpersonal Skills164

the emotion. Thus, descriptions of painful or pleasant things often work best as natural “triggers” of emotions. For example, since we often feel anger at someone who, we believe, has received benefi ts without deserving them, a communicator who wants to make us angry will offer a case of someone rewarded unfairly. On the other hand, if we want to invoke pity, we might present an example of a small child who is somehow disadvantaged.

Consistent with our emphasis on audience analysis, pathos is accentuated when speakers use stories and examples that are highly relevant to their audi- ence, appealing to identity and self-interest. This is why the recovering addict plays such an important role in 12-step programs and why stories of religious conversion are so powerful during worship. The audience in these cases is greatly interested in the story, because ultimately the story could be about them (or they can at least see parts of themselves in the story). We also naturally fi nd more per- suasive a communicator who fl atters us (especially indirectly) instead of insult- ing us. If, for example, a writer wants a reader to evaluate something negatively, she or he may try to arouse the reader’s anger. Or to produce action to benefi t someone (for example, to persuade us to make a charitable donation), an arguer may work on our pity.

Logos: Appealing to Logic

Finally, a communicator can persuade by appealing to an audience’s sense of logos. Logos comes from logical arguments, facts, fi gures, and evidence. Logos is what makes listeners feel like they are making an informed rational choice. As a speaker, you have two avenues to enhance logos. The fi rst is to construct logically sound arguments in support of your position, and the second is to fi nd evidence in support of those claims.

Logical Arguments. In the most general sense, there are two types of argu- ments: inductive and deductive . Induction is moving from the specifi c to the general, while deduction begins with the general and ends with the specifi c. Argu- ments based on experience or observation are best expressed inductively, while arguments based on laws, rules, or widely accepted principles are best expressed deductively. Consider the following example:

JoEllen: I tried a profi t-sharing plan for my restaurant managers for two months last year and our restaurant had its best sales performance in both of those months. Paying for performance works!

Matthew: That’s reinforcement theory—people do what is rewarded. If you reward people for higher performance, you will generally get more of it.

JoEllen is using inductive reasoning, arguing from observation. Matthew is using deductive reasoning, arguing from the theory of reinforcement. Matthew’s argu- ment is clearly from the general (reinforcement theory) to the specifi c (the higher restaurant sales). JoEllen’s argument may be less obviously from the specifi c (individual instances in which she has observed reinforcement work) to the gen- eral (her prediction that a specifi c action will result in a specifi c outcome in the future).

In most business and interpersonal relationships, inductive logic is used most often and is the more powerful form of persuasion. Politicians, for example, are quick to isolate individual people who have had some positive or negative experi- ence with a policy as a means of advocating their own stance. That is an induc- tive approach (in other words, if this person had a good experience, you will; if this person is getting ripped off, so are you). In the classroom, many students prefer to learn inductively (via current cases and real-world examples) rather than deductively via general theories and models. In any case, it is important to

“Men decide far more problems

by hate, love, lust, rage, sor-

row, joy, hope, fear, illusion, or

some other inward emotion, than

by reality, authority, any legal

standard, judicial precedent, or

statute.”

— Cicero

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recognize whether the form of an argument is inductive or deductive, because each requires different types of support. JoEllen’s inductive argument demands support from compelling personal experiences or observations. Matthew’s deduc- tive argument should be supported by some accepted law or recognized theory.

Use of Evidence. Beyond the structure of your argument, logos is also enhanced via your effective use of facts and evidence. So a critical question to always ask yourself in building a persuasive case is “What is my evidence?” Evi- dence can take many forms, of course, but in most contexts at least one form of powerful evidence is fi nancial or performance-oriented—what is commonly called the “business case” for an idea or action. That is, you need to be prepared to get beyond the “feel” or intuitive appeal of a recommendation and be able to argue how it can positively impact the “bottom line” of your audience. In busi- ness contexts, compelling evidence might relate to employee or customer atti- tudes, social responsibility measures, environmental impact or new growth or innovation. Once again, the most important considerations when using evidence are the validity of your data and its relevance to your specifi c audience.

Remember, although solid evidence is often critical to a persuasive presenta- tion, you don’t want to overwhelm your audience with evidence, and remember that logos is not the only component of a successful message. What an audience is looking for in a speaker is prudence , the practical wisdom to make the right choice at the right time. You show prudence by demonstrating your mastery over the subject matter, not by proving yourself to be the smartest or best-informed person in the room. 9

A typically asked question concerns which approach is the most important among ethos, pathos, and logos. The answer is twofold: (1) as with almost every communication prescription, it depends on the audience—so analyze your audi- ence and know the type of appeals likely to persuade them; and (2) since all three elements have persuasive potential, a good general presentation strategy is to aim to use all three elements as part of your message. Probably the biggest persua- sive weakness of many communications is a disproportionate reliance on just one of the elements. For example, pathos can be particularly powerful if used well and delivered with passion but, especially in business contexts, most effective communications do not rely solely on pathos. Similarly, logos can be effective in many contexts but can easily overwhelm and confuse the recipient. So, while incorporating all three elements is not always possible, it is certainly a good starting point for planning persuasive appeals. Ethos, pathos, and logos are also a central part of the specifi c strategies for making your messages sticky—which we discuss next.

Making Messages Sticky: The SUCCES Model

One of the most exciting and useful contributions to persuasive communication in recent years has been the concept of “stickiness.” The term “stickiness” was popularized by Malcolm Gladwell in his book The Tipping Point 10 and more fully developed and illustrated by Chip and Dan Heath in their book, Made to Stick. 11 The authors set out to better understand a question that lies at the heart of all effective communication: What makes an idea memorable or “sticky”? They con- clude that there are six underlying principles of stickiness, represented by the acronym SUCCES. We describe and illustrate each of those principles next.

Simple—Find the Core of the Idea

A successful defense lawyer once noted, “If you argue 10 points to a jury, even if each is a really good point, when they get back to the jury room they won’t

“When dealing with people, let us

remember we are not dealing with

creatures of logic. We are dealing

with creatures of emotion, crea-

tures bustling with prejudices and

motivated by pride and vanity.”

— Dale Carnegie

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remember any. ” So the fi rst key of sticky messages is to fi nd and express the essential core of our ideas. To strip an idea down to its core, you must be great at exclusion. That is, you will likely need to discard a lot of great insights in order to get the most important insight to really shine and stick. The hard part is weeding out ideas that may be really important but just aren’t the most important.

The United States Army invokes this idea with what they call Commander’s Intent. The idea is to force a commanding offi cer to always highlight, in advance of the mission, the single most important goal of an operation. The value of the Intent comes from its singularity. Even if everything breaks down and different tactics are required, the troops still always know their number-one priority. Note that fi nding the core is not the same as dumbing down or creating sound bites. S aying something short is not the mission. Rather, we want to present ideas that are both simple and profound. You can’t have fi ve primary advantages, you can’t have fi ve “most important goals,” and you can’t have fi ve Commander’s Intents. So always ask yourself, What is my core idea? Management Live 5.2 is a twist on this idea.

Unexpected—Grab Attention with Surprise

A second key element of stickiness is unexpectedness. How do you get an audi- ence to pay attention to your idea and strike their interest? The most basic way is to be unpredictable and break a thinking pattern, or be boldly counterintui- tive. S urprise is a proven way to increase alertness and sharpen focus—to grab people’s attention. You simply do not want your listeners to be thinking, “I’ve heard all this before.” Rather, you want them thinking, “Really? Wow! Now I’m not sure what to expect.” So a key to being unexpected is to determine how to violate, not conform to, people’s expectations. So fi gure out what in your

MANAGEMENT LIVE 5.2

Getting to the Core: A Six-Word-Long Story? Legend has it that the famous American writer Ernest Hemingway was having lunch with several other famous writers, claiming he could write a six-word-long short story. The other writers dismissed his idea. Hemingway told them to ante up 10 dollars each. If he was wrong, he would match it. If he was right, he would keep the pot. He quickly wrote six words. The words were: “For Sale, Baby Shoes, Never Worn.”

Hemingway won the bet: His short story was complete. It had a beginning, a middle, and an end! More than that, think about how much is conveyed in those words and how they prompt curiosity. Was a baby on the way at one point? Was that a life dream? Why sell now? And so on. The lesson is that it is possible to boil down a lot of information into a core—but it is neither easy nor intuitive. Indeed, the irony is that creating meaningful short messages is actually harder than crafting longer ones. In fact, a famous quote variously attributed to Mark Twain, Blaise Pascal, T. S. Eliot, and Henry Thoreau famously notes, “If I had more time, I would write you a shorter letter.”

Building on the spirit of six-word brevity, Smith Magazine started a reader contest asking people to tell their own life story in six words. 12 The magazine was fl ooded with entries including one from a plumber: “Fix a toilet, get paid crap”; a dominatrix, “Woman Seeks Men—High Pain Threshold”; and celebrity chef Mario Batali “Brought it to a boil, often!” Comedian Stephen Colbert offered, “Well, I thought it was funny,” and the creator of Wikipedia, Jimmy Wales, submitted: “Yes, you can edit this biography.” Whether it is life stories or other per- suasive messages, the search for a six-word synthesis can be both fun and useful. So whatever your message, try capturing it in six words. It will help you fi nd the core.

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message could be framed as a surprise, or at least counterintuitive, and insert that into your presentation.

Concrete—Illustrate Your Ideas in Ways That Are Tangible

and Easy to Grasp

A third characteristic of sticky messages is concreteness. Concrete is memora- ble, while abstract is not. So look for common, simple, and well-known images and examples to make your points. Where possible, you want to explain your ideas in terms of human actions and sensory information that people can readily relate to and feel. This is one place where far too many business presentations go wrong. Abstract talk of mission statements, synergies, competencies, return on investment, and so on are often ambiguous to the point of being meaningless. In contrast, naturally sticky messages are full of concrete images that most anyone can see and feel—angry customers, a bonus check of $15,000, a surgery patient jogging out of the hospital—because we are wired to remember concrete images. Effective coaches use concrete rather than abstract images to convey what they want from their players (for example, “I want your belly button stuck to his belly button” rather than “We need to play tighter defense”). That is because concrete- ness also makes it easier for us to coordinate our activities with others, who may interpret abstraction in very different ways. So seek to illustrate your message with clear and concrete examples and images.

Credible—Ensure That People Believe You

The fourth element of stickiness deals with how you get people to see your mes- sage as believable. This principle should be familiar—it is further emphasis on the persuasive principle of ethos, discussed earlier. And while the familiar sources of ethos—expertise, honesty, and trustworthiness—are the core of cred- ibility, three other strategies are proven sources of stickiness as well. We discuss each of those three next.

Vivid Details . First, the richer and more vivid you can make your illustrations, the stickier they will be. If you want to raise charitable contributions to a village devastated by a natural disaster, do not just cite general evidence of suffering. Rather, detail the deprivation and squalor—one young man is sleeping in feces, a young woman has not had clean water for four days, and so on. If you want to claim that customers really love your corporate brand, get beyond citing survey results and show a picture of a group of bare-chested guys with the company logo tattooed on their chests. Studies of jury decisions are particularly compel- ling in showing that jurors rate arguments illustrated with vivid details signifi - cantly more credible than their less detailed counterparts. 13

Anti-authorities. While we intuitively associate credibility with demonstrated expertise and authority, sometimes it is anti-authorities, or at least people who are not authorities in any conventional sense, who make the most cred- ible sources. For example, a smoker dying of lung cancer can make a powerful and credible voice for not smoking. Similarly, a cheater who got caught and dismissed from school can be a strong model for others to avoid that kind of temptation. A car company trying to sell you a car is not very credible—they have an obvious agenda. Conversely, your best friend who loves that car model is a very credible source. It is her honesty and trustworthiness—not her expert status—that gives her credibility. So be creative in searching for credible support of your messages and recognize that sometimes anti-authorities are even better than authorities.

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Testable Credentials. The idea of testable credentials can be simply translated as “Don’t take my word for it; go see for yourself. ” Indeed, while external sources and expert validation have their place, it is personal validation that is often the most powerful source of credibility. Wendy’s famous advertising slogan “Where’s the Beef?” was an example of testable credentials. In effect, the restaurant chain was saying to customers, “Go get one of our competitor’s hamburgers and see if it stacks up to ours.” The idea of testable credentials is even what makes eBay work. Think of the feedback rating system for sellers. This is actually a testable credential that shows how that seller has behaved with other buyers. Manage- ment Live 5.3 is a particularly poignant and arresting example of how testable credentials can be so sticky.

Emotions—Make Them Care

Here again, we see another one of the principles of persuasion, pathos, as a key to stickiness as well. Put simply, we get people to care about our ideas by getting them to take off their analytical hats and to experience emotions related to our message. We show how our ideas are associated with things that people already care about. We appeal to their self-interest and current identities, but also to the people they would like to be.

MANAGEMENT LIVE 5.3

Risks in Promiscuous Sexual Activity: The Power of Testable Credentials Each year the National Basketball Association (NBA) faces the challenge of educating incoming NBA rookie players about life in the big leagues—including how to deal with the media, maintain healthy nutritional habits, make sensible investments with their new riches, and the dangers of HIV/AIDS. NBA rookies are young men often under 21 and they are sudden celebrities, with all the adoration that goes with new fame. They have heard about HIV/AIDS their entire lives, so the risk is not that they are unaware of AIDS; the risk is the circumstances of their lives prompt them to drop their guard for a night. Until a few years ago, the NBA would use standard strategies to alert these young men: doctors relaying the effects of the virus; other players who had contracted HIV and would solemnly warn them; and so on. A few years ago, however, the NBA came up with a different approach— one that belongs in the stickiness hall of fame.

A few weeks before the NBA season began, all the rookie players were required to meet in Tarrytown, New York, for a mandatory orientation session. They were essentially locked in a hotel for six days with no phones or laptops, and attended classes on the topics just discussed (for example, media, nutrition, money). Despite the secrecy surrounding the orientation, a group of female fans staked out the location. On the fi rst night of the orientation, they were hanging out in the hotel bar and restaurant, dressed to be noticed. The players were pleased with the attention. There was a lot of fl irting and the players made plans to meet up with some of the women later in the orientation. The next morning, the rookies dutifully showed up for their class session. They were surprised to see the female fans in front of the room. The women re-introduced themselves, one by one. “Hi, I’m Sheila and I’m HIV positive.” “Hi, I’m Donna and I’m HIV positive.” Suddenly the talk about HIV clicked for the rookies. In the past, the NBA had put forth a doctor or veteran player as a credible source to persuade the rookies. But what is more likely to stick with you: hearing about others who got fooled, or being fooled yourself? The NBA was using the very sticky power of testable credentials. Search for ways to use that same tactic in your own messages.

Source: Condensed from Heath, C., and Heath, D. (2007). Made to stick, pp. 162–163. New York: Random House.

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So place an emphasis on benefi ts and how people will feel if they buy into your message. Research shows that people are more likely to make a charitable gift to a single needy individual than to an entire impoverished region. We are wired to feel things for people, not for abstractions. Sometimes the hard part is fi nding the right emotion to harness. For instance, it’s diffi cult to get teenagers to quit smoking by scaring them with the consequences of such a habit. It’s easier to get them to quit by drawing on their resentment of big tobacco companies. In a related vein, some of the most successful charities now invite participation to honor those loved ones lost to a certain disease—rather than appealing directly to donors for help in preventive research.

In creating a sticky message, the key question is: Will what I am present- ing strike an emotional chord? Will people smile, laugh, or become repulsed or frightened? If so, then you’re on the right path to creating something that is emo- tional and ultimately sticky.

Stories—Bring Ideas to Life by Showing Not Telling

The fi nal principle of stickiness is to use a story (or stories) to bring your ideas to life. Storytelling is one of the oldest, most powerful modes of communication. Research has found that stories are more convincing to an audience than ratio- nal arguments, statistics, or facts. 14 Well-told stories can illustrate almost any business concept: customer service, culture, teamwork, decision making, and leadership are all readily conveyed through stories.

Stories make information more relevant and “richer” to the listener. Those on the receiving end can see themselves in the story and become emotionally charged by the narrative. When listeners begin to ask themselves, “Who do I know like that?” or “When did something like that happen to me?” or “I see how others I admire acted in that situation,” then you have them hooked.

Well-crafted stories embody several of the other stickiness principles. That is, stories are almost always concrete. Most of them have emotional and unexpected elements. The hardest part of using stories effectively is making sure they’re simple —that they refl ect your core message. It’s not enough to tell a great story; the story has to refl ect your agenda. Indeed, while stories can clearly be a key ele- ment in making a message sticky, the reality is that they are often poorly crafted and thus fall short of reaching their stickiness potential. Table 5.1 is a summary of the characteristics of a good story.

Delivering Powerful Messages

The Basics of Effective Presentations

Effective communication depends on two factors: a persuasive and sticky mes- sage and a clear and powerful delivery of that message. The most compelling information in the world won’t make it through to most of your audience unless you convey it in a compelling way. To grab—and keep—your audience’s atten- tion, it is critical to make a powerful connection at the outset. A simple, fi ve-step process can guide you when preparing any persuasive presentation. For sim- plicity, they are known as the Five S’s , and are shown in Figure 5.2 . The S’s are sequential, in that each step builds on the preceding one. The most important key to persuasive communication is good planning. So, as you will see in the following, the fi rst three steps involve preparation, while the fourth and fi fth focus on the actual presentation. We shall now discuss each of the steps in more detail.

“One death is a tragedy; one million

is a statistic.”

— Joseph Stalin

KO 5 - 4

D O 5 - 2

Practice this! Go to www.baldwin2e.com

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TABLE 5.1 Characteristics of a Good Story 15

At some level we all know that stories can be powerful communication tools. But we also know that not all stories, or storytellers, are effective. In the following, we highlight a select list of the keys to a good story. Consciously try to use those principles in crafting stories that will help your messages stick.

Good stories make the details count. The great Russian playwright Chekov once said that if there is a gun on the wall in the fi rst act, it has to go off in the third act— why else put it there? In our lives, individual events or details might be random, but in a story, details are selected for a purpose. So include the kind of detail you need in order to tell the story you want to tell and the amount of detail you need—no more and no less.

Good stories are aimed at a particular audience. The teller shapes the tale—but so does the teller’s sense of the listener. This is not to say you should tell true stories to some audiences and not to others. It is to say that the kind of story you tell, the degree of disclosure your story aims at, and the degree of detail you need depend on the particular audience you are trying to reach. Students do not tell the same story of their weekend to their parents that they tell to their roommates, though both stories can be true.

Good stories have structure. This is another way of saying that the story should either have a beginning, middle, and end, or else it should reveal a signifi cant pattern. So begin at a point that serves as a beginning, an event that (in your mind) shapes the story to come. And fi nd a place to end that offers at least a degree of clarifi cation for what has preceded it.

Good stories express wishes and fears. Wishes and fears are the moving forces behind all stories: what the characters want and what they fear give the story its emotional power and drive it forward. And because every wish has a corresponding fear (I want to be successful—I fear failure; I want to be loved—I don’t want to be alone), good stories acknowledge the force of both emotions.

Good stories establish common ground between teller and listener. Stories connect teller and listener by expressing wishes and fears that the teller and listener share. Sometimes they establish explicitly common ground (the listener is similar to the teller in specifi c ways) and sometimes they rely on a broader common ground (the teller has wishes and fears and so do the listeners). Establishing common ground is one of the central goals of storytelling.

Good stories “show” rather than “tell.” It might at times be necessary for you to point out to your listener what your story is about. But if the listener doesn’t get the point without your spelling it out, you haven’t told the story well enough; you haven’t really drawn on the power of stories. Stories move us more effectively than any other medium precisely by cutting underneath the rational level and working on the level of specifi cs; the details and events, as they connect and build, cut underneath our rational defenses. You can reject overt messages, but how do you argue with a true story?

Good stories include trouble or its possibility as well as (or instead of) successes. Stories are the central metaphor humans have devised to express the shape and meaning of our lives. Therefore, we expect stories to include trouble, sadness, and failure (or at least the fear of these things), because our lives inevitably include these complexities. If stories avoid complication, we don’t believe them.

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Strategy

Think about this scenario for a moment. You are in sales and you need to swap sales calls with someone because you have a bad history with a person who could be a potentially important client for your company. You have two other salespeople with whom you could swap clients: a co-worker whom you do not know very well, but who has a client that would fi t your needs well, and your best friend at work who has an acceptable client to trade as well. What will you do?

If you are an effective persuader, you will not likely use the same approach for both sources. Instead, you may focus on the merits of your client and the good of the company when you develop your persuasive message for the co- worker you do not know well. On the other hand, you will likely draw on a more personal appeal when making the pitch to your best friend. You would choose different approaches and arguments because the audiences are differ- ent. Similarly, you might even use different language and presentation styles when you interact with your friend versus when you talk with the colleague you know less well.

Consistent with our prior discussion of audience analysis and the elements of persuasion, good planning for a presentation would include consideration of your goal for the presentation, who is your audience, and your general approach for persuading. Recalling our earlier discussions of Commander’s Intent and audience analysis, this is where you determine your core idea and what would make your presentation a success in addition to fi guring out your listeners’ hot buttons.

Structure

Once you have decided on your core ideas and the key “hot buttons” of your audience, a second key element is determining the structure of your presenta- tion. That is, how do you start? How do you sequence your ideas? How will you fi nish crisply and with a fl ourish? As noted earlier, research has shown audiences

“Don’t take me through the pain of

your journey.”

— Steve Ballmer, CEO of Microsoft

(referring to presentations that

focus too much on what the pre-

senters went through to arrive at

their recommendations rather than

quickly stating and defending those

recommendations)

FIGURE 5.2 The Five S’s of Delivering Presentations Formulate a

strategy for your specific audience.

Strategy

Develop a clear structure.

Structure

Support your points with evidence.

Support

Combine ideas with an enhancing presentation style.

Style

Supplement with informed responses

to questions.

Supplement

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PART TWO Interpersonal Skills172

remember material better and respond to it more positively when it is arranged in a logical sequence or tells a story. You can create a story by organizing the ele- ments of your presentation in a planned and compelling way. For a few illustra- tions of what to avoid when putting together your presentation, see Management Live 5.4.

One of the most common mistakes of novice presenters is to take too long to get to their main point or recommendations. Former McKinsey & Company consultant Barbara Minto has developed a winning strategy for beginning effective presentations in a manner that tells the audience a story. 16 She rec- ommends beginning “with the end in mind” and easing your listeners into the message. Using this strategy, you state your recommendation up front, rather than building up to it. You begin with a statement you know your audience agrees with, such as, “We all know that our company needs to remain profi t- able.” Second is a statement of complication: “However, our profi ts are higher at some times of the year and then bottom out at other times, making it hard for us to project budgets from quarter to quarter.” Then, you state your recom- mendation: “I want to tell you about a diversifi cation in our product line that can protect our profi ts from cyclical downturns. Adding X to our product line will alleviate our problem.” The rest of the speech then explains why X (your recommendation) is going to resolve the problem you stated (and have other benefi ts, too!).

There are many ways speeches can be framed. Table  5.2 describes several of the most common strategies for organizing persuasive messages. The most important point is to not “wing it” but rather plan your presentation according to a structure you know can persuade.

MANAGEMENT LIVE 5.4

Presentation War Stories Peter Shea, a controller for Imperial Chemical Industries, was summoned to his company’s headquarters to give a fi ve-minute presentation on his value to the company. He wanted the 18 senior managers to remember him, so he devised a metaphor comparing his factory to a race car, where his job was to keep it running fast. Bad idea. Turns out there were not any racing fans in the group and they just did not understand what he was talking about. The executives cut him off after a few minutes and asked him to leave the room. “I lost it,” he cringed. “I wilted and died. Somehow I should have checked to see if it was the kind of audience that would get my analogy.”

Dave Jensen of Search Masters International is an executive recruiter in the biotechnology industry. Wanting a memorable beginning for a presentation, he took a joke from a book of speaking tips. Bad idea. “It just died,” he reported. “It wasn’t very funny. And industrial microbiologists aren’t a real loose and funny group to begin with. When you lose something in the fi rst two minutes of a talk, you just can’t get it back.”

Darryl Gordon, from an advertising agency in La Jolla, California, was invited to demonstrate the power of digital technology to 60 ad agency presidents. He devised a creative computer-based presentation with colorful slides, bright graphics, and lots of sound. Bad idea. He fl ipped on the power button and nothing happened. It took 15 minutes to load the presentation onto another machine; the fi rst one was ill-equipped to handle a presen- tation of this size. “Every second of that 15 minutes felt like a lifetime,” he recalled. “I’ll never forget it.” 17

So what can we learn from these blunders? First, know your audience, and consider their need for information fi rst—and judge your creative ideas using those criteria. Second, unless you are absolutely certain a joke is funny to the type of people in your audience, it is not advisable to use it in your presentation. Third, know your available technology and plan accordingly.

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Support

No matter how credible you are, you need to provide some evidence other than your own opinion if you wish to change the “hearts and minds” of an audience. Based on research exploring the use of supporting materials or evidence in speeches, the following patterns emerge as general guidelines:

• If you have moderate credibility, evidence will probably increase your persuasive effectiveness. Speakers with low credibility are almost always seen as more credible when they cite evidence.

• Using evidence is usually better than not using it.

• Evidence can reinforce the long-term effectiveness of persuasion.

• Evidence produces more attitude change when the source and source’s qualifi cations are provided.

• Using irrelevant evidence or poorly qualifi ed sources may provide an effect opposite to what the speaker intends.

There are a wide variety of supporting materials you can use in a persuasive appeal. Some of the most common types are listed in Table 5.3 .

“Make sure you have finished

speaking before your audience

has finished listening.”

— Dorothy Sarnoff

TABLE 5.2 Organizing Strategies for Persuasive Messages

Strategy Explanation

Chronological Traces the order of events in a time sequence (such as past, present, future or fi rst step, second step, third step).

Problem-Solution Describes a problem, and then explains how your proposal solves that problem.

Causal Develops ideas from cause to effect, or from effect to cause.

Familiarity-Acceptance Begins with ideas the listener knows or believes, and moves on to new ideas, relating them to the “old” ones.

Inquiry Order Develops the topic in steps, the same way you acquire information to solve a problem.

Question-Answer Raises and answers a series of listeners’ likely questions.

Elimination Surveys all available solutions and systematically eliminates each possibility until one remains.

TABLE 5.3 Types of Supporting Materials

Type Explanation

Examples Specifi c instances that illustrate the point or clarify the idea.

Statistics Numbers that express relationships of magnitude, segments, or trends.

Testimony The opinions or conclusions of others, particularly subject-matter experts.

Stories Narratives that illustrate a key principle or point, or establish common ground with the audience.

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Style

One important research fi nding is that when your audience has no prior knowl- edge of you or your reputation, they are likely to determine your credibility partly on the basis of the quality of your delivery. They will use cues such as how you are dressed, how confi dent you appear, or how professional your visual aids appear to be. 18 So, to be sure you have the maximum possible credibility, you need to make certain the quality of your presentation refl ects your expertise.

Do not, however, assume there is a simple “formula” for effective delivery. Rather, the most effective presenters are those who use their natural gestures and style to their best advantage. Trying to mimic the delivery of others is self- defeating: Audiences will detect the unnaturalness of a borrowed technique and conclude you are not being sincere. Delivery is a highly personal matter and there is no one preferred form. Everyone should tailor their speech to their own personal strengths and weaknesses. There are, however, some aspects of delivery that are common to all good speakers.

Show Enthusiasm/Passion. The most important style factor is to be inter- ested and enthusiastic about your topic. Movement and gestures will come natu- rally if you genuinely believe what you are saying has value. And if you cannot get excited about what you have to say, why should anyone else?

Speak Clearly and Firmly and with Good Pacing. The speaker’s volume must be suffi cient for everyone in the room to hear clearly. Nothing damages credibility like a soft-spoken voice, for two reasons: Pragmatically, if I can’t hear you, how can I decide whether or not to support your arguments? Plus, speak- ing with appropriate volume shows confi dence in your position. That confi dence can—and will—translate into ethos for your argument. Moreover, one of the greatest errors made by speakers is speaking so fast that they lose the ability to enunciate properly. Varying the rate at which the words are spoken is an effective technique, but as a rule of thumb, slow is better than fast. Regulating the volume of one’s voice is important. Do not speak using a monotone voice. Variations in volume can communicate a great deal of meaning. Think about what a whisper conveys. In contrast, think of a loud shout. Volume and rate of speech are the functional equivalents of italicized or bolded words in a written text.

Make Eye Contact, Smile, and Gesture. This aspect of delivery is critically important although many speakers fail to make eye contact. In North America, not making eye contact is refusing to engage the audience. Other cultures have different attitudes about eye contact and one should be sensitive to these differ- ences. Second, always stand up straight and smile before you say your fi rst word. Even if your subject matter is serious, a smile will establish a rapport with your audience that can be built upon.

Finally, gestures are very important in maintaining attention but they must be used sparingly and judiciously or else they overwhelm the message’s content. To begin with, you may have to force yourself to move and gesture to say it with style. Encourage the action until the style becomes natural and expressive, and you will become a more persuasive and effective speaker. Do be careful about making the same hand gestures over and over again because that can distract your audience.

Avoid Self-Defeating Statements. Delivering persuasive presentations is tough enough without hurting your own cause through self-defeating behav- iors. So avoid statements like “ I am really nervous, ” “ I have a few typos on my slide; please forgive me, ” “ I did not have time to cut this down so I am going to move quickly through a bunch of extra slides, ” or “ I am not sure how to use this

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fancy technology. ” Although such comments may be sincerely felt and designed to evoke empathy, all they ultimately do is make you less credible in the eyes of your audience. In fact, rather than empathize, your audience will be inclined to think “Why are you so nervous—don’t you know your stuff? ” “Why did you not take the time and preparation to have this better organized? ” “Why don’t you know how to use the technology? ” And so on.

Supplement

Finally, you will need to be prepared to handle questions after your presenta- tion. Don’t make the mistake of thinking your attempt at persuasion ends when your allotted time is done. How you handle the questions and concerns raised by your audience can make or break your persuasive appeal. This is a vulnerable moment, since you are outside the realm of your carefully planned presentation. Still, there are effective ways to prepare for and handle the question-and-answer (Q&A) component of a presentation.

Probably the best tip is to think in advance about the types of objections or questions that your audience might have and come prepared with supplemental slides, or at least have some answers in mind for such questions and issues. Ide- ally, you will have chosen your most compelling evidence for your actual presen- tation, but there is never enough time to do it all, so remember to focus on your core idea. It is often wise to hold back some statistics, testimony, or other forms of evidence you have, which can be used to drive home a point or answer a spe- cifi c question. Having additional supplemental support available adds a strong touch of professionalism and has the added benefi t of making you feel confi dent that you are fully prepared.

When answering questions, paraphrase them back to be sure you understand what the audience member wants to know. Not only does this give you time to think through your response, but it also helps to ensure that you really under- stand the listener’s concerns and are prioritizing them appropriately. After you paraphrase, ask the listener if you have interpreted the question correctly. The added bonus to this technique is that, if you have it right, you have the listener agreeing with you from the start.

Finally, specify when you want the Q&A session. In your introduction, you should state that you’ll entertain questions at any time, after each section of the talk, or at the end of the talk. Although taking questions during your presenta- tion can make it longer (and possibly disturb your focus), doing so can also make your talk interactive and more engaging. 19

“Effective management always

means asking the right question.”

— Robert Heller

“A recent survey stated that the

average person’s greatest fear is

having to give a speech in public.

Somehow this ranked even higher

than death which was third on the

list. So, you’re telling me that at a

funeral, most people would rather

be the guy in the coffin than have

to stand up and give a eulogy.”

— Jerry Seinfeld

Tool Kit 5.1 The Effective Presentation Checklist There is a lot to know about persuasive communication and it can rightfully seem overwhelming to try to learn and incorporate it all. Moreover, it is normal to be very nervous prior to a presentation, and that can work against good communication as well. With that in mind, we present the following checklist designed to synthesize the most critical points to consider in preparing to deliver a persuasive presentation. It does not include everything that is important, of course, but if you work through the checklist, our experience is that you will be prepared and confi dent enough to do your best.

• Answer the question, “Who is this audience and why are they here?”

• Eliminate the extraneous—what is my core idea.

MANAGER’S TOOL KIT

(continued)

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PART TWO Interpersonal Skills176

Presenting Plans That Bosses (and Others) Can Approve Of

At many points in your working life, you will be required to present a proposal that someone else needs to approve. To be effective in this endeavor, you need to understand some basic principles about how these decisions are made, and tai- lor your presentation of a solution appropriately. When you present a proposal, four key components must be included. 20 The elements are usually most effective when presented in the order noted next.

1. What is the plan?

Begin with a positive, specifi c, and future-tense statement of strategy, followed by a list of concrete actions to support the strategy. Think in terms of a statement that the listener can either accept or reject (e.g., “The auto products division will acquire a chain of muffl er repair shops”).

Why begin with the recommendation? For two reasons. First, in this context, there is no need for a presentation of background or history. The people who are evaluating your proposal already know their history (they lived it) and their goals (they told them to you). They don’t need to be reminded of these components. What they are primarily interested in is what you have to offer that is NEW. Sec- ond, you get listeners’ attention more quickly and effectively when you give them something concrete to evaluate. Why have an audience that is bored with the fi rst part of your presentation? Wow them at the beginning; buildups are unnecessary in business presentations.

2. Why is the plan recommended?

Make the plan’s rationale clear, rather than forcing listeners to fi gure this out for themselves by wading through muddled details or unstated operational con- cerns. Provide synthesized information about markets, competition, costs, and other variables if it is appropriate. Your proposal will only be accepted if the lis- tener remains confi dent that the opportunity is attractive and that there is a basis for obtaining competitive advantage. Consequently, you must make the rationale for your plan clear.

3. What important goals will the plan help us achieve?

The goals are what you expect to have happen if your plan is adopted. You should identify and defend specifi c goals that could be used to evaluate your plan and deter- mine its ultimate success. While this may make you slightly uncomfortable, it will give your listeners better control over the implementation of your proposal, and make sure the audience’s expectations of the project’s outcomes are realistic.

4. How much will the plan cost and what are the risks?

As the fourth and fi nal step, presenters need to identify the resources necessary to implement the plan. This may take the form of asking for resources for yourself

• Craft your opening and ending.

• Get to your recommendations quickly.

• Intentionally include as many elements of persuasion and stickiness as you can.

• Rehearse, rehearse, rehearse.

• Familiarize yourself with any technology or logistics.

• Predict questions and supplement your materials with backup information to address such questions.

• When the time comes, be enthusiastic and go win the day.

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CHAPTER 5 Communication 177

or your work unit if you are presenting a plan to your boss. It is important to give the decision-makers a sense of “costs and benefi ts” in order to allow them to weigh the merits of your proposal against its potential costs. In other words, hav- ing established the plan, its rationale, and its potential benefi ts/goals, you have to “cut the deal.” In order to receive suffi cient funds and personnel to implement the project successfully, you have to be successful in this step.

Certainly there is room for variation in this presentation structure. How- ever, a successful proposal will generally include all of these elements—carefully researched, creatively and intelligently presented, and, most important, tailored to the audience you need to persuade. Above all, and we cannot emphasize this enough, you should remain focused on your audience throughout the prepara- tion of your proposal. This isn’t about what entertains or sounds good to you, but what your audience cares about. Take to heart the ideas in this chapter about audience analysis and the fundamentals of persuasion and stickiness. Determine what is likely to be most important to this particular listener (or group of listen- ers) and then focus on that relentlessly.

Effective Use of PowerPoint and Visual Aids

Whether you are presenting an operations budget to the board of directors or doing a sales presentation for an important client, visual support of your mes- sage is often essential for success. Certainly some speakers can hold an audi- ence’s attention without visual aids, but they are exceptions to the rule. If the audience can’t visually relate to what you’re saying, they’ll tend to shut you out. Visual aids also help your audience track where you are going and feel more comfortable that they understand. They know your presentation has a plan and that you are following it. Graphics also keep people more alert and focused by stimulating their senses.

More pragmatically, visual aids help your audience remember what you said. Of all the information we absorb in a day, less than 20 percent comes from hearing alone. The ability to retain your message has another benefi t: Research has shown presentations that use visual aids are signifi cantly more persuasive than those without them. 21 Visual support helps listeners understand abstract concepts, organize complex data, and see connections between topics. Effective visual support also increases audience retention of the material.

With current presentation software and technology, it is now possible to create presentations of far higher cosmetic quality and fl ashiness than ever before. Unfor- tunately, too many of today’s presentations are famous for overwhelming audi- ences with boring and confusing material and making audience members want to run from the room. Although it is now popular to demonize PowerPoint for all the horrors perpetrated in its name (for example, “Death by PowerPoint”), we think it is important to clarify that PowerPoint, per se, is not the problem. That is, Pow- erPoint uses a medium that can be used effectively —with effective learning design principles—or i neffectively, with ineffective design methods. Either way, the key is the nature of the message and delivery, not the medium on which it is transmitted.

Many opinions and resources are available that delve into the specifi cs of how to make slides and design graphics—but those are beyond the scope of a management skills text. However, given the importance of visual communication and the time most managers spend either creating or consuming PowerPoint mediated messages, we felt it was important to highlight a few evidence-based principles regarding visual presentations in general. Although there is not yet a rich research literature on PowerPoint, there is an extensive literature on how to design effective visual messages. Among the most important lessons are to be clear on your message purpose and to create your visuals based on what is known about how people learn.

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PART TWO Interpersonal Skills178

Know Your Goal

One of the biggest problems with many PowerPoint presentations is that they suffer from a lack of goal clarity. In this regard, it is worthwhile to distinguish between two possible goals in making a PowerPoint presentation— information presentation, in which the goal is simply to package and present information, and cognitive guidance, in which the goal is to guide the audience in their processing of presented information. When your goal is information presentation, Power- Point slides can rightly be fi lled with information that may be hard to quickly interpret or be processed by the audience—and that is okay. Many PowerPoint slide decks today are designed to serve as convenient mediums to package and disburse information. In such cases, you are simply providing information and documentation in PowerPoint form, and persuasion or action is not the priority.

Be Learner-Centered

Unfortunately, however, many of the misuses of PowerPoint occur when the slides are suited to present information when the desired goal is actually cog- nitive guidance. When the goal is cognitive guidance, you need to design your slides so they are consistent with how people learn. PowerPoint discussions tend to quickly focus on a distinction between a technology-centered approach and a learner-centered approach. In a technology-centered approach, the focus is on the capabilities of cutting-edge technology. Thus, we would be interested in the effects of the many features of PowerPoint.

In a learner-centered approach, however, the focus is on the way people learn and process information. Thus, we would be interested in fi nding ways to use the features of PowerPoint to support people’s natural ways of learning. Evidence has shown the learner-centered approach to be far more effective in accomplish- ing presentation goals. Three important features of the human information pro- cessing system are particularly relevant for PowerPoint users: dual channels, limited capacity, and active processing. We discuss each of those next.

Dual Channels

First, people have separate information processing channels for visual material and verbal material. So does your presentation take advantage of the dual- channel structure of the human information processing system by presenting complemen- tary material in words and pictures? It is probably a good idea to regularly stray from the PowerPoint default template that suggests “place title here; place bullets here,” because that tends to force single-channel learning—when your goal is dual channel.

Presentations do not require a magic number of visual aids. Some talks ben- efi t from extensive visual illustrations, while others may require very little. Let content be your guide. Ask yourself, “Is there something visual I could use to make my point, and in so doing take better advantage of the reality that people learn through dual channels?

Limited Capacity

Second, people can pay attention to only a few pieces of information in each channel at a time. Filling your slides with information will easily overload peo- ple’s cognitive systems. A good rule of thumb is to put less—not more—on a slide to avoid cognitive overload. Thus, a bar graph should not be presented with three-dimensional bars and lots of cute, but irrelevant, clip art. Moreover, it is more effective to be conversational and not put text where you want attention on the graphic. Remember, your audience has a limited capacity. If you want them to read, put text. If you want them to focus on the graphic, leave the text off and

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CHAPTER 5 Communication 179

simply highlight verbally (and maybe with a few arrows) what you want them to take from the graphic.

Active Processing

People understand presented material best when they attend to the relevant material, organize it into a coherent mental structure, and integrate it with their prior knowledge. So does your presentation promote active cognitive process- ing by guiding the processes of selecting, organizing, and integrating informa- tion? For example, this is where innovative new software programs like Tableau (see chapter-opening case) are so effective in that they allow the users to actively engage and interact with the data. Even in the absence of such innovative tech- nology, there are things you can do to highlight the main ideas that the audience should attend to; an outline can help people organize the material, and concrete examples—perhaps as video clips—can help people relate abstract concepts to their own concrete experience. Most graphical displays are not obvious—even though those who created them may think they are. Does your presentation guide people through your message (with some checkpoints) in ways that prompt them to actively process and follow where you are going?

Choosing Your Communication Medium

There are many ways you could choose to communicate with someone. Research is clear, however, that some ways clearly are not as effective as others. So when should you rely on face-to-face communication, and when is an e-mail more effective? Will a phone call do, or should you arrange a personal meeting? You should consider two important variables when making such decisions: (1) the information richness of the available communication channels, and (2) the top- ic’s complexity.

Information richness is the potential information-carrying capacity of a communication channel, and the extent to which it facilitates developing a com- mon understanding between people. 22 Media high in information richness can translate more information. In this context, we defi ne information in three ways:

1. Feedback. Some ways of communicating offer immediate feedback, while for other channels the rate and amount of available feedback are very low.

2. Audio / visual. With visual communication, you have the added benefi t of being able to read someone’s body language and nonverbal communica- tion. With only audio interaction, you lose this ability.

3. Personal / impersonal. Some forms of communication help build rela- tionships between people by encouraging and facilitating personal contact. Other modes are more formal, and the ability to develop rela- tionships outside the topic at hand may be more easily lost.

Naturally, face-to-face communication is highest in information richness. First, the participants get the benefi t of both visual and audio stimuli. They can read facial expressions, body language, tone of voice, and other nonverbal clues as well as hear the words being spoken. Second, feedback in face-to-face conversa- tions is immediate, both verbally and nonverbally. How many times have you changed tactics in a conversation simply because of the other person’s changed facial expression, when she or he hasn’t said a word? Face-to-face interaction allows you to clarify things you don’t understand immediately and to provide additional support or insight if needed. Finally, conversations are the most

D O 5 - 3

D O 5 - 4

“This ‘telephone’ has too many

shortcomings to be seriously con-

sidered as a means of communi-

cation. The device is inherently of

no value to us.”

— Western Union Internal

Memo, 1876

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PART TWO Interpersonal Skills180

intimate type of verbal communication available, and they facilitate relationship development. We learn about someone’s sense of humor, interests, and values when we converse, and these allow us to develop trust. It is no mystery why the most important part of the whole eHarmony process (see Chapter 1 case) is the fi rst in-person meeting.

While telephone conversations allow instant access to additional informa- tion, they are less information rich than face-to-face conversations. Some non- verbal clues can be gleaned from the tone of the other person’s voice, but the person’s facial expressions and body language are unclear. Though some informa- tion richness is lost, telephone communication has the benefi t of being personal and provides the ability to access additional thoughts or information quickly.

Written communication addressed to a specifi c person is next on the con- tinuum. There is, however, a large drop in information richness between a phone call and an e-mail or note. First, the feedback time is signifi cantly longer with written communication. Since misconceptions often cannot be cleared up as they occur, additional communication is often necessary to clarify intentions and glean additional information. Nonverbal communication is also eliminated from the equation. Although some e-mail users are adept at using emoticons , or type- written faces such as :-), these are not universally accepted. Still, because the message is being sent directly and clearly from one person to another, the com- munication does have a personal component and can help develop relationships. In fact, the number of people developing friendships online continues to grow.

Finally, formal written communication is essentially one-way. When a memo is sent to a large group of people, usually to outline a new policy or serve as a reminder, there is little opportunity to receive feedback. No audio cues are available, nor is it usually possible for someone to get additional information in a timely way. Because it is not personally addressed, no sense of relationship exists between sender and receiver. As we’ll see next, this method of communica- tion may be fi ne for routine information, but is inappropriate for more complex or personal topics. Table 5.4 provides a quick summary of the varying levels of information richness for different communication channels.

The second aspect to consider when choosing a medium is the complexity of the topic you will be discussing. Low-complexity situations are routine mat- ters where each party has its own ready access to information. On the other hand, high-complexity issues don’t happen every day and usually involve several people to adequately address the problem or opportunity. Ideally, the problem’s complexity should dictate which communication channel to use. More complex problems need channels that allow for high information richness so that ideas can be more readily exchanged. Routine problems can, on the other hand, be handled through communication channels low in information richness. Research supports the idea that more complex problems need to be han- dled in face-to-face meetings. This may explain why, on average, senior level

“The real problem is not

whether machines think, but

whether men do.”

— B. F. Skinner

Channel Feedback Rate Audio/Visual Personal/Impersonal Information Richness

Face-to-face communication

Immediate Both Personal High

Telephone Fast Audio Personal Moderately high

Personally written missive (i.e., e-mail)

Moderate No audio or visual Can be both Moderately low

Formal letter Slow No audio or visual Impersonal Low

TABLE 5.4 The Information Richness of Communication Channels 23

“A memorandum is written not to

inform the reader but to protect

the writer.”

— Dean Acheson

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MANAGEMENT LIVE 5.5

What Google Can Teach Us About Picking the Right Communication Channel Note: The following is a blog post from Stew Friedman, Practice Professor at Wharton Business School of the University of Pennsylvania. He is reporting on a trip to Google corporate headquarters (The GooglePlex) for a speaking engagement. His experience is a wonderful example of how important it is to pick the right communication channel.

I had the pleasure of speaking in the Leading@Google series at the company’s storied Mountain View cam- pus. It is a remarkable place. Yes, the food is amazing, and it’s everywhere (you are always within 100 feet of free, fantastic fare). Yes, the surfaces are ecologically sound and the use of energy is minimal. Yes, the organic culture is refl ected in creative work settings and meeting locations, like the fi ve-seated exercise cycle on which people ride and convene simultaneously.

Beautiful and informative electronic displays of information are ubiquitous. Everyone’s on email, all the time. So, in this defi nitively 21st-century work environment, how do you grab employees’ attention to entice them to attend a one-hour session with an author talking about his new book? This was the challenge for my hosts and, being creative Googlers, they found a way that cut against the grain, and it worked.

They created small posters on paper and taped them on the glass door entrances to virtually all of the build- ings on campus. They used a bit of paper, it’s true, because they knew that the medium had to be distinctive. And so it was. We had a great crowd. This was another great example of how Googlers are continually innovating with the use of media, even if it means going back to the future. This episode reinforced a few important lessons for how to choose your medium intelligently:

1. Know how the people you’re trying to reach use various forms of media. If your kids are texting to converse, and you want to enter the conversation, why bother using email or a phone call?

2. Experiment with the use of different media to see what works best when. Is face-to-face as necessary as you think it is? Why not try reducing face-time with some key people in your life (your subordinates, for example) and increasing it with others who might need it more (like your clients and friends)?

3. When you need to stand out and rise above the din, switch it up. In today’s world there’s something special about receiving a personal note or letter, one that displays the distinctive hand of the author. When was the last time you wrote a personal letter?

Condensed from www.totalleadership.com .

executives spend signifi cantly more time in meetings than do middle managers, since senior execs typically deal with the most complex organizational issues.

A couple of other aspects should be considered when choosing a communi- cation channel. First, you should know how comfortable your intended recipient is with the channel you’re planning to use. People who are very familiar with e-mail and have been using it for a long time perceive it as a richer communica- tion channel than do those who lack this experience. 24

Similarly, your relationship with the receiver infl uences the richness of the communication channel. When people have had signifi cant interaction face to face, they are often able to overcome the limitations of less rich media. In one study, people who had a history of interaction actually did better on a complex decision-making project that they completed over e-mail than teams meeting face to face who had not met before. 25 Again, this makes the value of face-to-face meet- ings more clear: When people have a chance to get to know one another, they are able to use less rich communication channels more effectively. Tool Kit 5.2 sum- marizes which medium to choose depending on the situation and results you want.

“It has become appallingly obvious

that our technology has exceeded

our humanity.”

— Albert Einstein

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PART TWO Interpersonal Skills182

About E-Mail

First, some legal issues. The e-mail you write on any computer owned by your employer can be monitored by your employer, and likely is. Most large compa- nies have some sort of monitoring system in place. So, for personal issues, it is a good idea to use a personal (not work) e-mail account and not access that per- sonal e-mail from work.

Second, the messages you send and some of those you receive are routinely saved and stored whenever your employer backs up data. These messages are offi cial documents of the organization, just like memos and other written mate- rials. For example, in the government’s antitrust case against Microsoft, e-mail messages sent between the company’s executives were subpoenaed and used against the company during the trial.

Third, some pragmatic advice: Even though e-mail communication has become less formal as the medium has become more common, electronic com- munication still takes place between people who are not physically near one another. Messages can be misinterpreted, jokes taken literally, and succinct and direct messages viewed as abrupt and rude. Before you dash off a quick e-mail, make sure it is complete, clear, and not easily misinterpreted. Above all, be sure it is professional. It’s always better to err on the side of professionalism than on the side of casualness.

Tool Kit 5.2 Choosing Your Medium: Written vs. Verbal MANAGER’S TOOL KIT Put it in writing when . . . Communicate verbally when . . .

A number of people must receive consistent instructions or information.

You want immediate and direct feedback and input.

You are concerned about legal, regulatory, or other documentation requirements.

You don’t want or need a written record of the communication.

You want your position on something to be perceived as formal.

Delivering the message in person will enhance its sense of urgency.

Your recipient has a history of problems with verbal instructions.

Your message may spark an emotional reaction that you need to acknowledge.

Tool Kit 5.3 Making E-Mails Reader-Friendly

1. Beware of confi dential subjects. You can never be sure where your messages will be forwarded, how long they will be kept, or by whom.

2. Assume high standards. Many readers are put off by bad writing in any form, including e-mail. Write as well as you can, whenever you can.

MANAGER’S TOOL KIT

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CHAPTER 5 Communication 183

3. Select your readers. When messaging multiple people, be selective. Send copies only to those who abso- lutely need to see it.

4. Don’t assume what you see is what they get. If your readers’ systems are different from yours, your line lengths may spill over and cause an annoying text-wrap effect on their screens. To be safe, keep your line lengths to 55 or 60 characters, including spaces. Exaggerate any indentation you use to make sure it “catches” on your readers’ screens.

5. Avoid typing in all capitals. It’s easier to type, but IT SURE LOOKS LIKE SHOUTING, DOESN’T IT? Also, “all cap” writing slows reading by inhibiting recognition of acronyms, proper names, and sentence starts, which all depend on uppercase/lowercase contrasts.

6. Use informative subject lines. Readers may screen their e-mails by scanning subject lines, discarding mes- sages that don’t seem relevant or clear without reading them. To get your e-mails read, don’t use subjects like “Management meeting” or “Project XYZ” if you can use “Request to reschedule meeting” or “How Project XYZ will save $500K this year.”

7. Keep it short. Try to get your whole message on one screen.

8. Use emphasis devices. Even though some e-mail systems don’t allow many word-processing options, you can still facilitate reading by using headings, white space, occasional all caps, indents, lists, simulated underlines, and other devices.

9. Change the subject line of your reply. Your reply is not the same message as the original e-mail you were sent, is it? So if you can, change the subject line. Reply to “Request to reschedule meeting” with “Meeting rescheduled to May 31,” or reply to “How Project XYZ will save $500K this year” with “I’m sold; let’s do Project XYZ.”

Active Listening

The Paradox and Importance of Active Listening

The paradox is that, despite spending more waking hours listening than doing any other activity, we are typically not very good at it. Listening is a very dif- ferent process from hearing. Hearing refers to the physical reality of receiving sounds; it is a passive act that happens even when we are asleep. Listening , on the other hand, is an active process that means a conscious effort to hear and understand. To listen, we must not only hear but also pay attention, understand, and assimilate. Active listening involves interaction and good questioning. Lis- tening is a vital yet underestimated part of the communication process. Listening skills can greatly infl uence the quality of your friendships, the cohesion of your family relationships, and your success as a student and manager. Unfortunately, few people are naturally good listeners. Even at the level of simple information, many people do not listen well. Studies show 75 percent of oral communication is ignored or misunderstood and that very few of us are skilled at listening for the deepest meaning in what people say.26

Listening involves caring, hearing, interpreting, evaluating, and responding to oral messages to gain a shared understanding. 27 For managers, listening is how we learn what motivates our associates and what their values and expecta- tions are. Even when managers cannot give employees what they want, employ- ees feel better when they believe their point of view has been heard. Listening to employees is a way of showing support and acceptance, which makes for a more open work climate and higher satisfaction and productivity. 28

Moreover, managers who listen to employees can learn new ways to approach company problems. Harvard professor Rosabeth Moss Kanter tells of a textile

KO 5 - 5

KO 5 - 6

D O 5 - 5

“My friends listen to what I say,

but my parents only hear me

talk.”

— A teenager’s lament

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PART TWO Interpersonal Skills184

company that for years had a high frequency of yarn breakage. Management con- sidered the breakage an unavoidable business expense until a new manager, who listened to his employees, discovered a worker with an idea on how to modify the machines to greatly reduce the breakage. The new manager was shocked to learn that the man had wondered about the machine modifi cation for 32 years. “Why didn’t you say something before?” the manager asked. The reply: “My supervisor wasn’t interested, and I had no one else to tell it to.” 29

On a more personal note, listening is an essential skill for making and keep- ing good relationships. If you’re a good listener, you’ll notice others are drawn to you. Friends confi de in you and your friendships deepen. Success comes easier because you hear and understand people. You know what they want and what hurts or irritates them, and you can act accordingly. People appreciate you and want you around.

Finally, the success of many leading companies in the Unites States has been attributed to the way in which they listen to their customers. These companies learn valuable information about their products and services, and get sugges- tions for future offerings. Listening to customers can also increase sales and cus- tomer satisfaction. Consider the following example from the training manager at Macy’s department store in New York:

One big diffi culty with new, inexperienced sales clerks is that they don’t listen. Here’s what an inexperienced clerk often does: A customer steps to the counter and says, “I want that blouse on display there. I’d like size 14 with short sleeves.” [The clerk] rushes away and brings back a blouse, size 14, but with long sleeves. The customer again explains, “Short sleeves.” Back goes the clerk, and again the customer waits. In a store the size of ours, such incidents can run into money. There’s useless work for the clerk, unnecessary handling of merchandise and, most important, possibly an irritated customer. That’s why in our training we stress, “Listen before you act.” 30

Traps and Barriers to Active Listening

Active listening is a skill that is part what you do right and part what you avoid doing wrong. Most people have all the right stuff to listen well and are well inten- tioned, but have simply acquired bad habits. If you can overcome just some of these habits, you will be a long way toward being a more effective listener.

The Tendency to Evaluate

Humans have a natural urge to evaluate what other people say. If you express con- fi dence that the Chicago Cubs will win baseball’s World Series, I will likely respond by agreeing or disagreeing with you, basing my evaluation on my own frame of reference. This tendency to evaluate gets stronger as my emotional stake in the conversation rises. So, if I don’t care much about the game of baseball, I may think something like, “Oh, she must be from Chicago.” On the other hand, if I am an avid fan of Chicago’s other baseball team, the White Sox, I will respond more viscerally— “Are you nuts?” Because I have such a strong emotional stake in my own position, I am less likely to listen to the content of your position. This impulse to use our own perspective to evaluate others’ statements effectively blocks good listening.

The key to stopping our tendency to evaluate is to be aware of it. For com- munication to be most effective, we need to hear other people’s statements from their point of view. Seeking understanding, rather than evaluating, can lead to fewer emotional and irrational conversations. The next time you fi nd yourself in an argument with someone, try this rule: Before each person talks about her or his perspective, each has to accurately rephrase what the other person has just said, in a manner that shows she or he comprehends. This is communication, or coordination of meaning, at its fi nest.

“A good listener is not only popu-

lar everywhere, but after a while

he gets to know something.”

— Wilson Mizner

Practice this! Go to www.baldwin2e.com

“Let go of your attachment to

being right, and suddenly your

mind is more open. You’re able to

benefit from the unique viewpoints

of others, without being crippled

by your own judgment.”

— Ralph Marston

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CHAPTER 5 Communication 185

Misreading Nonverbal Cues

Nonverbal communication happens all around you. Sometimes it is conscious, as when one person smiles at another in a friendly greeting. Other times it is unconscious, as when someone absentmindedly drums his fi ngers on a desk. To accurately determine the meaning of a nonverbal message in a business or pro- fessional setting, you need to know the sender’s personal frame of reference, her cultural background, and the specifi cs of the situation from her perspective.

Cultural differences can be a big source of misinterpretation (see Figure 5.3 ). Although research supports the idea that some facial expressions such as laugh- ing, smiling, frowning, and crying are fairly universal, 31 the meaning of many nonverbal messages depends on the culture in which they occur. For example, in the United States embarrassment is normally shown by lowering the head or blushing; in Japan embarrassment is shown by laughter and giggling. Arabs often show embarrassment by sticking out their tongues slightly. 32

Not surprisingly, many managers use only American norms when interpret- ing nonverbal communication. For example, in American culture, eye contact

“The most important thing in

communication is to hear what

isn’t being said.”

— Peter Drucker, Management

Theorist and Presidential Medal of

Freedom winner

FIGURE 5.3 Cultural Misunder- standings in Nonverbal Communication

A-OK Sign

“V” for Victory Sign Finger-Beckoning Sign

“Hook’em Horns” Sign

In the United States, an upraised hand means “stop.” In Singapore and Malaysia,

however, it is used to get someone’s attention or to ask for permission to speak.

In the United States, this means “good job” or “good going,” but in most Islamic countries, most of Latin America,

and Greece, this is a rude gesture.

“Stop“ Sign “Good” Sign

In the United States, this is just a friendly sign for “All right!” or “Good going.” In

Australia and Islamic countries, it is equivalent to what generations of high

school students know as “flipping the bird.”

This sign encourages University of Texas athletes, and it’s a good luck gesture in

Brazil and Venezuela. In parts of Africa, it is a curse. In Italy, it is signaling to another

that “your spouse is being unfaithful.”

In many parts of the world, this means “victory” or “peace.” In England, if the palm and fingers face inward, it means “Up yours!” especially if executed with

an upward jerk of the fingers.

This sign means “come here” in the United States. In Malaysia, it is used only for calling animals. In Indonesia

and Australia, it is used for beckoning “ladies of the night.”

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PART TWO Interpersonal Skills186

performs several functions: It shows interest and attention in a speaker, signals someone’s willingness to participate and be recognized, and controls the fl ow of conversation by signaling others that it’s okay to talk. However, in some Latin and Asian cultures, eye contact with a superior indicates disrespect. 33

Here again, awareness is the fi rst step toward improving your ability to understand nonverbal communication. Do not rely solely on your personal lens to view nonverbal behaviors, but instead inquire about the situational and cul- tural norms that infl uence others. When you observe nonverbal behaviors, don’t jump to conclusions or assume you know what a particular behavior means.

Personal Focus

Many of us either overtly or covertly like to hear ourselves talk and be a signifi - cant part of any conversation. This often leads us to focus on what we are going to say, rather than paying attention to what others are saying. Several studies have revealed this barrier is particularly common in that most people can remember nearly everything they said in a conversation, but hardly anything about what the other person said. A simple maxim is it is hard to listen to someone else when you are doing the talking.

Thinking Is Faster than Speaking

The human mind is capable of thinking from 400 to 600 words per minute, but the average conversation proceeds at only about 125 words per minute, sometimes slowing to 100 words per minute (particularly if the information is complex). 34 This discrepancy means that the listener has quite a bit of leisure time available while listening. Consequently, listeners often take “side trips” that reduce the amount of things they actually hear. One strategy to help with the thinking versus speaking rate disparity is to try to guess where the speaker is going—either con- fi rming or disconfi rming as he gets there. This at least keeps you focused on the conversation at hand and not daydreaming or having your thoughts wander to other concerns.

Selective Perception/Filtering

When you fi lter , you listen to some things and not to others. You pay attention only long enough to discern what you predetermined is of interest or what you need. Another way people fi lter is simply by avoiding hearing certain things— particularly anything threatening, negative, critical, or unpleasant. It’s as if the words were never said; you have no memory of them.

One powerful and humorous study related to fi ltering and selective percep- tion was conducted by Dan Simons of the University of Minnesota. 35 Partici- pants were asked to watch a tape of a basketball game and count the number of passes made by the team in white uniforms. Roughly halfway through the video a man dressed in a gorilla suit runs out on the court, pounds his chest, and stalks off. Approximately one-half of those who watched the video in the study didn’t even see the gorilla. Indeed, they expressed shock and surprise when the tape was rerun for them. Apparently, when we are paying very close attention to something in an active way, we can be completely blind to anything else, no mat- ter how odd or exciting it may be. The key to listening is attention, and this study highlights just how dramatic our unintentional blindness can be.

Tendency to Advise

Many of us often substitute advice for listening. That is, we don’t have to hear more than a few sentences before we begin searching for the right advice. How- ever, while we are cooking up suggestions and convincing someone to “just try

“No man ever listened himself out

of a job.”

— Calvin Coolidge

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Type of Listening How to Do It

Empathizing. Drawing out the speaker and getting information in a helpful, supportive way.

Empathize with the other person; try to understand not just what the speaker is saying, but the feelings behind the words. You can make the person feel comfortable by maintaining eye contact and minimizing the physical distance between you and the speaker. Pay close attention to what the person is saying, talk very little, and use encouraging nods and words to keep the person talking (such as “Go on” or “I see”).

Analyzing. Seeking concrete information and trying to disentangle fact from emotion.

Use analytical questions to discover the reasons behind the speaker’s statements, especially if you need to understand a sequence of facts or thoughts. Ask questions carefully, and use the person’s responses to help you form your next set of questions. Once you are clear on a key point, write it down and then turn to the next one.

Synthesizing. Guiding the conversation toward a desired objective.

Solicit others’ ideas so that you understand potential advantages and disadvantages to your proposal. Keep your mind open and your thoughts unselfi sh. Focus on the idea and the objective, rather than the personalities involved (including your own).

CHAPTER 5 Communication 187

it,” we may miss what’s most important. That is, we often don’t hear the feel- ings being expressed or recognize that the person may not have been looking for advice. Sometimes people just want to know they’ve been heard.

Principles of Effective Listening

Of course, just avoiding biases does not constitute truly great active listening. Great listening skill comes from wanting and intending to do so and a mastery of a short set of fundamental behaviors.

Know Your Objective

Not all listening contexts are similar, and thus it is important to fi rst know what your objective is. In some cases, you are trying to empathize with someone; in others you are trying to analyze data or solve problems. How you listen should always be based on what you are trying to achieve. The three types of active lis- tening and associated strategies are summarized in Table 5.5 .

Actively Interact

Just being quiet while someone talks is not effective listening. Active listening requires a conscious effort to interact. Reporters often say their jobs require them to be experts for a day depending on their story—one day an expert on public schools and the next an expert in military policy. The truth is that the main expertise of great journalists is asking informed and insightful ques- tions. It’s the same for successful listeners. Like a reporter, you can learn to put people at ease and ask questions that engage them and prompt thoughtful responses.

When asking questions, it is useful to ask “how” and “why” questions that require a certain amount of elaboration, as opposed to questions that can be answered with a simple yes or no. It also can help if you share a little bit about yourself while asking questions. For example, “I have been having a hard time getting customers to buy the extended warranty product. How do you recom- mend I deal with it?”

“We have two ears and one

mouth so that we can listen twice

as much as we speak.”

— Epictetus

TABLE 5.5 Types of Active Listening 36

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PART TWO Interpersonal Skills188

Other good interactive listening tips include:

• Paraphrase the talker’s comments in your own words. This lets the person know you’re really understanding what’s being said.

• Frequently mirror back to the talker what he’s said and your empathy for his position. Let the talker know you recognize his feelings.

• Make supportive comments. Well-placed phrases such as “That’s inter- esting” or “Why do you think that?” not only show the talker that you’re focused on the conversation, but encourage him to elaborate on the top- ics you fi nd personally most interesting or helpful. 37

Stay Focused

Focus is probably both the most important and most diffi cult of all listening skills. Listening well requires self-control to not allow your mind to drift into random thoughts. Consider the case of a college lecture. Most students accu- rately comprehend and retain only about half of what they hear in a 10- minute period. 38 Therefore, students who can stay mentally engaged and focused on

“I like to listen. I have learned a

great deal from listening carefully.

Most people never listen.”

— Ernest Hemingway

Tool Kit 5.4 Tips for Good Listening

1. Focus and commit to overcoming bad habits. Awareness of your own listening defi cits is the greatest contributor to improved listening. Some experts claim that 50 percent or more of an average adult’s poten- tial improvement in listening can come from realizing he or she has bad listening habits and is capable of listening more effectively.

2. Look at the person talking. Looking at the speaker affi rms you are interested in what that person is saying. Other good nonverbal behaviors of listeners include unfolding your arms and turning toward the speaker.

3. Control random thoughts. Daydreaming and preoccupation with other matters often preclude people from hearing what is being said.

4. Make supportive comments. In informal conversations, well-placed exclamations or questions (such as “That’s interesting!” or “Why do you think that?”) not only show the speaker you’re focused on the con- versation, but encourage that person to elaborate on the topics you personally fi nd most interesting or helpful.

5. Find something to get interested in. Make up your mind at the outset that you’re going to fi nd some nugget of valuable information or thought stimulator in what you’re about to hear.

6. Put yourself in the speaker’s shoes. There’s nothing like a little empathy to enhance listening. It is often hard to really understand what someone is saying unless you try to see the world from his or her perspective.

7. Sift and sort. Mentally consider the words being presented to pull out ideas and feelings that are central to the message. Be sure you’re following the main, central ideas rather than merely hearing every word. Don’t get sidetracked on irrelevant material.

8. Rephrase what you’re hearing. In large groups you can do this in your mind, but in conversations it can be very effective to verbally take “reality checks” every once in a while to be sure you’re on the same page with the speaker.

9. Conquer your fear of silence. For many people, the urge to fi ll silence with talk is irresistible. Take time to think before answering questions, and make sure you’re allowing the other person ample time to do the same.

MANAGER’S TOOL KIT

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CHAPTER 5 Communication 189

CASE CONCLUDED

Concerned that potential users might not be drawn to Tableau out of fear that it would be too compli- cated or laborious to use, Tableau set as their express goal that anyone who cares about data should be able to work with it. Tableau’s primary advantages are (a) it is relatively simple to learn and use and requires no computer programming or sophisticated analytic understanding; (b) it is well suited for use with a full range of new media devices such as iPads and smartphones. According to Tableau’s Ellie Fields, “Fast authoring has been a big driver of uptake” and mobile applications are a big opportunity for the fi rm as well. People are making decisions when out and about, not at their desks. “And when you think pretty data on the Web these days, the iPad is usually front of mind.” Tableau is currently developing an iPad app that will allow for touchscreen scrolling through data, pinch down, and more.

Tableau now claims to have tens of thousands of published visualizations and is one of the most

> visible (pun intended) companies devoted to graphi- cally analyzing and presenting the ever-increasing amount of data in our world.

Questions

1. What is Tableau doing that Excel or PowerPoint cannot?

2. What are the potential traps or limitations of this new technology?

3. How do other new software tools like Prezi and Spotfi re compare with and/or complement tools like Tableau and PowerPoint?

4. Partnering with one or more fellow students, create a concept (and use Tableau if you have access) for a visual presentation that will bring a data set to life.

From How One Company Is Taming Big Data with Visualizations by Richard MacManus, http://www.readwriteweb.com/archives/ taming_big_data_with_visualizations.php.

listening to their instructors during class stand a much better chance of learning the material presented and accurately applying it in assignments and examina- tions. One way to increase your focus is to tell yourself at the beginning of a lecture that you’re going to fi nd some nugget of valuable information or thought stimulator in what you’re about to hear. Think of it as a treasure hunt, a game, or challenge. That’s much more fun than being bored, and a better route to good listening.

Concluding Note

In today’s wired world, it is easy to be lulled into thinking that oral and written communication skills are no longer so important. Most people today communi- cate mainly through voicemail, e-mail, and texting and have many relationships with people they have never even laid eyes on. Virtual communication has trans- formed business, in many cases making it faster, easier, and cheaper to get things done. However, a shift to more virtual media not only does not supplant the need for communication skills but makes such skills even more critical and an even more distinctive personal competency that can set you apart from your peers.

To be effective in almost any job today, you have to communicate well. To be a great manager, you have to communicate exceptionally well. Whether it’s selling an idea to your boss, making a quick pitch for support on a project or a new initiative, crafting a presentation for a customer, or just trying to listen to your people to fully understand their concerns, management demands com- munication skill. In short, to be an effective manager, you must be an effective communicator.

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PART TWO Interpersonal Skills190

KEY TERMS

active listening 183 assertive communication 160 deductive 164 emoticons 180 ethos 162

fi lter 186 Five S’s 169 hearing 183 inductive 164 information richness 179

listening 183 logos 164 pathos 163 prudence 165

One of the most effective ways to arouse pathos in an audience is to tell a story they can relate to or learn from. Corporate executives at Nike and FedEx know this, and use storytelling to fully engage their workers in the company’s culture. “Our stories are not about extraordinary business plans or fi nancial manipulations,” says Nel- son Farris, Nike’s director of corpo- rate education and the company’s chief storyteller. “They’re about get- ting things done.”

Like all great stories, those at Nike offer lessons from which people can learn. For example, employees hear how Bill Bowerman, cofounder of Nike, decided the running team he coached needed better running shoes. So he went out to his work- shop and poured rubber into the family waffl e iron, and Nike’s famous “waffl e soled shoe” was born. From this, listeners learn about Nike’s sup- port for innovation. Similarly, when they hear about Steve Prefontaine,

CASE Storytelling at Nike and FedEx

> >

one of Bowerman’s students who fought to make running a profes- sional sport, they remember Nike’s commitment to helping athletes. The company’s success in each of these areas is testimony to the power these stories have in shaping employee behavior at Nike.

At FedEx, the stories generally relate to employees who did the extraordinary to meet the com- pany’s overnight delivery commit- ment. For example, one employee rented a helicopter to make a deliv- ery. Another could not access a drop box, so he gathered a group of guys and lifted the entire box into his truck so the package could be extracted and the delivery made on time. Such stories arouse the positive emotions of people and

inspire others to emulate the same level of commitment.

Discussion Questions

1. When you hear the story about the FedEx employee who lifted an entire drop box in order to make an on-time delivery, what does it make you think about FedEx and why?

2. Why is it that good stories carry more “punch” in conveying mes- sages over time?

3. Given that all stories are hardly created equal in their communica- tion and persuasive power (mean- ing, there are a lot of bad and boring stories), what are some of the recurring elements that make for good and persuasive stories?

Sources: Randsell, E. (2000, January). The Nike story? Just tell it. Fast Company, 31, pp. 44–45. Basch, M. D. (2002). Customer culture: How FedEx and other great companies put the customer fi rst every day. Upper Saddle River, NJ: Prentice Hall.

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CHAPTER 5 Communication 191

(continued)

SELECT MANAGE WHAT? DEBRIEFS

Selling an Idea to Your Boss: Debrief Naturally, you want to utilize the most persuasive tactics in any context, but the tough challenge posed here, and the inevitable resistance from the boss, serve to heighten the importance of having a framework you can turn to quickly and which will help you consider those elements that will matter most in achieving your objectives. Thoughtful and realistic audience analysis and the three elements of persuasion (logos, pathos, and ethos) are the essential tools here.

Always the fi rst thing you need to do to prepare for your “pitch” is analyze your audience. What does your boss care most about? What do you know about his boss and reward structure, and what kinds of goals and objectives does he have? The key to success is to develop an argument that speaks to him—not just you or some notion of what is current or modern or right to do. He probably won’t want to hear about your frustra- tion or be moved by your youthful passion alone, but rather will more likely be persuaded by higher customer service or lower costs or enhanced effi ciency that comes with these new innovations. In short: How can making these changes make his job easier/better and make him look good as a manager? Moreover, how can you take out some of the threat and fear he may have regarding not being knowledgeable about these new innovations and thus perhaps incapable of getting the most from them or even explaining the expenditures to his boss? The answers to this question become the arguments you present.

As with any time you are trying to persuade, your goal is to try to include at least something that would evoke all three elements of persuasion: logos, pathos, and ethos . The logos could be cost data and some benchmarked projections regarding sales and revenue gains from the new innovations. The pathos could be some critical event at the restaurant (customers lost, spiked costs of advertising, key executive shocked that the restaurant was not already doing some of this stuff, or a recent commercial showing more senior people embracing social media, and so on) that is designed to hit your boss’s emotions not just his rational and cognitive side (for example, get at the heart—not just the head). The ethos might stem from your own personal experience with the new innova- tions and perhaps some testimony from others you know regarding the potential. You might also refer to some knowledge or experience you have about the competitive advantage other competing restaurants enjoy that use such tools (remember, you are trying to persuade, so look for every weapon of infl uence you can fi nd).

You’ll also need evidence to support your claims; examples and statistics are likely your easiest source of mate- rial in this short time frame. Finally, it will be a good idea to bring along some supporting materials so you have ready access to the information you need to supplement your presentation in the question and answer session.

The two biggest traps here are (a) trying to persuade on the basis of your view, perspective, and passion and neglect to fully understand and prioritize your boss’s perspective (this is akin to the best sales training where you are trained to fi rst understand your client’s problem and then aim to solve that problem rather than walk in and try to sell him what you have); and (b) limited tactic persuasion—that is, using only one of the persuasion strate- gies rather than all three. For example, a single logos strategy here would be to focus only on evidence of social media and e-commerce growth. That might work, of course, but a far better strategy is to also try and hit the heart (pathos) and drive home your personal credibility (ethos).

The importance of managing “up” is sometimes not fully understood by young managers, and yet is critical to effectiveness. This is another case where you have no authority and thus cannot rely on organizational hier- archy or your control of rewards/sanctions to gain you any infl uence. In fact, any attempts to try to pressure or threaten would be ill-advised and likely career threatening. And once you have presented your recommendation, ask for input. Organizations desperately need people capable of managing up; thus you want to learn what went well, and what did not, and use the opportunity to refi ne your approach for your next episode.

The Elevator Pitch—Making Your Case in a Very Short Time: Debrief Here again, you always want to utilize the most persuasive tactics in any presentation, but a last-minute scenario and a very short presentation serve to heighten the importance of having a framework you can turn to quickly and that will help you consider those elements that matter most in achieving your objectives. Always the fi rst

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PART TWO Interpersonal Skills192

thing you need to do to prepare for your “pitch” is analyze your audience. What does the budget committee care about? What do you know about the people on it, and what kinds of goals and objectives do they have? The key to success is to develop an argument that speaks to your listeners. They probably don’t want to hear about your team’s frustration with equipment failures. Instead, they will more likely be persuaded by missed deadlines or lower costs or enhanced effi ciency that comes with new equipment. In short: How can making this expenditure in the short run make them money in the long run? The answers to this question become the arguments you present.

Then develop a coherent structure for your presentation. One of the simplest, yet most effective, is the problem/solution approach. Here, you would describe the problem in the terms you know will resonate with the budget committee (stories pertaining to missed deliveries, lost revenue, ineffi ciency, and so on). Then present as coherent and complete a solution as you can. Be specifi c about the resources you need and how they will solve the problem. You’ll also need evidence to support your claims; examples and statistics are likely your easiest source of material in this short time frame.

Next, when crafting your introduction, remember the McKinsey model based on Barbara Minto’s work. Begin with a statement about the situation that you know the group agrees with, such as “Budgeting money in the most effi cient way possible is important to this company’s profi tability.” Next, discuss the complication, such as “I know the easiest way to allocate funds is on the basis of ‘fairness,’ but this year that allocation pattern isn’t the most effi cient choice.” Now, your recommendation: “I believe the most effi cient and effective use of our limited funds would be to invest in updated equipment for my group.” The remainder of your speech is the list of reasons why this will be an effective use of funds.

As you make your pitch, make sure your style is appropriate for this audience. Even if the meeting appears to be informal, it is best to err on the side of formality and professionalism. Finally, it will be a good idea to bring along some supporting materials so you have ready access to the information you need to supplement your pre- sentation in the question-and-answer session.

The big mistakes you should avoid include (a) listing problems fi rst and then your recommendation at the end—you lose your listeners’ interest that way; (b) simply listing reasons for your request with no structure or support to your presentation; and (c) looking for sympathy from your audience for your plight. The budget com- mittee might feel badly for you, but they must make decisions based on sound business rationale.

Actively Listening to Understand a Problem: Debrief The fi rst thing to do in this situation is to get yourself in an active listening mindset —sort of like a pre-game pep talk. Particularly in this case, when you are convinced (and maybe right) that you already know the problem and solution, those preconceptions can prevent you from being a good listener. Stress and high emotions have similar detrimental effects on good listening, so getting in the right mindset is even more diffi cult but crucial in those situations as well.

Active listening is one of those managerial skills that is largely about what not to do, so remind yourself of some common bad listening habits you are trying to avoid: premature evaluation and advice; selectively perceiv- ing what is said; and talking too much yourself. Your objective here should be both analyzing (that is, what the problem is and how to fi x it) and empathizing (drawing out information in a way that conveys caring and support). So make up your mind that you are going to understand this customer’s perspective by the end of the meeting (one useful strategy for focus is to tell yourself that, no matter what, you are going to extract at least one new nugget or something you did not know) and consciously tell yourself that your objective is to make him feel heard and respected and to resolve his diffi culty with the product—not to be the “expert” or “teacher” here.

More specifi cally, it might be a good idea to ask the customer to take you through a chronological history of trying to use the product and when it failed. Defi nitely take notes, but rather than writing down every- thing you hear, be attentive to nonverbals and aim to focus on his “hot” issues. Mentally sort what is being presented and be sure you’re focusing on the main concerns, rather than getting sidetracked with details. Remember the “active” in active listening and be on the ready to inject questions, both to clarify and to give the customer a chance to elaborate and expand on feelings as well as technical product issues. So in addition to queries like “What did the screen say?” and “Could you access the setup menu?” it can also be useful to ask “Was that frustrating?” and “What did you do then?” Empathic statements like “I know, that happens to

(continued)

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CHAPTER 5 Communication 193

most new users” or “I struggle with that on my own computer” are likely to help the customer feel comfort- able and heard.

Perhaps most importantly, to be sure you understand the customer, restate his conversation in your own words, and ask for confi rmation that what you heard is correct. That way, you can pinpoint where you have con- gruence and where you need to probe further to ensure you comprehend and share understanding. Beyond resolving this one issue and keeping this single customer satisfi ed, information gleaned from this type of meeting could be very useful to your marketing group in selling the advantages, and addressing the most common com- plaints, typically associated with the product.

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v

194

O B J E C T I V E S

PART TWO INTERPERSONAL SKILLS

KO 6-1 Explain the expectancy theory of motivation and its components.

KO 6-2 Articulate the benefi ts of rewards beyond money.

KO 6-3 Describe fi ve forms of job characteristics.

KO 6-4 Explain how improving job charac- teristics increases work motivation.

KO 6-5 Explain the conditions under which goal setting is most effective.

KO 6-6 Explain different behavioral strate- gies available to a manager apply- ing reinforcement theory.

6 Motivating Others

KNOWING DOING

“The one factor that distinguishes

a high-performing individual is

motivation. Those with high moti-

vation consistently excel and

outperform. I will always take a

modestly talented person with

a driving motivation to succeed

over a brilliant person with little

hunger in his eye.”

— Bill Carpenter, Vice

President of Human

Resources and Safety,

Diamond Chain, Inc.

After reading this chapter, you should be able to:

DO 6-1 Diagnose motivational problems. DO 6-2 Design motivating work by applying

the job characteristics model. DO 6-3 Create a motivational work environ-

ment using goal setting and rein- forcement theory.

DO 6-4 Use rewards effectively to improve motivation.

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195

> > Case: Ritz-Carlton Hotels

T here is a great line from a Dilbert cartoon suggest- ing that you do not need

a motivation program to get people to eat a chocolate chip cookie—and Dilbert is right. That is, there is no great magic in motivating highly paid people to do what they love, or to get great athletes to play hard in the championship game. The real test of motivation is getting ordinary peo- ple to provide extraordinary perfor- mance, and in the absence of any great pay or job excitement. Exam- ples of exactly that phenomenon occur daily at Ritz-Carlton hotels.

Known worldwide for consistently delivering an excellent hotel experi- ence, Ritz-Carlton managers have the diffi cult challenge of motivating their staff—ordinary people paid a relatively modest wage—to consis- tently deliver extraordinary levels of customer service. Among the strate- gies they employ are the following.

Sharing “wow stories.” Every day, employees of every department in every Ritz-Carlton hotel around the world gather for a 15-minute staff meeting where they share “wow stories.” These are true stories of employee heroics that go above and beyond conventional customer service expectations. In one, a hotel chef in Bali found special eggs and

milk for a guest with food allergies in a small grocery store in another country and had them fl own to the hotel. In another, a hotel’s laundry service failed to remove a stain on a guest’s suit before the guest left. The hotel manager fl ew to the guest’s house and personally delivered a reimbursement check for the cost of the suit. Telling stories in these pep talks accomplishes two goals. First, it reinforces the high standards of customer service the hotel strives to provide its guests. But most impor- tantly, it gives employees instant “local fame.” Employees want to be recognized in front of their peers, and giving them public recognition is a powerful motivator.

Demonstrating passion. Moods are contagious. Managers who walk around with smiles on their faces and who demonstrate passion for their jobs have an uplifting effect on others. Enthusiasm starts at the top. For example, at a recent staff meeting the supervisor was dressed

impeccably in a blue suit, white shirt, purple tie, and shined black shoes. His wardrobe communicated respect for his job and his staff. “Good morning, everyone,” he said enthusiastically. The housekeepers returned an energetic greeting. This manager was all smiles and showed respect for his team. He said they returned his commitment through their hard work.

1. Why do employees at Ritz- Carlton, who are not paid signifi - cantly more than people at other retail establishments, work so hard to provide remarkable cus- tomer service?

2. As a manager, what lessons can you draw from the Ritz-Carlton example regarding how to get people to go the extra mile?

3. Are those that go the extra mile generally paid the highest, and do such fi rms have the highest labor costs? If it is not just about the money, what is also at stake?

MOTIVATING ORDINARY PEOPLE TO BEHAVE IN EXTRAORDINARY WAYS

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1. Taking Over as Manager: Building a More Motivational Workplace You have worked as a sales representative for the last three years, and your boss has just quit. You have been asked to take over as manager of your region, and you are going to accept for two reasons. First, you would like to move up and try some- thing different and more challenging. Second, you have been very disappointed with the way your prior manager ran your sales group. He was not a good people manager and he did very little to motivate the sales representatives. More specifi cally, he let the low performers slide by, while the top performers (which you feel you are) did not seem to be recognized for their contributions. The situation was not horrible; he was not abusive or hostile in any way. But you know the group has some tal- ented people and could do much better—if only they had a motivational spark.

So how would you proceed in this situation? Where would you start? What types of things would you do to enhance moti- vation? What would be the biggest obstacles to getting this group energized? Would there be any predictable traps to avoid?

2. Dealing with the Unmotivated Person As a new employee in the accounting department, you are surprised at how few people seem willing to do more than their most basic job duties. To you, it appears ridiculous; you know all of your co-workers have college degrees and several are CPAs. Clearly, they are well paid and have excellent working conditions. When you ask a more senior employee about his apparent lack of motivation, he answers, “Well, the only reward around here for working hard is more work, so if you’re smart, you are better off just doing what you are told and fl ying under the boss’s radar. Moreover, all management tries to do is keep us from socializing and being together. I guess they feel like we cannot be trusted to give the company a fair day’s work. Just try to have a game of cards at lunch with some buddies and see what management does.” How would you diagnose this lack of motivation: Is it the people or the situation? What might be done to increase motivation in this situation?

3. Motivating in an Economic Downturn You are a successful manager in a leading commercial bank and are attending a meeting with the CEO of your fi rm. Early in the discussion, he says, “Nobody questions that employees will be happy and motivated in times of prosperity. Employees will freely give their all when they are well treated, appreciated, and compensated with full salaries and nice bonuses. The challenge for us is that we are now under extreme pressure to justify every cost. Although we are still prof- itable, salaries and bonuses are frozen and there is no way that we can continue to spend as much on our HR programs and benefi ts.”

He then looks at you and asks directly, “So given that we hope to keep morale and motivation high, what do you recom- mend? Is there anything we can do to enhance motivation and engagement without spending the money we traditionally have?”

4. Motivating People in a Foreign Country From the day you joined the fi rm, you have actively sought an international position. Last week you were fi nally assigned to be an assistant plant manager in an appliance assembly plant in Guangzhou, China. Upon learning that you got the job, your new boss has already sent you an ominous welcoming e-mail that concluded with: “I was great in the states where I knew what people want. In this place I feel like a fi sh out of water and have no idea what to do. Our productivity and quality is way off the last few months and if I do not get these folks motivated I will probably be out of a job. Can’t wait for you to arrive. Happy travels.”

How would you proceed? What would you recommend for building motivation in this foreign land and why?

5. Enriching the Boring Job You share an offi ce suite with four others. The fi ve of you are blessed to work with a secretary who is exceptional at what she does. She handles all clerical requests in the offi ce in a timely manner and with a high level of quality and presents a profes- sional image to all who visit or call in to the offi ce. The only problem is she has just come to you and said her job is boring. As she accurately points out, she is relatively isolated in her work and does the same tasks repeatedly. In addition, she rarely knows whether she is doing a really good job or how she can improve.

What makes a job enriched? What general strategies might make this job more interesting and fulfi lling? Are there rela- tively simple things you could do that might help? What personal and organizational factors need to be considered in decid- ing whether to signifi cantly change a job description and expectations? What is likely to happen if you do nothing?

MANAGE WHAT?

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CHAPTER 6 Motivating Others 197

Introduction

Not many people would argue with the statement that “motivated people are central to the success of any business.” It is reassuring to know, however, that we do not need to rely on “folksy wisdom” or generally accepted statements that have not been subjected to empirical tests. According to the National Bench- marking Study conducted by Dr. Palmer Morrel-Samuels in association with the University of Michigan, employee motivation has been found to be related to four important measures of corporate performance. More specifi cally, compa- nies with more motivated employees enjoy a stronger return on assets, higher product quality, greater customer satisfaction, and better stock returns than companies with lower levels of employee motivation.

Now that we know “motivation matters,” does this mean “case closed” and “mission accomplished”? Far from it! Of course there are piles of books, stacks of research articles, and endless video examples on how to create a motivated workforce. And despite many people having their “fi ve secrets” or “three steps” for building motivated workforces, the reality is that there is no simple formula or easy one-size-fi ts-all strategies for building motivation. Fortunately, there is a wealth of good theory and evidence that can inform motivational interventions. This evidence suggests that motivation is not just about “morale” or “happiness.” There are plenty of happy employees that do not deliver value for their fi rms. Nor is it just about compensation, perks, and benefi ts, as important as they may be. Rather, what good theory and models help us understand is how to assess the motivational conditions in any context and to recognize the full range of drivers of motivation at work.

The ultimate goal is to learn how to intelligently assess motivational condi- tions and then act in ways informed by the best theory and evidence available. Put another way, you want to learn principles that can be generalized from situ- ation to situation and that is where good theory and evidence are so important. In this chapter, we attempt to incorporate the best and most useful theories—not for the sake of knowing the theory alone—but in a way that illustrates how they might be applied to enhance motivation at work. In addition to providing guid- ance as to good examples of theory and research evidence regarding what works in the area of employee motivation, we also provide you with a few persistent myths regarding motivation. Avoiding making the errors described in Myths 6.1 is a good fi rst step.

A recurring question in discussions of motivation is “How do you motivate people?” Although this may intuitively sound like the very question you want answered, it is overly simplistic. For example, drawing a parallel to the medical fi eld, an analogous question for physicians would be “How do you heal patients?” Obviously, before doctors are able to make any informed judgment about an appropriate medical treatment, they have to understand their patients’ health and treatment history, apparent symptoms, and other specifi cs of the situation. There is certainly no one best way to heal patients.

Motivation of people is no different. As a result, the question “How do you motivate people?” should rightly be expanded to “ How do you motivate who, to do what, under what circumstances? ” That is, effective motivation strategies always depend on the people involved, their history, and context. While we can learn much from examples where supervisors succeeded using certain motiva- tional tactics (for example, frequent verbal feedback, spot bonuses, enhanced job responsibilities), the recurring trap is to assume what worked in one context with one group of people will work similarly in another. Motivating restaurant servers to “upsell” profi table offerings is very different from trying to motivate

“I consider my ability to arouse

enthusiasm among men the

greatest asset I possess. The

way to develop the best that is

in a man is by appreciation and

encouragement.”

— Charles Schwab

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PART TWO Interpersonal Skills198

new supervisors to provide regular feedback to their staffs. Similarly, motivating professionals in an accounting fi rm or law practice can be substantively different than motivating operators on a production line or mechanics on a big produc- tion job. Even more so, motivating young Chinese workers in a Shanghai factory is very different from senior engineers in a German chemical fi rm. The medical school mantra for aspiring doctors is “no treatment without diagnosis” and man- agers would do well to adopt that same motto.

So ultimately the goal of this chapter is to provide you with the information needed to motivate different types of people, to do different types of things, in different circumstances. While this is a tall order, motivation is central to great management. Before this relatively involved process can be provided, however, some frameworks are needed to help make sense of it all.

• Money is the only effective motivator. In some situations, money is one of the best methods to motivate people. In others, it is entirely ineffective. Most importantly, it is certainly not the only motivator. What will motivate always depends on the people and the situation.

• Everyone is motivated by the same things I am. Although many people share common needs and desires, different people in different situations are motivated by an extraordinary range of factors, including fi nancial gain, recognition, esteem, personal achievement, desire for equity, need to belong, fear, freedom, involvement, interesting work, and so on. What motivates one may not motivate another, and the same factor that motivates a person in one situation may not motivate that same person in a different situation.

• Punishment does not motivate. Although rarely the fi rst choice to infl uence behavior, punishment, or the threat of it, can be an effective motivator. The problem, however, is that this type of motivation tends to be short term and rarely is associated with getting people to do beyond the minimum. Its appropriateness will depend on the situation. In some cases, it may be the only or most effective consequence available, and thus it is important to learn how to most fairly administer punishment.

• Low performance is always attributable to low motivation. Any performance is a function of motivation, ability, and the opportunity to perform. So, although low motivation is a common cause of low performance, it is certainly not the sole cause. Low performers may well lack the ability or the opportunity to achieve high performance.

• Lack of motivation stems largely from lazy and apathetic people. That is sometimes the case, of course, but more often it is the situation that lacks suffi cient incentives to energize people. People labeled as unmotivated in one situation (say their job) are sometimes highly engaged and committed in another case (for example, as a Little League coach). The managerial challenge is to discover what brings out the effort in your people and to infl uence what you can.

• Smart people don’t need to be motivated. This is a dangerous myth that can have consequences well beyond what a manager may realize. Because smart people have high ability, their motivation is key to obtaining really high levels of performance. A smart, but unmotivated person may still perform at an acceptable level, but that person is capable of much more and ultimately will probably become disillusioned with the job and leave it—leaving a hole bigger than will be immediately obvious to most managers.

MYTHS 6.1 Motivation Myths? ?

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CHAPTER 6 Motivating Others 199

The Multidimensional Nature of Performance

A good place to start in our understanding of motivation is with a formula fi rst presented in the 1960s 1 that captures the relationship between motivation, abil- ity, and performance. 2

Performance 5 f (Motivation 3 Ability 3 Opportunity)

According to this simple but useful equation, any performance (job, athletic, music, academic) is a multiplicative function of your ability (“can do”), motiva- tion (“will do”), and opportunity (“get to do”). The multiplicative nature of the equation correctly captures that all three aspects are essential to performance and that one can only modestly compensate for the other.

For example, people who have high motivation and average ability to perform a task can perform at an above-average rate if given the opportunity. However, strong performance is unlikely to be present in the absence of some moderate level of all three factors. No amount of motivation can overcome a complete lack of ability, nor can great ability compensate for a dearth of motivation even when provided multiple opportunities. Thus, if someone is not performing well, a good starting point is to investigate whether the cause of the problem is an issue of motivation, ability, opportunity, or some combination of the three.

Because ability tends to remain relatively stable over time, motivation and opportunity are more subject to managerial infl uence. That is the good news. The bad news is that motivation derives from multiple sources and can be exceed- ingly complex to understand and manage. As a result, great managers devote much of their time to trying to discover what motivates their associates and to build work environments that engage those motives.

Framing Motivation Challenges and Ideas: The Expectancy Theory

It is because of the multidimensional and complex nature of motivation that an organizing theory is so important in framing and diagnosing motivational situa- tions. The best available theory of motivation for this type of practical diagnosis is expectancy theory. (See Figure  6.1 .) Expectancy theory serves as both our starting point for diagnosing and framing motivational challenges and our struc- ture for integrating a variety of other motivational models and concepts.

Expectancy theory is based on three specifi c employee beliefs:

• Expectancy • Instrumentality • Valence

Expectancy is the understanding of what performance is desired and the per- son’s belief that effort will lead to a desired level of performance. Put simply, does the person know what he has to do and will he be able to accomplish the behavior desired? Motivation will decline any time we perceive a low probability of success. For example, few of us would be motivated to study hard for a test if we did not know what material was going to be covered or felt we had no chance of passing. Your resulting expectation would be “Regardless of how hard I study, I’m not likely to perform well.” From a managerial perspective, then, expectancy beliefs point to the importance of clarifying goals and expectations, and ensuring that people have confi dence that their effort can lead to good performance.

“Never confuse will power with

firepower.”

— U.S. Marine axiom

“. . . Nothing in the world can take

the place of motivation. Talent will

not; nothing is more common than

unsuccessful people with talent.

Genius will not; unrewarded genius

is almost a proverb. Education will

not; the world is full of educated

derelicts. Motivation and determi-

nation are omnipotent.”

— Calvin Coolidge

KO 6 - 1

D O 6 - 1

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PART TWO Interpersonal Skills200

When expectancy is high, the person believes:

• “If I try, I can do it.”

• “I have the knowledge, skills, and abilities to get the job done.”

• “The goal is reasonable and if I exert myself, I am sure that I can succeed.”

In contrast, when expectancy is low, the person may believe:

• “Why bother trying, no one could make that goal.”

• “It is not even clear what my goal is, so how can I achieve it?”

• “I don’t think Superman could do what is being asked of me.”

Instrumentality is the belief that a given level of performance will lead to specifi c outcomes. Instrumentality perceptions can range from zero—everyone gets the same pay no matter how hard they work and produce—to certain—every time I sell a unit I get a 7 percent commission. Motivation will be high only when people believe that there will be meaningful consequences, positive or negative, from their efforts (or lack thereof). From a managerial perspective, instrumental- ity beliefs point to the critical importance of linking rewards directly to desired performance.

A common example of instrumentality can be seen in the distribution of stu- dent grades. If you score a 97 percent on a test, you would normally believe your teacher would assign you an A on that test. However, what would happen if the teacher told you she was giving everyone C’s on the test, no matter what score they received? In this case, your instrumentality would be zero because you would not believe your performance (your test percentage) would lead to the expected reward (the A). Your resulting motivation to get a high score would therefore be low.

When instrumentality is high, the person believes:

• “My boss has always followed through on her promises before. I am sure she will this time as well.”

• “If I sell 500, I get a $5,000 bonus.”

In contrast, when instrumentality is low, the person may believe:

• “They tell us that we will get to take vacation time after this project, but I don’t believe it. There is always another project around the corner.”

• “I don’t count on any promises around here. I’ve been burned before.”

The fi nal component of expectancy theory is valence, the value a per- son places on future outcomes. Valence is another way of saying, “What’s in it

Performance

Valence 1

Valence 2

Valence 3

Expectancy Ins

tru me

nta lity

1

Instrumentality 3

Instrumentality 2 Effort

FIGURE 6.1 Expectancy Theory

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CHAPTER 6 Motivating Others 201

for me?” Any outcome could be either desirable (for example, a chance to get involved in a project you love or getting a company car) or undesirable (being laid off, being poked repeatedly in the eye with a sharp stick). Much of what we know about motivating people is that different people will place different valences on the same outcome. Just consider the example of a company-provided cell phone. Some people would see this as a great reward and worth a great deal of effort to obtain. Others may view a company-provided phone as a headache and fear a lack of privacy and the rules associated with the phone’s use. So from a managerial perspective perhaps the greatest challenge is to fi nd those outcomes that have high valences for your target individuals.

Two important ideas of expectancy theory warrant special emphasis. First, like the ability, motivation, and opportunity equation introduced earlier, the three beliefs of expectancy theory—expectancy, instrumentality, and valence—combine multiplicatively to produce an individual’s motivating force —symbolically rep- resented as: 3

MF 5 E 3 I 3 V

Stated simply, high motivation will come only in the case of high levels of all three beliefs. Similarly, the absence of any of those three beliefs will render moti- vation low or zero. Second, always remember that expectancy theory is based on individual beliefs and perceptions, not necessarily on a manager’s beliefs or some objective reality. It will not be enough that desirable outcomes are attain- able and linked to appropriate behavior. Rather, an individual must believe that effort will lead to good performance, believe performance will be rewarded, and believe the reward to be of high value. In matters of motivation, perception is reality. Contributing to a high level of each of these employee beliefs is a critical component in increasing motivation in the workplace. Some specifi c skills for effectively using the expectancy approach are provided in Tool Kit 6.1.

Why Capable People Are Not Motivated

Some discussions of motivation focus on “slackers,” “deadwood,” and other terms to categorize those who seem disinclined to work hard. Of course, there are people who are incapable or lazy and are special motivational challenges.

“Motivation is not something you

do to people but something you

discover about them.”

— Unknown

Tool Kit 6.1 Skills Needed to Improve Motivation Using Expectancy Theory The following actions are good ways to increase the components of the expectancy formula:

• Select capable and motivated people.

• Provide necessary training.

• Show successful examples.

• Be supportive and available.

• Make the link between performance and outcome extremely clear.

• Follow through quickly.

• Make rewards proportional to effort.

• Reward based on individual preferences.

MANAGER’S TOOL KIT

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PART TWO Interpersonal Skills202

However, far more common are cases where people have the ability to perform but are not inclined to do so. We have found that one of the most useful ways to begin to diagnose motivational issues is to fi rst think about why capable people might not be highly motivated.

To illustrate, consider the case of someone who is not motivated to attend or study hard in a particular college class. An expectancy theory diagnosis would tell us the causes of low motivation likely stem from one or more of three beliefs: (1) the student is unsure about what will lead to high grades or doesn’t think her effort will lead to mastering the subject (low expectancy); (2) she doesn’t believe the professor will give her a good grade even if she performs well (low instru- mentality); or (3) she doesn’t value a high grade or fear a low grade in the class (low valence). Additional steps in diagnosing motivational problems can be seen in Tool Kit 6.2.

This diagnosis concisely frames the potential belief pattern of low-motivated students. The motivational challenge for an instructor is to fi nd out which beliefs exist in any particular case and to focus intervention strategies accordingly. Per- haps the biggest trap is to create a motivational strategy geared to beliefs that do not exist. It is always critically important to test your assumptions and uncover the real causes of low motivation. To revisit the parallels from the medical world: “No treatment without diagnosis.”

Although expectancy theory is exceptionally useful in framing motiva- tion challenges, it hardly provides all the answers. That is, understanding that high-valence beliefs will be critical to motivate the students in the preceding illustration does not address just what might make different students value attending class if it is not grades. Similarly, recognizing that instrumentality is a key element in motivation does not specify the different types of con- sequences and how they might best be administered in different academic settings. Likewise, appreciating the importance of clear expectations and con- fi dence does not provide specifi c guidance on how to enhance expectancy in various contexts.

Tool Kit 6.2 Diagnosing Motivational Problems Given the complexity of motivational problems, here are some important questions that will help guide you through the diagnostic process.

• Are goals and performance expectations clearly communicated and understood?

• Does the person (or people) in question have the skills, training, and self-confi dence needed to perform as asked?

• Is performance rewarded clearly and in a timely fashion? Does the person have strong reason to believe that if the work is performed, the outcome will be delivered?

• Is the outcome important to the person? Do I really know what that person values at this point in time, and how do I know it? Am I offering something that person has told me he or she values?

• Are rewards proportional to effort and administered in a direct and timely way? Have you made sure that the outcomes are proportional to the effort needed?

• Is the job designed to maximize the core job dimensions? What can be done to make the job more motivating?

MANAGER’S TOOL KIT

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CHAPTER 6 Motivating Others 203

While many discussions of motivation tend to get mired solely in money and fi nancial rewards, the reality is that there are many additional drivers of motiva- tion. Some of those drivers derive from the person, while others are more a func- tion of managerial action or characteristics of the job. In this regard, we like to use a “bucket” analogy of motivation (see Figure 6.2 ). When a person’s bucket is full, she is optimally motivated, and assuming suffi cient ability, performance will follow. When a person’s bucket is low, greater managerial effort will be required to fi ll that bucket. As depicted in Figure 6.2 , there are three primary faucets or sources available to fi ll an employee’s motivational bucket, each one helping to improve employees’ expectancy, instrumentality, and valence beliefs: (1) personal drives, (2) the job or work itself, and (3) managerial actions. Obviously, turning on all of the faucets at once fi lls an employee’s bucket more quickly. But in many cases, such a “fl ood” of motivation is not necessary. We review and synthesize these major sources of motivation in the following sections.

The Person as a Source of Motivation

One source of motivation stems from a person’s own motivational drives or needs. Infl uential theories of human needs include equity theory and David McClelland’s model of learned needs.

KO 6 - 2

Person

Manager

Job

Motivation

FIGURE 6.2 The Bucket Analogy of Motivation: Key Sources

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PART TWO Interpersonal Skills204

An Equity Approach to Motivation

Equity refers to workers’ perceptions of the fairness of outcomes they receive on the job. 4 These personal equity judgments are based on a social compar- ison by which people compare what they are getting out of their job (their outcomes) to what they are putting into their job (inputs). Outcomes include things like pay, fringe benefi ts, increased responsibility, and prestige, while inputs may include hours worked and work quality, as well as education and experience. The ratio of outcomes to inputs is then compared to correspond- ing ratios of their comparison group. The outcome of this comparison is the basis for beliefs about fairness. 5 See Figure 6.3 for an overall representation of equity theory.

Potential Actions to Restore Equity

When people experience inequity, they will take some action to restore balance. Consider the case of a person who is paid $40,000 a year and then fi nds out his co-worker is making $48,000 for doing the same job and their respective inputs (education, job tenure, skills, and so on) are the same. How will the lower-paid person react? In all likelihood, the employee will take action to restore a sense of fairness. A person who wishes to restore a sense of equity on the job has multiple options, including both behavioral and perceptual actions.

Behaviorally, workers can increase their outcomes (by, say, requesting a pay raise) or decrease their efforts (take longer lunch breaks, or fi nd ways to avoid work) to balance the equity equation. Perceptually, they may rationalize they weren’t working as hard as they thought, thus reducing the perceived value of their own inputs. Further, they might convince themselves that co-workers are actually working harder than they thought. It is diffi cult to predict exactly how a person will react, but as you can see, few of the choices are really great ones for the person or for the company. Equity perceptions can be surprisingly impor- tant in organizations and even nature. Equity is so central an issue that it is even of substantial importance to brown capuchin monkeys! (See Management Live 6.1.)

“Ethics and equity and the prin-

ciples of justice do not change

with the calendar.”

— D. H. Lawrence

FIGURE 6.3 The Equity Theory Diagram

Scales “calibrated” and measured against comparable references

Inputs Outcomes

People become demotivated, reduce input, and/or seek change/ improvement whenever they feel their inputs are not being fairly rewarded.

pay, bonus,

perks, benefits, security, recognition,

interest, development, reputation, praise,

responsibility, enjoyment, etc.

performance, time, effort,

ability, loyalty, tolerance, flexibility,

commitment, reliability, personal sacrifice, etc.

Source: Adapted from Adams (1963).

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CHAPTER 6 Motivating Others 205

Equity Sensitivity

While equity may seem like a relatively objective phenomenon, in truth what different people see as equitable can vary signifi cantly. In fact, an emerging body of research is fi nding that people differ signifi cantly in what is called equity sensitivity. 7 Research has found that those high in equity sensitivity are more outcome-oriented and want more than others for the same level of inputs. Those low in equity sensitivity pay more attention to their inputs and are less sensi- tive to equity issues. Additional fi ndings suggest people who are high in equity sensitivity place a great deal of importance on extrinsic outcomes such as pay, status, and fringe benefi ts. 8 Employees with low equity sensitivity place more importance on intrinsic outcomes such as feelings of personal worth, using one’s abilities, and a sense of personal accomplishment. To better understand your own equity sensitivity and that of others, consult Tool Kit 6.3.

What Managers Need to Do to Maintain Equity

The most important and challenging thing about equity is that we are dealing with both our own perceptions and the perceptions of other people, and those may not be the same. As a result, even if you perceive a serious injustice, oth- ers may not be aware of it or may consider the inequity trivial. Great managers monitor and constantly use reality checks to gauge associates’ perceptions of equity. By asking others about equity issues—“Do you feel that promotion was fair? Why or why not?” or “What types of behaviors should be valued here?”—top managers realize they will be better able to manage equity perceptions and be more aware of treatment that may de-motivate workers.

An understanding of equity theory is why excellent managers do not treat or reward all workers the same. That’s right—great managers do not treat all people equally but, rather, fairly! Consider this for a minute. If managers provide the same treatment and rewards to everyone, then by defi nition the managers treat everyone as being “average.” What workers would feel like they are being treated

“Fairness is what justice really is.”

— Potter Stewart

“These men ask for just the same

thing—fairness, and fairness only.

This, so far as in my power, they,

and all others, shall have.”

— Abraham Lincoln

MANAGEMENT LIVE 6.1

Equity Is Also Monkey Business6

Even monkeys expect a fair day’s pay for a fair day’s work. Inspired by a history of work showing that humans inherently reject unfairness, Sarah Brosnan of Emory University wondered whether this was also true for capu- chin monkeys. Brosnan designed an experiment that put two capuchin monkeys together where they were trained to exchange a small rock with human handlers to receive a reward—in most cases, a piece of cucum- ber. Brosnan points out that, while this may sound very simple, “not very many species are willing to relinquish things, especially intentionally.”

Partners of monkeys who willingly exchanged received either the exact same reward (a cucumber slice) or a more desirable reward (a grape) for the same work or, in some instances, for doing no work at all. Brosnan observed that those monkeys who saw unfair treatment and failed to benefi t from it were ultimately less likely to trade with the handlers in the future. Moreover, the monkeys who had been treated unfairly would often not eat the cucumbers they received and, in other cases, actually threw the cucumbers at the researchers!

While humorous at one level, the results are a powerful confi rmation of the infl uence of equity perceptions. Not only did monkeys expect fair treatment and reject a desirable food item as a result of inequity, but the human desire for equity seems to have a very deep-seeded basis that even occurs in other primates.

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PART TWO Interpersonal Skills206

MANAGER’S TOOL KIT

fairly under this system? Poor performers may prefer this system but would have little reason to improve their performance. Average performers would feel equitably treated and likely maintain their level of motivation. High performers would see substantial inequity when everyone is treated equally. As a result, the high performers would be motivated to either reduce their inputs, seek more outcomes (which they will not be able to receive when everyone is rewarded the same), or leave to seek equity elsewhere. If we let a system of equality run to its logical conclusion, we will have all low and average performers. Treating every- one the same is not a prescription for great management. In fact, it is a great recipe for mediocrity or worse.

The Platinum Rule

The lasting lesson is that even the best-intentioned managers often confuse the intuitive idea of equality with the real issue at hand—fairness. Therefore, we encourage you to follow this simple rule, often referred to as the platinum rule (a variation on the golden rule), which states: “Treat others how they wish to be treated.” That is, each employee may require a slightly different approach to ensure his or her perceptions of fairness are met, which in the end is entirely

Tool Kit 6.3 Equity Sensitivity Measure9

In Any Organization I Might Work For:

1. It would be more important for me to:

_____ A. Get from the organization.

_____ B. Give to the organization.

2. It would be more important for me to:

_____ A. Help others.

_____ B. Watch out for my own good.

3. I would be more concerned about:

_____ A. What I received from the organization.

_____ B. What I contributed to the organization.

4. The hard work I would do should:

_____ A. Benefi t the organization.

_____ B. Benefi t me.

5. My personal philosophy in dealing with the organization would be:

_____ A. If I don’t look out for myself, nobody else will.

_____ B. It’s better for me to give than to receive.

Scoring. Answering 1A, 2B, 3A, 4B, and 5A all indicate being equity sensitive. 1B, 2A, 3B, 4A, and 5B indicate you are not equity sensitive.

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CHAPTER 6 Motivating Others 207

appropriate and highly effective to ensure motivation remains high. To further reinforce the idea that different people are motivated differently, a brief synthesis of the work of David McClelland follows.

McClelland’s Learned Needs

David C. McClelland found that people would do well to learn the predominant needs in themselves and in others in order to fi nd those roles and situations where success is most likely. 10 McClelland focused specifi cally on three needs or motives: achievement, affi liation, and power. Although we all have these needs, McClelland noted that people tend to have one need that is most dominant. We can use McClelland’s simple framework to provide some structure around the questions of “What do I need from work?” and “What motivates others?” Whether the focus is on you or others, the three basic needs remain the same: the need for achievement, need for affi liation, and need for power ( Figure 6.4 ).

What Do I Need from Work?

McClelland’s research suggests that motivational needs are an important predic- tor of who will be an effective manager. 11 For example, McClelland argues a high need for affi liation can often be problematic for managers. Since being liked is the dominant motive underlying the affi liation-oriented manager’s actions, these managers may have diffi culty resolving confl icts and be more likely to make exceptions to make people happy. A manager with a dominant need for affi li- ation may not be inclined to take decisive action when an unpopular course of action is warranted (for example, have people work late to fi nish an important project).

Further, McClelland argues that, while a high need for power will produce a strong work ethic and commitment to the organization, people possessing this drive may not possess the required fl exibility and people-centered skills to be effective in leadership roles. Perhaps most importantly, McClelland argues that people with strong achievement motivation make the best leaders, although they can have a tendency to demand too much of their staff in the belief that they are all similarly and highly achievement-focused and results-driven. Maybe not too surprisingly, different personal profi les tend to gravitate toward different jobs. Some examples of these can be seen in Table 6.1 .

FIGURE 6.4 McClelland’s Theory of Needs

100

75

50

25

0 Achievement Affiliation

Motivation Profile

Power (Persuasion)

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PART TWO Interpersonal Skills208

What Motivates Others? When it comes to addressing the question—“What motivates others?”—McClelland’s model provides us with a nice framework for diagnosing basic motivational needs. Of course, the challenge in diagnosing needs is we can’t see them. We can only infer them from a person’s observable behavior. As a result, great managers pay very close attention to the behavior of people around them. Unfortunately, as Table  6.2 demonstrates, most of us are inaccurate judges of what other people want. The only real way to know is to pay attention and to ask people directly.

In explaining how different needs impact the way people behave, McClelland recounted a story about 450 workers who had been put out of work in Erie, Pennsylvania. 12 Most of the newly unemployed workers stayed at home for a while and then checked with the employment service to see if their old jobs or similar ones were available. But a small minority behaved very differently; the day they were laid off, they started job hunting. They checked both national and local employment offi ces; they studied the Help Wanted sections of the papers; they checked through their union, their churches, and various fraternal organi- zations; they looked into training courses to learn a new skill; they even left town to look for work, while the majority when questioned said they would not under

“The difference between a suc-

cessful person and others is not

a lack of strength, not a lack of

knowledge, but rather in a lack

of will.”

— Vincent T. Lombardi

TABLE 6.1 Typical Needs Profi les

Position Achievement Affi liation Power

Sales Very high Low Somewhat high

Entrepreneur Very high Very low Somewhat low

Corporate Manager Somewhat high Somewhat low Very high

Politician High Somewhat low Very high

Support Staff Somewhat low Very high Somewhat low

Information Systems Very high Very low Low

TABLE 6.2 What Do Employees Want?

What Employees Want Items What Employers Think Employees Want

1 Interesting work 5

2 Appreciation of work 8

3 Feeling ”in on things” 10

4 Job security 2

5 Good wages 1

6 Promotion/growth 3

7 Good working conditions 4

8 Personal loyalty 6

9 Tactful discipline 7

10 Sympathetic help with problems

9

Source: Reprinted from Business Horizons, Vol. 30, No. 5, by Kenneth A. Kovach, “What Motivates Employees? Workers and Supervisors Give Different Answers,” pp. 58–75. Copyright © 1969, with per- mission from Elsevier.

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CHAPTER 6 Motivating Others 209

any circumstances move away to obtain a job. Obviously, the members of the active minority were differently motivated.

Achievement-motivated people thrive on pursuing and attaining goals. They have a desire to do something better or more effi ciently, solve problems, or mas- ter complex tasks. They like to be able to control situations. They take moderate, calculated risks. They like to get immediate feedback on how they have done and tend to be preoccupied with a task orientation toward the job to be done. McClelland describes the self-motivated achiever as a person with a tendency to think about ways to accomplish something diffi cult and signifi cant when he is not being required to think about anything in particular—that is, when he is free to relax and let his or her mind just “idle.” The self-motivated achiever tends to set goals and prefers tasks that provide feedback. Achievers strive to reach goals and measure success in terms of what those efforts have accomplished. They learn to set challenging but achievable goals for themselves and for their jobs and, when they achieve them, to set new goals.

Power-motivated individuals see most work situations as an opportunity to infl uence other people or to take control. Generally, people with strong power motives have the desire to control others, infl uence their behavior, and be respon- sible for them. Often these people will volunteer for leadership positions, recom- mend changes whether or not they are needed, and are very willing to assert themselves when a decision needs to be made. In an organizational sense, the need for power is the need to manage the behavior of others in order to achieve goals. A high need for power does not necessarily imply autocratic, tyrannical behavior, but rather a need to have impact, to be infl uential, and to be effective in achieving goals. People who spend their time thinking about how to infl uence others, how to mount arguments, and how to change other people’s behavior toward organizational goals are exhibiting a high need for power.

Affi liation-motivated people have the desire to establish and maintain friendly and warm relations with others. Individuals who enjoy helping others, are con- cerned with the growth and development of subordinates, are fond of spending time in lengthy conversations, and are good listeners tend to have a high need for affi liation. Some people with strong affi liation motives can be distracted from their work, as work can often take a backseat to the social environment. That is, the social environment may not just be viewed as a means of getting work done; it may be viewed as being more important than getting work done. They will usu- ally respond to an appeal for cooperation and generally like to be part of a group. They prefer to share in accomplishments rather than to take individual initiative and sole responsibility. They are often presented with opportunities to capitalize on, and take credit for, ideas and actions they conceived and initiated, but gener- ally do not have a high need for recognition for individual achievement and are often quite happy to have their group or department receive the credit.

Applying the Learned Needs in the Workplace

While the research is clear that different people have different needs, the skill challenge for you is how to apply that evidence in the workplace. The idea that people have a dominant need (achievement, affi liation, power) should provide you a starting place by giving you an understanding of what is in each indi- vidual’s “motivational bucket.” For example, people with a high need for achieve- ment are going to start off with their buckets being more full than other people. So your fi rst job with each employee is to get under the surface and determine how much of the bucket needs to be fi lled or to understand what sources of moti- vation you will need, because some employees will be starting with practically empty buckets while others will have a good head start on having their buckets full. McClelland, therefore, offers a helpful tool for understanding an important source of motivation—that is, the person as the source of motivation.

“Achievement is largely the prod-

uct of steadily raising one’s levels

of aspiration . . . and expectation.”

— Jack Nicklaus

“Most people give up just when

they’re about to achieve success.

They quit on the one-yard line.

They give up at the last minute of

the game, one foot from a winning

touchdown.”

— Ross Perot

“Power is the ultimate

aphrodisiac.”

— Henry Kissinger

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PART TWO Interpersonal Skills210

While equity theory and McClelland’s learned needs were covered in detail here, this should not suggest that other motivational scholars and approaches are somehow less important or less “correct.” From an applied perspective, how- ever, we consider these two approaches most central. To get a brief summary of a number of other important perspectives and how these frameworks can assist you, look at Table 6.3 .

TABLE 6.3 Key Takeaways from Popular Motivation Theories and Writing

Many students of organizational behavior, and prospective or current managers, rightfully fi nd the existing collection of motivational theories and models to be a bit confusing—if not downright bewildering. Moreover, some theories have little actual research support, others fall out of current favor, and others are supplanted because the insights they provided have infl uenced, and been incorporated by, further generations of management theorists and practitioners.

Nonetheless, our view is that, if a theory has gained popular acclaim, or stood the test of time in textbooks and other sources, it probably has at least a gem or two of an idea that has value. Many such theories do not warrant full coverage or a deep dive into the specifi cs in a text like this, but we felt it worth synthesizing several of those that frequently make their way into discussions of motivation topics. In that spirit, this table is a brief synthesis of the key takeaways from some of the more popular theories you may have studied or heard of (or will become familiar with in the course of your education and career).

Maslow’s Hierarchy of Needs. The same people can be motivated by different needs at different times. In Maslow’s heirarchy of needs, the most basic needs are breathing, food, water, and shelter and top out with higher human desires such as morality, creativity, spontaneity, and problem solving. The peak of the hierarchy is called self- actualization. Humans are most motivated by higher pursuits and will not stay content for long with work that only fulfi lls their basic needs. Research Evidence: Has been largely discredited through research. Did provide important ideas that were built upon by others (mainly that intrinsic rewards are very important), but specifi cs were incorrect.

Alderfer’s ERG Theory. Alderfer took Maslow’s model and tried to align it with research evidence (Maslow’s research has not held up well under testing). As a result, Alderfer presented his ERG theory, where Maslow’s fi ve needs are collapsed into three needs called existence, related, and growth. Alderfer’s ERG theory demonstrates that more than one need may motivate at the same time. A lower motivator need not be satisfi ed before other needs are motivating. As a result, the ERG theory accounts for differences in need preferences between cultures better than Maslow’s Needs Hierarchy because the order of needs can be different for different people. This fl exibility accounts for a wider range of observed behaviors. For example, it can explain the “struggling musician” who may place growth needs above those of existence. Finally, the ERG theory acknowledges that if a higher-order need is frustrated, an individual may regress to increase the satisfaction of a lower-order need that appears easier to satisfy. This is known as the frustration-regression principle. Research Evidence: The structure of the three needs has received support, but measurement issues have prevented some other specifi c claims from being validated.

McGregor’s Theory of X and Y. Douglas McGregor suggested that there are two fundamental approaches to managing people: Theory X and Theory Y. Theory X holds that the average person dislikes work and will avoid it if he/she can; must be forced with the threat of punishment to work toward organizational objectives; prefers to be directed and avoids responsibility; and wants security above all else.

In contrast, Theory Y holds that effort in work is as natural as work and play: people will apply self-control and self-direction in the pursuit of organizational objectives and do so without external control or the threat of punishment. Further, commitment to objectives is a function of rewards associated with their achievement, and people usually accept and often seek responsibility.

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CHAPTER 6 Motivating Others 211

Now that we have identifi ed a few important sources of motivation from the “employee bucket,” we will shift attention over to the job as a source of motivation.

The Job as a Source of Motivation

The Job Characteristics Model

We have now seen that how people should be motivated can differ based on the person. Richard Hackman and Greg Oldham have presented an intuitive, prac- tical, and evidence-based model of how motivation can stem from the job or

KO 6 - 3

KO 6 - 4

D O 6 - 2

McGregor argued that many managers tend toward Theory X, and generally get poor results. Enlightened managers use Theory Y, which produces better performance and results, and allows people to grow and develop. Research Evidence: Since the Theory of X and Y is more a typology and has fewer predictions than the other theories, it has not been tested as rigorously.

Herzberg’s Two-Factor Theory. The two factors that comprise Herzberg’s theory are hygiene and motivation. Hygiene factors include working conditions, quality of supervision, salary, security, and interpersonal relations. Motivation factors, such as achievement, recognition, advancement, and growth on the job, are needed in order to motivate an employee into higher performance. Herzberg’s most infl uential idea was that his two sets of factors are independent and not just two ends of one scale. Thus, it is possible to be satisfi ed at work even though the working conditions are poor, and it is possible to be relatively content with the latter even though you may not be very motivated to put in any extra effort. Importantly, Herzberg’s work focused attention on the work itself, and this was an important precursor to job characteristics theory. Research Evidence: Herzberg’s fi ndings have been duplicated by some researchers but have been criticized as being “method bound”13 (in other words, the results only hold up when the research is conducted in a specifi c manner and are not generally robust).

Deci’s Cognitive Evaluation Theory. In a similar vein as Herzberg and Maslow, Edward Deci suggested that there are intrinsic and extrinsic motivators, and one or the other of these may be a more powerful motivator for a given individual. Intrinsically motivated individuals perform for their own achievement and satisfaction. If they come to believe they are doing a job because of the pay or the working conditions or some other extrinsic reason, they begin to lose motivation.

The belief is that the presence of powerful extrinsic motivators can actually reduce a person’s intrinsic motivation, particularly if the extrinsic motivators are perceived by the person to be controlled by people. In other words, a boss who is always dangling this reward or wielding that stick will turn off intrinsically motivated people. Research Evidence: Research has been decidedly mixed, and cognitive evaluation theory has remained relatively controversial since it was introduced.

Daniel Pink’s Fundamentals of Drive. Building on the tradition of Maslow, Herzberg, and Deci, Pink boils down motivation into three elements: (1) autonomy, the desire to direct our own lives; (2) mastery, the desire to continually improve at something that matters; and (3) purpose, the desire to do things in service of something larger than ourselves.

Pink warns that traditional carrot-and-stick methods, in which companies use a particular incentive—often money—as a contingent reward for a task, are not only ineffective for motivating employees, but potentially harmful. He offers up his model for corporations that he says will tap into true motivation, yield higher satisfaction among employees, and deliver stronger results. Research Evidence: Pink’s drive approach is synthesis of other existing research, but it has not been well tested at this point. Considering that it is similar to the job characteristics theory in important ways (and the job characteristics theory has received very strong research support), it likely has signifi cant merit. A weakness may be its equally tight link to cognitive evaluation theory, which may limit some applicability.

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PART TWO Interpersonal Skills212

work itself. 14 This addresses the second source for fi lling a person’s motivational “bucket.” Their job characteristics model (JCM) provides a relatively simple yet powerful explanation of why some jobs are more motivating than others and how the motivation potential of a job can be enriched. The model has proven so applicable it is among the most widely referenced frameworks in the manage- ment fi eld.

The details of the job characteristics model are important to applying it on the job. As a result, they are presented in some detail next. Even more than the details of the model, it is important to think about the real importance of having people do work that they “love” to do. When people are matched to a job that really “fi ts” them, most of the problems associated with “unmotivated” or “lazy” people disappear. If people are doing work they love, the job itself becomes the major motivator and fi lls the motivational bucket up in ways that a manager rarely can. So what we are really in quest of is fi guring out the characteristics that make someone love his or her job. Now, it is important to realize that there are some jobs that people are just never going to love (for example, the authors doubt that many people love being sewer inspectors or toll booth workers), but in the vast majority of cases, work can be made signifi cantly better.

The JCM identifi es fi ve core job dimensions —the vital characteristics of the work itself—and proposes a link between those and the psychological states experienced by the worker. In Figure  6.5 , the relationship between the core job dimensions, the psychological states they infl uence, and their subsequent

Practice this! Go to www.baldwin2e.com

FIGURE 6.5 The Bucket Analogy of Motivation: Key Sources

Person

Manager

Job

Motivation

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CHAPTER 6 Motivating Others 213

outcomes is illustrated. As can be seen in Figure 6.6 , well-designed work can lead to high-quality work performance, high levels of motivation, low absenteeism and turnover, and increased job satisfaction. See Table 6.4 for some examples of jobs with varying degrees of the core job dimensions.

To further understand the JCM and how it can help isolate desirable motiva- tional perceptions to fi ll a signifi cant portion of the motivation bucket, we need to further explain the model. People experience a job as more motivating when the job has a high degree of:

• Skill variety, or the range in number of skills used to complete the job tasks (conceptual, physical, technical, people skills). Astronauts have a high degree of skill variety stemming from their need to be technically profi cient, be in great physical shape, and be good at problem solving.

• Task identity, or the degree to which the job requires completion of a whole or identifi able piece of work. Artists enjoy very high task identity because they see their work through from beginning to end.

“When they believe in the com-

pany and in what they are doing,

employees tend to pitch in and

do what it takes to succeed even

when it means working longer and

harder.”

— Roger Ballou, President

and CEO, CDI Corp.

FIGURE 6.6 The Job Characteristics Model

Personal and Work Outcomes

Core Job Dimensions

Critical Psychological States

Strength of Employee Growth Need

Skill variety Task identity

Task significance

Autonomy

Feedback

Experienced meaningfulness

of the work

Experienced responsibility for work outcomes

Knowledge of the actual results of the

work activities

High internal work motivation

High-quality work performance

High satisfaction with the work

Low absenteeism and turnover

TABLE 6.4 Examples of Jobs with Varying Degrees of the Core Job Dimensions

Job Characteristics “High” Examples “Low” Examples

Skill Variety Plant manager, elementary school teacher, astronaut

Data entry clerk, assembly worker, computer programmer

Task Identity Sales account manager, attorney, artist, carpenter

Insurance underwriter, restaurant host or hostess

Task Signifi cance Medical doctor, nurse, social worker

Telemarketer, data entry clerk

Autonomy Self-employed, salesperson, computer programmer

Auditor, police offi cer, military

Feedback Telemarketer, medical professional, stand-up comic

Retail sales clerk

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PART TWO Interpersonal Skills214

• Task signifi cance, or the degree to which the job has a direct effect on the work or lives of other people. For instance, surgeons perform a job with very high task signifi cance.

• Autonomy, or the freedom to select how and when particular tasks are performed. As one of our colleagues likes to say, “If you have to ask per- mission to go to the bathroom, it’s not likely you will experience high autonomy on the job.” Professors, for example, have highly autonomous jobs, while manufacturing workers often have rather low autonomy.

• Feedback, or the degree to which individuals receive knowledge of their results from the job itself. Workers with jobs high in feedback normally receive feedback frequently and from multiple sources. Stand-up comics have a high degree of feedback on their job; they immediately know the results of their work.

Because these core job characteristics ultimately infl uence employee moti- vation and satisfaction on the job, enhancing core job dimensions will enhance employee motivation. When employee motivation is enhanced, both employees and managers are better off. Employees are better off because they have a job they fi nd more interesting and satisfying. Managers and the organization are bet- ter off because high employee motivation is associated with reduced turnover and absenteeism, increased quantity of performance, and improved quality. In addition, maximizing employees’ core job dimensions increases their intrinsic motivation and reduces the time a manager spends supervising their work. So enhancing a job really does create a situation where everybody wins.

Using the JCM on the Job

The JCM also provides direct implications for enriching poorly designed or bor- ing jobs. When the JCM was developed in the 1970s, it was primarily used to improve repetitive assembly line work in manufacturing settings. It is important to realize, however, that the JCM is applicable across the entire spectrum of jobs. For example, a recent study 15 used the JCM to redesign jobs of customer service representatives in a technical service call center. Findings indicated the call cen- ter workers responded quite well to the job redesign efforts. More specifi cally, after the intervention, the number of successfully solved problems signifi cantly increased as did the overall customer service score. At the same time, the per- centage of repeat calls needed and the percentage of calls escalated to a higher level decreased similarly.

An important part of that job redesign effort was a new process to facilitate learning called the “hot seat.” The hot seat was devised to enable specialists to spend a portion of their time off the phones and working on problems on their own without interruption. The specialists worked three days on the phone (in the hot seat) and then two days off the phone working on problems they had been unable to solve. The result was a more in-depth understanding of the problems, problems being solved quicker, and problems being solved right the fi rst time.

The MPS Formula

One feature that makes the JCM so user-friendly is its specifi cation of the fi ve core job dimensions and how they can be combined into an equation calculating the motivation potential score (MPS) for any job. The equation is provided in Figure 6.7 .

FIGURE 6.7 The MPS Equation

MPS = Variety + Identity + Significance

3 3 Autonomy 3 Feedback

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CHAPTER 6 Motivating Others 215

Within this equation, the properties of multiplication are again very impor- tant (as they were in expectancy theory). That is, the absence of any of the core job dimensions is magnifi ed in the model. To improve the motivating potential score of a job then, it is important to consider each of the fi ve elements since a lack of any can be detrimental to the motivating potential. Before we discuss how to increase the core job dimensions, there is an important caveat. If an employee does not have a need for growth, attempts to make a job more motivating will fail. The theory and use of the model is based on the assumption that people want their jobs to be more motivating. This may well be true for many people, but it is important to acknowledge that not all employees would look favorably on interventions to enrich their jobs. More specifi cally, employees with a low growth need strength may be very content to work in a relatively unenriched environment.

JCM Interventions: How to Enrich Boring Work

As noted, in addition to identifying the core dimensions themselves, Hackman and Oldham further outlined a set of interventions shown to infl uence the MPS. These fi ve interventions provide a blueprint for designing more fulfi lling work (see Table 6.5 ). The fi rst intervention is to combine tasks. A combination of tasks

TABLE 6.5 Implementing Concepts for the Job Characteristics Model

Job-Enriching Technique Enhances . . .

Combine Tasks Skill variety, task identity, task signifi cance

Form Natural Work Units Task identity, task signifi cance

Establish Client Relationships Skill variety, task identity, autonomy, feedback

Vertically Load Jobs Autonomy, task identity

Open Feedback Channels Feedback

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PART TWO Interpersonal Skills216

leads to a more challenging and complex work assignment because it requires people to use a wider variety of skills. Newport Corp. in Irvine, California, 16 emphasizes its training and cross-training programs, which include combining tasks. Newport employees participate and are involved in both classroom and on-the-job training programs to stay current with the latest manufacturing and assembly techniques. The cross-training program adds to the workforce’s adapt- ability and fl exibility, allowing for smooth transitions between varied production volumes. A more fl exible workforce simultaneously reduces costs and makes jobs more meaningful to the people performing them.

A related strategy is to form natural work units. Natural work units are imple- mented so that task identity and task signifi cance can be increased. This is the basic idea behind the use of the manufacturing cell, instead of straight assembly lines. For years, Volvo has built cars in small groups of employees referred to as cells. 17 These cells are responsible for an entire component of the vehicle, for example, the interior or the engine.

The third technique for enhancing jobs is to establish client relationships. A client relationship involves an ongoing personal relationship between an employee and the client or customer. This relationship can increase autonomy, task identity, skill variety, and feedback. Enhancing jobs in this way has been an important part of the success of Wainwright Industries, St. Peters, Missouri. 18 Wainwright employees serve as customer champions, interfacing with customers and solving problems for them. Any score below 95 percent on a customer satis- faction measure results in a customer champion assembling a cross-functional team, which then develops an action plan within 48 hours. This close personal relationship between employees and customers aids in fast and accurate prob- lem resolution.

The fourth suggestion, vertically load jobs, refers to giving increased author- ity to workers for making job-related decisions. In reality, vertical loading can be thought of as being synonymous with employee empowerment. That is, workers and their bosses share responsibility. As supervisors delegate more authority and responsibility, their subordinates perceive increases in autonomy, account- ability, and task identity. At Phelps County Bank in Rolla, Missouri, 19 an exten- sive training program was set up to give employee owners the motivation and tools to take responsibility for the business. Management established classes in problem solving and fi nancial statement analysis, as well as tutorials where departments exchanged information with each other about their products and services. Employee-owners went through cross-training days where, for exam- ple, tellers would inform loan department staff about their roles and responsi- bilities. As a result of these efforts, employees became more empowered to deal with customer problems on the spot, without having to seek time-consuming approval from management or advice from colleagues.

The last intervention for improving job design is to open feedback channels. Feedback is important because workers need to know how well or how poorly they are performing their jobs if improvement is expected. Some jobs are blessed with immediate feedback; for example, a comedian knows within seconds whether or not her material was funny and an Olympic sprinter knows in an instant whether he won or lost a race. For most jobs, however, the problem is receiving too little feedback with few obvious mechanisms available to generate such feedback. When people receive timely and useful feedback, they are best able to adapt their behavior to achieve the highest performance. Karrie Jerman, human resources representative at Colorado Springs, Colorado–based Hamilton Standard Commercial Aircraft, says that 360-degree appraisals (a key tool used to open feedback channels) are imperative. “The thing we gain the most is input from so many people that know the employee’s work. Now their peers and cus- tomers give feedback,” says Jerman. “They feel it’s more fair.” 20

“Most employees have an oppor-

tunity to work a rally and do demo

rides. They are encouraged to talk

to the customers to get a better

understanding of their needs and

expectations, and how they feel

about the product.”

— Ron Mundt, Director of

Service Support Operations,

Harley-Davidson

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CHAPTER 6 Motivating Others 217

Overall, job design interventions have achieved impressive results. Firms that have undergone job redesign efforts typically report higher productivity, higher work quality, improved worker satisfaction, and less absenteeism. Understand- ing how to create a motivating job, not just a motivated person, is an important tool in the repertoire of any great manager.

The Manager as a Source of Motivation

While many “textbook treatments” to understanding motivation start with man- agers, we see it as the ending point. This point ties directly into the idea that there cannot be effective treatment without diagnosis. If we are really going to address the questions raised at the beginning of this chapter (“ How do you motivate who, to do what, under what circumstances? ”), we need to view the actions of the man- ager as coming “last.”

We have addressed two parts of our metaphorical bucket, and these ideas have presented us with two major portions of the motivational puzzle. We have seen that some people (people with high needs for achievement) will likely be more motivated to perform in a wide array of settings. We can see that people who have other dominant needs (power or affi liation) will benefi t greatly from that which fi ts their needs well and has a high motivating potential. We can also see that all people need to be treated equitably and that certain people are more sensitive to inequities than are others.

In cases where the bucket is not able to be fi lled very readily through the job or the person, it will rest upon the manager to provide the bulk of employee moti- vation (see Figure 6.8). It is not an accident that the previous statement sounds like using the manager as the primary source of motivation is a last resort. In many ways, it should be a last resort, and in many cases it is exactly this environ- ment of last resort that managers are brought into. Consequently, it is also these situations where the actions of the managers are extremely important, because they are faced with a nearly empty bucket and need to get it fi lled to an adequate level. Going back to the expectancy approach described at the beginning of the chapter provides a good place to look for answers and, again, research has pro- vided us with some useful ones.

Multiple models exist that offer ideas for managers to affect the expectancy and instrumentality beliefs of their people. Perhaps the two most universally rec- ognized, evidence-based, and applicable theories are goal setting and behavior modifi cation.

Goal Setting

Simply stated, the goal-setting effect is that specifi c, diffi cult, but attainable goals lead to higher performance than no goals or “do your best” goals. In decades of research, scholars Ed Locke and Gary Latham 21 have convincingly argued and demonstrated with multiple studies that “the benefi cial effect of goal setting on task performance is one of the most robust and replicable fi ndings in the psy- chological literature.” Goal setting is the most effi cient and effective way to both clearly convey expectations and motivate people to achieve them.

According to Gary Latham, 22 goals work for at least three specifi c reasons. First, goals direct behavior toward goal-relevant behavior and away from other behaviors. Second, goals energize and increase the persistence of a person. They provide a standard against which people can continually compare their performance, thereby increasing the striving to attain the standard. Third, goals

KO 6 - 5

KO 6 - 6

D O 6 - 3

D O 6 - 4

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PART TWO Interpersonal Skills218

increase the incentive for a person to seek out and use new sources of informa- tion to obtain the standard. These three reasons are at work whenever we have a goal and the reasons tend to operate together.

The foundation of many effective motivation programs is proper goal setting. 23 Managers should begin assessing the motivational climate of their work environ- ment by asking themselves, “Do subordinates understand and accept my perfor- mance expectations?” Although goal setting works to improve motivation toward accomplishing objectives, great managers know that not all goals are created equal. A great deal of research has indicated that some goals are more likely to be accom- plished than others—we call these “good goals” versus “bad goals.” For some examples of ineffective goals, see Table  6.6 . The characteristics of a good goal can be summarized by the acronym SMART, or specifi c, measurable, attainable, relevant, and time-bound. 24 See Chapter 1 for more detail on setting good goals.

Common Goal-Setting Traps

While a robust and powerful motivational technique, goal setting has several limitations and common traps involved in its implementation. For example, set- ting goals can create ceiling effects, whereby people can reach their goal and then abruptly stop, even though they might be capable of considerably higher performance levels. Thus, goals set too low can actually be harmful. In addition,

Person

Manager

Job

Motivation

FIGURE 6.8 The Bucket Analogy of Motivation: Key Sources

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CHAPTER 6 Motivating Others 219

goals can create the conditions for game-playing and suboptimization. That is, in the pursuit of goals, people may ignore other important objectives (not for- mally covered by goals) and may do things outside the spirit of the goals, even engaging in unethical behavior, to achieve them. This situation is illustrated in Management Live 6.2 about the mortgage crisis.

MANAGEMENT LIVE 6.2

Goals, Rewards, and the Mortgage Crisis The following is an interview from NPR’s Marketplace radio program. It does an excellent job of showing the problems inherent in misaligned goals—in this case, a problem that directly contributed to bringing the banking industry perilously close to collapse. The conversation is between Alyssa Katz of NPR and Tess Vigeland, a real estate expert who taught at New York University.

ALYSSA KATZ: During the 2000s, according to their trade group, they [mortgage brokers] sold four out of every fi ve mortgages. Most brokers have relationships with a number of different lenders, and the idea in theory is to have them work with a borrower to fi nd the cheapest loan that’s best suited to their needs . . .

VIGELAND: And what do mortgage brokers get out of this transaction?

KATZ: Well, they get fees. And those fees can be paid a couple of ways. One way is cash that the borrower has to put up at closing. But increasingly they can also take what’s called a yield spread premium. The bor- rower can take their compensation by basically arranging to have the borrower pay a higher interest rate than they might otherwise pay. The broker is permitted to take an additional fee for that arrangement, which then profi ts the broker and the lender. And brokers in the industry more generally defend the practice as a way that a borrower, who can’t put cash up front for a broker’s fee, can essentially pay it off over time through higher interest rates.

VIGELAND: Now, when someone’s bought a house, and they can’t even make the fi rst payment, or perhaps they just make one and then no more, that’s usually a sign of mortgage fraud. Now we know what happens to the family; they go into foreclosure. What, if anything, has happened to the people who wrote those loans?

KATZ: I mean, nothing. Brokers have—they basically collect their fees immediately, and then the loan is then out of their hands. And if anything happens to the borrower down the road, that is not immediately the broker’s responsibility. It’s only if that borrower were to sue, and make the case that they were set up with a loan that is illegally made, then the broker could be held accountable. But that is very unlikely that a bor- rower going into foreclosure is going to do that because they don’t have the money to pay a lawyer. That’s why they’re going into foreclosure.

TABLE 6.6 Examples of Ineffective Goals

“Try your best.”

“Give 110 percent.”

“We need to increase our sales.”

“Nothing short of a 300 percent improvement will do.”

“Let’s decrease copier use by 25 percent.”

“You need to get 25 new accounts.”

“If all goes well, you may be named Employee of the Month.”

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PART TWO Interpersonal Skills220

Further, in many situations, it can be hard to fi nd quantitative metrics for goal setting. For example, consultants may fi nd it quite diffi cult to derive SMART goals since their work is so often tied to helping others or providing them with a service rather than easily quantifi able output. One good strategy in such cases is to identify the internal customers for the job and set goals tied to the satisfaction and needs of those customers. For instance, a secretary could potentially be held accountable for the customer satisfaction (and SMART goals set for the target level of overall satisfaction) of the people (customers) in his or her offi ce suite.

Locke and his colleagues 25 have repeatedly found that setting vague goals, such as “Do your best,” are actually no better than having no goals at all and are of no real motivational importance. Remember this: Telling a person to “do your best” is equivalent motivationally to giving the person no goals or instructions. Despite this, providing vague goals is exceedingly common in companies today.

A truly specifi c goal can be seen in use at an Indiana machine shop. In this case, the goal for a lathe operator was to turn 100 feet of a ¾-inch bar into 80 acceptable pieces per hour. That is a goal that certainly meets the standard of being specifi c!

In addition to setting SMART goals, you can increase your chances of suc- cess by getting people involved in the goal-setting process. This is because people are also unlikely to accept goals if they do not feel they were part of the goal- setting process. 26 So whenever you can have associates set their own goals or at least have a voice in the process, you are likely to benefi t in terms of goal accep- tance. Moreover, people are more likely to accept goals that have been declared in public. Those responsible for the treatment of addictive behaviors know this principle well; a tenet of treatment programs is a public statement of the affl ic- tion and a plan to treat it. A sense of outside pressure is increased when a goal has been made public, making people feel more bound by these public goals.

There is an important caveat to add about goal setting and it’s the main rea- son why we placed the manager as the source of motivation in the fi nal position. Goal setting has been shown to work across an impressive range of tasks. An area where it is much more diffi cult to use, however, is in tasks that require signifi - cant amounts of creativity. It is not surprising that setting a goal for a person to be creative is not normally effective—it is not something that people can do “on demand.” In fact, signifi cant research suggests that goals may actually interfere with creativity for exactly the same reason they work in other cases. 27 As men- tioned in the beginning of this section, one of the reasons goals work is because they narrow the focus of the person with the goal and focus his efforts. Often- times, this narrowing of focus can lead a person to do things in a very “uncre- ative manner” due to the outside pressures.

Reinforcement Theory and Behavior Modification

Another major approach for motivating employees that emanates from the supervisor is reinforcement theory. Reinforcement theory, or the notion that people are motivated to repeat behavior that gets rewarded, is perhaps one of the oldest and most well supported of all psychological principles. 28 Indeed, it is an undeniable reality of life that people do what is rewarded and avoid what is punished. Would you write a 10-page paper for a class if no grade were attached, but the professor said, “It will be great for your development”? When undesir- able behaviors are rewarded and positive behaviors neglected (or sometimes even punished), dysfunctional results occur in organizations. Great managers tie desired behavior to positive behavior and are successful in communicating that linkage to their people.

For students, one close-to-home example of the folly described in Management Live 6.3 is right in our own university settings where learning and skill building

“If you don’t know where you’re

going, you might not get there.”

— Yogi Berra

“But there are advantages to

being elected President. The day

after I was elected, I had my

high school grades classified Top

Secret.”

— Ronald Reagan

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CHAPTER 6 Motivating Others 221

MANAGEMENT LIVE 6.3

The Folly of Rewarding A, While Hoping for B29

One of the truly classic articles in all of the management literature is “On the Folly of Rewarding A, While Hoping for B.” The article was written by Steve Kerr, the chief learning offi cer for Goldman Sachs and formerly in the same position at General Electric. Kerr observed there are countless cases in organizations and society where the folly is present in that we sincerely hope for one thing, but reward another. Notable among his examples is the hope that doctors will make accurate diagnoses, but that the reward system in place disproportionately rewards treat- ing well people as sick, because of more treatment revenue, reduced threat of malpractice, and the appearance of prudent medicine. Another example is the hope that politicians will be open, frank, and honest; however, the existing reward system elects those who do not reveal any potentially divisive beliefs and who get money directed to their constituents. The lesson is to clarify what you really hope for and then dig into your culture to determine if that is truly what is perceived to be rewarded. Kerr has convincingly argued that it too often is not.

are hoped to be the prized behaviors. However, it is hardly provocative to sug- gest that the indicators we use for learning and knowledge gain—grades—have increasingly become more important than the goals that underlie them. It is now grades, independent of true knowledge or skill, that are often most infl uential in job placement offi ces and graduate school admission departments. As a not very surprising result, fraternities and sororities are obsessive about keeping good test fi les, the Internet has emerged as a source of plagiarized term papers, and cheating is a greater problem than ever in U.S. universities. The point is that if we are going to avoid the folly, we fi rst need to clearly identify the behaviors we want and then fi nd ways to reward those behaviors and only those behaviors. This is exactly what the practice of behavior modifi cation is designed to do.

Based on the basic tenets of reinforcement theory, the managerial practice known as organizational behavior modifi cation commonly involves a fi ve- step problem approach to increasing motivation and ultimately performance ( Figure 6.9 ). The fi ve major steps are that (1) performance-related behaviors are identifi ed; (2) the frequency of these behaviors is measured; (3) the contingencies supporting the current behaviors are identifi ed; (4) a behaviorally based interven- tion strategy is developed and implemented; and (5) the resulting performance- related behaviors are measured.

Examples of Behavior Modification in the Real World

Behavior modifi cation has been used successfully in an extremely wide range of situations. In one of the most famous examples, Emery Air Freight Corp. (which was ultimately bought by UPS) used behavior modifi cation to improve

FIGURE 6.9 The Organizational Behavior Modifi cation Model

Source: Adapted from Luthans, F., and Stajkovic, A. D. (1999). Reinforce for performance: The need to go beyond pay and even rewards. Academy of Management Executive, 13, 49–57.

The Five Major Steps

The frequency of these behaviors is

measured

A behaviorally based intervention strategy

is developed and implemented

The resulting performance-related

behaviors are measured

The contingencies supporting the

current behaviors are identified

Performance-related behaviors are

identified

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PART TWO Interpersonal Skills222

its customer service. Emery had a goal for its customer service department of responding to customer questions within 90 minutes. At fi rst, the employees per- ceived that they met this goal about 9 times out of 10. In reality, however, Emery Air Freight was only meeting this goal 3 out of 10 times. Under any measure, 30 percent cannot be considered very good! As a result of this poor performance, a behavior modifi cation system was established in which the employees physically recorded how quickly each customer request was answered. The supervisor then gave praise and recognition for high performance. Within one day, performance went from 30 percent to 90 percent goal attainment and stayed between 90 and 95 percent for over three years. 30 This example should give you an idea of just how powerful behavior modifi cation really is!

Some recent examples of the success of behavior modifi cation in handling everyday work issues can be seen in the following examples. A food distribu- tion company implemented a behavior modifi cation program at one of its ware- houses. The program reduced order errors by 10 percent, with a cost saving of about $10,000. 31 In the area of safety, recent research estimates suggest money spent on safety-related behavior modifi cation programs can have payoffs of more than 10:1. In other words, for every $1 invested in these programs, more than $10 can be saved due to lower insurance costs, fewer accidents, and reduced worker compensation claims. 32

To further make the case, behavior modifi cation was recently used in a retail setting to modify the behavior of cashiers in keeping their register drawers bal- anced. Initially, daily cash shortages averaged $2.27. After the behavior modifi ca- tion program was implemented, average cash shortages were reduced to $0.06 per day. 33 An additional example of a success with pizza delivery drivers can be seen in Management Live 6.4.

Developing and Implementing a Behavioral Strategy

While behavior modifi cation is relatively straightforward, there are some impor- tant details specifi cally related to the fourth step of the process: developing and implementing a behavioral intervention strategy. To effectively develop and implement behavioral modifi cation strategies, it is important to understand some fundamentals of learning and behavioral change. The process of linking

MANAGEMENT LIVE 6.4

Behavior Modifi cation and Pizza Delivery Drivers34

When most of us think of safe drivers, pizza delivery drivers aren’t at the top of the list. In fact, reckless pizza delivery drivers have been the cause of numerous multimillion-dollar lawsuits and been a serious concern to pizza makers all over the United States. A study conducted by Timothy Ludwig, Jay Biggs, Sandra Wagner, and E. Scott Geller investigated the effects of a safe driving competition utilizing publicly posted individual feedback as the behavioral intervention. Their study looked at the safety behaviors (for example, turn-signal use, safety belt use, and complete stopping at intersections) of 82 pizza deliverers. After getting a baseline measure, pizza deliverers received posted weekly individual feedback on their turn-signal use (at Store A) or complete intersection stops (at Store B). The deliverers’ safe driving scores were posted individually on a vertical scale along with their names. Each week the driver with the highest average performance was rewarded with a free vehicle-maintenance cou- pon. Turn-signal use among drivers at Store A increased 22 percent. Complete intersection stopping among driv- ers at Store B increased 17 percent. Although the winners of the weekly competitions had the greatest increase in performance, nonwinners also increased their instances of safe driving during the competition.

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CHAPTER 6 Motivating Others 223

consequences with voluntary behaviors is referred to as operant conditioning. Operant conditioning employs strategies involving the addition or removal of pleasant or aversive consequences. Since there are two actions (addition and removal) and two types of consequences (pleasant and aversive), four different operant conditioning strategies are possible (see Table 6.7 ).

Positive Reinforcement

As indicated in Table  6.7 , positive reinforcement occurs when a behavior is linked with a consequence an employee considers pleasant. Examples of positive reinforcement occur all around us every day. A child given a certifi cate for getting all A’s on his report card, an employee given a bonus for meeting a diffi cult per- formance goal, and a politician reelected after doing a good job for her constitu- ents are all examples of positive reinforcement. Positive reinforcement should be used whenever the goal is to increase the frequency of a desirable behavior because it modifi es behavior in a way that is not viewed as being controlling and because it does not bring about negative side effects. Everybody wins with positive reinforcement. One of the challenges facing many managers, however, is what to provide as a reward. Remember that managers should seek rewards that have value to the employee. This also ties back to the idea of strengthening valence from the beginning of the chapter.

A frequent lament of managers everywhere, public sector or private, is that they have little discretionary power to reward their high performers with more money. Since this is often the case, an important management skill is to be creative in fi nding reinforcements that are both motivating and cost-effective, especially due to tough economic conditions that impact most organizations. As Management Live 6.5 illustrates, managers have had great success with showing appreciation using some surprisingly simple techniques.

Beyond showing appreciation for good work, it is also a good idea to rec- ognize important milestones and be thoughtful regarding personal issues and crises people face. Purchase a large supply of note cards and get in the habit of sending them for birthdays and promotions or other events. Send fl owers with a note for engagements, weddings, or family deaths. People will remember your kindness, probably much longer than you will!

“Simple observation suggests that

most of us are trinket freaks—if

they represent genuine thanks for

a genuine assist.”

— Tom Peters

TABLE 6.7 Four Operant Conditioning Strategies

Consequence Added Consequence Removed

Pleasant Consequence Positive Reinforcement Extinction

Increase frequency of a desired behavior

Reduce frequency of an undesired behavior.

Example: An athletics coach gives hard-working players more playing time to reward their effort.

Example: A club president withholds laughter because she is tired of her VP always making jokes.

Aversive Consequence Punishment Negative Reinforcement

Decrease frequency of an undesired behavior.

Increase frequency of a desired behavior.

Example: An Army sergeant has a private do 100 push- ups for being late for roll call.

Example: Your roommates tell you they will stop nagging you if you do the dishes.

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PART TWO Interpersonal Skills224

Another good source for creative and cost-effective rewards is a collection of ideas put together by author Bob Nelson, in his book 1001 Ways to Reward Your Employees. 35 Nelson makes the point that rewards don’t need to be expensive to have big impacts. The following list provides a fl avor of the types of rewards he suggests:

• Write a letter to the employee’s family about what his or her efforts mean.

• Arrange for a senior executive to have a recognition lunch with the employee.

• Find out what an employee’s hobby is and purchase a small gift related to that hobby.

• Dedicate a prime parking space for the outstanding employee of the month.

• Wash an employee’s car in the parking lot during business hours.

• Have a group of managers personally cook lunch for a group of top- performing employees.

• Use outstanding employees in the organization’s advertisements.

We need to always remember, however, that different employees will have different valence scores for each of the examples listed. One person might view having lunch with a senior executive as a valued outcome, while another might view it as being worse than a trip to the dentist. See Tool Kit 6.4 for a step-by-step approach to providing effective positive reinforcement.

“There are two things people want

more than sex and money . . .

recognition and praise.”

— Mary Kay Ash

MANAGEMENT LIVE 6.5

Simple Rewards36

For some ideas of how simple rewards can demonstrate appreciation, take a look at the following successful pro- grams from some top U.S. companies.

• The Spirit of Fred Award. Walt Disney World in Orlando, Florida, uses this simple recognition program named for an employee named Fred (not too surprisingly!). When Fred got his fi rst salaried position, a few key people taught him the values needed to be successful at Disney. The name Fred became an acro- nym for Friendly, Resourceful, Enthusiastic, and Dependable. The award has become highly valued within Disney.

• Thanks a Bunch. Maritz Performance Improvement Co. in St. Louis, Missouri, has a Thanks a Bunch pro- gram in which employees receive a bouquet of fl owers in appreciation for special favors or jobs well done. The employee receiving the award then passes the fl owers on to someone else who has been help- ful, with the idea of seeing how many people can be given the bouquet in a single day. With the fl owers, the employees get a written thank-you card. At certain times throughout the year, the cards are entered in a drawing for prizes.

• The Golden Banana Award. Years ago, a Hewlett-Packard Co. engineer burst into his manager’s offi ce in Palo Alto, California, to announce he had solved an important problem. In response, his manager looked around to fi nd something to reward the employee with and ended up handing the employee a banana from his lunch with the words, “Well done. Congratulations!” The employee was somewhat confused at fi rst, but over the years the Golden Banana Award became a prestigious honor given to inventive Hewlett-Packard employees.

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CHAPTER 6 Motivating Others 225

Tool Kit 6.4 Steps to Rewarding Effectively

1. Describe the desirable behavior.

2. Explain the benefi ts that the desirable behavior is causing.

3. Explain the consequences if the desirable behavior continues.

4. Provide examples and time for questions regarding desired behaviors.

5. Monitor behavior and reward desirable behavior.

6. Follow through with continued rewards should the positive behavior continue.

MANAGER’S TOOL KIT

The work of Richard Easterlin 37 may provide some answers as to why monetary rewards may not always be the most effective reward. His research has to do with how people adapt to having increased amounts of money across their lives. Easterlin, an economist, has found that young adults start out with fairly similar material aspirations. As young adults, he fi nds that people with more money are happier because they are better able to fulfi ll their aspira- tions. In other words, when we all have similar material expectations, people with more money are better able to meet those expectations than people with less money.

As we age, however, getting more money does not cause well-being to increase (for people with low or high incomes) because it generates an equivalent growth in material aspirations. In other words, as you get more money, you have an increased amount of wants. Since happiness is linked to the ratio of what we have versus what we want, this ratio will not tend to change for a person as his or her income goes up. So the more we get, the more we want, and we rarely can close the gap between what we have and what we want.

Extinction

As compared to the relatively straightforward application of positive reinforce- ment, extinction is the most diffi cult strategy to transfer from the laboratory to the work environment. 38 The technical defi nition of extinction is a behavior fol- lowed by no response. The idea of extinction is that a behavior not followed by any consequence would not likely be repeated again (because it did not bring about any gain for the person performing the behavior). For instance, extinction is normally thought of as a strategy for modifying the behavior of a person who complains about petty issues at work. The idea is that if the supervisor does not respond to petty complaints (“I don’t like the color of the walls in the offi ce,” “My desk chair has a stain on it,” or “Tom’s desk is newer than mine”), then the complainer will stop complaining because the complaints do not improve the situation.

However, in real-world situations, people hold expectations about what is likely to follow their actions based upon what they have observed in the past. As a result, what a supervisor intends as a nonresponse is usually interpreted either positively or negatively. Whatever the result, people clearly may interpret a great deal of meaning—quite possibly unintended meaning—from a nonresponse. One good example of extinction working as intended is as a response to a person who

“Poor man wants to be rich,

rich man wants to be king. The

king ain’t satisfied till he rules

everything.”

— Bruce Springsteen, “Badlands”

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MANAGEMENT LIVE 6.6

Show Me the Money! In a large meta-analysis, researchers Alexander Stajkovic and Fred Luthans examined 72 studies that used behavior modifi cation principles to increase employee performance. In each of these studies, a particular form of reinforcer was used, including money tied to performance (the employee receives money after reaching a previously set goal), social recognition (the employee receives public praise and honor), and feedback (the employee is told how well he or she is performing the job). The results tell an interesting and important story. As seen in the following fi gure, all three reinforcers were effective in improving employee performance: money, 21 percent increase; social recognition, 16 percent increase; and feedback, 11 percent increase.

The real lessons from this large study are twofold. First, the largest percentage increase (45 percent) occurred from a combination of providing money, social recognition, and feedback. If you have wondered how great man- agers use rewards to motivate performance, it seems to be rather straightforward: Frequently tell people how they’re doing on the job, recognize their achievements in front of others, and, when possible, reward performance with additional cash.

Second, a frequent complaint of many managers is that they have little power to provide fi nancial rewards, making motivating people impossible. This study clearly demonstrates that by simply providing a little recog- nition or giving regular feedback, both of which require no fi nancial commitment, managers can signifi cantly increase overall employee performance. In the long run, such increases may ultimately allow a manager increased capacity to provide fi nancial rewards.

Source: Stajkovic, A. D., and Luthans, F. (2003). Behavioral management and task performance in organizations: Conceptual background, meta-analysis, and test of alternative models. Personnel Psychology, 56, 155–194.

makes meetings longer because he’s always making jokes. By not laughing at the jokes, co-workers can quickly make the joking stop.

Negative Reinforcement

Like positive reinforcement, negative reinforcement is an attempt to increase the frequency of a desirable behavior. Negative reinforcement, however, involves linking desired behaviors with the removal of undesirable consequences, rather than the addition of positive consequences associated with positive reinforce- ment. For instance, promising a sales representative she can delegate her 10 least favorite accounts if she can increase her sales by 30 percent would be a construc- tive form of negative reinforcement. It is important to remember the term “nega- tive reinforcement” refers to the act of removing an aversive consequence. In general, positive reinforcement is the preferred method to increase the frequency of behavior, but negative reinforcement may serve as an additional tool when a manager is not able to control many desirable positive outcomes but is able to remove negative ones.

When used improperly, negative reinforcement takes the form of “manag- ing by threats.” An example of this can be seen when a manager says, “If your numbers don’t improve, you’ll be fi red.” When the numbers improve, the person is not fi red and the threat is removed. While this may work in the short term, it has harmful side effects and is not recommended as an effective management practice.

“I have found that you can get

further with a smile, a kind word

and a gun, than you can with a

smile and kind word alone.“

— Al Capone

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227CHAPTER 6 Motivating Others

The Effect of Reinforcers on Employee Performance Improvement

Punishment

The fi nal behavioral strategy discussed here is punishment, which consists of adding an unpleasant consequence as a response to a person’s behavior, with the goal of stopping the behavior from happening in the future. For example, if an employee disregards safety guidelines and acts recklessly on the job, a reprimand would be an appropriate means of trying to reduce this dangerous behavior. Most companies have punishment systems that increase in severity with the number of times the punishment has been administered (called progressive discipline ). For instance, a fi rst offense may be associated with a verbal warning, whereas a second offense will receive a written warning, and the employee is fi red for a third offense.

Although punishment is relatively straightforward, it should be avoided unless it is really needed. Research has suggested that punishment, especially if it is viewed as being unfairly administered, can have negative unintended side effects such as encouraging people to rebel because they feel they are being too tightly controlled. 39 Moreover, there is more useful motivational information in positive reinforcement because it essentially specifi es what to do. By its very nature, punishment can only specify what not to do —of which there may be an infi nite number of variations.

Since punishment normally provides people the most trouble, we wanted to provide more guidance on how to effectively discipline. A useful metaphor regarding the application of punishment is that of the “red hot stove.” Specifi - cally, that means punishment will be administered most effectively when it has the following four characteristics:

• Clear Expectations. The stove is red hot —anyone can see and feel that if they touch it they will be burned.

• Consistent. Any time anyone touches the stove (commits the behavior) they get burned.

• Timely. Anyone who touches the stove gets burned immediately.

• Powerful. The stove is red hot and leaves a severe and memorable burn. This makes the effect lasting.

“All in all, punishment hardens and

renders people more insensible; it

concentrates; it increases the feel-

ing of estrangement; it strength-

ens the power of resistance.”

— Friedrich Nietzsche

45

40

P e

rf o

rm an

ce I m

p ro

ve m

e n

t (%

)

35

30

25

20

15

10

5

0 All 3 Money

Reinforcers

Social Recognition

Feedback

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PART TWO Interpersonal Skills228

Another characteristic of effective punishment, in addition to the four described in the red hot stove example, is that it should focus exclusively on the specifi c behavioral problem. This is not the time to bring up old issues or to make general accusations. The focus of the punishment should be on eliminating a problem behavior, not on demoralizing or humiliating the other person. A behav- ioral focus increases the likelihood that the employee will associate the negative response with a specifi c act rather than viewing it as a generalized negative evalua- tion, which will reduce the hostility normally felt when being reprimanded. Please refer to Tool Kit 6.5 for more specifi c behavioral information about punishment.

The rules of the red hot stove apply equally as well to the administering of positive reinforcement. Try to catch people doing something right, be specifi c in telling them what they have done well, and present them with some type of rec- ognition while the stove is hot in the positive sense. Although managers typically

Tool Kit 6.5 Steps to Effective Punishment 1. Meet privately. Never punish in public.

2. Describe the undesirable behavior.

3. Explain the problems the undesirable behavior is causing.

4. Allow questions and opportunities for clarifi cation.

5. Explain consequences if the undesirable behavior does not change.

6. Provide examples and time for questions regarding desired behaviors.

7. Monitor behavior, and reward desirable behavior.

8. Follow through with appropriate responses to behavior (an aversive consequence if the behavior has not changed or positive outcomes if the behavior has changed).

MANAGER’S TOOL KIT

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CHAPTER 6 Motivating Others 229

have more discomfort and even dread administering punishment, ineffective pos- itive reinforcement is often a greater problem because managers are naturally inclined to assume people know they are doing well and to give only global non- specifi c feedback that has little motivating value (for example, “You are great; I wish I had fi ve more like you”).

As is evident from the preceding descriptions, there is a time and place for all four of the behavioral strategies. These strategies can be used either to make unacceptable behaviors acceptable or to transform acceptable behaviors into exceptional ones. They are designed to avoid the harmful effects typically associ- ated with the improper use of discipline as well as to assist with the appropriate use of rewards.

their supervisor was listening intently, as if the dis- cussion was the most important thing in his life at the moment—nodding, maintaining eye contact, and asking questions. He showed genuine interest in the topic. If it is important to his staff, it is important to him.

Praise effectively. Ritz-Carlton managers don’t focus on what employees have done wrong but instead seek to help them improve on a given task. Supervi- sors use staff meetings to publicly praise employees. Criticism is done in private.

Motivation can and should take place every- where within an organization. Simon Cooper cannot personally motivate each of his 35,000 employees worldwide, so it’s up to his department managers to reinforce the brand and its values through daily interactions with their teams. Are your employees engaged? Are they inspired to follow your vision? Five-star service does not begin with them. It begins with you.

Questions

1. What can individual managers do that refl ects the same strategies that the most motivating com- pany environments embody?

2. Is there value in selecting people with high moti- vation potential (see Chapter 12)?

3. Are these techniques limited to the hospitality industry or could they be incorporated into the daily routines of the multitude of organizations that perform business every day.

From Carmine Gallo, “Employee Motivation the Ritz Carlton Way,” Business Week, February 29, 2008. Used with permission of Bloomberg L.P. Copyright © 2011. All rights reserved.

CASE CONCLUDED

Selling the benefi t. In every daily staff meeting, Ritz- Carlton managers reinforce one of 12 service values all employees are expected to embody on the job. Service Value No. 2 is “I am always responsive to the expressed and unexpressed wishes and needs of our guests.” The housekeepers were encouraged to discuss how this value applied to their daily tasks.

“What is an expressed wish?” the supervisor asked the group.

“If a guest asks for extra pillows,” a woman said. “That’s exactly right,” he said. “But it’s the

unexpressed wishes that create the Ritz-Carlton mystique,” he continued, offering the example of a housekeeper who notices a champagne bottle sit- ting in melted ice and replaces the ice before being asked to do so. The question was then asked: “Why do we do it? Why do we go the extra mile?”

One housekeeper volunteered: “It offers a per- sonal touch that shows we care.”

“That’s exactly right,” another added. “It refl ects our commitment to fi ve-star service.”

Employees need to understand how their daily actions impact their clients. As shown through Ritz-Carlton, staff meetings help employees make that connection.

Do you think most meetings motivate an organi- zation to exceed expectations? How could meetings be conducted to maximize their impact?

Ask for feedback. Employees are encouraged to speak up during staff meetings. During a house- keeping meeting, the employees were debating the benefi t of one cleaner over another. It seemed they preferred the old product over the new one. At fi rst glance, it was a rather mundane discussion except

>

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PART TWO Interpersonal Skills230

autonomy 214 core job dimensions 212

equity 204 equity sensitivity 205

ERG theory 210 expectancy 199

KEY TERMS

Concluding Note

Putting It All Together to Increase Motivation

Hopefully, you have seen how the ideas presented can be used to help you “motivate who, to do what, under what circumstances.” While this series of questions obvi- ously does not have a short answer that is very satisfying (if it did, we wouldn’t have needed an entire chapter to explain it), you should now see the importance of the three techniques for fi lling the bucket. This metaphor helps us see why it is much easier to motivate certain people rather than others (the motivate who question), to do certain things (the issue of creativity comes to mind here and is an important consideration) under certain circumstances (when the person is well matched to a job that is highly motivating according to the job characteristics model).

As you can see, there are clearly multiple ways to “fi ll up” an employee’s moti- vational bucket. As managers, it is important to be aware of the dominant needs of our people and the various motivators available to us in rewards and the work itself. Motivation theories offer managers many applicable evidence-based tools for creating more energizing workplaces. The challenge is to put them to work in areas that matter. Based on practical experience and the tools and techniques discussed in this chapter, we offer a few critical prescriptions for any manager in almost any situation to ensure high motivation:

1. Recognize individual differences in motivation. Few people are moti- vated by the same things. Use the platinum rule to fi nd out what best motivates each individual, including what type of rewards each employee values most.

2. Strive for fairness, not equality, in rewards and punishments. You do not have to give everyone the exact same reward. You do need to ensure the rewards you give out are proportional to the performance and that they are equitable.

3. Do everything you can to make the job itself more motivating. Even in a job that seems boring or diffi cult to improve, there are usually very concrete ways of implementing the job enrichment interventions to improve the job signifi cantly.

4. Set good goals. Always specifi cally defi ne success. We can’t empha- size enough that setting good goals is one of the most effi cient ways to increase motivation.

5. Link rewards and punishments directly to performance. Make sure the rewards that people receive are based upon their performance.

6. Give credit where credit is due. Recognize people publicly for their achievements and don’t take credit for your employees’ work.

7. Model the way. Delegation is an important part of managing. However, nothing is more de-motivating than bosses who ask other people to do things they (the bosses) are not personally willing to do. Model the behavior you want from your people.

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CHAPTER 6 Motivating Others 231

When Gamal Aziz became president of MGM Grand Hotel & Casino in 2001, the huge hotel was doing ex tremely well—as was Las Vegas. The challenge for Aziz was to take something good and make it even better. Under Aziz, revenue zoomed, and along with the Bellagio, the MGM Grand became one of the most profi table hotels on the Las Vegas strip.

But ask Aziz what was the single most important factor in the jump, and he won’t talk about twirling acrobats or signature dishes such as free-range quail stuffed with foie gras. His answer is the employees. Now with times getting tougher in Las Vegas as tourism drops and gambling revenues fall, Aziz says his people have become even more critical to the company’s success.

Cost-Cutting Moves

“Employee engagement in times of diffi culties and severe economic cli- mate is far more profoundly impor- tant now,” says Aziz. “Employees are willing to give their all when they are well-treated, appreciated. And the ability to unlock that potential

is a competitive distinction. . . . It’s their decisions, their actions, their attitude that really make the dif- ference. Imagine taking 10,000 employees, and each and every one of them wanting to give more. That’s really the difference between [us and] a company that has its employees just punching the clock and trying to get through the day.”

But Aziz, like all managers, is under pressure to justify every cost. Although his hotel still had high occupancy rates, groups are can- celing, and those that do come are spending much less per visit. That’s forced Aziz to reduce costs associ- ated with some of these success- ful programs. He still does regular employee appreciation dinners for top performers, but he’s spend- ing about half as much this year as last. He’s started recruiting manag- ers from other properties to attend his MGM Grand University as a way

to reduce the costs of training his own top managers. And he’s put on hold one program that trains next- generation line managers.

Rank-and-File Insight

Aziz shares with employees the chal- lenges he’s facing. Employees, the CEO says, were what got the hotel to the next level, and they are the key to pulling through hard times. “We will get through this, we will survive,” says Aziz. “Once we get through this, the employees will be the ones who have gotten us through.”

When Aziz arrived in 2001, he quickly sought out rank-and-fi le insight into the hotel and how it could improve. A survey of the hotel’s 10,000 employees made clear that very little was being com- municated to the staff about the events going on in the hotel on a daily basis, including such basics

CASE Maintaining Employee Motivation

> >

expectancy theory 199 extinction 225 extrinsic outcomes 205 feedback 214 growth need strength 215 hygiene factors 211 instrumentality 200 intrinsic outcomes 205 job characteristics model

(JCM) 212 Maslow’s hierarchy of needs 210

motivating force 201 motivation factors 211 motivation potential score

(MPS) 214 need for achievement 207 need for affi liation 207 need for power 207 negative reinforcement 226 operant conditioning 223 organizational behavior

modifi cation 221

platinum rule 206 positive reinforcement 223 progressive discipline 227 psychological states 212 punishment 227 reinforcement theory 220 skill variety 213 suboptimization 219 task identity 213 task signifi cance 214 valence 200

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PART TWO Interpersonal Skills232

(continued)

as who was staying there, and what the hotel had to offer those particu- lar guests. Employees sometimes didn’t even know what conventions were at the hotel. That made it dif- fi cult for the staff to give the level of service that would affect customer loyalty, return visits, and spending in the hotel.

Aziz came up with a simple fi x. There is a short meeting now at the start of every shift in which every employee is given the rundown of what’s happening in the hotel that day. It’s a simple concept based on meetings that restaurants have long held to get waiters up on the daily specials. But rolled out across 10,000 employees a day, it’s a major undertaking.

MGM Programs

The MGM Grand made other moves to help employees grow. In his recent book, Closing the Engagement Gap, co-author and Towers Perrin Managing Director Don Lowman highlights many MGM programs, including the MGM Grand Univer- sity that offers dozens of classes on an invitation-only basis for high achievers. The MGM Grand Leader- ship Institute is a 24-week program for executives. And REACH! is the

hotel’s six-month course on basic supervisory skills for ambitious hourly workers. All this investment in the staff, along with recognition dinners and other rewards, has led to more than 90  percent of MGM Grand employees saying they are satisfi ed with their jobs, and 89 per- cent saying their work has special meaning. According to the book, 91 percent report they are proud to tell others where they work.

“One of the ways we’ll get through this dire economic circum- stance we fi nd ourselves in is if leaders set this tone that we’re all in this together,” says Lowman, who worked with a multitude of compa- nies as a consultant at Towers Perrin and ranks MGM Grand among the best at connecting with employ- ees. “It’s very easy to say ‘Let’s just whack 15 percent of the company.’ You can immediately take a lot of costs off your books. But that has a big cost both on the people doing the whacking [and on the company] in the long term, when you’ll need those people [you let go] again.”

In the book, Lowman sites a fi nding from the fi rm’s survey of tens of thousands of employees in six countries—including the U.S., China, and India—that the No. 1

thing that engages employees is senior management’s interest in their well-being. That trumped career advancement, relationship with one’s direct supervisor, and even pay. Visiting the MGM Grand, Lowman says he found evidence of that connection in spades. Aziz was impressive, Lowman says, for his tendency to ask questions and listen to the answers. Engagement starts at the top.

Discussion Questions

1. Using what you learned about rewards, identify some power- ful rewards mentioned in the case and explain why they are so powerful.

2. Apply the expectancy theory of motivation to the case and explain what Gamal Aziz is doing well. Now, pick another theory discussed in the chapter and apply it as well. Can multiple the- ories provide insight about why Aziz is successful?

3. Instead of focusing on cutting employees, this case argues that there are other routes to success (even in diffi cult times). Why do you think this is true? Can you think of cases where it may not be true?

Source: N. Byrnes (2009). The Issue: Maintaining Employee Engagement. Bloomsburg Businessweek, Interactive Case Study, January 16. Retrieved from http://www.businessweek.com/managing/content/jan2009/ca20090116_444132.htm

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CHAPTER 6 Motivating Others 233

Taking Over as Manager: Building a More Motivational Workplace This challenge is at the heart of what makes great management—establishing the type of culture and relation- ships where people are highly motivated to give their very best. While there are an infi nite number of specifi c tactics you might employ, we think a good framework for addressing this challenge is the three-faucet analogy used in the text. That is, motivation essentially stems from three sources—the person, the job, and the manager— so a multidimensional approach that considers all three is likely to be your most fruitful approach to creating a motivational workplace.

Motivation from the Person. As popular theories of motivation demonstrate, different people have different needs, and even the same people can differ in their most driving motives at different times. The simple (but neglected) implication is to make a concerted effort to learn more about each individual you manage and to make such learning a continuous process. Frequently ask your associates about their goals and dreams and what they might fi nd most stimulating in their work. As we note in the text, some people place a premium on achievement and recognition in their jobs, others put a priority on affi liation and belonging, while others want to have more power and control over what they do. So ask them directly what they expect of you and how they think you can help them in their work and career. Wherever possible, seek and select people on the basis of the energy and interest they show in the work you do.

The prior manager seemed to treat all people the same, and that is usually a grave motivational error. The goal is equity—not equality—and never underestimate the power of equity perceptions in infl uencing behavior. If people think they are treated fairly, you can get them to jump high hurdles for you. If they think your management behavior is not equitable, watch out!

Motivation from the Job. A second source of motivational options is the job itself. Not surprisingly, some job characteristics are far more motivating than others, and a terrifi c evidence-based framework exists for thinking about those aspects that might be infl uenced to enhance motivation. The fi ve key characteristics are skill variety, task identity, task signifi cance, autonomy, and feedback. The most motivating workplaces are where people feel like their jobs are stimulating, not boring, so look for ways to build those fi ve elements into the jobs your people are doing.

Motivation from the Manager. Here again, there are many tactics you could deploy, but a focus on two general areas will serve you well. First, very soon after you take the job, begin the process of establishing SMART goals for your unit and all individuals in your unit. Goals are both informational (they clarify what you want done) and moti- vational (they stimulate action). The power of effective goal setting in inducing higher performance is as close to a management “law” as exists. Indeed, if you are truly serious about establishing a more motivational context here, it might constitute managerial “malpractice” not to utilize the power of goal setting.

Second, and relatedly, pay particular attention to how rewards (and punishments) are distributed in your group. First, aim to remove any de-motivators that may be keeping people from making more of an effort and achieving higher performance. Then aim to create a context where you tie rewards to desired performance. A good maxim is to “reward your doers.” Who is doing the best work, and are they promptly, visibly, and signifi - cantly rewarded for doing so? It seems that was not the case under the prior manager, which had the resulting dampening effect on motivation.

Dealing with the Unmotivated Person The best motivation model for diagnosing this type of situation is expectancy theory, which suggests that people are not motivated when they (1) don’t know specifi cally what they are supposed to do; (2) don’t think they are capable; (3) don’t see any outcome (reward or punishment) tied to a behavior; or (4) don’t value the reward/out- come that is attached to the behavior. So the equation M 5 E 3 I 3 V helps us diagnose why this CPA may not be motivated to give his best, and, in turn, what might help motivate him to do so.

Expectancy. Does he know what high performance (organizationally and individually) looks like? Does he think he can do it? Few people will engage fully unless they have some ownership in the outcomes they are seeking and believe they can achieve them. In this case, there is little sense of collective goals or individual accountability

SELECT MANAGE WHAT? DEBRIEFS

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PART TWO Interpersonal Skills234

(continued)

for such goals. If this guy is not sure what it is he can do to contribute, then it is unlikely he will be giving his best effort. So one key here is to clarify his expected performance outcomes, and get his input on it and personal statements that he understands and feels he can achieve those outcomes.

Instrumentality. Does he believe that motivated effort will be linked to rewards or any sanctions attached to low performance? People will not be motivated in situations where there are ambiguous or nonexistent links between performance and specifi c outcomes. A recurring maxim of motivation is that “what gets measured and rewarded gets done.” That linkage seems to be missing here, and is therefore certainly part of the low motivation.

Valence. Does he value the rewards in place? People will not engage fully if the rewards (or punishments) are not suffi ciently important to them. That is, do they feel that what they receive (which may be experience, money, opportunity, or a whole host of other outcomes) warrants the effort to come and participate?

Since any motivation is a function of all three factors, this associate will need to have high positives on all three. For example, even if he has high expectancy and high instrumentality, he still won’t participate if they are completely neutral in valence.

The best way to address low motivation is to fi rst diagnose (there should be no treatment without a diagno- sis), in as realistic a way as possible, why it is that people do not give their best effort. Then match your recom- mendations to those diagnosed problems and come up with as many realistic, creative, and truly plausible ways in which to motivate people to give their very best.

Enriching the Boring Job The most critical thing is to understand what it is that makes a job interesting or enriched in the fi rst place (and why the lack of it makes one boring and maybe even demeaning). Fortunately, one of the most robust models in the organizational literature is the job characteristics model, which concisely outlines those very characteristics, and further outlines how the characteristics lead to meaningfulness, responsibility, and a knowledge of results, which in turn induce greater satisfaction, motivation, and effectiveness.

The fi ve characteristics are skill variety, task identity, task signifi cance, autonomy, and feedback, and the chal- lenge is to be creative in how those characteristics could be increased in this context—with the result being a more interesting and ultimately productive secretarial job. Your text includes specifi c examples of how the char- acteristics can be practically increased.

• Combine tasks (affects skill variety, task identity, and task signifi cance): Take on more different things to do—computer or otherwise—cross-training on different roles.

• Group tasks into natural work units (affects task signifi cance and task identity): Team up with other clerical folks and rotate tasks—this mainly gives the employee a support group and less isolation.

• Give contact with customers (affects skill variety, autonomy, and feedback): Work with the people in your organization to interface with the end-users of what you do.

• Vertically load jobs (affects autonomy): Add in new roles and expand beyond current roles so she is not labeled and stuck just in traditional clerical work.

• Open feedback channels (affects feedback): Develop a scorecard to be completed by all those she works for so she can get a more thorough and timely perspective on what she is doing well and how she can improve.

A subtle nuance is that enrichment needs to be balanced with effi ciency. That is, while there is substantial evidence that enriched jobs create positive outcomes, they also run the risk of lowering effi ciency and overall organizational productivity. That is, the designers of jobs low in those characteristics are not all evil but usually just looking for high effi ciency and low cost. It is not some insidious plot to abuse people or treat them like drones or bore them to death or something just as bad. Rather, in a competitive world they are simply adapting Henry Ford’s discovery that specialization leads to higher effi ciency in a number of dimensions.

The point is that such specialization also can lead to some dysfunctional outcomes associated with boredom and repetition and so on. So the persistent challenge for job designers is to try to balance specialization and its effi ciency outcomes and job enrichment with its quality, turnover and absenteeism reduction, and citizenship ben- efi ts. If something along those lines is not done in this current case, the outcome will very likely be the loss of a productive employee and the high turnover costs associated with bringing in a replacement.

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O B J E C T I V E S

PART TWO INTERPERSONAL SKILLS

KO 7-1 Defi ne organizational citizenship and state its importance to organi- zational functioning.

KO 7-2 Describe the major steps in the performance-management cycle.

KO 7-3 Describe the advantages and disadvantages of different performance assessment methods.

KO 7-4 Understand the most prevalent errors in performance assessment.

KO 7-5 Articulate the key factors that contribute to effective performance feedback.

KO 7-6 Contrast consultative and expert coaching.

7 Managing Employee Performance

KNOWING DOING

“I never cease to be amazed

at the power of the coaching

process to draw out the skills or

talent that was previously hidden

within an individual, and which

invariably finds a way to solve

a problem previously thought

unsolvable.”

— John Russell, Managing

Director, Harley-Davidson

Europe Ltd.

After reading this chapter, you should be able to:

DO 7-1 Manage employee attitudes to reduce turnover.

DO 7-2 Set clear performance expectations. DO 7-3 Evaluate job performance using

multiple methods and multiple sources of data.

DO 7-4 Overcome common errors in observing performance.

DO 7-5 Deliver effective performance feedback to a peer or an employee.

DO 7-6 Diagnose employee problems and manage them with performance improvement discussions and training.

DO 7-7 Make a reassignment or termination decision.

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> > Case: The Dallas Mavericks

A recent article in the fi eld of human resource management is entitled

Everyone Hates Performance Evaluation and it has become very popular among managers and employees alike. The reason for the popularity is that most of us have had (or know of) negative experiences with performance evaluation and thus the title resonates with us personally. Per- formance evaluations are often disliked because they tend to be subjective and often not related to important performance objectives. For example, all too many perfor- mance appraisals rely solely on sub- jective individual traits like initiative or professionalism or, even worse, attractiveness, height, or charisma.

Aware of the common weak- nesses in evaluation, and how those weaknesses manifest themselves in

the evaluation of professional bas- ketball players, Mark Cuban, the owner of the Dallas Mavericks NBA basketball team, decided to do things a different way. Partnering with Wayne Winston, a professor of decision sciences at Indiana Univer- sity, and author of the book Math- letics, Cuban sought to evaluate his players in a more objective way— one in which their evaluation was not tied solely to individual statistics.

1. How are professional basketball players typically evaluated, and what are problems/limitations with those typical appraisals?

2. If you were a team owner, on what measures would you want your players evaluated?

3. Would it be worth a signifi cant investment in performance eval- uation? Why or why not? What benefi ts could be achieved?

EVERYONE HATES PERFORMANCE EVALUATION—BUT THEY REALLY SHOULDN’T

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1. Critiquing an Existing Performance Evaluation Form Shown in the following is an authentic reproduction of the performance appraisal used for the servers at a typical chain restau- rant (disguised here as “Chez Beaumaire”). Recognizing that you have recently completed a management course and are up to date on the latest evidence and best practice, your boss asks you to do three things:

1. Briefl y make the case for him that effective performance appraisal is important enough that the managers at his restaurant should care enough to improve their form. Illustrate your arguments specifi cally in terms of the positive outcomes for that restaurant (critique the existing form with respect to its strengths and weaknesses: What does it help them accomplish? How does it limit them?).

2. Make recommendations for improvement—including some examples or illustrations of things you think would better help them meet their performance evaluation objectives. Be sure to include an explanation of why your improve- ments are better than what they currently do and also why these improvements will not create an overwhelming amount of extra work or hassle.

CHEZ Beaumaire Server Performance Evaluation

# of hrs worked/wk __________________________________________________________________________________ Direct supervisor ____________________________________________________________________________________ Performance Evaluation (Please rate against all other servers previously assigned to you)

Poor Average Outstanding

Customer service 1 2 3 4 5 6

Willingness to perform assignments 1 2 3 4 5 6

Able to perform assignments 1 2 3 4 5 6

Punctuality 1 2 3 4 5 6

Cooperativeness 1 2 3 4 5 6

Initiative 1 2 3 4 5 6

Attitude 1 2 3 4 5 6

Overall evaluation 1 2 3 4 5 6

Recommendations/comments

____________________________________________________________________________________________________

I HAVE DISCUSSED THIS PERFORMANCE EVALUATION WITH THE ABOVE SERVER

_____ Yes _____ No Signature __________________ Date _____

2. Evaluating Job Performance Last summer, you were an intern at Techlo, a logistics company catering to the high-tech industry. The internships were extremely attractive with high pay and great perks. One reason the internships are so attractive is that of the three interns Techlo takes each summer, at least one is traditionally offered a job after graduation. In fact, you took a job offer and you’ve been working for Techlo for one year. Given your clear understanding of the intern role, your boss assigns you the responsibil- ity of managing the new interns. Critical to this role will be to evaluate their performance over the four-month internship. Your boss will use your evaluation as the primary factor in determining which intern will be invited to join the fi rm full-time after graduation.

How should you determine the best-performing intern? How can you ensure the process for evaluating the interns’ per- formance is fair? Are there typical mistakes managers often make in these situations? The interns are all very talented, so what might help you distinguish good from great?

3. Managing Both the Problem and the Star Employee Your assistant operations manager, Ken, is truly a great guy. Everybody loves him. He’s funny, very social, and good-looking. He also seems to be a great source of support for other employees. Indeed, several fellow employees would claim Ken among their best friends. Ken seems to have everything going for him. There is only one problem—Ken doesn’t get results. In the

MANAGE WHAT?

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Introduction

The best managers know that their success stems largely from their people and they clearly understand three fundamental principles about effective management: 1

Principle 1: Management is the intervention of getting things done through others.

Principle 2: Managers need their people more than those people need the manager.

Principle 3: Managers get rewarded for what their employees do, not for what the managers do.

Put simply, the job of managers is to make their people as successful as possi- ble. Managers only succeed when their people succeed. Although that may seem straightforward, it is often one of the most diffi cult realizations for successful individual contributors making the transition to a management role: learning to get things done through other people—performance management.

Helping employees succeed through performance management involves set- ting expectations for employees, assessing their job performance, and provid- ing effective feedback. This process forms the basis of the relationship between employee and manager, and nothing is more important to a manager’s success than that relationship. Employees rely on this relationship to understand their performance, obtain rewards, seek advancement, and gain social support. Man- agers rely on this relationship to effectively structure and delegate work, generate ideas, and solve problems. Thus, it’s not surprising that performance manage- ment is not an event or two but really a day-to-day practice that results in stron- ger manager–employee relationships and results.

The challenge of becoming effective in managing employee performance, however, lies in the inherent discomfort involved in judging others. Whether it’s assessing an employee’s performance or delivering negative feedback, most peo- ple are not naturally comfortable playing such a role. There is a certain appeal to simply holding people accountable for results (which, by the way, is not as easy as it sounds) and ignoring the behaviors and processes they use to attain such results. However, that approach ignores the value of performance management, which, when done effectively, can dramatically improve individual performance. 2 Unfortunately, though we know a great deal about what makes for effective per- formance management, such information is often ignored in favor of intuition

two years Ken has worked in your store, he has never once met a single goal. You’ve met with him on numerous occasions about his performance, and each time he tells you the same thing, “I’ll work on it, boss. You don’t have to worry about me.” After these conversations, Ken puts in a few good weeks and sometimes shows improvement. Shortly thereafter, however, his performance slides again.

What steps should you take to deal with Ken’s subpar performance? What needs to be done fi rst? How strict or harsh should you be? Should you be concerned about damaging the positive employee feelings toward Ken? One of Ken’s peers, Venkat, is very quiet and reserved but has had exceptional performance over the last year. In what ways should you manage Venkat differently than you do Ken?

4. Conducting an Effective Performance Appraisal Feedback Session You have been a supervisor of three people for the last year and next week is scheduled to be your fi rst formal feedback ses- sion. You generally hated these sessions before you became a manager and you’re really nervous and hoping they go well. What should you hope to accomplish? What are the key rules and important tactics to keep in mind? What are the most com- mon and insidious traps that often characterize these sessions?

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Job Performance

Before we discuss the details of the performance management process, it’s important to understand the nature of performance itself. In fact, when asked, “What is it that managers manage anyway?” the short answer is simply “job performance.”

Job performance consists of two major components: task performance and contextual performance . Task performance refers to the core substantive or technical tasks that are essential to any job. As we’ll discuss in this chapter, all jobs have a set of critical job tasks. 4 Task performance, then, involves employ- ees’ behavior in accomplishing these tasks. Typically, managers are concerned with how effective and effi cient employees are in accomplishing their critical job tasks—where effectiveness refers to the results an employee achieves and effi ciency refers to the amount of resources dedicated to attain the results. Ide- ally, managers want employees to be both highly effective (that is, meet or exceed their goals) and highly effi cient (meaning they expend as few resources as pos- sible). Sometimes, however, these two aspects of task performance may be at

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• People are naturally good observers of behavior. Although most people think they can make accurate judgments about others’ behavior or intentions, the fact is that without concerted discipline and utilization of some evidence-based methods, most human beings are miserable at accurately judging others’ behavior.

• Performance management is mostly common sense. While most everyone wishes that were true, the reality is that a majority of people are less than satisfi ed with the way they are managed. Recent reports suggest an “under-management” phenomenon, noting that as few as 10 percent of managers practice the most basic elements of effective performance management on a consistent basis (see Management Live 7.1).

• Feedback is always effective. Conventional wisdom states that providing feedback to employees about their performance should generally lead to performance improvement. Yet substantial research reveals that poorly administered feedback can actually lead to decreased performance! 3

• Performance management is only for low performers. All players can benefi t from a good coach—not just the struggling ones. Some people will need more time dedicated to them than others, but a great coach can decipher when and what type of coaching each employee requires.

• Performance management is HR’s responsibility. Although a human resources department in an organization can support a manager’s efforts, the primary responsibility for managing others’ performance lies with managers. This myth is often believed because managers want to believe it—and who wouldn’t want to delegate such an important but also complex task? Great HR departments and managers know that for employees to be most effective, they need a manager committed to performance management.

MYTHS 7.1 Myths of Performance Management ? ?

and “commonsense” approaches. Indeed, common sense often leads to dysfunc- tional practice and is one of several myths (seen in Myths 7.1) that contribute to misunderstandings and lower-than-desirable performance.

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CHAPTER 7 Managing Employee Performance 241

odds. For example, consider the employee whose job it is to craft highly special- ized products or services, such as an executive chef. The chef may waste con- siderable resources (for example, throwing away an expensive cut of meat that wasn’t prepared to a certain standard) in making sure that the end product is highly effective. Conversely, consider the sales employee who spends very little money on entertaining clients but is not very effective in actually closing any new business. Most managers must deal with the inherent tensions in balancing these two key results of task performance. Regardless, task performance is generally considered to be “the bottom line” for most managers, and any good manager can expect to spend substantial time paying attention to his or her employee’s task performance.

The second component of job performance is that of contextual performance, also known as organizational citizenship behavior ( OCB ) . OCBs are employee behaviors that contribute to the overall effectiveness of the organization but are not formally required or considered part of an employee’s core tasks. Examples include volunteering to work on a project that is not part of one’s job, helping a co-worker learn a new task, and following organizational rules and procedures. Based on this description, it shouldn’t surprise you that OCB has often been referred to as “good soldiering” (see Table 7.1 for examples of OCBs). Unlike task performance, where job tasks differ greatly depending upon the job or occupa- tion, OCB tends to be common across many jobs and occupations.

Importantly, managers typically want “good citizens,” not simply because they’re nicer to be around but because OCB contributes to the effectiveness of an organization, even though such behavior is often less obvious and is certainly more indirect. For example, recent meta-analyses (including more than 50,000 people in total) examining the consequences of OCBs found that OCBs are strongly related to increased individual task performance, unit or department performance levels, as well as organizational productivity and profi tability. 5 Fur- ther, when employees engage in OCBs, they were found to be less likely to quit or be absent from work, and to have customers who are more satisfi ed. Thus, the evidence is clear that managers ought to be concerned with not only the results employees produce but also how they contribute to the organization in ways that don’t always show up in a job description.

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Altruism. Behaviors that have the effect of helping a specifi c other person with an organizationally relevant task or problem.

Civic Virtue. Behaviors regarding responsible participation in the political life of the organization. Civic virtue implies a sense of involvement in what policies are adopted and which candidates are supported. Behaviorally, civic virtue takes such mundane forms as attending meetings, reading mail, discussing issues on personal time, voting, and “speaking up.”

Conscientiousness. Employee behavior that goes well beyond the organization’s role requirements, in the areas of attendance, taking breaks, and obeying organizational policies.

Courtesy. Actions such as touching base with those parties whose work would be affected by one’s decisions or commitments. Providing advance notice, reminders, and passing along information are all examples of courtesy.

Sportsmanship. Behavior indicating an individual’s willingness to tolerate less- than-ideal situations by not fi ling petty grievances or complaining about minor issues. An employee who exhibits sportsmanship behavior can be described as being a good sport.

TABLE 7.1 Organizational Citizenship Behavior (OCB) 6

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Job Attitudes

Although it’s common for managers to talk about an employee’s “attitude prob- lem,” such a phrase makes little sense. Attitudes are appraisals or evaluations of people, objects, or events. All of us possess attitudes on any number of topics from religion and politics to television and sex, and yes even managerial prac- tices. When it comes to work-related attitudes, one of the more prevalent errors made by managers is to assume that peoples’ attitudes and behaviors are always highly correlated. We falsely assume, for instance, that poor job satisfaction will always be associated with poor job performance. Unfortunately, attitudes can be quite complex and just because a person possesses a strong attitude doesn’t mean that her behavior will be consistent with that attitude. For example, you may hold the attitude that it’s imperative people start being more environmen- tally responsible. Despite this attitude, you may engage in behaviors that would be inconsistent with such a strong belief such as using that unrecyclable coated- paper coffee cup you may be drinking from right now!

Because behavior doesn’t always follow attitudes doesn’t mean, however, that managers should ignore employee attitudes. To the contrary, managers should care about employee attitudes because attitudes play a key role in employee behavior. More specifi cally, some job attitudes are associated with withdrawal behaviors , whereby individuals are more likely to avoid or leave the work situ- ation altogether. Withdrawal behaviors, such as turnover and absenteeism, or even counterproductive work behaviors (for example, theft) are not only expen- sive but can be highly disruptive as well. Conversely, some positive job attitudes are associated with employees demonstrating extra effort or engaging in OCB. Thus, understanding, monitoring, and managing key employee attitudes along- side of performance management can greatly increase a manager’s success.

One major obstacle to understanding attitudes, however, is determining how best to collect information about employee attitudes. Although it might be tempting to simply ask employees directly (for instance, “Are you satisfi ed at work?”) or indirectly (for example, give them a survey asking such questions), employees are not likely to be forthcoming to questions that are not anonymous or where the manager could easily tie responses to a particular employee. Given these challenges, managers should seek outside groups to help elicit employee attitudes. This could include an organization’s human resources or organiza- tion development department or a consulting fi rm specializing in organizational focus groups or surveys. These professionals are trained to understand the many potential social and ethical pitfalls associated with collecting employee attitudes and feeding back the information to managers in ways that will be productive and safe for all involved.

With this in mind, in the following we describe three critical job attitudes to pay close attention to: job satisfaction, organizational commitment, and organi- zational cynicism.

Job Satisfaction

We’re fairly certain you’ve heard the many platitudes regarding job satisfaction such as “Happy workers are productive workers!” Such conventional wisdom captures the concept of job satisfaction or how an individual feels about his or her job. In its simplest form, job satisfaction is a global assessment of all aspects of one’s work role. Job satisfaction can also be viewed as an appraisal of specifi c aspects of the job role including satisfaction with one’s pay, co-workers, super- vision, promotional opportunities, and the work itself. Despite conventional

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wisdom about happiness and performance, decades of research have shown that job satisfaction is only moderately related to job performance. 7 However, the relationship between satisfaction and performance is stronger for jobs that are more complex because they offer employees more autonomy to make decisions about their work.

For some time, there was debate about whether job performance might be the cause of increased job satisfaction (for instance, “I perform well so therefore I am happier about my job”); however, a recent large-scale study seems to sug- gest that, by and large (there are some exceptions), it is satisfaction that helps enable performance. 8 Practically speaking, however, managers should not expect that attempts to simply “make people happy” on the job are a prescription for improved performance. Indeed, many organizational interventions have failed because they were built on the all-too-simple premise that making employees happy is the key to success. You already know, for instance, that while an indi- vidual may not be satisfi ed with his overall level of pay, what matters most is how equitably he is paid compared to others in similar jobs.

As noted earlier, great managers pay close attention to satisfaction because of the potential consequences beyond job performance. For example, satisfaction has been associated with increased customer satisfaction and loyalty. 9 Further, research has shown that satisfaction with the work itself is strongly associated with increased motivation and involvement on the job, and decreased turnover intentions. Similarly, satisfaction with one’s supervisor is highly correlated with increased engagement in OCBs, while satisfaction with co-workers is strongly associated with team cohesiveness. 10 This research clearly demonstrates the need for managers to understand not just whether or not employees are satisfi ed but the exact nature of their job satisfaction.

Organizational Commitment

Organizational commitment is an attitude representing the extent to which an employee identifi es with his organization and desires to remain a member of the organization. Generally speaking, there are three different forms of organizational commitment attitudes, each one representing a particular aspect of commitment. 11 Affective commitment represents an emotional attachment to the organization. People who are affectively committed want to stay with the organization because they feel a personal connection with people (for instance, “I have good friends at work”) or experience enjoyment from membership. Normative commitment is a wish to stay with the organization out of feelings of obligation (for example, “My boss gave me a chance when no one else would; I will never leave her”). Continu- ance commitment is a desire to stay with the organization because the costs of leaving outweigh the benefi ts (for instance, “I received $20,000 in tuition reim- bursement, which I will owe back if I don’t stay another two years”).

Although all three represent various means of commitment to the organiza- tion, some have noted that continuance commitment is less about commitment and more about a feeling of being “handcuffed” to the organization. Not sur- prisingly then, research shows that individuals who possess higher continuance commitment are less likely to quit but more likely to be lower performers! 12 That is, when people feel like they have no other choice than to remain with the organization, their performance suffers. The strongest fi ndings for com- mitment, however, seem to emerge more from affective and normative com- mitment. Like job satisfaction, research has shown that employees who are more strongly committed to the organization show lower levels of absentee- ism and turnover, and for some employees higher job performance. Further, research has shown that managers can have a strong infl uence on employees’

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level of commitment by engaging in important leadership behaviors such as setting high expectations, providing a compelling vision, and stimulating new ideas. 13 See Chapters 8 and 9 for a more complete discussion of how to increase employee commitment.

Organizational Cynicism

Everyone knows someone who seems to be overly critical of any new idea or proposed effort. Such an attitude may be indicative of organizational cynicism which is generally defi ned as an attitude of contempt, frustration, and distrust toward an object or multiple objects. 14 Importantly, cynicism in organizations is not the same thing as healthy “skepticism,” where an individual is playing devil’s advocate with the intent of improving a decision or being critical in order to explore assumptions underlying a particular effort. Rather, organizational cynics display a deep loss of faith or confi dence in management’s ability to do the right thing. So, regardless of how rational or thorough a particular decision might be, the organizational cynic isn’t “buying it.”

As you probably can guess, organizational cynicism is an attitude that can quickly become a toxic infl uence in work groups. Research has shown that orga- nizational cynicism is associated with decreases in organizational citizenship, job satisfaction, organizational commitment, motivation, intentions to quit, and intent to create change. Further, scholars have also shown that cynicism among managers results in lowered performance evaluations of managers by senior lead- ers in the organization. Thus, whether manager or employee, cynicism seems to have mostly harmful effects in organizations. 15

When asked about cynics in their organizations, we bet most managers would assume that cynicism is a personality trait and therefore “once a cynic, always a cynic.” To the contrary, research has shown that in fact cynical atti- tudes are largely shaped by experiences in the work context. 16 Such experiences can include organizations achieving consistently poor results, layoffs, repeated failed change efforts, breaches of implicit employment contracts, and excessive executive compensation. 17 Thus, while it would be easy to dismiss a cynic as someone who was born to criticize or be negative, cynics tend to instead be well- intentioned individuals who have felt the organization (specifi cally managers) has broken too many promises. The good news here is that despite the poor infl u- ence cynics have in the organization, managers can work to reshape their experi- ences by establishing credibility and trust over a period of time. The major trap in turning around the cynic is to blame the cynic for her poor attitude. Again, cynicism usually results from a long history of unmet expectations. Thus, man- agers should start by accepting blame themselves for the organization’s poor per- formance in keeping its promises. Tool Kit 7.1 discusses methods for effectively managing the organizational cynic.

Performance Management: The Day-to-Day Work of Great Managers

The essential elements of performance management can be concisely framed in a simple diagram (see Figure 7.1 ) of the performance management cycle (PMC) . Generally stated, the primary role of a manager is to establish expectations, assess performance, and provide feedback and development. Even though this sounds like a simple process, see Management Live 7.1 to see how infrequently these per- formance management basics are actually practiced.

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Yet for many managers hiring their own people is a luxury; most managers inherit a group of employees. There are, of course, no guarantees that the previous manager took careful steps to assess candidate potential in the selection process. Thus, great managers must learn to manage performance regardless of the cir- cumstances they inherit. This includes evaluating performance as well as learning how to manage and develop employee performance. Through the PMC, managers set clear performance expectations early and often. In addition, they frequently assess performance and provide the feedback necessary to keep employees on

Tool Kit 7.1 Managing the Organizational Cynic 18 A few key strategies can be employed when managing the organizational cynic within the context of organiza- tional change.

1. Deal with the past. The past is always at the heart of cynicism. It is past mistakes, failed attempts, and so forth that reduce a manager’s overall credibility. Thus, a manager must fi rst attempt to regain that credibility—to be seen as honest and competent. Start by admitting your mistakes. You might be inclined to say, “But I wasn’t even around when these past events happened!” It doesn’t matter—the reality is you are management now and you represent all that transpired with management then. Take action to rectify any negative consequences from past failures and say “I’m sorry” when hardships or bad feelings are present.

2. Involve cynics in change efforts. The cynic has insight into where mistakes have been made and as some research indicates is likely to provide much more feedback on how to avoid mistakes in the future. The trap here is to ignore the cynic, to marginalize him. This will only serve to reinforce his cynical perceptions.

3. As you plan a change initiative, don’t make future promises you can’t keep. Another trap in managing the cynic is to over-promise the benefi ts of a particular change effort in the hope that she will be “won over.” Even if the change effort is successful, there are likely to be aspects that were subpar.

4. Over-communicate. Cynics will interpret silence from their manager as an indication that once again, the organi- zation is hiding things or not being fully transparent. Be honest and communicate what you do and don’t know.

5. Involve cynical “converts.” Sometimes the best people to turn around cynics are those who were known to be cynical in the past but have since become champions of the organization’s efforts. Bring these folks into discussions to talk about how the organization has found ways to be successful.

MANAGER’S TOOL KIT

FIGURE 7.1 The Performance Management Cycle (PMC)

Set Performance Expectations

Assess Performance

Feedback Performance

Choose the Right Person for the

Right Job

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track. When performance is achieved, great managers recognize and reward achievement. When expectations are not met, great managers diagnose the perfor- mance defi ciency and repeat the PMC. Doing so sometimes may involve reassign- ing an employee to a job that more appropriately utilizes the employee’s skills. In some cases, it could involve terminating the employment relationship.

Setting Expectations and Evaluating Performance

Performance standards should never be a surprise, because nothing frustrates employees more than not knowing what is expected of them. Expectations should never be set informally through hallway conversations or periodic e-mails; rather,

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The “Under Management” Epidemic According to Bruce Tulgan of Rainmaker Thinking Inc., all good managers should master fi ve management basics:

1. Make clear performance statements.

2. Set measurable goals and hold people accountable for those goals.

3. Accurately monitor and evaluate work performance.

4. Provide clear feedback about performance and improvement.

5. Distribute rewards and punishments fairly.

Following these management basics produces “engaged” employees who are motivated and productive. Yet Tulgan’s research showed that few managers actually do these management basics regularly.

0 At least

once a year At least

once a month

P e rc

e n ta

g e

At least once a week

At least once a day

20

40

60

80

The problem Tulgan uncovered is that, while good management boils down to a handful of critical behaviors, few managers are willing to do what is necessary to engage in those behaviors. Whether it is due to a lack of time, lack of skill, or the fear associated with judging people, “under management” is widespread.

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CHAPTER 7 Managing Employee Performance 247

they should be established through a formal meeting with each employee. Discus- sions should include expectations for the context of work (such as when the workday begins and ends), how work gets done (for example, telephone versus face-to-face sales calls), and actual work goals (complete 42 sales calls per month for existing cus- tomers). The goal should be to establish a mutual performance contract. This is not an employment contract, but a document that stipulates performance expectations. To create this contract, you will need to structure exactly what it is you want to commu- nicate regarding performance. Topics to address in this contract discussion include:

• Critical job tasks

• Performance goals

• Professional conduct

• Resource requirements

• Developmental goals

Remember, this is a mutual process. Great managers make this conversation two-way by inviting employees to identify their expectations for the manager as well as their own personal performance.

Ensuring Goal Commitment

Recall from Chapter 1 the power of goal setting. This is one opportunity to put that technique into practice and tie it to performance standards and rewards. Setting SMART goals isn’t enough; managers also need to gain employees’ commitment to those goals. The mutual contract discussion is the perfect time to start enhancing employees’ commitment to goals by engaging in the following behavior. 19

• Make it public. Public goals increase goal commitment by creating an environment in which the employee is accountable to more than herself.

• Be supportive. When managers are supportive of employees’ goals, they express confi dence in the employee that he can attain the goal.

• Tie to vision/mission. Goals become more meaningful to employees when they are clearly relevant to the organization’s mission.

• Set goals, not actions. Sometimes employee work needs to be struc- tured. In many cases, setting the goal is all that is required, and letting employees determine how to get there, and what actions to take, can increase commitment.

• Track progress and give feedback. Employees will be more commit- ted to goals accompanied with regular feedback whereby they can assess their progress. More on feedback is provided later in the chapter.

• Ensure resources. Few employees will be committed to goals that require unattainable resources. The role of a coach is to ensure the proper resources (time, money, education, technology) are available or readily attainable.

• Remove obstacles. Managers must pave the way for employees by removing organizational obstacles. It is the role of a coach to advocate for employees and to deal with the political roadblocks that could keep them from meeting their goals.

Observing and Assessing Performance

According to a survey of employees in Fortune 500 companies, both managers and employees alike have a particular disdain for performance evaluation. 20 Peo- ple prefer not to be told about defi ciencies, don’t like vague performance stan- dards, feel vulnerable without control, and fear evaluations will not be related

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to their actual performance but based more on their personal relationship with their managers. For their part, managers dislike playing the role of judge, fear lawsuits, feel evaluation takes too much time, and that they have inadequate skills to differentiate performance. All of this is unfortunate as effective evalua- tion plays a central role in improving and sustaining employee performance. 21 To that end, overcoming these barriers and learning the basics of good performance evaluation are critically important.

Defining Job Performance Criteria: Behavior and Results

No matter what performance management assessment techniques you use, you must seek to capture employees’ results and the processes used to obtain those results. Most jobs have some objective outcome or results and require certain behaviors to obtain those results. For example, litigation attorneys have some clear results, such as the number of cases won and settlements reached. Of course, some jobs might require a bit more ingenuity in fi nding the results to be measured. For example, customer service agents are primarily respon- sible for solving customer problems. Results might include the percentage of problems solved the fi rst time versus those escalated to a specialist, or ratings from customer service surveys. To fi nd the results for any job, ask the following questions:

• If this employee performs poorly, what would suffer? For example, would customer service or repeat business suffer? How about revenue? What about customer satisfaction?

• What will this employee’s performance make possible and for whom? For instance, will good performance lead to increased unit performance? What about lower turnover or increased receivables?

A common mistake in performance management occurs when managers exclusively pay attention to employee results. Although results are critical, great managers know there are many ways to get those results—and that achieving them in the right way should be rewarded. For example, customer service rep- resentatives should engage in behaviors like answering the telephone promptly, using professional language, and asking questions that elicit the root of the prob- lem. These are not actual results, but effective behaviors that lead to desirable outcomes. To identify the important behaviors associated with performance, ask these questions:

• What are the most critical steps involved in achieving results?

• If this employee doesn’t do the most critical steps, will he still be able to succeed?

Using a results–behavior matrix is one way to visually classify and assess how an employee’s performance behavior and results work together. Note that in Figure 7.2 the upper right-hand corner of the fi gure represents employee per- formance that achieved results through strong behavior. The lower left-hand cor- ner represents the opposite: poor results and poor behavior. For most managers, these two boxes represent easy performance-related decisions. The upper right should clearly be rewarded with high performance assessments; the lower left certainly deserves lower performance marks.

More diffi cult, however, is what to do with employee performance that falls in the other two boxes of the fi gure. Take the lower right-hand corner, which represents good results attained, but through poor behavior. For example, Ted has the best sales numbers in his region. Unfortunately, Ted got those results by

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stealing contacts from other sales reps and making promises to customers the company couldn’t deliver. Is Ted a good performer? Probably not. Few managers would endorse his behavior as worthy of praise and would likely view his process as harmful to the organization. Looking at Ted’s results alone, however, would have masked critical performance information.

Just as diffi cult is the upper left corner which represents the person who is exhibiting good behavior but not getting results. For instance, Maria has demon- strated she can build strong relationships with her clients, but can’t seem to close the deal and make the sale. Is Maria a good performer? Here again, probably not. Results matter and achieving those results is part of performance. Unlike Ted, however, her behavior may lead her to results the right way, and she should certainly be recognized for her strong process.

Assessing Behavior, Not Traits

The appropriate performance management mantra remains the same: good assessment of future potential and current performance focuses on behav- ior and actual results, not traits or personal characteristics. Unfortunately, substantial research shows managers are highly infl uenced by traits or non- job- relevant information that reduces the accuracy of their assessment. 22 For example, many companies routinely ask managers to assess items such as dependability, initiative, and energy. But what does dependability mean? What would good dependability versus bad dependability look like? Instead of simply measuring the trait of dependability, the challenge is to determine what you mean when you say, “I want dependable employees.” You might mean you want people who arrive on time, accomplish work without frequent reminders, and meet deadlines. These things are measurable! You can track timeliness, work- ing without reminders, and meeting deadlines.

Using Multiple Methods to Assess Behavior and Results

There are multiple ways to assess employee behavior and results, and using mul- tiple methods results in a more complete understanding of performance. In the broadest sense, evaluation methods can be categorized as either objective or subjective.

Objective assessment includes methods based on results or impartial per- formance outcomes. These are usually easily identifi able since they represent employee output that is visible and countable. Results performance is typically

FIGURE 7.2 The Results–Behavior Matrix

RESULTS

B E

H A

V IO

R

Great Results Great Behavior

Great Results Poor Behavior

Poor Results Great Behavior

Poor Results Poor Behavior

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PART TWO Interpersonal Skills250

measured using objective assessment techniques. Examples of objective assess- ment include:

• Minutes to solve a customer problem.

• Sales calls per week.

• Completion versus noncompletion.

• Dollar volume sold.

• Research publications published in last year.

Subjective assessment includes methods that involve human judgments of performance. Subjective assessment methods are often more contentious since they involve opinion by the manager. That does not mean they are not useful. Many aspects of employees’ jobs are not easily “seen” and can’t be counted. For example, objectively quantifying a consultant’s relationship with clients is dif- fi cult. Yet the behavior involved in building strong client relations is central to successful consulting performance so subjective assessments often play an important role. However, since we already know managers do not always make accurate judgments of employee behavior, understanding the implications of the different types of subjective assessments is critical. Typically, managers will employ two types of subjective assessments, separately or in conjunction with one another. These are known as absolute and relative standards. An absolute subjective assessment involves comparing an employee’s performance to that of a “model” described in the performance statement, whereas a relative subjec- tive assessment compares an employee’s performance with another employee’s performance to determine the level of performance. Let’s look at some ways of accomplishing both.

Absolute Assessment Techniques

• Graphic Rating Scale. The most common form of absolute assessment (and evaluation in general) is known as a graphic rating scale . The graphic rating scale is used to assess how much of a particular behavior an employee displays on some graduated scale. For example, a manager might rate the level of customer service displayed by an employee on a scale from poor (1) to excellent (5).

• Behaviorally Anchored Rating Scale (BARS). Much like behavioral interviews, a behaviorally anchored rating scale (BARS) compares job behaviors with specifi c performance statements on a scale from poor to outstanding (or similar sets of descriptors). Although BARS assessments require a little time to develop, they are the best way to keep assessments focused on behavior and provide a little higher precision than graphic rating scales. Thus, like the graphic rating scale, a manager may rate an employee’s performance in customer service on a scale from poor to excellent, but unlike the graphic rating scale, each point on the scale would be behaviorally defi ned (e.g., 1  5  poor; employee ignores customer requests).

Relative Assessment Techniques

• Ranking . A ranking technique is a simple relative assessment. Managers use this technique by listing all employees from best to worst. The tech- nique is quite good for distinguishing high- and low-performing employ- ees, but diffi cult for assessing employee performance in the middle of the group.

Practice this! Go to www.baldwin2e.com

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CHAPTER 7 Managing Employee Performance 251

• Forced Distribution . The forced distribution technique, also known as topgrading , requires managers to assess employees based on pre- determined evaluation categories and to force employees into these categories to form a desired distribution. Only a certain percentage of employees may achieve each evaluation category. For example, three performance levels may exist in a company—poor, good, and outstand- ing—and only 20 percent of all employees can be rated as outstanding, 70 percent as good, and 10 percent as poor. See Management Live 7.2 for more on topgrading.

Using Multiple Sources of Data or People

Few managers have the luxury of observing their employees’ work throughout an entire day, much less an entire year. Thus, effective performance management involves collecting data from others about the employees’ performance that can help confi rm or disconfi rm a manager’s own observations. For example, it would be inadequate for a manager to observe her staff accountant for an hour and assume she has all the data required to evaluate performance. Other sources of data are necessary.

Peers, subordinates, project leaders, and customers can help a manager better assess her employees. Note, however, that all sources have their limitations. For instance, an employee’s peers work daily with the employee and see his behavior

MANAGEMENT LIVE 7.2

The “Topgrading” Debate Few areas of management development have generated more passionate recent discourse among academics and business professionals than that of forced distribution, or topgrading, performance management practices. Forced ranking refers to systems in which individuals are ranked in comparison to one another. Some managers, like high-profi le former GE executives Jack Welch and Larry Bossidy, have extolled such practices as effi cient and pragmatic means of “rewarding your doers” and “muscle-building” your organization. These and other authors often point to the success of General Electric, in both building shareholder value and developing executive tal- ent, as evidence of the effi cacy of forced ranking practices.

Many other organizations such as Heinz and SIRVA have instituted performance management initiatives based in whole or part on the process popularized by Welch and Bossidy. Even highly prestigious universities like Princeton are now topgrading. Princeton restricts the number of A’s to 35 percent of the student body each semester. Many students who earn high marks (say, 93 percent) will receive a letter grade of B!

Others, like well-known authors Jeffrey Pfeffer and Malcolm Gladwell, condemn forced ranking as dys- functional and suggest that such systems will be hazardous to an organization’s culture. They choose their examples from among such organizations as Ford Motor Co. and Enron, which have had well-publicized unsuccessful experiences with forced ranking systems. Among those critical of forced ranking, some take issue with the philosophy of the practice, while others contend they agree with the objectives but “not the way it is often done.”

So who is right? As is typically the case, the answer probably lies somewhere in the middle. The effectiveness of topgrading appears to depend on who is being topgraded and the culture of the organization. Cultures that are highly competitive and attract performance-oriented individuals are likely to see benefi ts from topgrading. In contrast, group- or team-oriented cultures would likely reject topgrading because it may be seen as pitting employees against each other. So as in many areas in management, the “right answer” depends, in this case, on the goals of the organization and what type of organizational culture it is trying to build.

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PART TWO Interpersonal Skills252

fi rsthand. Common sense would dictate giving his peers a survey and using the results as a measure of performance. Yet evidence shows that, when peers know their ratings are used to evaluate another co-worker’s performance, they provide inaccurate ratings. In some cases, they may “play” the system depending on how much they like or dislike their co-worker. 23

Here are a few tips on how to use multiple sources of data.

• Observe Behavior over Time. A single observation of behavior is never enough. Make time to see performance. This may mean going along with an employee to meet a customer, working with an employee on a project, or asking for monthly progress reports.

• Take Notes. Research shows that managers who keep a diary or journal on each employee make more accurate performance ratings and reduce the burden associated with the evaluation process. Start a fi le on each employee. Schedule an hour each month to record each employee’s successes and challenges over the last four weeks. Include any positive and negative data you received about the employee’s performance.

• Ask for Customer Feedback. Customers, internal and external, should be included in assessing part of the employee’s performance. This can be as simple as a few short survey questions, given periodically throughout a performance period.

• Allow for a Self-Evaluation. Employees themselves are a good source of data. They can highlight achievements they’ve made that managers may not often observe. Allow each employee to self-evaluate his or her performance.

• Monitor Common Errors. No matter what the source of data, if those data come from people, they are likely to have some error or inaccura- cies associated with them. In Table 7.2 , we discuss some of the common errors and what to do about them.

TABLE 7.2 Common Errors in Observing Performance and How to Correct Them

Manager’s Error What It Means Technique to Correct

Halo Effect • Judging all aspects of behavior or traits on the basis of a single trait or behavior.

• Can be either positive or negative.

Use multiple raters of performance.

Leniency and Severity • Consistently rating groups of employees as all high performers or as all low performers.

Use multiple raters of performance and a forced distribution or ranking technique.

Central Tendency • Consistently rating all employees as average. • Only using the middle of the rating scale; no high or

low ratings.

Use a forced distribution or ranking technique.

Recency or Primacy • Evaluating employee on only the most recent or initial performance, rather than performance for the entire evaluation period.

• Could lead to false high or low ratings.

Use frequent evaluations, and require raters to maintain logs over the entire rating period.

Similarity or Contrast • Bias due to the perceived similarity or difference between the rater’s job behavior and the employee’s job behavior.

• Similarity bias will lead to infl ated ratings. • Contrast bias will lead to defl ated ratings.

Raters can be trained to correct for bias.

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CHAPTER 7 Managing Employee Performance 253

Providing Effective Feedback

The purpose of feedback is to infl uence future behavioral change, and it can do so if done properly. 24 If done improperly, feedback can actually decrease performance or reinforce poor behavior. 25 Feedback works because it generates energy that serves to motivate the individual receiving it. Feedback also guides behavior in cer- tain directions when motivation to behave is already present. For example, feed- back can serve to generate motivation by disconfi rming an individual’s perception and creating reward expectations. Further, it directs behavior where motivation exists by calling attention to problems that need correcting and where learning needs to occur. 26 In addition, feedback contributes to building strong interpersonal relationships. Thus, feedback can serve as a valuable tool to keep employees on track or get them back on track toward achieving their performance goals.

The Principles of Good Feedback

Let’s elaborate on the critical elements of effective feedback:

• Be specifi c. Specifi c feedback is more effective than vague feedback. People respond most favorably to direct examples of their past behavior.

• Focus on the problem rather than the person. Feedback steeped in personal opinion and unconstructive criticism (for example, “You seem lazy”) is unproductive. 27 Feedback should focus on the task not the person. Avoid people’s perceived motives or attitudes.

• Maximize absolute feedback; minimize relative feedback and com- parisons to others. 28 Feedback that says, “Tyler, you just need to be more like Marcus,” won’t be heard. Focus on whether Tyler is meeting his performance goals.

• Avoid absolutes. Unless you work side by side with an employee daily, you can’t possibly observe everything. So don’t imply you can by using absolute words like “always” or “never.”

KO 7 - 5

D O 7 - 5

“The deepest principle of human

nature is the craving to be

appreciated.”

—William James

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PART TWO Interpersonal Skills254

• Be timely. Feedback is most effective when it is presented close in time to the actual behavior. 29

• Focus on the future. Feedback is inherently backward-looking, but what was done in the past is done. Your role is to infl uence future behav- ior by focusing on what can be done to correct undesirable behavior and continue desirable behavior.

• Include information for improvement. Telling an employee that her behavior is unproductive won’t help unless the employee understands why it is unproductive. Effective feedback includes a statement regarding ways to improve the behavior toward performance.

Doing Feedback Well

Using the preceding guidelines, we have synthesized a few simple steps to keep in mind as a primer to most effectively deliver feedback: 30

1. State the behavior you observed.

2. Describe the impact on self or others.

3. Provide information for improvement or explore improvement with the employee.

To further help you see how important phrasing feedback is, we’ve provided some examples of how to, and how not to, give feedback:

Ineffective Feedback: “You don’t handle your people well; you’re dictating, not managing.”

Effective Feedback: “I’ve noticed you tend not to involve your employees in making decisions. This doesn’t allow them the opportunity to express their own views. In the future, I’d like to see you provide more opportunities for employee input.”

The difference between the two examples is clear. In the ineffective feed- back example, the employee is given a vague and general statement that is overly evaluative. In all likelihood, the employee will walk away with little information to improve performance. The effective feedback example clearly articulates the behavior observed, describes the impact of the behavior on others, and gives direction for the future. Here’s another example:

Ineffective Feedback: “Your presentation of the data was unorganized.”

Effective Feedback: “When you create charts with formats different than the rest of the team’s, it causes confusion in data interpretation. Stick with the standard format to alleviate such confusion.”

Again, the effective feedback example is highly specifi c and behavioral and allows for immediate correction and future focus. Managers often fi nd themselves deliv- ering ineffective feedback when they are angry with an employee. Instead of communicating that anger, however, managers simply provide curt and unpro- ductive statements, masking what they really want and need to say. According to managerial psychologist Edgar Schein, this withholding of negative information that needs to be said does more harm than good. Communicate your anger about the employee’s behavior, and don’t lose sight of good feedback principles. Here is an example of communicating your anger in a productive way: 31

Ineffective Feedback: “You really blew that meeting John. You lack initiative and are just not aggressive enough for this kind of work.”

Effective Feedback: “John, I’m pretty upset about what you’ve done. When we got stuck on the ABC project, you seemed willing to let matters drift

Practice this! Go to www.baldwin2e.com

“You have to get ongoing feed-

back to push you out of your

comfort zone.”

—Kevin Sharer, CEO, Amgen

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CHAPTER 7 Managing Employee Performance 255

instead of coming up with a proposal for how to confront the problems and move forward. When the other division challenged the direction you were going, you backed off instead of showing them why your solution was the right one. I have seen both of these patterns on other projects and am con- cerned about the lack of initiative and assertiveness that is implied by such behavior.”

Unfortunately, although the principles are relatively simple, delivering effec- tive feedback is hard to do and people often react negatively to receiving it. 32 Many become defensive, due to our human instinct to protect our self-image. Because defensiveness can lead to anger, managers are often reluctant to say what people need to hear. As such, quality feedback for improvement becomes obscured and hidden in platitudes and niceties. Even well-intentioned and confi - dent managers fi ght their discomfort because they know how diffi cult it is to get candid feedback heard and acted upon. For an example of how to run a perfor- mance appraisal meeting well, see Tool Kit 7.2.

Managing Perceptions of Fairness in Performance Management

Managers fi nd managing performance and giving feedback to be so diffi cult in part because of the enormous burden of responsibility it represents. Performance management activities involve some of the most important and sensitive decisions

Tool Kit 7.2 Managing the Performance Appraisal Meeting If you’ve done your job through the performance management cycle, running a good performance appraisal should be rather easy because your employee will know exactly where she stands prior to that meeting, based upon your continual feedback about performance against her goals. Here are the basic steps in conducting the meeting.

1. Set the agenda and location. Clarify expectations for the meeting and set the process, including where the meeting will take place. We like neutral territory such as a conference room. Employees often wonder how much they’ll be able to talk or what managers expect from them in the meeting itself. We like managers who are very clear about what will happen, for instance, “We’ll use this meeting to review your goals from the past year (10 minutes), discuss your performance against these goals (20 minutes), . . . ,” and so forth.

2. Review expectations. Take a few minutes to simply state the goals and criteria upon which performance was evaluated. Again, this should not be surprising given your frequent feedback and early expectation setting.

3. Allow the employee to review his performance. Give your employee the opportunity to review his per- formance against the standards set in his own words. One easy way of doing this is to have the employee provide a self-evaluation ahead of the meeting and to review it with the manager during the meeting. Don’t debate his evaluation, but rather actively listen, take notes, and encourage elaboration where necessary.

4. Provide evaluation. Acknowledge accomplishments and discuss positive and negative feedback based upon the data you’ve collected to measure performance. This is the time to comment on all aspects of performance, including professionalism and citizenship. Remember to focus on behavior and job tasks!

5. Engage in discussion about the future. Now it’s time to set future goals which could include improvement in any of the previous areas (for example, particularly with respect to professional development). You’re now starting the performance management cycle anew.

MANAGER’S TOOL KIT

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PART TWO Interpersonal Skills256

within organizations, such as promotions, performance assessments, and pay decisions. The visibility of these activities makes performance management a highly scrutinized aspect of management. Indeed, substantial research shows people respond favorably to fairness but are also highly sensitive to being treated in ways they perceive as unfair. More specifi cally, when employees view their job situation as “fair,” they are less likely to withdraw from their work and more likely to be satisfi ed, perform better, and contribute to the organization beyond their stated job requirements. 33 Thus, maintaining a persistent focus on fairness is a hallmark of a good manager. As discussed in Chapter 4, perceptions of fair- ness are based on three primary factors: (1) the presence of a defi ned process, (2) a clear and communicated rule or decision model for distributing rewards, and (3) demonstrated respect for people.

• Use a fair, defi ned process. Employees view performance management as fair if they have input into the policies and procedures used to make decisions. In addition, employees want to see that the process is applied in a standard way. For example, evaluating two employees in the same job role using different performance standards is likely to lead employees to view the process as unfair.

• Distribute rewards and resources fairly. Employees will view per- formance management as fair when rewards and resources that follow from performance assessment are distributed fairly. This includes pay- ing close attention to the three potential rules for allocating rewards discussed in Chapter 4: (1) the equity rule , where resources and rewards are distributed to employees based on their contributions, (2) the equality rule , where resources and rewards are distributed so that each employee gets the same outcome regardless of contributions, and (3) the need rule , where resources and rewards are distributed to those who need them most. For a practice to be just, it doesn’t have to follow all three rules, but should follow at least one. For example, offer- ing health benefi ts to some employees and not others violates the equal- ity rule. Giving everyone a bonus, regardless of performance, violates the equity rule.

• Demonstrate respect. Respect comes in many forms. First, manag- ers must treat people with dignity when evaluating performance. Not all employees are stellar performers, but they are all humans, so treat them as such. Second, provide solid explanations and rationale for all performance management decisions. Employees understand that not all performance-related decisions are positive. What they won’t understand is why you won’t share the basis of your evaluation and the rationale for your decisions.

Dealing with the Problem Employee

The logical assumption behind feedback is that providing information about performance will lead to performance improvement. But what if, after multiple attempts to correct poor or inadequate performance through feedback, nothing improves?

We use the term problem employee to denote an employee who after repeated feedback interventions has not improved performance. Note, we caution manag- ers to not confuse this term with “bad person” or other disparaging or demean- ing labels. Like Ken in the Manage What? scenario at the beginning of this chapter, there are plenty of wonderful people who simply don’t perform. The

D O 7 - 6

D O 7 - 7

“Managing is like holding a dove in

your hand. Squeeze too hard and

you kill it; not hard enough and it

flies away.”

—Tommy Lasorda

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CHAPTER 7 Managing Employee Performance 257

problem with the problem employee is that he can’t or won’t change his behavior to meet acceptable levels of performance. The key to dealing with these problem situations is to determine the true source of the low performance and intervene to correct it. Great managers apply a disciplined framework for improving per- formance, which includes three fundamental steps: (1) diagnose the problem, (2) hold a performance improvement discussion, and (3) provide training when appropriate.

Diagnose the Problem

When multiple feedback attempts have failed, it is important to dig deeper and seek the reason for such failure. Recall that performance is a function of motivation, ability, and opportunity. No amount of feedback can replace talent, skills, and abilities, nor will it replace real opportunities to practice and improve. Managers must also turn the spotlight on themselves and ask what role they play in their own employee’s performance failure. Sometimes, a simple reality check about this role is helpful. For example, perhaps the goals set for the employee are unattainable given the resources available. Although it is tempting to simply blame the employee for performance failure, it is not always a “person” issue. In Tool Kit 7.3, we provide a series of key questions and corresponding actions to understand the root cause of a performance failure.

Hold a Performance Improvement Discussion

When a manager can say that (1) the employee’s performance is below expecta- tions, (2) multiple opportunities for performance improvement have been pro- vided, (3) the major cause of the performance defi ciency is due to the employee,

MANAGEMENT LIVE 7.3

Revenge of the Plant Workers A study by Professor Jerald Greenberg shows quite clearly the often hidden costs associated with perceptions of unfairness. In his research, two plants in the same company were anticipating a 15 percent pay cut for their work- ers. The pay cut was temporary and was to last 10 weeks. In plant A, management provided detailed explanations about why the cuts were necessary and how they would work. In addition, management expressed a great deal of regret in their announcement, acknowledging the sacrifi ce they were asking employees to make. In plant B, however, only a brief explanation was given, and management did not apologize or communicate regret for the decision.

Prior to these announcements, inventories (tools, supplies, and so on) in the plants were counted and were roughly equal. After the announcement, researchers measured the inventories and found that while both plants experienced theft, plant B had a signifi cant increase in “missing” inventory (from 3 percent normally to 8 percent after the announcement) compared to plant A. Apparently, employees in plant B who felt a sense of unfairness in the pay cut sought retribution by stealing inventory.

The lesson is simple: Taking time to explain decisions and making decisions transparent go a long way in pro- moting fairness and keeping employees committed to the well-being of the organization.

Source: Greenberg, J. (1990). Employee theft as a reaction to underpayment inequity: The hidden cost of pay cuts. Journal of Applied Psychology, 75, 561–568.

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PART TWO Interpersonal Skills258

and (4) the employee wants to improve her performance, a face-to-face discus- sion should take place. The steps and content of the discussion are outlined as follows. 35

1. Agree on the Problem. Agreement suggests that the manager and employee have a shared understanding that a problem exists and the nature of that problem. This sounds simple, but many managers fail in this step because they tell the employee, “We’ve got a problem, your per- formance is low,” and then try to fi x it. Performance management experts note the employee must truly agree that his behavior is problematic and has important organizational and personal consequences. That is, the employee must “own” the problem and understand that it is hers to rec- oncile. Until there is agreement about the problem, no further discussion can occur.

2. Mutually Discuss Problem Solutions. The key question that needs to be answered is “What will you (the employee) do differently now that you understand the problem?” Non-behavioral responses and solutions are not effective. For example, “I’ll work harder, boss,” and “I’ll move some things around in my schedule and take care of this” are not solutions but rather responses that generally don’t lead to behavior change. An effec- tive collaborative process requires the manager and employee to generate behavioral options and arrive at a solution.

3. Create an Action Plan. Recall from Chapter 6 on motivation that specifi c action plans must follow specifi c goals. Once an option has been selected, an action plan must be devised that the employee will commit to using to improve performance. Action plans must include (1) steps for improv- ing (exactly what will be done and when), (2) a timeline (with dates tied

Tool Kit 7.3 Analyzing a Performance Problem 34 This guide highlights the key questions to ask regarding a performance problem and shows the general actions to take, depending on the response.

MANAGER’S TOOL KIT

Question to Ask If . . . Action to Take

Does the employee know what is expected of him or her?

No Reinforce expectations and seek mutual understanding of those expectations.

Does the employee know performance can be improved?

No Tell the employee there is room for performance improvement.

Are there obstacles the employee faces beyond the employee’s control?

Yes Remove the obstacles. If it can’t be done, revise the performance expectations to take this into account.

Does the employee know how to improve? Does the employee lack particular skills necessary to perform?

Yes Provide training and practice opportunities to acquire skills.

Do negative consequences follow good performance?

Yes Reinforce good performance with positive consequences.

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CHAPTER 7 Managing Employee Performance 259

to each action step), (3) the resources required, including additional skill development if necessary, and (4) a plan for follow-up and evaluation. The fourth component is often overlooked. It is critical to document the plan and have the employee periodically demonstrate that she is moving in the right direction.

4. Provide Ongoing Feedback: Reinforce Improvement. As the person attempts to improve performance, the manager must provide feedback letting the employee know if improvement is truly occurring. In doing so, the manager is reinforcing such improvement. If improvement is occurring, then the manager’s role is simply to state that she sees improvement and to recognize that improvement verbally. For exam- ple, “Looks like you have made signifi cant strides in the percentage of clients retained since our discussion, great work!” If improvement is not occurring, the manager needs to communicate this observation immediately. Great managers do not reward zero improvement. That is, they do not tell an employee “good job” when it hasn’t happened. Of course, providing encouragement is helpful (“I know this is going to be diffi cult to break your previous habits, but you have a good plan, and sticking to it will improve your chances”) as long as it com- municates that anything other than performance improvement is not acceptable.

Train Employees When Appropriate

Although managers are quick to embrace training programs, it is important to note that training is a solution to only one category of problem: namely, skill defi ciency. Skills are behaviors that can be learned and practiced for consistent results. If there is an absent skill, provide training. Otherwise, do not waste time and money investing in training as a cure-all approach. This is an extremely important point and deserves to be restated. Since training will not cure all prob- lems, it should not be “prescribed” when the ailment is not the lack of a specifi c skill—to do so is managerial malpractice.

MANAGEMENT LIVE 7.4

Problem Employees: Invest or Divest? In their popular book, First, Break All the Rules, 36 based on extensive research by the Gallup Corporation, authors Marcus Buckingham and Curt Coffman passionately argue that the reason organizations are so ineffi cient is they simply don’t understand people. Most organizations, they claim, are built on two fl awed assumptions about peo- ple. The fi rst fl awed assumption is that people can learn to be competent in any area they choose. The second is that people’s greatest area for growth lies within their personal weaknesses. The message to managers is clear: Invest in your high performers and divest the low ones. Divesting would involve helping low performers fi nd a job that more appropriately matches their talents rather than waste considerable company resources on attempting to develop employees outside their talent areas. The Gallup researchers note that sometimes a low performer can be put back on the right track. But this process is damage control and should not be confused with develop- ment. That is, the person has the talent to perform the job, but needs some slight remediation to align that talent productively with the organization’s goals. In contrast to the fl awed assumptions, Gallup notes that the world’s best managers are guided by different assumptions that (1) each person’s talents are enduring and unique, and (2) each person’s greatest room for growth is in the areas of his or her greatest strength.

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PART TWO Interpersonal Skills260

Making a Reassignment or Termination Decision

As one of our colleagues is fond of saying, “Sometimes Humpty Dumpty falls off the wall and can’t be put back together.” In other words, if successive attempts to manage the problem employee have not led to improvement, great managers recognize the current situation cannot continue. As a general rule, a manager can recognize this situation when she is more heavily invested in the employee’s performance than the employee is. That is, when the manager is putting in more effort than the problem employee to correct the problem, reassignment or termi- nation is likely appropriate.

Sometimes great employees are promoted or moved into roles where they become poor employees. Take, for example, a highly productive industrial engi- neer who is promoted to managing a group of industrial engineers and then fails miserably as a manager. He is still a great engineer, despite the fact that he has failed as a manager. Thus, termination is not always the answer; sometimes reas- signment to old positions or different posts in the organization that better uti- lize the employee’s talent may be more appropriate. Don’t lose a great employee because someone made a poor staffi ng decision!

At the same time, retaining those who do not improve after ample time and resources are provided hurts everyone involved. The organization suffers from lower-than-expected performance that can drain the pool of available resources. Managers’ own resources are spent disproportionately on the problem person, making it diffi cult to advance efforts toward accomplishing goals. Co-workers of the problem employee often harbor resentment toward managers and the orga- nization for retaining someone who does not pull his own weight. And the prob- lem employee himself may also lose out on authentic opportunities to succeed in other environments or types of work. In general, the longer a problem employee stays without improvement, the more likely it is that the work environment will suffer for all involved.

The Termination/Reassignment Discussion

Few managerial situations are feared more than that of telling an employee he or she is to be let go. 37 Managers often fear the employee will protest and the situation will become ugly. Yet if the manager has truly done her job through the performance management cycle (PMC), the decision to terminate should not shock or surprise the employee; rather, it will be seen as consistent with the manager’s approach throughout. Nonetheless, few managers like to actu- ally deliver the news. Even when termination or reassignment is the right and appropriate thing to do, it is still diffi cult and thus conducting the termination or reassignment meeting takes preparation and forethought (see Tool Kit 7.4 for a checklist).

Recognition and Reinforcement: Managing the Star

Although rarely acknowledged, managing a star employee can be just as diffi cult as managing the problem employee. We use the term star employee to denote the person who consistently performs beyond expectations. Misperceptions of managing stars include beliefs that “stars” are completely self-motivated, will continue to perform regardless of how they are managed, and require little

“Creating a close connection to

those you do business with has

its many risks, rewards, and con-

sequences. There are few things

in business I have encountered

that are more difficult than fir-

ing someone, particularly if that

someone has always been, or has

become, a friend. On the flipside,

I have been rewarded with many

friends.”

—Mark Cuban

“Well, yes, I’ve fired a lot of people.

Generally I like other people to fire,

because it’s always a lousy task.

But I have fired many people.”

—Donald Trump

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CHAPTER 7 Managing Employee Performance 261

attention and resources. The evidence regarding managing stars suggests a more complex picture.

First, star employees may come to possess an overdeveloped sense of entitle- ment. They may believe their high performance merits treatment beyond what may be feasible or reasonable. 39 Second, star performance may be a function of external rewards and not intrinsic motivation. Remove the rewards (say, in diffi cult economic periods) and performance may decline. 40 Third, many stars have diffi culty seeing the contribution others make to their own success and may be inclined to alienate co-workers and clients. Fourth, managers often allocate more resources toward problem employees, reducing attention to stars and thus offering fewer opportunities for visibility and growth. Under such circumstances, stars may be more likely to leave the organization and seek opportunities elsewhere.

Put simply, star performance does not necessarily equate to “easy to man- age.” Of course, most managers prefer to have the diffi culties associated with stars than those associated with problem employees, but are not well informed as to how best to manage their stars.

Tool Kit 7.4 Terminating or Reassigning an Employee Termination or reassignment should always be done with dignity and concern for others. Keep in mind that termination in particular has broad effects on people’s families, peers, and co-workers, so taking it seriously is important. Here are the critical steps in terminating or reassigning an employee:

• Be Prepared. Have all your documentation regarding the employee’s performance on hand and summa- rized in a form that can be quickly delivered. This includes the dates of each performance improvement discussion and the feedback given in each discussion.

• Set the Right Tone: Get the Job Done. This is not a time to schmooze or ask about the employee’s fam- ily or personal life. Professionalism dictates the meeting should always be conducted face-to-face and in private and scheduled to last for 10 to 15 minutes at the most. In addition, do not attempt to relate your own termination stories or provide vague statements like “I know this is probably hard for you”—these are likely to make the situation worse. 38

• State the Reality. Use effective feedback techniques. Without evaluating the person, state the reality of the situation. For example, “Jim, as you know, I have been concerned about your performance over the past eight months, and we have met on three separate occasions to address it. Despite repeated attempts to improve performance, I have not seen such improvement to date. As I indicated in our last meeting, the next step would be separation. Thus, I have made the decision to terminate our employ- ment relationship. And this decision is fi nal.” Do not blame others involved or sidestep the issue; be direct.

• Review Next Steps. Organizations structure their severance and termination policies differently. The key here is to ensure you are prepared to tell the employee exactly what he is entitled to receive from the organization. Do this in writing and give a copy to the employee. In addition, it is important to tell the employee what to do next. For example, “OK, Jim, after we finish our meet- ing here, I’d like you to take 30 minutes to collect your things, return your keys, and leave the building.”

MANAGER’S TOOL KIT

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Understanding Star Performers

Research has provided a relatively clear picture of what stars value and how to induce the highest performance and commitment from them:

• Learning Orientation. Star performers seek environments where they can learn and develop their skills. This includes working for managers who provide regular performance feedback that helps them exploit their strengths and improve their weaknesses. 41

• Selective Hiring. Star performers want to know the manager they work for is actively seeking to hire only the best, to create a group of motivated and talented people to share the workload.

• Rewards and Recognition. Star performers prefer to work in environ- ments that reward individual performance and provide a high degree of recognition for their efforts. Rewards and recognition may be in the form of frequent fast-track promotions, performance-based pay, and praise and public recognition. 42

• Challenging Job Assignments. Star performers tend to want increas- ingly challenging work assignments that expand their areas of perfor- mance achievement and expertise. 43

Engaging the Star Performer

Based on the preferences of star performers, we recommend important steps to ensure your star performers stay engaged and performing as stars. As we discuss in Chapter 9 on leadership, all people respond best to rewards that are contingent upon performance. That is, stars in particular want to know their exceptional outcomes will be met with rewards and recognition. Simply stated, great managers reward “doers.” In fact, nothing is likely to burn out your star performer as much as equal rewards, whereby everyone receives the same reward, regardless of performance. Remember, fairness in distributing perfor- mance rewards is achieved by providing rewards commensurate with effort and results.

One common mistake managers make is to leave their star performers alone, assuming that the stars will continue to perform with a hands-off approach. While a star performer certainly will not appreciate micromanagement, it is not true that the star prefers no management. To the contrary, great managers are fully involved in providing challenging job assignments to star performers to feed their need for challenge and learning. Challenging job assignments gener- ally have one or more of the following characteristics: 44

• Transitional. Assignments that involve unfamiliar, new, or broader tasks. Such assignments also involve proving one can handle the added pres- sure. Examples include being the inexperienced member of a team and taking a temporary assignment in a different functional area.

• Change-Oriented. Assignments that challenge through added respon- sibility to create change in the organization, to grapple with recurring organizational problems, and to handle problems with people. Examples include launching a new product, hiring new staff, resolving employee performance problems, or facilitating the development of a new vision or mission statement.

• High Level of Responsibility. Assignments that involve high stakes and visible results, heavy time investment, diversity of responsibility,

“What every individual needs—is

to be recognized, by their leader

and their peers, for outstanding

individual performance.”

—Vince Lombardi

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CHAPTER 7 Managing Employee Performance 263

and external pressure. Examples include taking a visible assignment with tight deadlines, representing the organization externally, or managing additional responsibilities following a personnel restructuring.

• Non-Authority Relationships. Assignments that require infl uencing others without positional power. Examples include presenting a proposal to top management, serving on a cross-functional team, or managing an internal project such as a company event.

• Obstacles. Assignments that provide challenge through exposure to adverse situations like fi nancial concerns, lack of top management support, and great diversity of opinions regarding project directions. Examples include working with a talented but diffi cult boss, ambiguous projects, or starting a new project with few resources.

Coaching for Employee Growth

Many people turn to their managers to provide support and guidance to navigate more effectively in an organization. And if you were to ask 10 people what they think a great coach does, you’d probably get 10 fairly similar responses: give advice. Although coaching does often involve giving advice, great managers know that advice often falls short in efforts to help develop employees, to help them learn. When people give advice on solving problems (or avoiding them), they do so from their own personal experience base. That is, their advice is formed by their own assumptions about the way the world works.

In his groundbreaking book, The Fifth Discipline, Peter Senge argues that most people spend the majority of their work life dispensing advice or advocat- ing their own position about the world. He notes, however, that problems are often highly distinctive, and just because a method solved a similar problem in the past does not in any way guarantee it will work in the future—especially for someone else. In the end, the advice may make the advice-seeker feel better and give her something to do, but it won’t necessarily help her learn to solve the prob- lem for herself in the future. That is, the goal of managing employees for growth and development is to help people build their capacity to develop and solve their own problems more effectively.

A simple example can show why giving advice doesn’t always work the way we think. Say you have a son in third grade who is just learning to multiply and divide fractions. One day, your son says, “Gosh, I’m stuck. I really don’t know how to solve this math problem. What should I do?” As a parent, you have a few options:

Option 1: Retreat. Tell your son, sorry, but you can’t help him; it’s his home- work and he must struggle to do it himself.

Option 2: Take Action. Solve the problem for your son. Take his pencil and simply do it for him, saying, “See what I did there? Now go fi nish the rest.”

Option 3: Consult. Ask your son several questions about the problem that might help him solve the problem on his own, such as, “What have you tried? Have you seen this type of problem before? How did you solve the earlier problem? Are there similar rules that may apply?”

Few parents could stomach Option 1; it’s just too cold. Option 2, however, is much more palatable and seems quite reasonable. Yet, in reality, the person being helped in this option is not the son, but the parent. The parent dives into

KO 7 - 6

“If it’s free, it’s advice; if you pay

for it, it’s counseling; if you can

use either one, it’s a miracle.”

—Jack Adams

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PART TWO Interpersonal Skills264

action, reducing the anxious feelings over seeing his or her son struggling and needing help. Although the child may get by with what the parent has done, it is unlikely he has learned how to solve similar problems in the future. Option 3 offers a chance to help the child learn through discovery and develop the capac- ity to solve similar problems in the future.

Coaching employees for growth is no different, albeit the problems that arise may be more complex. As a developmental coach, you have a few modes of oper- ation that can make for successful manager–employee relationships. The fi rst mode is known as expert coaching. An expert coach dispenses advice, instructs, and prescribes. The second mode is known as consultative coaching. A consulta- tive coach helps the employee explore alternatives and challenges the employee’s thinking through asking questions. Table  7.3 shows a few differences in these two approaches.

So which is better? That depends on the problem to be solved by the employee. We have developed a few guidelines to help guide you in your choice of which approach to take.

Use the expert coaching approach when:

• The problem and solution are simple and clear (for example, following federal regulations).

• There are “right” answers (for instance, accounting rules).

• The employee is a novice and needs to be given a lot of structure.

Use the consultative coaching approach when:

• The problem and solution are ambiguous (many factors are involved and one solution won’t fi x everything).

• The problem continues to reappear; past attempts to solve the problem have failed.

• There is relatively less urgency; work output can wait.

Coaching vs. Mentoring

Although great coaches help people develop, coaching should not be confused with mentoring. Mentoring is an intense, long-term relationship between a senior, more experienced person ( mentor ) and a more junior, less experienced person ( protégé ). 45 Mentoring differs from coaching in at least two signifi cant ways. First, the goal of mentoring is focused on an employee’s overall develop- ment, not necessarily on day-to-day performance. Second, mentors are typically not the employee’s direct supervisor. As such, mentors and protégés (those being mentored) generally have a relationship quite different from that of employee and supervisor. Coaching, on the other hand, is about day-to-day work and is focused directly on job performance.

TABLE 7.3 Expert vs. Consultative Coaching

Expert Coaching Consultative Coaching

Based on my experience, I would tell your co-worker to let you drive this one.

vs. What criteria are you using to make your choice?

Budgeting always works better if you solidify your alliances early.

vs. What are the possible political ramifi cations of not talking with folks about the budget ahead of time?

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CHAPTER 7 Managing Employee Performance 265

Concluding Note

The key principles of performance management are relatively simple to under- stand but are a challenge to consistently execute. Execution of those principles, however, is among the most powerful levers a manager can have in driving higher performance. The most important recurring lessons of good performance man- agement include the following:

• Set Performance Expectations Immediately. Remember that “settling in” sends the wrong message. Use the power of goal setting to get perfor- mance up and running.

CASE CONCLUDED

Inspired by emerging evidence-oriented evaluation examples in other sports (see Moneyball), Cuban and Winston were most interested in measuring a player by how well the team did with that player on the court, after accounting for the other players on the court with him. The Mavericks’ “plus/minus index” adjusts for how good the team is without the player on the court as well as for the opponent and for game situations. (Without such adjustments, players on a top team like the Los Angeles Lakers would all look good, because the Lakers so often dominate.)

While Professor Winston is quick to point out that no system is perfect, he believes the system he derived for the Mavericks beats other player evalua- tions because it can refl ect defensive prowess. It’s with defense, Winston says, that plus/minus “really shines,” because defensive stats such as blocked shots, rebounds, and steals can’t encapsulate a player’s worth. Cuban also defends the system from skeptics, saying it is not for ranking players by talent or for trades, but for determining good lineups and tracking player development. “It’s a system you use to see how [players] are being used and contributing in the short term, and how good they are over the long term.”

Professor Winston adds, “. . . optimizing your spending under the salary cap in professional bas- ketball is really critical.” Winston explains: “The whole issue for me is getting beyond player per- formance as defi ned by box scores and other tradi- tional measures. For me, it’s about determining the contribution the player makes toward the team’s success. Then I can parse out what he is worth. A given team only wins so many games, so the holy grail is fi guring out how many wins each player can create. Once you know that, team owners can

> really make smart decisions. They could say that a certain player is worth fi ve wins, but he can be signed for half as much money as a player who is worth seven wins. That’s a better buy. The owner is getting more player for the dollar.” Being effi cient with the money you have is the key to being suc- cessful in professional sports. But he warns that “math is a tool, not an end-all solution. You want to think in terms of multiple inputs, and good math- ematical analysis is just one tool to be used in the evaluation process.”

The proof of the value of the Mavericks’ evalua- tion system is clear to see. During the last 10 years the team has systematically improved their winning percentage from 49 to 69 percent and won the team’s fi rst NBA championship in 2011.

Questions

1. In what ways does the Mavericks’ system of evalu- ation address the most common problems with performance evaluation?

2. Why are people so skeptical of objective data, often choosing to use far more subjective metrics in their own evaluations?

3. What concerns or questions would you have about using only this type of information in per- formance evaluation?

4. What lessons can be learned from this article in creating an evaluation for fi rst-line managers?

5. What kinds of metrics in a business organization might capture the same spirit as a basketball plus/ minus index?

Sources: Wayne Winston www.kelley.iu.edu/ugrad/spotlights/ spotlight_wayneWinston.cfm ; http://blogs.wsj.com/numbersguy/ mark-cubans-surprising-player-performance-numbers-580/tab/print/ .

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PART TWO Interpersonal Skills266

• Give Feedback Early and Often. The more information employees have about how they are performing at any given time, the less you will have to manage their performance. When employees don’t receive feed- back, they will seek it out, sometimes from unreliable sources. 46 So don’t wait until the end of the year to give feedback; it will lose its motivating potential.

• Focus on Behaviors, Not Traits. Don’t evaluate people; evaluate their performance. Observe behavior frequently and take notes.

• Assess Both Behavior and Results. Remember, just because employees hit their target goals does not necessarily mean they are outstanding per- formers. Understand the full range of performance by taking into account how they achieved those goals.

• Identify and Rectify Performance Gaps. When a performance gap exists, revisit the goal contract with the employee and agree upon inter- ventions for closing the gap. Remember, training is not always the answer!

• Allow for Productive Failures. Employees need to know it is acceptable to fail or to miss the mark. What is unacceptable is to not learn from this failure and to repeat mistakes frequently. Great coaches help employees learn from their mistakes and never repeat them.

• Reward Desired Behavior and Ensure It Repeats. If you really want people to perform, make their rewards contingent upon reaching perfor- mance goals. Be careful that you are rewarding the behavior you desire and not inadvertently another behavior.

• Make It Just. Whatever you do, no matter what type of assessment is involved, ensure that the process, outcomes, and interactions with employees are perceived as fair. Fairness, not equality or happiness, is the key to great performance management.

KEY TERMS

absolute subjective assessment 250 affective commitment 243 altruism 241 attitudes 242 behaviorally anchored rating scale

(BARS) 250 civic virtue 241 conscientiousness 241 consultative coach 264 contextual performance 240 continuance commitment 243 courtesy 241 effectiveness 240 effi ciency 240

equality rule 256 equity rule 256 expert coach 264 forced distribution 251 graphic rating scale 250 job performance 240 job satisfaction 242 mentor 264 mentoring 264 need rule 256 normative commitment 243 objective assessment 249 organizational citizenship behavior

(OCB) 241

organizational commitment 243 organizational cynicism 244 performance management cycle

(PMC) 244 protégé 264 ranking 250 relative subjective

assessment 250 sportsmanship 241 subjective assessment 250 task performance 240 topgrading 251 withdrawal behaviors 242

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CHAPTER 7 Managing Employee Performance 267

Besides getting less vacation than workers in many other countries, Americans often don’t use all the time that they do get, and what vaca- tion they take is spent in small slices and often in contact with the offi ce, according to most surveys on the subject. An important distinction for workers in the United States is that there is no federal law mandating that companies pay employees for time off or that they grant them a minimum amount of vacation days unpaid. This is not the case in most of the rest of the world.

The typical practice in the United States—among large companies anyway—is 15 days paid vacation and 10 days of paid holidays for full-time employees with 10 years of tenure, according to a survey conducted by human resource con- sulting fi rm Mercer. Another study, however, by the Center for Eco- nomic and Policy Research (CEPR), found the norm to be much lower when considering companies of all sizes and workers of all tenures: 9 days of paid vacation with 6 days of paid holidays. It also estimates that almost one in four U.S. work- ers don’t get any paid days off at all. To provide some context for this, all members of the European Union, by contrast, must provide workers with a minimum of 20 paid vacation days a year plus public holidays. Some specifi c exam- ples from other countries include Finland with 30 required vaca- tion days and 14 public holidays,

CASE Extra Time Off at Procter & Gamble

> >

France with 30 vacation days and 10 public holidays, and Australia with 20 vacation days and 11 pub- lic holidays. In fact, of the coun- tries surveyed, only countries like Vietnam, the Philippines, and Thailand have less vacation than the United States.

To compound the problem, most vacation time is accumulated in the United States based upon tenure. So, for example, an employee may get 10 days of vacation until she has more than 5 years of tenure, at which time she would get an extra 5 vacation days. Joe Robinson, who runs the Work to Live Campaign and advocates for a minimum paid- leave law in the United States, con- tends that a vacation system based on tenure, which is typical at U.S. companies, leaves U.S. workers with consistently low vacation ben- efi ts given how frequently people change jobs during a career.

While it is not legally required, Procter & Gamble has taken a slightly different approach to the vacation issue. In May of 2004, P&G’s senior management orches- trated a company-wide important announcement: There would be time off for good behavior. P&G workers learned they had been

granted a two-day vacation bonus, a reward for the company’s sustained excellent performance over the pre- vious four years, during which time P&G’s stock rose from $60 a share in the mid-2000s to more than $106 a share in May 2004. “We’ve never before offered a company perform- ance award such as this, but you’ve earned it,” the chairman wrote to employees in an e-mail. Employees will have the option of taking two days’ pay instead of the time off. A spokesman for P&G said that the cost of the bonus “will be in the mil- lions, though it isn’t material from an accounting standpoint.” The cash involved would be equivalent to a less than 1 percent bonus. Never- theless, P&G’s gesture had people pondering the value of time off as a motivational tool.

Discussion Questions

1. Do you think P&G’s “across the board” days off reward will moti- vate employees to perform?

2. What principle of distributing rewards is P&G using?

3. Do you think that making vaca- tion contingent upon perform- ance is a good or bad idea? Why?

4. How do you think top perform- ers are likely to react?

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SELECT MANAGE WHAT? DEBRIEFS

Critiquing a Performance Evaluation Form: Debrief a. Briefl y argue why performance appraisal is important enough that the managers at this restaurant should care

enough to improve the system.

b. Critique the form with respect to its strengths and weaknesses. What does it help them accomplish? How does it limit them?

The overall reason is that very important administrative and developmental decisions are made on the basis of performance appraisal information and hence they would want evaluation to be as accurate and fair (reliable and valid) as possible. More specifi cally, those decisions could include pay, promotion, discipline, awards, training, establishing expectations, and feedback. With respect to this restaurant, they may want to have some profi t shar- ing or merit-based pay and they are certainly interested in feedback and development (of mostly young, inexpe- rienced servers). They might also be interested in awards or providing recommendations of different sorts, and probably would benefi t from establishing clear customer service expectations.

The form is a classic example of a solely trait-based form with all the associated weaknesses. About all it helps them accomplish is to give a numeric score, it does give a rating of all servers, and it is the same for everyone, so it might be used to compare employees for administrative decisions. It is also certainly easy to understand and is not time-consuming to complete. With respect to limitations, it very much limits them in terms of establishing expectations, giving any type of meaningful feedback, or making reliable and valid administrative decisions— because it is so subjective and thus prone to different interpretations of the same labels (for example, initiative). It also would not stand up well in a discrimination court case.

c. Make recommendations for improvement—including a sample form/process that you think would better help them meet their objectives. Be sure to include an explanation of why your improvements are better than what they currently do and also why they will not create an overwhelming amount of extra work for them.

They clearly have to get away from traits (a common source of consistency problems) and move toward objective results and/or behavioral indicators. They may also want to think about more tailored (often behav- ioral) appraisals for different jobs or job classes. Ultimately, they want some type of combination of behavioral and objective results. Objective results might include the total revenue at his tables, total tips, broader res- taurant revenues for the evening, cost cutting and waste reduction, attendance/on-time records, and other items. Behavioral items can be derived by taking the trait names and expanding them to specifi c behaviors. For example, customer service might include behaviors like smiles at customers when welcoming them; promptly checks with them just after they sit down; fails to bring their check after they have completed eating. Similarly, initiative might include behaviors like takes on additional tasks when assigned tables are not occupied; asks manager if he can contribute in other ways when not busy; fi lls water and drinks for fellow servers when sees the need; and so on.

Evaluating Job Performance: Debrief This is another scenario where “common sense” and past experience are too often not consistent with the evi- dence regarding how to make the most accurate evaluations. And given what is at stake for these interns, you will want to make every effort to make your evaluations as fair and legally defensible as possible. The two main les- sons to keep in mind are (1) defi ne your performance criteria in terms of results and behavior—not solely personal traits, and (2) look for multiple sources of data for your evaluations.

Most jobs have some objective outcomes and require certain behaviors to obtain those outcomes. In an effort to determine some appropriate results measures, you might ask, Who do these interns serve? What will their per- formance make possible and for whom? What would suffer if they performed poorly? For short four-month roles like these, it may require some ingenuity in coming up with objective results to be measured, but it is worth the effort. One way to get outcome data is to identify “customers” of the interns’ work (whether those customers are external or internal to the fi rm) and gather performance and satisfaction data from those customers.

Although results are a critical element in any good performance evaluation, it is also true that many fac- tors in organizations can infl uence (some would say bias) results achieved (for example, projects assigned,

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department, luck), so it is important to also have some evaluation of behaviors or “how results were achieved.” To reveal key behaviors, ask: What do the most successful people in this role do so well and frequently? Con- versely, what are the behaviors that doom the less successful people in that role? For example, effective nurses review forthcoming treatments with patients, check for an understanding of the procedures to be followed, respond promptly to requests for pain treatment, follow up with patients to ensure compliance with their medi- cation schedule, and so on. Those are not actual patient outcomes, but they are behaviors that lead to better outcomes.

The essential point is that both the outcomes and the behaviors are important to a comprehensive evalua- tion. Results/outcome evaluations are best for making administrative decisions, and behavioral evaluations are particularly good for providing feedback about why a certain rating was given and how someone can do better. In this case, those interns not selected will likely be frustrated and eager to get feedback as to why they were passed over; thus some behavioral evaluation information would be particularly useful here.

The second major thing to keep in mind, and which might not be intuitively apparent, is to seek input on these interns’ performance beyond that from their immediate supervisor (in this case, you). For example, can you collect any feedback from their peers or other people they worked with, or interacted with, in their time at the fi rm? It may also be useful to have them complete a self-evaluation just to be sure you uncover major accomplishments that might not otherwise have been noted.

The most signifi cant traps are just the inverse of the two major recommendations. First, resist the temptation to rely solely on subjective trait evaluations (for example, attitude, initiative, professionalism) because those terms are vague and do not have shared meaning. Such trait-oriented measures also have a poor record of support when challenged in the courts. Second, do not limit your evaluation data to just one immediate supervisor. Aim to collect data from multiple people and sources whenever possible.

Managing Both the Problem and the Star Employee: Debrief In essence, what you have here is a “problem employee” and a “star employee,” and the basic framework for dealing with a “problem” is:

• Agree on the problem

• Mutually discuss solutions

• Create an action plan

• Provide ongoing feedback—reinforce improvement

Here again, presenting that basic framework is a great start, but the best answers will specify actions and illustrate how management should approach Ken, doing so in a way that yields higher performance from him. The context is authentically complex: Ken is beloved by other workers so you do not want to destroy your culture— but you also need to send a message that performance is critical around here. So any vague soft-pedaling will not serve your purpose and will probably be dysfunctional. You need to tell Ken what he does not want to hear and yet do it in a way that he will respect you, not be defensive and disruptive, work harder with a focus on per- formance goals, and deliver performance. And he needs to know what will happen (and when it will happen) if he does not do those things.

Some potentially good ideas are to be sure to reference and build on Ken’s strengths and fi nd some way to use his good relations with others to help him reach those performance targets. They should also be consistent with the rules for giving good feedback in how they talk with Ken.

Venkat, on the other hand, is a “star” employee and the evidence suggests that he will respond best to sev- eral different things:

• Learning orientation. Opportunities to grow and get better and become even more valuable and deserv- ing of more pay.

• Selective hiring. He wants to work with winners and he is quite interested in how you will deal with Ken. He is not amused by Ken’s lovable low performance and it bugs him to think that Ken would get the same rewards that he (Venkat) gets despite a much greater focus and success in delivering performance outcomes.

(continued)

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PART TWO Interpersonal Skills270

• Reward and recognition. A critical trap is simply to let Venkat do his thing and get out of his way. Stars do not want close monitoring, but they do want to be recognized and rewarded. And the more specifi c the praise and rewards, the better. It shouldn’t be “You’re doing a great job” but “Thank you for the excep- tional work on the Ben Dover account—that saved us in excess of $6,000 alone and qualifi es you for an additional gain-sharing bonus.”

• Challenging job assignments. Such as the following:

• Transitional assignments

• Change-oriented

• High-level of responsibility

• Non-authority relationships

• Chance to overcome obstacles

(continued)

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v

272

O B J E C T I V E S

PART TWO INTERPERSONAL SKILLS

KO 8-1 Differentiate the concepts of power, infl uence, and authority.

KO 8-2 Explain how patterns of depen- dence in organizations act as sources of infl uence.

KO 8-3 Describe the role of norms and con- formity on behavior.

KO 8-4 Recognize the effectiveness of vari- ous forms of infl uence tactics.

KO 8-5 Explain the key infl uence principle for each type of social infl uence weapon.

KO 8-6 Articulate methods for fostering a good relationship with one’s manager.

KO 8-7 Describe at least fi ve profession- alism tactics for improving your impression.

8 Using Power and Influence

KNOWING DOING

“You cannot be successful in our

group without building power and

being able to influence custom-

ers and associates, whether or

not you have any direct author-

ity. Without power and influence,

managers are not much use to

anyone around here.”

— Scott Pickering, Vice

President of Sales, Urogyn

Medical, Inc.

After reading this chapter, you should be able to:

DO 8-1 Use infl uence tactics and “weapons of social infl uence” to infl uence oth- ers informally.

DO 8-2 Infl uence your boss to adopt a given idea.

DO 8-3 Demonstrate competence and con- sistency in professional behavior.

DO 8-4 Build positive relationships with employees and co-workers.

DO 8-5 Create a memorable and positive fi rst impression.

DO 8-6 Expand your personal network.

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273

> > MEASURING THE VALUE OF WHO YOU KNOW

Case: KLOUT

T he world is full of follow- ers. But truly infl uential leaders remain an elusive

commodity. Nowhere is this more evident than in the world of social media. Today’s most progressive marketers believe that connecting with one infl u- ential leader, that one real beacon in a given niche, is worth at least a thousand followers. And that’s where KLOUT comes in. KLOUT (a play on the concept of clout) was originally conceived as a way for fre- quent Internet users to gauge their personal infl uence and perhaps use it as a sort of “badge of honor” if their infl uence was deemed sub- stantial. Founders Joe Fernandez and Binh Tran quickly discovered, however, that the system could be a gold mine for marketers looking to locate the true infl uential whales in a vast sea of little fi sh.

KLOUT has created an intricate (and secret) rating system that scores a person’s “worth” in the social media world. It analyzes not only how many followers you have, but who they are and the type of content both you and your followers post, click on, or tweet. Originally, the system was devoted primarily to Twitter use, but KLOUT is now analyzing Facebook data—and You- Tube, LinkedIn, MySpace, and Digg aren’t far behind. When it comes to clout, the more the better.

1. What is infl uence, and what is the fundamental premise of a system like KLOUT?

2. How have technology and social media changed the nature of networking and infl uence? How does online infl uence differ from infl uence in an organizational context?

3. Do you buy the fundamental notion that infl uence matters on the Internet and different people are more or less infl uential?

4. Identify people you think have great online infl uence and would likely have correspondingly high KLOUT scores.

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1. Infl uencing Without Formal Authority You are the leader on a marketing project that requires a great deal of graphic design and production work to be successful. You have design people in the fi rm but they do not formally report to you and seem to have little urgency to get your work done. You are irritated by their lack of help and know they are not nearly as busy as they let on, but you have no authority to tell them what to do or threaten them with anything they care about. You are reluctant to go over their heads to their boss out of fear such a move would alienate them and compromise the level of effort and quality they would ultimately bring to the project.

To meet deadlines, you need some of the work done within a month. How might you get the graphics folks energized to complete your work? Are there any specifi c tactics you could use to get them moving? Are there any common but counterpro- ductive tactics you should defi nitely avoid?

2. Selling an Idea to Your Boss You have read a lot about the most successful companies and have picked up an idea you think would work well in your unit (operations) of the fi rm. Specifi cally, you think your department should go to an “open offi ce” design whereby all the cubicles would be taken out and replaced with more modern collaborative workspaces. You have a host of good reasons why this would be a good idea for your unit, but your boss is a little old-fashioned and unlikely to buy into the idea. While she has always claimed she has an open-door policy and is “constantly on the lookout for good ideas,” your past attempts have been met with comments like, “Interesting idea, we’ll have to look into that,” “Maybe sometime in the future we could do some- thing like that,” and ”We don’t have the budget for that right now, but it is a great thought.”

If you really want to see this idea come to pass, how would you prepare to sell this to her? Where should you start? What would be some of the key factors to consider? Are there any tactics you should defi nitely avoid because they would be likely only to hurt your chances of her approval?

3. Making a Positive First Impression Ever since you were a young child, your passion has been music. You love music in all its forms, play an instrument yourself, and want to make your passion your vocation—your dream is to work in the music industry. However, once in college you quickly learned that, because so many people share your dream, it is exceptionally diffi cult to get a job in the music industry. As luck would have it, however, your current management professor has two personal friends who are senior offi cers (one in human resources, the other in marketing) at Sony Music, and he has invited them to make a presentation to your class. Knowing of your lifelong interest, he has asked if they would be willing to spend half an hour with you after the presentation and they have agreed. How would you prepare? How would you try to make a good fi rst impression? How might you appropriately try to lever- age your professor’s relationship? Would there be any absolute taboos (things never to do) or common mistakes to avoid here?

4. Building a Personal Network That Enhances Your Power After your fi rst six months at a public accounting fi rm, you are starting to see it will be very diffi cult to stand out until you really know the ropes and feel more connected, like all of your more senior associates. All but one of your colleagues at work have been at the fi rm for more than fi ve years. Your fear is you will always be seen as a newbie around the fi rm. You also know you will have a far better chance of getting things done and moving up if you have a network of people within and outside the fi rm who mentor, coach, and support you. You are not really willing, however, to wait fi ve years for that to happen.

Where would you start in your attempt to get more connected? What specifi c ways would make people want to be associ- ated with you? How would you go about building a network?

MANAGE WHAT?

Introduction

Although sometimes considered to be a “necessary evil” or the “unsavory” side of organizational life, skilled use of power and infl uence is critical to both personal and managerial success. For managerial purposes, power can be defi ned as the ability to exert infl uence to control others or events, and the capacity to defend against the infl uence of others.

Who has power in organizations? What are the sources of that power? What strategies will broaden our networks and increase our own power? What specifi c tactics have been shown to yield the most infl uence, especially in cases where we

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“We have learned that power is

a positive force if it is used for

positive purposes.”

— Elizabeth Dole

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lack formal authority? How do we manage upward and navigate the political real- ities of organizational life? This chapter focuses on addressing these questions.

Authority and Influence

Although formal authority is often confused with power, it is just one type of power. More specifi cally, authority is the type of power a person possesses due to his posi- tion. In other words, a mother has the authority to make decisions for her fi ve-year- old daughter solely because she is the child’s mother. Similarly, a supervisor has the authority to discipline an employee who has been late to work. A company presi- dent has the authority to sign a legal contract as a representative of the company.

Infl uence, on the other hand, is the use of power. Infl uence is power in action, and infl uence tactics serve as the means by which managers gain and exercise power. While authority can be an important tool, great managers realize they need more than just authority to be effective. Therefore, understanding what power is, where it comes from, and the most effective tactics to get beyond authority to infl uence others is a key to great management. Since it is unlikely most of us will ever have enough formal authority to command wide-ranging action (particularly early in our careers), building personal skills associated with power and infl uence is important for both you personally and the organizations for which you work.

Dependence and Networks

As a starting place, it is important to note that power is relational. That is, power only exists where there are at least two people, and is a property of the relation- ship between people. A useful and popular way to think of power is that it is based on dependence . Dependence leads people to do things they may not other- wise do (“I am dependent upon Jennifer for babysitting so I will buy my new car from Jennifer’s husband,” or “Anne controls my raises so I will pay close attention to what Anne says”). Understanding such relational dependencies is key to under- standing your own power and the power of others. It is also a useful starting point for determining the infl uence tactics that can help you build broad networks and infl uence others to get things done. To be effective in your use of power and infl u- ence, it is important for you to understand the patterns of dependence in an orga- nization; it can also help you understand and navigate the organization’s political landscape. To diagnose interdependence, ask the following questions:

1. Whose cooperation will I need to accomplish what I am attempting?

2. Whose support will be necessary to get the appropriate decisions made and implemented?

3. Whose opposition could delay or derail what I am trying to do?

4. Who will be impacted by what I am trying to accomplish? More specifi - cally, will anything change regarding (a) their power or status, (b) how they are evaluated or rewarded, or (c) how they do their job?

5. Who are the friends and allies of the people I have identifi ed as infl uential?

Research has shown that people who have power and use it effectively attain desired jobs more quickly, make more money, and are promoted more quickly than people without power. While this might not be particularly surprising on the surface, the way it plays out is not always obvious or self-evident. For instance, conventional wisdom suggests that it is “who you know” that leads to getting a job. Although this is sometimes the case, of course, research suggests new jobs are more often the product of the “ weak ties ” 1 of the indirect relationships one possesses rather than the “ strong ties ” of direct relationships. In other words, people ultimately tend to get jobs through a friend of a friend (weak ties) and not

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through people they know directly (strong ties). The implication is that having positive relationships with many people, and people who are well-connected, is an important strategy for fi nding a job.

Not very long ago, the concept of strong and weak ties was pretty esoteric to most people. Recently, however, this has all changed because of social networking. It is largely this “weak tie” phenomenon that has led to the success of social net- working sites like LinkedIn. A close examination of LinkedIn reveals that it is really a network management tool where people can recommend one another and build their professional networks in a very tangible manner. In terms of personal net- works, Facebook serves a very similar role. In fact, the suggestions of people you may know come from the idea of weak ties. The suggestions provided by Facebook are based on friends of your friends. The more friends of yours who are friends with a certain person, the more likely that person will be recommended to you as a friend. Beyond LinkedIn and Facebook, however, this networking ability also allows Amazon.com to make book suggestions, Netfl ix to make movie recommen- dations, and a whole host of other applications—the importance of many of which is not yet fully understood due to its unfolding nature. For some specifi c examples of how social networking can pay off in the job market, see Management Live 8.1.

The reasons why weak ties are so important may not be immediately evident. First, it is important to understand that weak ties grow exponentially when your immediate network grows. This is because each person you know has ties to numerous other people who all become weak ties in your network (for example,

MANAGEMENT LIVE 8.1

Successful Uses of Personal Networks Through LinkedIn The following cases are a few ways that social networking websites like LinkedIn can be effective when it comes to fi nding a job or otherwise enhancing one’s career. These examples are taken from LinkedIn’s website, but they are indicative of success stories using a number of other social media as well.

Liz Manning of Seattle, Washington Liz saw an article in the paper about a new company and she said to herself, “I want to work there.” She went to LinkedIn and found one of the founders of the company and sent him an InMail. He wrote back and appreciated her interest, but they had no openings at the time. Then she saw an ad on Craigslist for an opening at this com- pany a couple of months later and this time the LinkedIn toolbar on the side of her screen showed that she was a 2nd-degree link to the cofounder. One of her old co-workers had just added him to her network. She sent him another InMail (and mentioned their common connection) and got a call for an interview within a day and landed the job. The company provides “senior transition coordination.” This was exciting for Liz because she just worked on “transitioning” her mother into a retirement community, so helping other people transition their parents was a perfect personal fi t for her as well.”

Steve Weinstein of Milwaukee, Wisconsin The recruiter for Cooper (Steve’s current employer) did a search for marketing communications people in the metro Milwaukee area, and found Steve, among others, who fi t the bill for the position that Cooper had open. Steve went in, interviewed for the job, and landed it. Now he’s the Manager of Marketing Communications at Cooper Power Systems and he also is a member of the LinkedIn Milwaukee Group.

Chuck Hester of Raleigh, North Carolina Chuck’s connections on LinkedIn helped him land his current job. After relocating his family to North Carolina from California, Chuck began using LinkedIn to reach out to marketing professionals in the area. Among them was the chief executive of iContact, an e-mail software company where Chuck is now the corporate communications director.

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O'Brien

Stock

PaineShapiro

Cole

Cole

Jones

Jones

Andrews

Andrews

Williams Miller

Miller

Taylor

Sen

Sen

HussainHussain

Bell

Bell

Ramirez

Ramirez

Hughes

Hughes

Kelly

Kelly

Cohen

Reservoir Shapiro

Production O'Brien

Sales Taylor

Engineering Williams

G&G Cohen

Paine

Smith

Smith

Cross

Petrophysical Cross

Moore

Moore

Production Stock

Senior Vice President

The chart of network connections to the right illustrates how Cole has far more potential power than her position might suggest.

FIGURE 8.1 Who Has the Power Is Not Always Obvious

• Power and infl uence are inherently “corrupt.” An old but true axiom is that power can be used for good or evil. Great managers use their power to exert infl uence to accomplish positive change in organizations.

• Rationality is the best form of infl uence. We’re taught to give people data, to infl uence others through the use of facts and fi gures. It turns out, however, that despite the popularity of the rational approach to infl uence, emotional approaches often win the day. People want to be inspired, challenged, and moved.

• Power stems solely from one’s position. Title alone is only one form of power, and it does not in any way guarantee success toward infl uencing others. Some of the most powerful people in organizations have unimpressive titles—for example, secretary or help-desk specialist. However, such folks often have great infl uence in organizations.

• Involving others and sharing power weakens your own position. By and large, sharing power only increases your own ability to infl uence. Showing people you don’t need to be protective because you are confi dent in your abilities and approaches increases your credibility and future infl uence potential.

• First impressions and good manners are old-fashioned. Hardly! Managing the impression you make always matters greatly in your ability to infl uence others. This includes all aspects of your work life, such as how you answer your telephone, what clothes you choose to wear, and how you introduce yourself to key clients or your boss’s boss.

MYTHS 8.1 Myths of Power and Infl uence ? ?

see Figure  8.1 ). For instance, just getting to know one person could add 50 or 100 weak ties if that new friend is well connected. In addition, weak ties serve as an important information-gathering tool. Weak ties allow a person to collect information from a much broader network than those with fewer weak ties,

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PART TWO Interpersonal Skills278

which provides a signifi cant competitive advantage, an advantage that has been shown to result in both higher wages and a higher likelihood of being employed. 2

Thus, people with broader networks have more power and an increased num- ber of options, making them more valuable to their organization. In this light, it should not be surprising that power holders are often able to utilize their power to negotiate higher wages. Organizations are rightly willing to pay more for a person with the power and infl uence to get things done. For the organization, the powerful person is likely to be able to accomplish more and bring in additional resources. Thus, paying more for power would seem to be a wise investment that provides handsome returns for an organization.

Finally, research has also shown that people with well-developed power net- works receive earlier promotions, have increased career mobility, and higher managerial effectiveness. 3 In short, power is advantageous to many important outcomes, and thus active efforts to gain and manage your power are a step toward a successful managerial career.

The Sources of Power and Influence

Even a casual observer would notice that some people in organizations are far more able to make things happen and get what they want done than others. Think for a moment about your personal situation, your family members, and your friends. Are some of them consistently more able to get things done and to bring together the resources they need? From your personal experience, you will probably notice that the people who are able to “get things done” are not always the ones with for- mal authority. Understanding differences in personal power bases, networks, per- sonal professionalism, and the ability to use social infl uence effectively is central to using power effectively in organizations. We expand on these four areas next.

Bases of Power

The most widely known and accepted classifi cation of power is French and Raven’s model of the fi ve power bases , fi rst introduced more than 50 years ago. 4 Their classifi cation has stood the test of time and become the way in which authors and practicing managers most often think about power. The fi ve bases are reward, legitimate, referent, expert, and coercive power. (See Figure 8.2 .)

Reward Power. A point emphasized throughout this text is that rewards are powerful motivators of behavior. Put simply, people are inclined to do things that will bring them rewards. Rewards can come in many different forms. In fact, anything we fi nd desirable can be a reward, be it a new Lamborghini, a

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FIGURE 8.2 French and Raven’s Power Bases

The Bases of Power

Reward

Legitimate

Referent

Expert

Coercive

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promotion, a good grade on a test, or a pat on the back. What is really important is that the reward being offered is desirable to the person you want to infl uence. Reward power is thus the ability to provide others with rewards they desire in exchange for work you need accomplished.

In order to increase your reward power base, you do need to control some rewards, and this may take a certain amount of creativity depending on your position. Remember, however, that social reinforcements (feedback, compli- ments, and so on) can be very effective rewards in some cases and that many rewards do not need to be expensive or linked to your position in the hierarchy. Simply stated, the best way to build reward power is to actually reward people, and the reality is that “if you don’t use it, you will lose it.” Few managers that have not paid anyone a compliment or provided some form of reward to people in the past fi ve years would be seen by employees as having a strong reward power base (even if they have signifi cant budget control).

Legitimate Power. Legitimate power is that which is invested in a role or job position (often called authority). Politicians, police offi cers, and managers all have legitimate power. The legitimacy generally stems from some higher hierar- chical level or legal mandate. A police offi cer has legitimate power to arrest you by virtue of laws made by elected offi cials. The legitimate power of a manager ultimately comes from the company’s owners or shareholders.

A common seduction of legitimate power is to neglect the reality that the infl uence associated with a role most often really stems from that position, not the person in the position. When people either fall from power or move onto other things, they can be surprised that those who used to fawn at their feet no longer do so. Legitimate power is often suffi cient to gain compliance behavior but is less effective in inducing engaged and committed action.

Building legitimate power is often thought of as the most diffi cult power base to increase. This is because of its close tie to one’s position in the organi- zational hierarchy. Remember, however, that taking a leadership role on high- profi le projects and being associated with important divisions within a company do not always require receiving a formal promotion, but can be effective ways of increasing your legitimate power.

Referent Power. Unlike legitimate power, referent power is highly associ- ated with the person and not the position. Referent power stems from another person either admiring you or wanting to be like you. It is the power of charisma and fame and is commonly (although often curiously) wielded by celebrities as well as others in highly visible roles. No one really believes Brett Favre is an expert on jeans, Danica Patrick is a web guru, or that William Shatner is really a knowledgeable travel consultant. However, they are highly successful at selling products because of their referent power.

In the workplace, referent power is normally associated with respect and a good working relationship. In other words, we are generally more willing to respond to a request from a person whom we admire and respect than from someone we do not know or dislike. You don’t have to be friends with someone to have referent power—plenty of people are highly respected, but not neces- sarily liked. Referent power is one more reason why having a positive work- ing relationship with your colleagues, bosses, and subordinates is extremely important.

Unlike legitimate power, referent power is directly under your immediate control. To increase your referent power, you need to be trusted and respected. By being seen as approachable, fair, friendly, and competent, you will build your referent power and be more effective in the process. In fact, much of this text- book is geared toward helping you do exactly these things.

“I have as much authority as the

Pope, I just don’t have as many

people who believe it.”

— George Carlin

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Expert Power. Much like referent power, expert power is normally associ- ated with a person and not closely with the rank of a position. When a person possesses knowledge and skill someone else requires, then she has expert power. This common form of power is the basis for a large proportion of human col- laboration, including in most companies where the principle of specialization allows large and complex challenges to be undertaken.

Expert power is relevant across a wide variety of situations. Trade unions often use expert power when they encourage their members to strike for bet- ter pay or working conditions. Many information technology (IT) departments within companies are powerful due to their specialized knowledge. Expert power is also at work when you go to a doctor and she prescribes medication; you tend to accept the prescription because the doctor is supposed to “be the expert.”

The most common ways for people to build their expert power is through education. Be it a college degree, advanced degree, or specifi c certifi cations (for example, a CPA or a CFP), education is key. Beyond the role of education, how- ever, obtaining specifi c, scarce knowledge is a great way to increase your expert power. For example, a low-level computer programmer can have the most power in the company when a system for which she is responsible fails. Become a tech- nical expert in your fi eld and you will likely fi nd your expert power in the organi- zation will increase.

Coercive Power. Coercive power can be associated with either a person or the rank attached to a person’s position. This is the power to force someone to do something against his or her will. Coercion often involves physical or verbal threats. It is the power of dictators, despots, and bullies. Coercion can result in physical harm, although its principal goal is to infl uence action. Demonstrations of personal harm are often used to illustrate what will happen if compliance is not gained.

In the workplace, coercive power can be thought of as coming in the form of disciplinary actions, demotions, or job loss. Generally, being threatened with fi ring is considered the most extreme form of coercive power, although threat of legal action may be used as a severe coercive inducement as well.

Actually building coercive power can be a tricky business and is not something we would recommend in most instances. As you might imagine, building coercive power tends to undermine some of your most powerful sources of positive power. More specifi cally, building coercive power by “fl exing your muscles” and disci- plining people or assigning unpleasant work duties will likely reduce your refer- ent power signifi cantly. To effectively manage coercive power, the best idea is to be fair and consistent when standards are not met. We recommend building and using coercive power sparingly, perhaps only when it is absolutely necessary that you receive 100 percent compliance (for instance, legal or safety compliance). In this way, people know that although you do not make it a practice to coerce behavior regularly, those who violate critical standards will receive a commensu- rate response. Remember that you don’t have to use power to hold power. That people know you could coerce them is often enough to gain compliance.

Norms and Conformity

Another subtle but very powerful form of infl uence is found in behavioral norms. Whether overt or just understood, every group and organization possesses a set of norms , a code of conduct about what constitutes acceptable behavior. Some norms will be strictly adhered to while others permit a wide range of behavior, but these norms have a signifi cant infl uence on behavior in organizations. Usu- ally, sanctions from the group (such as disapproval) are applied in the case of deviations from the norm.

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To illustrate, think back to the days in which you dared a friend (or maybe even “double-dog dared” if you grew up in one of our neighborhoods) to do something outrageous. Such dares—like streaking naked though campus or eat- ing bizarre amounts of restaurant condiments—are dares because they repre- sent behavior that some reference group deems as inappropriate (would there be any other reason to drink an entire container of maple syrup?). Organizations of every kind are fi lled with such norms.

For example, if you show up late to a meeting when the norm is to be on time, most people in the group are likely to give you the “you’re late” look. These looks are designed to let you know you are violating a rule and that you should not have done so. Norms are frequently associated with clothing, language (slang, cursing), Internet usage, the open expression of feelings, promptness, interrupt- ing or challenging leaders, volunteering one’s services, avoiding confl ict, and so on. Many such norms are implicit, and new members may fi nd it diffi cult to adjust—there rarely is a nice documented set of rules. Nonetheless, norms have great infl uence on workplace behavior.

From a managerial perspective, norms can be the source of both desirable and undesirable forms of infl uence. For example, you may want your employ- ees to show up every Sunday for work. However, because this is not a general societal norm, you will certainly be met with resistance. Breaking norms makes people feel uncomfortable. The next time you get on a crowded elevator, start off by turning and facing the back of the elevator. Then, after a few seconds, start looking people in the eye. We guarantee you will not only make other people feel uncomfortable, but we suspect you will feel exceptionally awkward in bucking established norms. The important lesson is that most behavior is likely to happen “inside the norms,” so it is always important to know what those norms are and how diffi cult it can be to infl uence people to break those norms.

Stemming directly from the infl uence of norms is the notion of conformity. Conformity is defi ned as a tendency to believe, behave, and perceive in ways that are consistent with group norms. Conformity enables us to feel as if we fi t in, to feel comfortable with other people, and to have well-understood codes of conduct in society at large. Conformity is an important infl uence on the actions of people, especially when no formal authority or power is present. Two striking examples of the extraordinary infl uence of conformity are provided in famous experiments conducted by Muzafer Sherif and Solomon Asch. 5

In Sherif’s study, people were invited to estimate the amount that a point of light moved and to do so in a context where each participant could hear the estimates of other participants. Results showed that group members’ estimates converged on a middle-of-the-road “group estimate” indicating the presence of a persuasive urge to conform. Asch conducted a set of similar experiments focused on social pressures to conform. In his experiments, several people were seated around a table and all but one were actually in on the experiment (that is, they were working for the experimenter as confederates). The group was shown a display of vertical lines of different lengths, and each participant was asked to say which line was the same length as another displayed line. One after another, the confederate participants chose the same (but wrong) line as that which was identical in length to the other displayed line. The only real participant sat in the next to last seat so that all but one of the confederates had given an answer prior to his choice. (See Figure 8.3 .)

Incredibly, in repeated trials of the experiment, the real participants fre- quently picked the same incorrect line as the confederates, even though it was apparent to outside observers that the choice was clearly wrong. In fact, the unwitting participants (each of whom participated in a number of trials) con- formed to the group response in 32 percent of the trials and 74 percent of the participants conformed at least once. It should be noted that recent research has

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shown some reduction in conformity since Asch’s studies in the 1950s. 6 Never- theless, his studies were instrumental in demonstrating the subtlety of confor- mity, a deceptively powerful source of infl uence.

One distinction between the tasks used by Sherif and Asch was the ambiguity involved. In Sherif’s task, the light appeared to move but actually did not (this is known as the autokinetic effect). In this case, people looked to others because they were uncertain about what actually happened. In Asch’s study, there was no ambi- guity involved; people clearly answered due to social pressure. Thus, this points to two important times when people look to others, but for very different reasons. In many ways, the aftermath of 9/11 serves as an excellent illustration of both of these types of infl uence. People were unsure as to what happened, so they looked to oth- ers to make sense of the event. Then legislation and other rules passed quickly (some of which have since been revoked) due to the social pressure that followed.

Influencing Without Authority

Thus far, we have focused on understanding what power and infl uence are, where they come from, and how to develop them. The applied managerial skill, how- ever, is how to use infl uence to get real and positive things accomplished through others, particularly in those cases where you have no legitimate power from your position. In short, you want to learn to infl uence without authority. In the follow- ing, we present the supporting evidence for several approaches and tactics that have been demonstrated to be successful in such cases.

Frequency and Effectiveness of Different Influence Tactics

A variety of different tactics are used to infl uence others, the most common of which are described in Table 8.1 .

Research regarding these nine infl uence tactics has uncovered interesting and important fi ndings. First, some tactics are used far more commonly than others, and certain tactics are also used much more frequently on particular tar- gets (superiors, peers, or subordinates). Most importantly, some of the tactics are considerably more effective in achieving desired outcomes than others. 7

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FIGURE 8.3 The Lines from the Asch Study

A B C Comparison

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More specifi cally, evidence shows that rational persuasion and pressure are the most frequently used infl uence tactics. 9 Interestingly, the other seven tactics are employed relatively rarely. With respect to the targets of infl uence attempts, downward infl uence (trying to infl uence a subordinate) is the most common, representing about 42 percent of the overall attempts. Upward infl uence (trying to infl uence your boss) was second, and lateral infl uence (trying to infl uence a peer) was the least common. Given the disproportionately large amount of time spent with peers, this fi nding is somewhat surprising.

The relative effectiveness of tactics can be defi ned as the reaction of the infl u- ence target in one of three ways: resistance, compliance, or commitment.

• Resistance. The infl uence target is opposed to carrying out requests and will resist accomplishing what is being requested.

• Compliance. The target is willing to do what the infl uencer asks, but is not enthusiastic about it. Compliance is characterized by doing only that which is required by a request—and nothing more.

• Commitment. The target agrees with a request or decision from the agent and strives to carry out the request or implement the decision with energy and engagement. The target complies with the request and will often go beyond and do more than is requested.

Of course, commitment is the most effective and desirable of the infl uence outcomes. However, compliance may often be acceptable and may sometimes be the best that can be achieved. For example, a supervisor may be responsi- ble for overseeing that several relatively unpleasant tasks get completed. It is unlikely anyone will be “committed” to cleaning the bathroom or to fi lling out an expense report, so in such cases, compliance is likely the maximum outcome. Nonetheless, gaining commitment is the gold standard of infl uence attempts and should be sought at every available opportunity.

Practice this! Go to www.baldwin2e.com

TABLE 8.1 The Range of Infl uence Tactics 8

Infl uence Tactic Description

1. Rational Persuasion Using logical arguments and facts to persuade someone your request will result in benefi cial outcomes.

2. Pressure Using demands or threats to get what you want.

3. Personal Appeal Appealing to someone’s loyalty or friendship with you to get him/her to do something.

4. Exchange Offering an exchange of favors to get what you want.

5. Ingratiation Using praise or fl attery to put someone in a good mood prior to making a request.

6. Coalition Seeking the help of other people to get someone to do what you want, or using the support of other people to get someone to agree with you.

7. Legitimizing Establishing the legitimacy of a request by appealing to authority or pointing out its consistency with existing values or norms.

8. Consultation Seeking someone’s participation in planning or developing something that he/she will ultimately need to buy into.

9. Inspirational Appeal Arousing an individual’s enthusiasm by appealing to values, ideals, and aspirations.

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Table  8.2 presents data from research that has studied the effectiveness of the nine infl uence tactics presented in Table  8.1 . 10 Note that personal appeal, consultation, and inspirational appeal all have “commitment” as their most likely outcome and thus are deemed the most effective of the tactics. On the other end, rational persuasion, pressure, ingratiation, and coalition are all linked most fre- quently with “resistance.”

By bringing together the two questions of most interest—“Which tactics are most frequently used?” and “Which tactics are most effective?”—an important disconnect should be apparent. That is, the most frequently used tactics are among the least effective, and those used most infrequently are among the most effective! This would certainly seem to be a case where, in the words of Will Rog- ers, “Common sense ain’t so common.”

This disconnect between what is done most often and what works best leads to the obvious question of “Why would people do something that is not effective?” In our previous discussion of conformity, we referred to cases where the task was ambiguous (for example, the “moving light”). In the case of infl uence, whether a tactic works or not can be unclear to people observing (especially because of the time lag between the attempt and the result). As a consequence, we will look for meaning from others, and if others are using rational persuasion, we will use it as well. Now, however, you know better, so you do not need to “follow the crowd” in using ineffective infl uence techniques.

The lessons for students of infl uence should be clear. Do not necessarily do what you see others doing but rather do what works! Why the emotional appeals (for instance, inspirational appeals and personal appeals) work so well is because they are consistent with what we know about persuasion. That is, there is both a rational and an emotional component that leads to change. 11 But research sug- gests that managers generally invest most of their infl uence efforts on the ratio- nal aspect, even though emotional elements often lead most directly to change. Consider what persuades you most, a 100-page report full of charts and graphs or a passionate appeal to your heart? With all this said, we don’t want to give the impression that rational persuasion should never be used. To the contrary. As it turns out, your boss is likely to give you a higher performance evaluation and more rewards when you use rational persuasion. 12 So the best idea is to make an emotional appeal and then briefl y give people access to the rational persuasion evidence you have collected.

“You’d be surprised how hard

people work around here. They

work nights and weekends, some-

times not seeing their families for

a while. Sometimes people work

through Christmas to make sure

the tooling is just right at some

factory in some corner of the

world so our product comes out

the best it can be. People care so

much, and it shows.”

— Steve Jobs

TABLE 8.2 Consequences of the Nine Infl uence Tactics

Outcomes (%)

Tactic (listed in order of use frequency) Resistance Compliance Commitment

Rational Persuasion 47 30 23

Pressure 56 41 3

Personal Appeal 25 33 42

Exchange 24 41 35

Ingratiation 41 28 31

Coalition 53 44 3

Legitimizing 44 56 0

Consultation 18 27 55

Inspirational Appeal 0 10 90

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Most people are heavily persuaded by emotional appeals for at least two rea- sons. First, emotional appeals establish a sense of urgency and help bring people together. Second, it is generally believed that thoughts and emotions are closely interrelated, and sometimes they may be in confl ict. When there is a strong rela- tionship between rational and emotional components, impacting the emotions will usually bring the rational elements into line (people convince themselves that something is a good idea and then justify it with data). If, however, thoughts and emotions are not in full agreement, appealing only to rational issues leaves the possibility open that people will reject the change based on an emotional objection (in other words, “I don’t like the way this change feels”)—something which cannot easily be overcome by data.

Closely related to infl uence tactics are a collection of behaviors broadly labeled political skills. Political skills combine the most effective infl uence tac- tics, resulting in a “disarmingly charming and engaging manner that inspires confi dence, trust, and sincerity.” 13 Like it or not, politics often play an impor- tant role in the work environment. It is often the case in organizations where the needs of two parties do not align. For example, with respect to resource allocation (pay raises, budget dollars, offi ce space, new equipment), people and groups are often pitted against each other and respond by looking out for their own interests and ignoring those of others and the overall organization. In these cases, using the most effective infl uence tactics can be especially important to your ultimate success or failure in the organization. One of the most potent forms of political skill behavior involves methods for infl uencing without direct authority—a concept known as social infl uence . When used appropriately, social infl uence can help an individual achieve positive and ethical outcomes in organizations. In the next section, we describe the most important social infl u- ence behaviors.

Social Influence Weapons 14

Many eager but inexperienced workers often fi nd themselves in a bit of a quan- dary, anxious to get things done, but too junior in the organization to possess any real legitimate or formal authority. That is, it is often the case that we fi nd ourselves asking the question “How am I supposed to get things done if I don’t have the authority to infl uence people?” This is an important issue and one that thankfully has received a great deal of attention. The study of social infl uence provides a solid, research-backed series of tools to help people infl uence others in the absence of formal authority.

To better understand how people are able to infl uence without authority, the work of Robert Cialdini is considered to be “state of the art.” Cialdini has sum- marized more than 50 years of research to better understand the basic principles of infl uence. And the best news is that these principles can be taught, learned, and applied. Cialdini’s six principles include (1) friendship/ liking, (2)  commit- ment and consistency, (3) scarcity, (4) reciprocity, (5) social proof, and (6) appeals to authority.

Principle 1: Friendship/Liking

The central principle behind friendship and liking is that we tend to like others who like us. And once others like us, we’re more likely to be effective in infl uenc- ing them. Although mere attractiveness certainly plays a big role in liking (see Management Live 8.2), it by no means tells the whole story. We also like people because of their similarity to us, and the fl attering treatment they direct toward us. The fact that we have a greater liking for those similar to us has been repeat- edly demonstrated, and the wide range of comparison factors people consider

KO 8 - 5

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MANAGEMENT LIVE 8.2

Do Looks Really Matter? However unfair, research evidence is clear that “looks matter!” In a recent summary of studies 18 that examined the effects of attractiveness, the researchers found that:

• Attractive individuals fared better than their less attractive counterparts in a variety of job-related outcomes.

• The attractiveness effect existed even when a lot of job-relevant information was available (so people viewed the attractiveness as being relevant even when performance levels were known).

• The biasing effect of attractiveness was present for professionals as well as for college students.

• The attractiveness effect was just as strong for attractive men as for attractive women.

• The attractiveness effect seems to be weakening over time (that is, it is not as strong as it was 20 years ago), but it is still quite signifi cant.

“Clothes make the man. Naked

people have little or no influence

on society.”

— Mark Twain

in determining who is like them include age, race, gender, religion, politics, and even cigarette smoking habits. 15 People also do respond favorably to fl attery. In a famous example, Joe Girard, who is billed as the World’s Great Salesman by the Guinness Book of World Records, claimed the secret to his success was sending out a monthly card to 13,000 former customers that simply said, “I like you.” The point here is that to really get others to like us, we need to uncover genuine similarities and offer praise when it’s genuine.

The truly amazing thing is that even in cases where fl attery is obvious and where the person clearly has a motive to manipulate another person, fl attery can increase liking. In a controlled study where people received personal feedback from men who needed favors from them, the men who only provided positive feedback were better liked even though it was clear they had something to gain by using fl attery. 16 In other words, we are infl uenced by people who like us, are similar to us, and who fl atter us.

Principle 2: Commitment and Consistency

The key principle behind commitment and consistency is that once we make a choice, we’re more likely to remain consistent with that choice. Cialdini explains that:

Once we make a choice or take a stand, we will encounter personal and interpersonal pressures to behave consistently with that commitment. Those pressures will cause us to respond in ways that justify our earlier decision. We simply convince ourselves that we have made the right choice and, no doubt, feel better about our decision. 17

One classic example of how commitment and consistency can be used as infl u- ence weapons is what is known as the “foot-in-the-door” technique. Here a small request is made and granted, and is then followed by a larger request. This technique has been used by salespeople to get your commitment to buy fi rst because they know once you’ve made the commitment to buy, you are far more likely to continue to buy. This is why nasty and unethical sales techniques like lowballing (i.e., you agree to an offer and the salesperson then adds unattractive details) and the “bait and switch” (i.e., you’ve shown up at the store ready to buy the advertised sale item only to learn it no longer exists, but the upgraded model is in stock) are so effective.

What is really important about all of these techniques is gaining some small degree of commitment that can then be turned into something larger. A great

“My love for you really has less to

do with how I feel about you, and

more to do with how you make

me feel about me. ”

— Unknown

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example of this type of infl uence can be seen in a classic study conducted by Steve Sherman, a psychology professor at Indiana University. 24 Dr. Sherman called a sample of local residents as part of a survey and asked them to predict what they would say if asked to spend three hours collecting money for the American Can- cer Society. Notice that he did not actually ask them to collect money, but just to indicate what they would say if they were asked to volunteer. Because people did not want to appear uncharitable, a large number of people said they would volunteer. A few weeks later, the American Cancer Society called these people. As a result, there was a 700 percent increase in volunteers as compared to an earlier solicitation. You see, people really do strive for consistency!

Consistency is no less powerful in the workplace. Assume that you are a new sales manager and you have an employee who has had three straight quar- ters of low sales. Many new managers would be tempted to give a fi nal warn- ing before terminating. Contrast this approach with the use of commitment and consistency, where you meet with the sales employee, discuss the reasons for the underperformance, and have her articulate a plan for improvement. Next, ask the employee to put the plan in writing and then send it to you. Once you have the written plan and the employee has explained it, you share the plan with your boss and maybe a few other key managers in the area. You and the other manag- ers let the struggling employee know that the plan looks great and that each of you are there to help her should she run into obstacles. Your employee has now made an active commitment and will generally act in a manner consistent with the plan because she wrote the plan and others are aware of it. That is a smart way to infl uence while building goodwill and strong relationships.

Other studies have shown that attractive people are assumed to be more talented, kinder, more honest, and more intelligent than people who are less physically attractive. 19 Keep in mind these are major infl uences and not just relevant in some obscure cases. This effect holds for such far-reaching areas as politics (where physically attractive candidates get many more votes than unattractive ones 20 ), salaries for jobs (where attractive individuals get paid 12 to 14 percent more than their unattractive co-workers 21 ), and court cases (less attractive defendants are twice as likely to avoid jail as unattractive defendants). This effect also starts very young in life (elementary school teachers assume attractive children are better behaved 22 and more intelligent 23 than their less attractive classmates) and continues through adulthood.

Attractive Average Plain

S al

ar y

D if fe

re n

ce (

% )

8%

14%

6%

Level of Attractiveness

The Relationship Between Attractiveness and Salary

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Principle 3: Scarcity

Despite what some economics classes may have you believe, individuals are not always rational in their decision-making processes (see Chapter 3). This makes scarcity all the more powerful when it is used to wield infl uence. Inter- estingly, people are particularly sensitive to a perceived loss—more so than they are to a perceived gain of the same magnitude. Studies in medicine have shown people are more likely to fully engage in their prescribed treatment when the message received is framed in terms of what they could lose by not doing so rather than in terms of what they gain from compliance. For example, a poignant example is found in messages focusing on how many years are cut off a smoker’s life versus those who do not smoke or quit. The lesson is that the positioning of a message (loss versus gain) makes a great deal of difference. Rather surprisingly, people do not need to actually have something to fear its loss, as they fear lost opportunity in much the same way they fear the loss of actual property.

This desire to preserve our options is a main component of psychological reactance theory, which proposes that whenever free choice is limited or threat- ened, the need to retain our freedom makes us want it more than before. 25 Psy- chological reactance makes us very susceptible to scarcity and can cloud our judgment signifi cantly. Take the case where a company is hiring new college graduates. The company makes the assertion that you have to make up your mind in a day or two because it has so many other qualifi ed candidates and only a few openings. The scarcity of the job opening tends to make it more attractive (even though it may not be) to job candidates. 26

Scarcity also helps explain why attempts to ban activities or products gener- ally do not work (think about efforts to prevent fl ag burning or banning specifi c controversial books). Even when people do not engage in a practice, they want to feel they are free to do so if they wish. By making access to the activity “scarce,” people actually want it more!

There can be great personal advantage in using the principle of scarcity. For instance, knowing a specifi c computer language your company uses, but that is known by relatively few people, may make you irreplaceable. The ability to speak well in front of an audience may be a very scarce commodity in some con- texts. By developing skills that are scarce, you increase your value and potential infl uence.

Another area where scarcity can often be of value at work is the scarcity of information. For example, let’s say you’ve got an early look at a report from your senior management. It’s not confi dential, but you want to use scarcity to infl u- ence others to support the report’s conclusions. Get your people in a room and say, “I just received this and it won’t be distributed to anyone until next week, but it’s important and I wanted all of you to get an early look.” The information will be seen as being of more value because of its exclusivity and more likely others will pay attention to it. 27

Principle 4: Reciprocity

The basic principle behind reciprocity is that people generally repay actions in kind. This basic premise is so widespread that sociologists and cultural anthro- pologists worldwide have found it to be universal across all human societies. The interdependencies created by reciprocity allow for division of labor and the creation of an organized society. If people did not generally reciprocate others’ actions, we would face a chaotic environment. It is the very widespread accep- tance of reciprocity that makes it a particularly strong infl uence weapon.

The reality in most reciprocity-based infl uence attempts is that the person being infl uenced often did not request the service or action in the fi rst place.

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A clever and familiar example of this is a tactic used by a Boy Scout troop in their attempt to sell candy bars door-to-door. Using the door-in-the-face technique, the scouts fi rst asked for a relatively large donation for an event the majority of targets would have zero interest in attending. When that offer was inevita- bly declined, the scouts were trained to then follow with, “If you don’t want the tickets, will you at least buy some chocolate bars? They are only $1.00 apiece.” Notice that this creates the appearance that both people are “giving in.” In real- ity, the scout meets his objectives, while the buyer does not.

Managerial approaches such as “stretch goals” are examples of infl uence that capitalize on the reciprocity principle. Performance targets like “100 percent customer satisfaction” or “zero defects” are unlikely to ever be fully realized. However, by setting an extremely high goal at fi rst, managers succeed in getting commitment to higher performance than would otherwise have occurred.

Resisting this form of infl uence can be very diffi cult, but a fundamental understanding at least makes you more aware of the possibility of being unwill- ingly trapped. Cialdini suggests we “accept the offers of others but to accept those offers for what they fundamentally are, not for what they are represented to be.” 28 In other words, if the initial favor turns out to be some form of decep- tion, we should respond as if someone is trying to take advantage of us. By look- ing at the infl uence attempt for what it is, rather than what it pretends to be, we are better able to respond in an appropriate manner that we will not regret later.

Reciprocity can also serve as a very legitimate and important tool in your “managerial tool kit.” By supporting others when they need it, by making your- self available with your expertise, and by doing the “little extra things” that need to be done, you will build a greater reservoir of infl uence. If you have taken care to treat other people well, it is likely others will reciprocate this treatment when you need it most. A specifi c example of this is being helpful and sharing resources with your colleagues or other departments. When they thank you for your assistance, just be sure to follow it up with, “Always glad to help. I know how important it is, and if I were in the same situation, I know you’d help me, too.” This action solidifi es the reciprocity. 29

Principle 5: Social Proof

Social proof is based on the reality that we tend to view actions as more accept- able to the degree that we see others performing them in the same or similar situations. In a classic study, researchers canvassed neighborhoods door to door asking for donations from residents. The researchers showed residents a list of their neighbors who had already donated to the cause. The results revealed that the longer the list of donors, the more likely residents were to donate. 30

More recently, Cialdini conducted research at a hotel chain where the hotel was trying to increase reuse of towels by their guests. In one condition, they placed cards in the rooms saying, “Help save the environment. You can show your respect for nature and help save the environment by reusing your towels during your stay.” This was associated with a 38 percent reusage rate among guests. Another condition used a card that read, “Join your fellow guests in helping to save the environment—Almost 75 percent of guests who are asked to participate in our new resource savings program do help by using their towels more than once. You can join your fellow guests to help save the environment by reusing your towels during your stay.” This resulted in 48 percent of the guests choosing to reuse their towels. The difference here is simple: The second condi- tion harnessed social proof—“If others think (and act) in a way to reuse towels, I should, too.” 31

Social proof is most infl uential under two conditions: (1) uncertainty, when people are unsure about what to do or the situation is unclear and can be

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PART TWO Interpersonal Skills290

interpreted in multiple ways, and (2) similarity, where people are more likely to follow the lead of people who are like themselves. As a result, this makes social proof an excellent description of what happened in the Sherif studies (that is, the “moving light”), which were discussed earlier in this chapter.

The methods for using social proof in a positive manner are relatively straightforward. You need to have vivid examples with rich details and be able to cite several instances where your recommendation has been effective. Also, staying on point (using a few themes over and over) tends to reinforce the idea and make it more likely to be accepted by others. It may be even more effective to let other people serve as examples of social proof. If you have had a diffi cult time getting buy-in for a new project from a few of the engineers, ask a senior engineer who is well respected by her peers to make the case and explain why the project is a winner; this may serve you better than trying to make the case yourself.

Principle 6: Appeals to Authority

The central principle of appeals to authority is that people generally defer judgment to others whom they believe are experts or authority fi gures. The tendency to obey legitimate authority comes from early socialization where we learned to obey our parents and teachers. Of course, the tendency to obey authority is actually very important to the safety of a child (for instance, lis- tening to others may stop a child from running into the street) and to the smooth functioning of society (people generally accept court decisions because they view the process as legitimate). Like all social infl uence weapons, appeals to authority can be used for good or manipulation. Some variations of this weapon include things like “snob appeal” in which infl uence is based on appealing to people’s sense that they are somehow better than others. An example of this is the marketing of the American Express Centurion Card (also called the Black Card), which is reserved for very high-income clients. Their website reads “Rarely seen, always recognized. Available by invitation only, The Centurion Card is the world’s rarest American Express Card and confers a level of service that can be extended only to selected individuals worldwide.” Other examples include appealing to tradition (e.g., “That’s the way it’s always been”) or to things that are novel since “newer” is seen as “better.” For instance, we are sure that no one reading this book would get a new smartphone due to its ability to do something you never use, such as a forward-facing camera for videoconferencing, but we are sure that you know of people who would do this (some sarcasm intended).

The trick to using authority effectively on the job is to let people know your strengths and expertise without coming off as a “bragger.” Good ways to do this include recounting prior projects or telling short stories about accomplishment and the role you played. In general, disclosing personal information about your- self is a good way to let people know your strengths and what you are capable of accomplishing.

Appeals to authority are made most powerfully when they concern obeying the requests of genuine authorities who possess recognized knowledge and wisdom. Problems arise, however, when we obey authority as a mindless shortcut. Accept- ing false authority in an unquestioning manner is a formula for manipulation.

Research has shown three kinds of symbols are most dangerous in creating artifi cial authority: (1) titles, (2) clothing, and (3) automobiles. In separate stud- ies investigating the infl uence of these symbols (titles, clothing, automobiles), people who possessed one or another of them (and no other noteworthy creden- tials) were granted more obedience by others. 32 Moreover, in each case, the obey- ing persons underestimated the effect of authority pressures on their behaviors.

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That is, the people infl uenced generally believed that the symbols made no differ- ence, but they actually did. It seems entirely irrational that the type of automo- bile a person drives would signal his or her authority, but the evidence supports it nonetheless.

We can defend ourselves against the unwanted effects of authority by ask- ing two simple questions: Is this authority truly an expert? How truthful can we expect this expert to be in this case? The fi rst question directs our attention away from the simple symbols and toward evidence for authority status. The second advises us to consider not just the expert’s knowledge in the situation but also his or her trustworthiness in this instance. Legitimate appeals to authority can be a useful tool of infl uence. But be ever vigilant in ensuring your “authorities” and those of others are truly worthy of the label.

The social infl uence weapons offer proven strategies for infl uencing others when you do not have the formal authority to do so. Using the infl uence weap- ons, however, takes some thought and practice. Just as importantly, you need to be on the lookout for people trying to infl uence you in unwanted or undesirable ways. We have found it interesting how once you understand and recognize the basic social infl uence tactics how often you can see their use around you, and how effective you can be through their use.

Managing Your Boss

Many people report diffi culty with the idea of “managing” their boss. This can result in a norm of politeness, where people are always courteous to their super- visors but are reluctant to pass along information that might distress them. 33 However, as one researcher put it:

Effective organizational functioning demands that people have a healthy disrespect for their boss, feel free to express emotions and opinions openly, and are comfortable engaging in banter and give-and-take. 34

When we explain the preceding point to students, we often get looks of dis- belief. Upon further refl ection, however, this fi nding is not so surprising. If you consider the relationship between you and your boss to be like any other rela- tionship, communication is always an important factor of success. By engaging in the behaviors just described, the amount of communication is enhanced, and this gives both parties (meaning you and your boss) more to base feelings of trust upon. However, if an employee “clams up,” this deprives the boss of the required information to have an effective relationship. In fact, research indicates that the frequency and depth of effective communication between supervisor and sub- ordinate increase each person’s trust for the other, enhance managers’ willing- ness to act on their employees’ suggestions, and actually make the manager more effective. 35 When managers don’t get feedback from their subordinates regularly, it can have a negative effect on the whole organization. As mentioned in the deci- sion-making section in Chapter 3, one study found that, of 356 decisions made in fi rms without signifi cant upward communication, one-half of those decisions failed. 36

The reality is that in almost all situations, you will have information your supervisor needs to effectively do her job. Further, your boss depends on you to make her look good, meaning your relationship with her is one of reciprocity. Your ideas have value because you are likely closer to the customer than your boss can be. You can actually help your supervisor become a better manager by giving feedback, provided you put it in a way that is constructive and that she will be willing to hear and act on. 37

KO 8 - 6

D O 8 - 2

“Accomplishing the impossible

means only that the boss will add

it to your regular duties.”

— Doug Larson

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General Strategies for Managing Your Boss

Of all of the management “gurus” out there, perhaps Peter Drucker has had the largest impact on the day-to-day practice of management. Almost 60 years ago, Drucker wrote that “few managers seem to realize how important it is to man- age the boss or, worse, believe that it can be done at all. They bellyache about the boss but do not even try to manage him (or her). Yet managing the boss is fairly simple—indeed, generally quite a bit simpler than managing subordinates.” 38 Just as is the case in so many areas, Drucker’s words here are very wise.

Keep in mind, however, that what Drucker is referring to is not about how to be a “brown noser,” and you should not mistake the information in this section as being a “primer in sucking up to the boss.” To the contrary, Drucker argued that “one does not make the strengths of the boss productive by toadying to him. . . . One does it by starting out with what is right and presenting it in a form which is accessible to the superior.” 39

Building on the work of Drucker, the following are a few guiding principles that have been proposed as fundamental to managing your boss.

• It is important to understand your boss’s mindset and see the world through his lens. What is important to him? What are her goals and objectives, and how does your work contribute to those? What are his pressures? What are her strengths and weaknesses? If you understand these fundamental things, you can frame your communication in an appropriate way. You can appeal to shared values, or explain how your idea can create value relevant to your boss. 40

• Aim to communicate in your boss’s preferred style. Is your boss a listener or a reader? Each of us has a particular way in which we prefer to receive information, and that is usually the channel we choose to communicate with other people. If your boss consistently initiates face-to-face com- munication, this is likely the best way to proceed with a request. On the other hand, if your boss is a reader, it is a good idea to provide her with information in writing prior to a meeting, so she has a chance to fully absorb it. 41 But don’t make this a guessing game. Ask your boss how he or she likes to communicate best and act accordingly.

• Understand yourself. The exercises and suggestions in Chapter 1 gave you a head start on this. Understanding your personal strengths, weaknesses, pressures, and goals helps you prioritize what requests you make of your boss, and gives you context when she approaches you with new chal- lenges or opportunities. 42

• It is very important to manage your boss’s time effectively. Remember that you likely represent only 1 percent of his problems, so don’t take up 25 percent of his time. The simpler the problem or issue at hand is, the less time you should have your boss spend on it. So the more you pre- pare, summarize, and synthesize information and options, the better off you will both be. A good practice is to book your boss for a series of short meetings over a period of time. This way, you are able to chart progress, and not have to wait weeks until decisions can be made to fi nalize a deci- sion or a project that needs your boss’s input.

Managing Your Boss Through Effective Communication

So, when approaching your supervisor, what are the best communication strate- gies? We provide step-by-step advice on how to do this in Tool Kit 8.1.

“Listening, not imitation, may be

the sincerest form of flattery. If

you want to influence someone,

listen to what he says. When he

finishes talking, ask him about

any points that you do not

understand.”

— Dr. Joyce Brothers

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CHAPTER 8 Using Power and Infl uence 293

Tool Kit 8.1 Steps for “Managing Your Boss”

1. Begin with the end in mind. Have a clear vision of your recommendation, including its strategic impor- tance, and say it up front. Some phrases that might help you begin the conversation are “I’ve noticed we have a problem with X and I have a solution I’d like to propose,” and “You mentioned that one of our strategic goals for this year is X and I have an idea of how we can do that.” That way your boss will listen because she knows where you are headed and you won’t waste her time.

2. Do not confuse raw data with useful information. Your job is to integrate data and turn it into a meaning- ful story, not to dump everything you have learned into your boss’s lap. So be selective, be visual, group the data, bring out what is essential. Data overload creates stress, which in turn can create denial, rejection, and numbness. Effective employees show up with useful information and are able to convey the results in an easily digestible form.

3. Outline both costs and benefi ts, being as specifi c as you can about both. Don’t forget about intangible but important costs such as time and allocation of resources.

4. Ask for input. As a general rule, if you are going to approach your boss with a problem, come prepared with a recommendation as well. Your solution may not be the one that is ultimately implemented, but showing your boss that you are capable of understanding a problem and its consequences is important to your career. 43

MANAGER’S TOOL KIT

Professionalism: A Source of Trust and Respect

As noted earlier, power and infl uence are properties that come from relation- ships between people. Your power and infl uence will therefore be tightly linked to your ability to create strong and positive relationships. You must proactively and consistently work on building such relationships—they just don’t happen on their own. That may seem obvious, but unfortunately studies show that nearly half of new management hires fail in their fi rst jobs because of their inability to build good relationships with bosses, peers, and subordinates. 44

When most people talk about infl uential managers, they tend to focus on personal characteristics and most frequently cite traits that relate to trust and respect. For example, when describing effective managers, people commonly say things like:

• “He was highly organized and did what he said he would do.”

• “She was tough, but fair and honest, and I respected that.”

• “He always went out of his way to say thank you for the things I did.”

• “She sent the most caring and comforting note when my dad died.”

Conversely, when describing ineffective managers, people commonly say things like:

• “He was scattered and unfocused, and did not follow up on commitments.”

• “She would tell you anything to keep you happy—she sucked up to upper management and was a phony with us.”

KO 8 - 7

D O 8 - 3

“People do not care how much

you know, until they know how

much you care.”

— Unknown

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PART TWO Interpersonal Skills294

• “He took the credit for our work.”

• “He knew nothing about me and never seemed to appreciate anything I did.”

So what do the trusted and respected managers consistently do that those less successful do not? The managers who get the highest marks from their peo- ple are often not the most brilliant, or the most versed in managerial knowledge. Rather, they are those who have devoted themselves to building relationships that bring out the best in people, and they know how to navigate social situations. We call that capability professionalism . When athletes are described as being “pro- fessional,” it means they play the “right way,” make others around them better, and represent themselves and their team well. Just as importantly, they do not do insensitive or immature things that damage their reputation or that of the team. Professional managers are the same.

Professionalism is the source of trust and respect; it brings out the best in others and strengthens your reputation and that of your organization. It is also an area where blunders can be fatal to a management career. While it can take months or years to fully gain the trust and respect of others, one breach of trust or one disrespectful outburst can damage a relationship for a lifetime. Though professionalism can include a wide variety of elements, a synthesis of the many popular management guidebooks and manuals reveals that the core of profes- sionalism concerns how you manage your relationships, your etiquette, and your social network. Attention to building and refi ning competence in those areas will ultimately determine the level of trust and respect you will earn as a manager.

Building Positive Relationships

Clearly, different managers have different styles and there is no “one best way” to build relationships. However, three general strategies consistently emerge as critical to creating positive relationships:

1. Get to know your people.

2. Show appreciation.

3. Under-promise and over-deliver.

Although many different labels have been used to describe those strategies, those three are the essential tools for managers most adept at relationships. Con- versely, a neglect of such strategies often leads to relationship breakdowns and the derailing of otherwise promising management careers (see Management Live 8.3).

Getting to Know Your People: Showing Genuine Interest in Others

You cannot manage well without knowing those you manage. Therefore, the sin- gle most important professional behavior is to get to know those with whom you work. Unfortunately, demanding goals and busy schedules often make it diffi cult for managers to fi nd the time to sit down with their people and get to know them well. A great sadness at funerals is that people often say they learned more about a deceased individual in an hour-long service than they did after working with him or her for 30 years or more. At the frantic pace of business today, learning about others is unlikely to occur naturally. Therefore, great managers proactively create opportunities to “stay in the loop” and keep abreast of the lives and concerns of their people. Specifi c behaviors useful to getting to know your people include:

Practice MBWA: Management by Walking Around. Make yourself visible by regularly talking and visiting with people. Every day, make a point to get out of your regular offi ce or workstation and visit with people in your work- place. If your people are not in the same physical location, then call and still occasionally visit. Don’t limit your visits to just those at your level or higher.

D O 8 - 4

“What’s done to children, they will

do to society.”

— Karl A. Menninger, psychiatrist

“If there is any one secret of suc-

cess, it lies in the ability to get

the other person’s point of view

and see things from that person’s

angle as well as from your own.”

— Henry Ford

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CHAPTER 8 Using Power and Infl uence 295

MANAGEMENT LIVE 8.3

Managers Relating Badly The success rate for new managers is disturbingly low, largely because of a failure to build positive relationships with people. Here are a few of the most frequent and damaging relationship mistakes that managers make:

• Taking Credit for the Work of Others. A death sentence for relationships. Great managers obsess over showing appreciation and delight in the fact that their workers feel they are not taken for granted.

• Failing to Follow Up on Commitments. Quickly undermines trust and creates a culture lacking in accountability. Better not to commit than to offer a promise and not live up to it. Always live by the principle: Under-promise and over-deliver.

• Trying to Show Everyone Who’s in Charge. One of the unfortunate misconceptions of young managers is that they need to convey complete control. They often feel any admission of weakness, or revealing a limitation, is dangerous and probably inappropriate. Contrary to such notions, the reality is you will almost certainly be more effective when you behave authentically. So apologize when you are wrong, and do not feel you have to disguise all weaknesses.

• Refusing to Ask for Help. You are not alone. Think of your group as a team and ask for their help. As a general rule, people want to help, and it is being left out of the loop that is far more damaging.

• Overreliance on Title. Perhaps the hardest lesson for young managers to learn is that a management title does not elicit automatic respect and obedience. Actions speak louder than words. If you show a level of competence, and demonstrate the skills that come with your title, the respect of your workers will follow.

For example, secretaries and service staff often have surprising infl uence in organizations and, more importantly, are interesting people in their own right.

MBWA sends positive messages to people. It reveals your interest in them and in their work, and it says you don’t consider yourself “too good” to spend time with them. MBWA also enables you to stay in touch with what is going on in your department, section, or unit. So make time every week to spend time with people and aim for some contact even if you work at home or in a virtual environment. Some executives (Herb Kelleher of Southwest Airlines is a famous example) are beloved by people in their organizations because they take the time to visit with, and take a sincere interest in, people at all levels. That is a strategy worth emulat- ing. See the series of steps that follow to better understand how to practice MBWA:

Get Your Hands Dirty. One of the most common complaints of frontline workers is that their managers do not fully understand what they (the work- ers) really do. One good way to avoid that perception is to actually sample and do the employees’ jobs on occasion. Plop down in front of the computer, pick up the telephone to deal with a customer complaint, or review a project chart. Sample their job enough to show your interest in it and to under- stand how it works. Think of it as a great way to connect with your frontline people and to gain a fi rsthand understanding of exactly what they are deal- ing with during a typical workday. Experience what they go through in their jobs, and you will have a much richer understanding of their circumstances, be able to relate to them much better, and almost certainly gain their appre- ciation as well.

“You can observe a lot just by

watching.”

— Yogi Berra

“Seek first to understand, then to

be understood.”

— St. Francis of Assisi

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Arrive Early to Work and Meetings. Make it a point to arrive at least 10 to 15 minutes early for work and meetings, and visit with people at that time. Similarly, after meetings or other more formal events, do not always rush back to your workspace. Linger occasionally and talk shop with people there. The casual time spent in informal contexts is often the easiest and most comfortable time to get to know people. If this feels like too great a loss of “productive” work time, remind yourself that time spent building relationships is perhaps the most productive management work.

Talk a Little About Yourself. People are more willing to share their own journeys with someone who has proven willing to share a bit of his or her own. So let people know about your hobbies, kids, or pets. Having some understanding and connection to your life will empower people to open up about their own lives as well. Of course, be careful not to talk so much about yourself that you are perceived as self-involved and narcissistic.

Be Authentic; Do Not Fake It. Seek to learn about others with enthusiasm and a desire to know and get the best from them as they are, not as you would want them to be. Whatever you do, do not fake it. If you do not have some authentic curiosity and interest in others, you will have a diffi cult time building relationships.

Show Appreciation. Probably the easiest yet most neglected tool for build- ing good relationships is to more frequently use the words “thank you.” A lack of appreciation is the cause of innumerable relationship breakdowns, and appearing to have taken credit for others’ work is among the surest ways to sabotage relationships. It is easy to forget to show appreciation and just move on to the next challenge. But great managers know that apprecia- tion is the lubricant of positive relationships and are obsessive about show- ing it to their people whenever they can.

So take the time to pass along credit and compliments to those who have made a contribution to your cause. Always speak well of your people and point out their accomplishments to any interested party.

Under-promise and Over-deliver. Especially for new managers, the innate desire to please and be liked, and to be viewed as top performing, often cre- ates a pressure to over-promise. However, respect comes not from idealistic intentions—however noble—but from doing what you say you will do— when you say you will do it. Indeed, there are few relationship killers like unmet expectations. People can put up with a lot, provided they feel they are being told the truth and promises made are kept, even if they originally desired something more.

Great managers, therefore, are acutely aware of the importance of managing expectations. They also know the most raving fans and highest customer appre- ciation often stem from delivering ahead of promised commitments. 45 Since the same logically holds for personal relationships, you should aim to make only those commitments, promises, and deadlines you can meet or exceed—and aim to restrict a very natural inclination to promise what you cannot deliver. It bears repeating—great managers under-promise and over-deliver!

Power Etiquette and First Impressions

For many of us, the terms manners and etiquette have a way of prompting thoughts of stuffy formal events and seemingly ridiculous, outdated conven- tions. Yet an understanding of modern business etiquette simply enables you to conduct yourself with ease, style, and confi dence. Manners do not make you

“The one thing I never want to be

accused of is not noticing.”

— Don Shula

“Nothing great was ever accom-

plished without enthusiasm.”

— Ralph Waldo Emerson

“Losers make promises they often

break. Winners make commit-

ments they always keep.”

— Denis Waitley

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CHAPTER 8 Using Power and Infl uence 297

stuffy, obnoxious, or overly formal. They make you more comfortable in situ- ations because you know exactly what to do. Indeed, as the family and social institutions that once taught manners decline in infl uence, a personal command of business etiquette is now one very good way to set you apart from others. In other words, exhibiting strong business etiquette allows you to “fi t in” and feel comfortable with expected norms.

Of course, there are many written and unwritten rules and guidelines for etiquette and no possible way to know them all. Possibilities to commit a faux pas are limitless, and chances are, sooner or later, you’ll make a mistake. But it is less important that you might use the wrong fork and more critical you have a polished introduction of yourself, can use and recall names with ease, and can convey the right impression with your dress and manners. In short, we labeled this section Power Etiquette because our focus is on just a few areas of etiquette we believe have a direct and powerful impact on your success as a manager.

First Impressions and Introductions. It’s often very diffi cult to overcome a poor fi rst impression, regardless of your knowledge or expertise. So the fi rst rule of management etiquette is to understand the power of that good fi rst impression and to be sure to polish your approach. People make extraordinary assumptions about your professional credibility and potential performance based upon your appearance and behavior during your fi rst meeting or meetings.

A variety of research studies support the power of fi rst impressions, but we are particularly taken by one very simple investigation. In that study, par- ticipants were given a description of an individual with the following order of adjectives: intelligent, industrious, impulsive, critical, stubborn, envious. The researchers then gave the same description of this individual to other partici- pants, but merely reversed the order of the adjectives to envious, stubborn, criti- cal, impulsive, industrious, intelligent. Both sets of participants rated how likely it would be they would be friends with the person. Those with the fi rst order of description were signifi cantly more likely to be friends than those given the sec- ond ordering—even though both descriptions had the exact same descriptors! When positive information is given fi rst, people are more likely to ignore later negative information. First impressions are truly important and carry consider- able weight.

Much of your fi rst business impression will be based on elements such as handshake, introductions, and clothing. A handshake is almost always appropri- ate, so develop a good fi rm handshake and make a practice of rising to shake hands with anyone who enters your offi ce or room, whether male or female. You will also want to develop a ready and refi ned introduction.

The goal is to make a short but memorable impression. You should gener- ally include some hint to help people remember you and to provide a tidbit of information to draw others into a conversation. Your self-introduction may vary according to the setting and the people you are meeting. A brief, fi nely tuned introduction is particularly useful when networking, beginning a conversation, or meeting someone new.

Beyond your own introduction, it is also wise to increase your skill and comfort level at introducing others. It is all too common for young managers to overtly avoid introductions because they are uncomfortable with how best to do it. An introduction is a courtesy to help people feel more comfortable when they meet for the fi rst time, and it is an opportune time to demonstrate your profes- sional acumen. Of course, some people have a knack for bringing others together, and there clearly is an art to good introductions. However, introductions really are not hard to make if you follow the three simple guidelines presented in Tool Kit 8.2.

“Manners open doors that power,

position, and money cannot.”

— Dana Casperson

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Tool Kit 8.2 Making Introductions

1. Aim to help facilitate easy and comfortable conversation between the people by weaving in information regarding their backgrounds or accomplishments.

2. Try to state each name at least a couple of times to give each the best chance of picking up on the name.

3. In the business world, defer to offi ce seniority and age (not gender or social standing). This means that you introduce the younger person to the older person, and not the other way around.

MANAGER’S TOOL KIT

Learn and Use Names. It has often been said a person’s name is to that per- son the sweetest and most important sound in any language. However, like many others, you may likely struggle to remember names or have even noted you are “bad with names.” How many times have you met someone and fi ve minutes later not remembered that person’s name? While remembering names in a gen- eral way is certainly a valuable social skill, it can be vital to a successful manage- ment career. Remembering names and faces is a priceless and rare quality—and thus a great competitive advantage in the workplace. (Remember how important scarcity can be in making it infl uential.)

© Ted Goff, The New Yorker Collection, www.cartoonbank.com

Fortunately, remembering names is a skill accessible to all of us. But, like all the skills we discuss here, it takes a willingness to invest one’s time and disci- pline and consistently apply a few simple memory techniques. Perhaps the best memory framework is one used to dramatic effect by Benjamin Levy, a world- renowned magician and performer. As part of his act, Levy starts out his routine by asking every member of his audience (often well over 100 people) to state their name to him. He commits all those names to memory and then reveals those later in the performance. Levy’s book describing his model was named as one of Fortune magazine’s top 75 business books of the last 75 years. His model is appropriately abbreviated as FACE—focus, ask, comment, employ—and is described in Tool Kit 8.3.

“No matter how much memory

and power we put into computers,

few things are as impressive as

someone walking up to you and

remembering your name.”

— Ben Rosen, Chairman Emeritus,

Compaq Computer Corp.

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Tool Kit 8.3 The FACE Method for Remembering Names

• Focus. The fi rst mistake most of us make is a failure to truly focus. When trying to remember a name, the fi rst key is to intently lock in on the name at the fi rst opportunity. So the fi rst objective of remembering a name is to recognize the critical importance of locking it in at the fi rst opportunity. The moment will pass instantaneously, so you have to target your attention intensely knowing that, like your locker number or your student identifi cation number, you will need that name later.

• Ask. Ask to clarify that you have heard the name correctly. This gets you involved with the name and acti- vates the memory process. A side benefi t is it conveys to the other person you really care.

• Comment. Make some comment that will help cement the name in your memory. For example, “Paris, like the city?” Tie it to something familiar, a question, or something that will elicit a bit of further discus- sion. Doing that will help lock it into your memory.

• Employ. A terrifi c aid to memory is taking new material and teaching it to someone else. That is what happens when you introduce someone you’ve just met to someone else. It also gives you the opportunity to use the name again.

MANAGER’S TOOL KIT

Far too many managers, young and old, resort to the excuse that they are “just not good with names.” Discipline yourself to use the steps of FACE, and you will stand out as one of those magical people with a knack for names.

Building Your Social Network. Few great managers have ever achieved suc- cess on their own. Rather, they build and nurture a social network of people whom they can learn from, turn to for advice and support, and use as resources throughout their career. An important property of power is “the ability to mobi- lize resources to get things done,” and social networks are immensely useful to that end. 46 See Management Live 8.4 as a networking example.

Fortunately, building a social network to enhance your power and infl uence is not a complex undertaking, but does take superior persistence, organization, and follow-up. A few simple steps can provide an excellent basis for building a good social network.

First, it is important to have a positive outlook on needing help and about soliciting support. Many people make the mistake of assuming that needing help is a sign of weakness. As a result, they do not reach out to others and thus fail to make important connections. The truth is most people you might seek for your network have been in similar places in their careers and will often gladly offer assistance whether it is arranging for personal introductions or providing advice and counsel. In general, all people like to feel needed, and involving them in your personal network is not likely to be an unwanted imposition. Just remember to “ask for a little,” and it will often lead to much greater support.

Second, be sure to get beyond your organization and become active in indus- try or other professional events. Clubs and professional associations offer excel- lent ways both to add to your expertise and to meet others in your fi eld of interest. Make it a point to meet and talk to at least a few new people each month, and don’t forget to get business cards. Always follow up with the people you meet in a quick next-day e-mail. The goal is to make an impression so they will remember you the next time you contact them.

“Part of my concern about names

is that I know how I feel when

somebody I’ve met before does

not know my name. It’s like saying,

‘I didn’t bother—you must have

had so little consequence in what

you were saying or what you were

doing, I don’t even remember who

you are.’”

— Steven Gluckstern, CEO, Zurich

Global Asset Management

D O 8 - 6

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MANAGEMENT LIVE 8.4

“Old Girls Network” Helps Bring Young Women into Technology Jobs 47 According to a report by the American Association for University Women Educational Foundation, the adventure games and programming challenges that attract young men to computers can serve to repel girls. In fact, most women enter information technology (IT) jobs via different paths than men, the report found.

Word of these differences has encouraged female “techies” to band together to help others break into the IT fi eld. Networking groups are revolutionizing the way women learn new technical skills and ultimately fi nd jobs. These groups are also reaching out to children who may have a knack for technology. A good example is Web Women, an online mailing list for women interested in Internet-related careers. They recently sponsored a Take Our Kids to the Web day.

According to Eve Simon, creative director at Interactive Applications Group, a Washington, DC, fi rm that creates websites for foundations and nonprofi ts, “An old girls network is a really powerful tool.” That notion gains support from DC-area hiring managers who overwhelmingly say they prefer to bring on candidates who are referred by current employees. It is also supported by research conducted by professors at Stanford Business School on the hiring patterns and organizational structures of Silicon Valley technology companies.

Leslie Forte comments that, in her eight years in the IT fi eld, she has endured countless slights, mostly from people who didn’t think she fi t the stereotype of an IT person. She balances the negatives with the acknowledgment that she has benefi ted from her network of support, which has helped her move from the help desk, traditionally a low-status position in IT, into a manager’s role. Forte’s boss tells her she’s been rewarded because she can work comfortably in the world of computer hardware and still display soft skills, like communication. “What you’re going to need is people to communicate the technology and teach people how to use it to change their lives,” she says, “and for that, you’re going to need people who are good with other people.”

Third, to manage the contacts you have made, use a “black book,” phone, tablet, or some other organizer that includes the names and contact informa- tion for those in your network. There will come a time in your career when knowing these people will pay off (with a job lead, a recommendation, advice), so it is important to keep your contacts “fresh.” Proactively seek reasons to contact the people in your network (acknowledge an event or recognition they received, briefl y report on a personal accomplishment, give them some grief on a favorite sports team defeat) and send an occasional e-mail or make an occa- sional phone call so your information is up to date and to make sure you are not forgotten.

We have seen many students confuse having a lot of Facebook friends with necessarily having a large social network. As a good test of your social network, think of how many of your Facebook friends would show up to help you move to a new apartment? While getting people to help you move may seem to be a pretty high hurdle, next think of how many people in your social network could you get to come to a party at your place this weekend. We have seen people with over 600 “friends” who sit home on Saturday night with nothing to do. Ask yourself, “Is this an effective social network”?

Finally, perhaps the most important lesson is that, just as the key to making friends is to fi rst be a friend, your network will only grow to the extent you give as much as you gain. So look for opportunities to meet with and support others in their work.

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As evidence of just how important personal networks are to career success, consider a study conducted at a major consulting fi rm. 48 The study was designed to determine any distinctive characteristics of high performers in terms of indi- vidual expertise, technology use, and personal networks. Results indicated that neither level of expertise nor skilled technology use differentiated average per- formers from high performers. It was solely the presence of larger and more diversifi ed personal networks that differentiated the top performers from the average and low performers. Despite such fi ndings, many of us spend an exorbi- tant amount of time and effort building our technical abilities and almost no time or effort building and maintaining our personal networks. Do not fall prey to that trap. Dedicate yourself to building a personal network from today forward.

Managing Facebook and Other Social Media Sites. A Harris Poll con- ducted in 2009 for CareerBuilder.com found that 45 percent of employers use social networking sites to research job candidates and another 11 percent who were not using them planned to start doing it. This was up from just 22 per- cent in 2008. Of those employers who used online sources to check on job appli- cants, 29 percent used Facebook, 26 percent used LinkedIn, and 21 percent used MySpace. Another 11 percent searched blogs and 7 percent followed job appli- cants on Twitter. Not too surprisingly, this was particularly common for employ- ers in information technology and professional and business services.

Many students do not realize that many of the things they put online are there “forever.” Of the employers who screen social media sites, 35 percent reported that they found content on a site that caused them to not hire a candi- date. Some examples of why candidates were not hired included provocative or inappropriate pictures, drinking or drug use, bad-mouthing former employers, poor communication skills, discriminatory comments, lying about qualifi ca- tions, and sharing confi dential information from a previous employer. When it comes to communicating with an employer, similar patterns can be seen, and employers did not hire candidates because they used an emoticon (for example, a smiley face) or text language (GR8, BRB, or U) in an e-mail or job application.

While it may seem like you would be well advised to just stay away from social media altogether, that is not likely possible or necessarily desirable. There are positive consequences of employers screening your profi les, as 18 percent of employers found content that caused them to hire candidates. The most common reasons included that the profi le provided a good sense of fi t, it supported the professional qualifi cations, showed creativity, solid communication skills, and that the candidate was well-rounded. So, when it comes to managing your social media, Rosemary Haefner, Vice President of Human Resources at CareerBuilder, recommends the following DOs and DON’Ts to keep a positive image online:

• DO clean up digital dirt BEFORE you begin your job search. Remove any photos, content, and links that can work against you in an employer’s eyes.

• DO consider creating your own professional group on sites like Face- book or BrightFuse.com to establish relationships with thought leaders, recruiters, and potential referrals.

• DO keep gripes offl ine. Keep the content focused on the positive, whether that relates to professional or personal information. Make sure to high- light specifi c accomplishments inside and outside of work.

• DON’T forget others can see your friends, so be selective about who you accept as friends. Monitor comments made by others. Consider using the “block comments” feature or setting your profi le to “private” so only des- ignated friends can view it.

• DON’T mention your job search if you’re still employed.

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CASE CONCLUDED

So how are marketers and others thinking of using the KLOUT measurement of infl uence in the social media world? Marketers can use it to target infl u- encers, of course, but there may also be other applications as well. For example, the Palms Hotel and Casino in Las Vegas is working on “The KLOUT Klub,” which they claim will “allow high-ranking infl u- encers to experience the Palms’ impressive set of amenities in hopes that these infl uencers will want to communicate their positive experience to their followers.” Presumably, only those with abnormally high KLOUT scores will be granted admission to the club. In the future, it may be the deciding factor in the battle over the Kingpin Suite or free tickets to Cirque de Soleil.

According to AdAge magazine, the primary downside of KLOUT is that it is a form of putting all your eggs in one basket. Says one expert, “KLOUT is like having just one credit monitoring company. You might do spectacularly well or have a terrible ranking but the validity of the ranking system itself has yet to be proven, at least until you have another service to compare it to. . . .” Along the same lines, KLOUT can certainly conjure up a rather scary, “Big Brother” scenario. Suppose your bank decides to use KLOUT scores to determine the interest on a mortgage loan? Or your real estate agent does

> not fi nd you “KLOUT worthy” to live in a certain neighborhood?

For some, the whole idea of ranking people by KLOUT scores, and then offering rewards to the top of the list, smacks of the immaturity of high school. “ Want to sit with me at lunch? Hang on while I check your KLOUT and then we’ll talk .  . .” KLOUT is just one more example of innovations stemming from the Internet that create complicated scenarios for us all.

Questions

1. What type of applications could you see for KLOUT in your world? Would you be comfortable using KLOUT scores as one measure for selecting offi cers of a student club looking to expand its membership? Why or why not?

2. What are the potential downsides of KLOUT? Could you envision people trying to artifi cially manipulate and enhance their KLOUT scores?

3. How do people consciously increase their power in a fi rm? How does that relate to increasing your KLOUT score.

4. View the celebrity KLOUT indices from 2011 listed next. What can you conclude? What kinds of busi- ness decisions might those indices affect?

Name KLOUT Score

Justin Bieber 99

Ashton Kutcher 97

Kim Kardashian 93

Rev Run 92

Jimmie Fallon 90

Lady Gaga 90

LeBron James 85

Snoop Dogg 84

Britney Spears 80

Ellen Degeneres 80

Reggie Bush 76

Lance Armstrong 75

Oprah Winfrey 65

*Most people have KLOUT scores under 20.

Source: From Kathlene Hestir, http://kathlenehestir.com/2010/07/ 13/how-klout-scores-work/. Reprinted with permission.

Source: Adapted with permission from Marketing Pilgrim Internet Marketing News Blog, October 5, 2010, http://www.marketingpilgrim. com/2010/10/want-a-vegas-upgrade-get-klout.html.

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Concluding Note

Power is not a dirty word. In fact, it is rather essential for great management. To be effective, managers need to go beyond their formal authority and understand the infl uence tactics—social, political, and otherwise—that have been found to be most effective in gaining commitment. Professionalism is the source of trust and respect; it brings out the best in others and strengthens your reputation. How- ever, like power and infl uence, it is also an area where blunders can be highly detrimental to a career. Skilled use of power, infl uence, and professionalism is the hallmark of all great managers.

KEY TERMS

authority 275 coercive power 280 conformity 281 dependence 275 expert power 280 infl uence 275 legitimate power 279

norms 280 political skills 285 power 274 power bases 278 professionalism 294 psychological reactance 288 referent power 279

reward power 279 social infl uence 285 social infl uence weapons 285 social network 299 strong ties 275 weak ties 275

The British anthropologist and Oxford professor Robin Dun- bar has posed a theory that the number of individuals with whom a stable interpersonal relationship can be maintained (read: friends) is limited by the size of the human brain, spe- cifi cally the neocortex. “Dun- bar’s number,” as this hypothesis has become known, is 150.

Facebook begs to differ. What would be an impressive,

even exhaustive, number of friends in real life is bush league for Face- book’s high rollers, who have thou- sands. Other social networks use less-intimate terminology to portray contacts (LinkedIn has “connec- tions,” Twitter has “followers”), but

CASE Are 5,001 Facebook Friends One Too Many?

> >

Facebook famously co-opted the word “friend” and created a new verb.

Friending “sustains an illusion of closeness in a complex world of continuous partial attention,” said Roger Fransecky, a clinical psy- chologist and executive coach in New York (2,894 friends). “We get captured by Facebook’s algorithms. Every day 25 new people can march into your living room. I come from a

failed Presbyterian youth, and there was a part of me that fi rst thought it was impolite not to respond. Then I realized I couldn’t put them all in a living room—I needed an amphitheater.”

Facebook discourages adding strangers as friends, adding that only a tiny fraction of its 400 million users have reached the 5,000 thresh- old, at which point Facebook wags its digital fi nger and says: That’s

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PART TWO Interpersonal Skills304

enough. The company cites behind- the-scenes “back-end technology” as the reason for the cutoff, implying that the system will implode at the sight of a 5,001st friend.

What may seem surprising is that the subset of people with sizable lists is not limited to unemployed 20-somethings, commandeering tables at Starbucks and deluding them- selves that they’re “networking,” social or otherwise. The high-users include plenty of grown-ups with real jobs and, seemingly, better things to do with their time than updating their “status” for stran- gers, former colleagues, and camp buddies from 300 years ago.

“At one point, I arbitrarily decided that for every new friend I confi rmed, I had to delete one, like people with small closets do with their clothes,” said Kurt Andersen (3,072), the host of Studio 360 on public radio. “I devoted an entire weekend to going through them. But it made me feel like a 14-year-old girl: ‘I’ll be friends with you but not with you.’”

Facebook friends grow like kudzu for a variety of reasons, often per- sonal or professional marketing—a proxy for the exchange of business cards (so old school). As in life, social networking lends itself to expanding social circles with like-minded peo- ple, so there are analogous Facebook cabals for foodies, literati, political junkies, perhaps gardeners, probably plumbers, and defi nitely Civil War re- enactors (whose membership seems to be self-selected from former high- school audiovisual clubs).

If Facebook is a place of indis- criminate musings and minutiae, where people report their every thought, mood, hiccup, cappuccino, increased reps at the gym, or switch to a new brand of toothpaste, why not indiscriminate friendships? Why deny the little frisson of pleasure when your page proclaims you are “now friends with John Smith and 27 other people?”

Facebook’s announcements and “suggestions” for new friends help to fetishize those numbers, although few will admit to an ego-gratifying interest in attaining the mythical quota of 5,000, like the Ryan Bing- ham character of Up in the Air, who’s obsessed with reaching 10 million frequent fl ier miles.

As a metric for status or worth, Facebook has the ability to reduce its adult users to insecure teenag- ers, competing for high SAT scores or a seat at the cool kids’ cafeteria table.

“I’m a Facebook friend of Bob Dylan, which probably means I have a deeply meaningful relationship with his publicist,” said Daniel A. Farber (1,762), a law professor at the University of California, Berkeley. “I was hoping to impress my wife. And on the scale of things I’ve done to impress her, it’s pretty good.”

Jeffrey Wolf, a Bay Area real estate broker, claims, among (4,447) others, Alicia Keys, Alicia Silverstone and Alicia Witt as friends—and that’s just the A-list. “I wanted to get Rachel Maddow,” he said, “but she doesn’t take friends.”

Administering such a prodigious inventory—tending to requests from impending friends, let alone communicating with extant ones—is strenuous.

“Normally I start hitting it about 10 o’clock at night, and if I do it right, I can be done by 1 a.m.,” Mr. Wolf said. “Anybody in his right mind would consider abandoning it.”

What Mr. Andersen, the radio host, calls a graceful number of Facebook friends is a mutable con- cept. “I was grossed out when I fi rst saw people with as many or fewer friends than what I have now,” he said. “There’s some optimal number, but I don’t know what it is.”

A large number (3,811) feels like the extension of a community for Hilary Rosen, managing partner of the Brunswick Group, a public strat- egy fi rm in Washington that has done consulting with Facebook. “When I went to work at Huffi ngton Post, Arianna told me, ‘Darling, you must confi rm everybody,’ and for the most part, I follow Arianna’s rule,” Ms. Rosen said. “But there’s a core group that gets more attention, just like there used to be brown edges around some cards in my old Rolodex.”

In his book How Many Friends Does One Person Need? Professor Dunbar stands by his number, acknowledging that digital resources help us keep in touch but fail to substitute for face- to-face relationships with loved ones who are sources of mutual support in a fl esh-and-blood world.

Or, as Dr. Fransecky said, “I need friends that I can scratch and sniff.”

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Source: Adapted and excerpted from “Are 5,001 Facebook Friends One Too Many?” by Aimee Lee Ball, New York Times, May 28, 2010.

CHAPTER 8 Using Power and Infl uence 305

SELECT MANAGE WHAT? DEBRIEFS

Infl uencing Without Formal Authority: Debrief This type of scenario is faced daily by people in organizations and is therefore perhaps the most important of all power and infl uence skills. Obviously, because you do not have authority associated with your position, or any ability to reprimand the folks in graphics for not helping you, you must turn to other means to enlist their support.

Research on infl uence tactics is interesting in that it reveals that the most used tactics are often the least effective in gaining commitment. Specifi cally, people tend to rely on rational persuasion and pressure when the evidence suggests that those more often lead to resistance. The more effective strategies are those that rely on personal and social infl uence. In this case, your best bet for convincing the graphics group to help you out of this jam resides in one or more of three infl uence strategies:

• Friendship/Liking. Put simply, we are infl uenced by people who like us, are similar to us, and who fl atter us. A traditional adage is that you get more fl ies with honey than with vinegar and, like it or not, it’s true. So look for ways to establish personal relationships with the folks in graphics and search for common interests and connections. People are infl uenced by friends—so be a friend.

• Commitment and Consistency . Do not ask for their full commitment on the project immediately. Start by asking for something small, commend them for the work, and then gradually work up to the full request. Evidence suggests that once people have agreed to help, at even a small level, they will be more likely to offer further assistance. If you can just get the group started and modestly engaged on your work, then your chances of getting them to jump in and complete it are signifi cantly enhanced. In this same vein, you might use the principle of reciprocity to get them on board. That is, you might describe the full set of work you have forthcoming and due, but would not want to burden them with it all on short notice—just this one reasonable project at this time. The effect is that you seem to be compromising. The hope is that they will reciprocate, in gratitude for you not dumping all the rest of your work on them at such a busy time, and take on the one project you put on their plate.

• Social Proof. Look for ways to send the signal to graphics that it is not just your group (with no authority or clout) but others more infl uential who want this project done well and on time. For example, can you get a senior leader or a key customer voice in the discussion? The goal is to have graphics feel that their comple- tion of this project is important to other key stakeholders and thus should be prioritized more than they oth- erwise might.

(continued)

Discussion Questions

1. After reading the chapter, do you think that 5,000 “friends” make you more “connected” than 4,000 “friends”? Than 2,500? Than 1,000?

2. Dunbar’s number suggests that humans can only have 150 stable

interpersonal relationships and that this number is limited by the size of the human brain. What is your experience with this number? Do you feel you have 150 “stable interpersonal relationships” or anywhere near that number?

3. From a power and infl uence per- spective, are there many benefi ts to having friends that you can- not “scratch and sniff”? What types of power are derived from having a lot of interpersonal connections?

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Selling an Idea to Your Boss: Debrief The importance of managing “up” is sometimes not fully understood by young managers and yet is critical to effectiveness. This is another case where you have no authority and thus cannot rely on organizational hierarchy or your control of rewards/sanctions to gain you any infl uence. In fact, any attempts to try to pressure or threaten would be ill-advised and likely career threatening.

The fi rst key to infl uencing your boss is to fi rst understand her mindset. Be sure you are fully aware of what is important to her. What are her goals and highest priorities, and how does your work contribute to those. What are her pressures and what is keeping her most occupied? If you understand these fundamental things, then you can frame your communication in an appropriate way. You can appeal to shared goals and values, or explain how your idea can create value that is relevant to her.

Second, have a clear vision of your recommendation, including its strategic importance, and say it up front. Some phrases that might help you begin the conversation are “I’ve noticed we have a problem with . . . and I have a solution I’d like to propose” or “You mentioned that one of our strategic goals for this year is . . . and I have an idea of how we can do that.” That way your boss will listen, because she knows where you are headed and that you won’t waste her time. Always outline both costs and benefi ts, being as specifi c as you can about both. Don’t forget about costs such as time and allocation of resources. As a general rule, if you are going to approach your boss with a problem, come armed with a recommendation as well. Bosses are famous for saying “I have plenty of problems. What I need are solutions.” Your solution may not be one that ultimately actually gets implemented, but showing your superior that you are capable of understanding a problem and its ramifi cations could prove to be an asset to your career.

Finally, communicate in your boss’s preferred style. Is your boss a listener, or a reader? Each of us has a par- ticular way in which we prefer to receive information, and that is usually the channel we choose to communicate with other people. If your boss consistently initiates face-to-face communication, this is likely the best way to pro- ceed with a request. On the other hand, if your boss is a reader, it is a good idea to provide her with information in writing prior to a meeting, so she has a chance to fully absorb it. But don’t make this a guessing game; ask your boss how he or she likes to communicate best since we all have very different preferences. And once you have presented your recommendation, ask for input. Organizations desperately need people capable of managing up; thus you want to learn what went well, and what did not, and use the opportunity to refi ne your approach for your next episode.

Building a Personal Network That Enhances Your Power: Debrief While too often dismissed as frivolous and superfi cial, your efforts to build relationships will likely defi ne your career—so it is never too early to start your network and to increase your competence in doing so. In fact, some- one in this scenario would be well advised to expand the time they spend establishing and nurturing a personal network and avoid focusing solely on their own personal development.

Networking has enjoyed a surge in popularity and a number of bestselling books and seminars have emerged touting the many secrets to effective networking. In reality, however, a few simple and practical strategies have stood the test of time and are the building blocks of strong personal networks.

• Be bold in asking for help. Everyone has been in this same place at some point in their career and people are remarkably willing to help and “give back”—but they have to be asked. One good maxim is to start by asking for a little. That is, request a 10-minute phone conversation or a short informational interview (with no resumés or job leads requested). Such requests are more likely to be accepted and they often lead to follow-up opportunities of greater depth.

• The best way to receive is to give. It should never simply be about getting what you want. It’s about get- ting what you want and making sure that the people who are important to you get what they want, too. Look for opportunities to help others make contacts and build their networks—they will likely reciprocate.

• Never eat alone. The death trap in trying to build a strong network is to disappear. So constantly be look- ing for chances to invite someone to lunch, join in on a group dinner, bring bagels in the morning prior to work so folks will gather. Look for the professional and civic organizations you can join and keep your

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calendar full. And think about how you can bring others together (for example, two of your contacts that have not met join you for lunch).

• Get organized and keep track . Be obsessive about creating and maintaining your personal “data base.” Over time, nothing will be more valuable to your professional future. So get organized and create a record- ing system that enables you to rapidly store and receive (and keep fresh) the contact information for your growing network of friends and contacts.

• Ping consistently. Finally, constantly be on the lookout for opportunities to contact the people in your net- work (for example, acknowledge an event or recognition they received, briefl y report on a personal accom- plishment, reference something in the news you know they would fi nd of interest). This has often been stated as looking for reasons to have a conversation, so send an occasional e-mail or make a brief phone call to stay in touch. In today’s jargon, this is called “pinging” and is essential to make sure your network is up to date and you are not forgotten in the clutter of everyday life.

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308

O B J E C T I V E S

PART TWO INTERPERSONAL SKILLS

KO 9-1 Explain the full range of leadership approach to leadership.

KO 9-2 Articulate how personal traits are related to leadership effectiveness.

KO 9-3 Describe the basis of transactional leadership.

KO 9-4 Describe the primary behaviors associated with transformational leadership.

KO 9-5 Describe the relationship between transactional and transformational leadership.

9 Leading Others

KNOWING DOING

“On-field leadership is critical to

the success of an NFL team,

but we believe that leadership is

equally important to the business

side of our club. We need pas-

sionate people with the ability to

energize others to accomplish

very aggressive objectives. The

young people who get hired by

the Texans will be those who

have demonstrated that they

have the potential to lead others.”

— Jamey Rootes, President,

Houston Texans

After reading this chapter, you should be able to:

DO 9-1 Display transactional leadership behaviors in order to build trust.

DO 9-2 Exhibit transformational leadership behaviors.

DO 9-3 Create a development plan to improve your leadership skills.

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309

> > Case: Google

I n early 2009, statisticians from Google’s corporate headquar- ters (known as the Googleplex)

embarked on a plan code-named Project Oxygen. Their mission was to devise something far more important to the future of Google Inc. than its next search algorithm or application. They wanted to build better bosses.

So, as only those from a data- mining giant like Google can do, they began analyzing performance reviews, feedback surveys, and nom- inations for top-manager awards. They correlated phrases, words, praise, and complaints.

Later that year, the “people ana- lytics” teams at the company pro- duced what might be called the Eight Habits of Highly Effective Google Managers.

Now, brace yourself. Because the directives might seem so obvious— so, well, duh —it’s hard to believe that it took the mighty Google so long to fi gure them out:

“Have a clear vision and strategy for the team.”

“Help your employees with career development.”

“Don’t be a sissy: Be productive and results-oriented.”

The list goes on, reading like a whiteboard gag from an episode of “The Offi ce.”

“My fi rst reaction was, that’s it?” says Laszlo Bock, Google’s vice pres- ident for “people operations,” which is Googlespeak for human resources.

But then Mr. Bock and his team began ranking those eight directives by importance. And this is where Project Oxygen gets interesting.

For much of its 13-year history, particularly the early years, Google has taken a pretty simple approach to management: Leave people alone. Let the engineers do their stuff. If they become stuck, they’ll ask their bosses, whose deep tech- nical expertise propelled them into management in the fi rst place.

But Mr. Bock’s group found that technical expertise—the ability, say, to write computer code in your sleep— ranked dead last among Google’s big eight. What employees valued most were even-keeled bosses who made time for one-on-one meetings,

who helped people puzzle through problems by asking questions, not dictating answers, and who took an interest in employees’ lives and careers.

“In the Google context, we’d always believed that to be a man- ager, particularly on the engineer- ing side, you need to be as deep or deeper a technical expert than the people who work for you,” Mr. Bock says. “It turns out that that’s absolutely the least important thing. It’s important, but pales in compari- son. Much more important is just making that connection and being accessible.”

1. Briefl y summarize what Google found in their quest to uncover the best bosses.

2. Describe the best or worse boss you ever had. Is it consistent with Google’s fi ndings?

3. What do you think would be your strongest skill as a potential boss?

THE CONTINUING QUEST TO BUILD A BETTER BOSS

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1. Making the Transition to a Leadership Position You have been working for four years in a bank branch located in the front section of a large grocery store. For the last two years, the branch has been underperforming and a poor place to work—tellers show up late, cash drawers are often out of balance, and the customer service numbers for your branch are in the bottom quarter when compared to other branches of your bank. As a result of these problems, the branch manager was removed from your branch. Today, the regional manager offered you the job on an interim basis. The terms of your job include a three-month trial period, and if all goes well, you will be made the branch manager. You know that the problems in your branch stem in part from the lack of trust and respect for the prior branch manager. While you know the employees will be happy the old boss is gone, you are not sure how they will feel about your promotion to be their new manager.

So where would you begin? How would you go about building a solid foundation of trust in your leadership? How would you address the poor fi nancial performance? Considering you were just recently a peer of your associates, and now their man- ager, would there be any critical things to do or not to do?

2. Leading People to Performance Beyond Expectations After your fi rst two years as manager of a local pizza franchise store, performance is in the upper third of all stores in the fi rm, turnover has been low, and you enjoy good relations with your employees. However, you want to be better than just good— you want your store to be seen as great! You currently have a capable workforce, even some who are seemingly interested in moving up in the company, but right now they appear relatively content to just keep doing what they are doing. For your own career progress, you know that to really move up you will need to get your store to have higher performance and a more notable profi le in the company. Your boss has assured you that if you are able to “do great things” with your store, there will be a wide variety of options open to you within the company. You like the company and believe your boss, but are struggling to determine how to get higher performance out of your people and further your own leadership plans.

What would you do to energize your employees to take it up a notch and perform above expectations? What do leaders that transform situations like this really do? Are there any common traps to avoid making the situation worse instead of better?

3. Leading People Older than Yourself You got a great education and really dedicated yourself in your fi rst few years in your job. Your boss saw positive things in your future and so you were promoted, over several folks much older, to be the leader of your group. You are really excited but also quite anxious about leading people older than you are (some as much as 25 years or more) and who also have far more experi- ence in your fi rm. Is it really that different than managing those younger? What will be the keys to your success in managing people older than yourself? What are the most common traps?

4. Developing Yourself as a Leader Even though you have been moderately successful, you are not “coming along” in your career as quickly as either your boss or you had hoped. Two years ago, becoming the regional sales manager looked like it was about three years away. Now it seems like it could be fi ve years away. You frequently overhear your boss and his boss saying, “We have plenty of good managers but few real leaders.” The inference is that you and your colleagues either do not have, or have not shown, “the right stuff” of leadership.

What does it mean to be a leader? Can it be learned? How might you demonstrate it for your superiors? What specifi c actions could you take that have been shown to help build real leadership capability?

Introduction

Of all the topics in this book, leadership probably receives the most attention in the “popular press,” and companies spend incredible sums of money trying to develop “leaders” and “leadership.” Despite this considerable attention, most people still have a number of misconceptions about leadership and tend to have a very diffi cult time succeeding in leadership roles.

The concepts of “leader” and “leadership” have been around for literally thou- sands of years (there are even Egyptian hieroglyphs associated with them), 1 and yet perceptions vary widely regarding what leadership is and how it can best be

MANAGE WHAT?

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CHAPTER 9 Leading Others 311

developed. The focus of this chapter is on the wide range of competencies related to leadership effectiveness. Current leadership research recognizes that leader- ship is not genetic or a mysterious gift bestowed on just a few. 2 It is not just one thing but a comprehensive set of personal characteristics, skills, and behaviors that can be learned (although some are more amenable to learning than others) by anyone with the desire to do so. Consistent with our book title, the question is “What do those managers who are great leaders know and do?”

Of the many defi nitions of leadership, we tend to like Churchill’s concise notion that “leadership is taking people in a direction they would not otherwise go.” That is, leadership is the ability to infl uence people to set aside their personal concerns and support a larger agenda—at least for a while. The most effective leaders motivate people to perform above and beyond the call of duty, and enhance group success. Leadership effectiveness is not simply who exerts the most infl uence or emerges to control the group, but who can achieve high group performance over time.

A great deal of attention has been devoted to the distinction between leader- ship and management. Although it’s popular to think of “leaders” and “manag- ers” as different people or people who do different things, little research supports such a distinction. In fact, despite the popular notions, leadership can actually be considered a subset of effective management. Indeed, across fi ve or more decades of research examining the major requirements of effective management, leader- ship is always seen as part of the managerial role. 3 That is to say that a manager is not being entirely effective if she ignores the importance of leadership as a central part of her role. To be certain, effective leadership is not a proscribed role and non-managers can display and enact leadership. Put simply, leaders may not be in a managerial role, but effective managers are almost always effective leaders. So how important is leadership to the managerial role? It is important enough that we dedicate an entire chapter to enacting leadership.

Leadership Matters

Leadership development is a multibillion-dollar industry in both the United States and Europe, and the amount of attention being paid to leaders and leadership has exploded in other parts of the world as well. In fact, due to rapid economic devel- opment, leadership development has become extremely important in India and China.

The reason for all of this focus on developing leadership skills is that effective leadership is paramount for the success of organizations and the well-being of employees and citizens. Recent meta-analyses conducted of the leadership lit- erature make it easy to see why so much attention gets paid to organizational leadership and its development. 4 Leadership behavior has been linked to a wide variety of important outcomes across a wide variety of companies. In fact, lead- ership behaviors have been shown to be important for organizational success across industry types (such as for profi t, not-for-profi t, government, and others) and across national boundaries. Increasing evidence even suggests effective lead- ership is one of the best sources of sustainable competitive advantage an organi- zation can have over its competitors. 5

Effective leadership makes great things happen. Indeed, the most important achievements of humankind are associated with people who infl uenced others to achieve more than they thought was possible. On the other hand, the lack of inspired leadership has probably been responsible for more failed careers and unhappy employees than any other cause.

One interesting indication of the popularity of leadership today is that a quick search on Amazon.com reveals well over 68,000 books currently available on the topic. 6 Just for fun, we went ahead and playfully categorized some of those many books in Management Live 9.1.

“Projects, budgets, and facilities

can be managed. People need to

be led.”

— Ross Perot

“Leadership is like beauty; it’s hard

to define, but you know it when

you see it.”

— Warren Bennis

“The question, ‘Who ought to be

boss?’ is like asking, ‘Who ought

to be the tenor in the quartet?’

Obviously, the man who can sing

tenor.”

— Henry Ford

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PART TWO Interpersonal Skills312

MANAGEMENT LIVE 9.1

Categorizing the Vast Array of Leadership Books To help navigate the great number of books on leadership, we thought that providing a classifi cation of these books would be illustrative. While this is presented largely in fun, it does show the extremely broad range of books available. It also demonstrates the intense demand for leadership knowledge.

Numbers • Executive Charisma: Six Steps to Mastering the Art of Leadership • Leadership Wisdom from the Monk Who Sold His Ferrari: The 8 Rituals of Visionary Leaders • Leading Every Day: 124 Actions for Effective Leadership

CEOs This category was way too large, so we just include a small sample of Jack Welch books here!

• * 29 Leadership Secrets from Jack Welch • Get Better or Get Beaten! 31 Leadership Secrets from GE’s Jack Welch • Jack Welch and the 4 E’s of Leadership

Laws These can also be considered a subset of the numbers category.

• The 21 Irrefutable Laws of Leadership • The 9 Natural Laws of Leadership • The Stuff of Heroes: The Eight Universal Laws of Leadership

Presidents of the United States • Cigars, Whiskey and Winning: Leadership Lessons from Ulysses S. Grant • John F. Kennedy on Leadership: The Lessons and Legacy of a President • Lincoln on Leadership: Executive Strategies for Tough Times

Religion and Spirituality • Dynamic Spiritual Leadership: Leading Like Paul • The Maxwell Leadership Bible: Lessons in Leadership from the Word of God • They Smell Like Sheep: Spiritual Leadership for the 21st Century

Secrets • The Leadership Secrets of Billy Graham • The Leadership Secrets of Colin Powell • The Leadership Secrets of Santa Claus

* Denotes the winning book. This falls into the numbers, secrets, and Jack Welch categories all in one brief title. Note: In the fi rst edition of this text, we had an idea for a book titled The 12 Secret Laws of Millard Fillmore’s Spiritual Army (with a forward by Jack Welch). We have since reconsidered and are now thinking that The 365 Spiritual Laws of Steve Jobs (with a forward still being written by Jack Welch) may be more marketable.

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CHAPTER 9 Leading Others 313

In reviewing the extraordinary range of publications on leadership, two obser- vations stand out. First, leadership clearly matters and people are eager for ways to learn about how to more effectively lead and improve their groups and orga- nizations. Second, the multitude of lists, models, laws, and so on make it hard to know what is really associated with leadership effectiveness and supported by more than just opinion. In this chapter, we use the best evidence available to pro- vide guidance regarding the essential conditions and leader behaviors associated with leadership effectiveness. Our goal, then, is not just to help you learn the most effective knowledge and behavior associated with great leadership, but also to help you consume leadership books and research more effectively. As noted, leader- ship is an area where there is a great deal of misinformation, and myths abound. Myths  9.1 identifi es a few of the most common leadership myths. A fi rst step toward understanding effective leadership is to fi rst understand what is not true.

The Full Range of Leadership

As presented in Myths 9.1, one persistent misnomer in casual discussions of leader- ship is that effective leadership is comprised of just one general skill or competency. This gives rise to questions of whether leadership can really be taught. Of course,

KO 9 - 1

MYTHS 9.1 Leadership Myths ? ?

• Leaders are born, not made. Leadership is multidimensional and consists of a range of skills, competencies, and behaviors. Genetics play some role, of course, but mostly in terms of personal traits and what makes someone emerge as a leader or gain the admiration and respect of followers. Ultimate leadership effectiveness is almost exclusively related to leader behaviors (what leaders do) and those behaviors are generally learnable.

• Leaders must be charismatic. While some great leaders are exceptionally charismatic, a large number of others are not. Charisma is often problematic because two people may observe the same person and disagree as to whether he or she is charismatic. Also, charisma may be helpful or harmful, depending on the situation, and charisma is certainly not a necessary condition for effective leadership.

• Leaders don’t delegate the important stuff . Leaders delegate the right work to the right person. They share work and responsibilities to get the job done, and doing this doesn’t reduce their credibility. Delegation is an important tool for effective leaders to develop the talents of the people around them.

• Leadership exists only at the top. Even though we are all familiar with the names of celebrity CEOs and businesspeople (such as Bill Gates, Jeff Bezos, or Jack Welch), effective leadership is demonstrated by scores of people whose names you have never heard. Effective leadership can be found at all organizational levels and is everyone’s business.

• Leadership incompetence results from too little of “the right stuff.” An emerging body of evidence suggests leadership failure is more related to having undesirable qualities and exhibiting toxic behaviors than it is to lacking desirable ones. Sometimes having the wrong stuff can be just as detrimental as any right stuff we may be lacking. 7

• Leaders need to keep others at a distance. Forming close relationships is actually an important key to building relationships with high leader-member exchange (LMX). These effective relationships are associated with improved employee work attitudes and performance and should be encouraged, not banned.

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PART TWO Interpersonal Skills314

some personal characteristics like integrity and decisiveness are not particularly responsive to change. However, leadership is multidimensional (not just personal characteristics) and many interpersonal and organizational leadership skills—such as diagnosing follower performance, tying rewards to performance, and creating collective goals—are certainly open to teaching and learning. With that in mind, we think it is most useful to address a wide variety of leadership competencies.

With respect to personal characteristics, the action focus is mostly on under- standing the personal traits of importance and becoming more self-aware about your own personal profi le so you can adapt when necessary and put yourself in positions where you are most likely to succeed. With respect to behavior, the key is to learn and practice those behaviors that promote positive transactions and transform people to go above expectations. (See Management Live 9.2 for a simple but powerful example.)

Consistent with the theme of this book, and the goals of this chapter, we are presenting what research and practice have found to be the most straightforward and up-to-date approach for understanding and practicing effective leadership. Although some of the ideas have been researched for over 50 years, the overall approach has been developed over the last 20 years and has enjoyed both research support and success in practical application. When asked how to guide a person in a management position toward “what to do” to be successful, the combination of building a solid foundation and then focusing upon more advanced leadership behaviors offers the most solid, research-backed, behavioral prescriptions. This combination is broadly referred to as the full range of leadership approach . 8

In order to describe this full range approach, we begin by addressing personal characteristics and transactional leader behaviors. The remainder of the chapter is dedicated to learning transformational leader behaviors.

MANAGEMENT LIVE 9.2

R. Seshasayee of Ashok Leyland As managing director of Ashok Leyland, a leading transportation company in India whose buses carry 70 million people a day, R. Seshasayee was faced with reinvigorating the company to restore its performance after a few down years. An interview with Seshasayee suggests leadership in an Indian transportation company requires many of the same abilities as it does anywhere else in the world, or in most any workplace situation.

Seshasayee asserts, “Outstanding leaders are those who set audacious objectives and get people to own and achieve them.” He continues by suggesting that leadership requires three essentials:

[First is] setting a goal which seems impossible or needs a fundamental leap; second is to communicate to people and inspire them that the task is not so daunting; and the third is to be a living example of what can be done so that followers can refer to the leader’s life and his actions and see the way to behave in given circumstances.

The leadership practices of Seshasayee go beyond the “big picture” issues described earlier. One of his favorite practices is to use small notes as motivational tools. He describes a habit of using pink notes as recogni- tion tools.

There was this employee who wrote a good report on something. I sent him a note saying that it was a “great delight to read this report. Good show.” Later, this person left us and went to West Asia. Many years later, I ran into him in an airport and after chatting with him, he brought out his wallet and showed me the pink slip—he had preserved it all those years! The message is that little things can have a tremendous impact on people. The basic issue is to be able to relate to and touch people.

Source: Kamath, V. (2002). Leadership has to touch people. Praxis, 3 (4), 22–29.

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CHAPTER 9 Leading Others 315

Personal Characteristics of Leaders

Early leadership research looked at successful leaders in detail to see how they differed from people who were not leaders. This early approach (starting around 1850) became known as the Great Man theory of leadership 9 (there was little thought of women leading in those days) and was based on the premise that leaders both were more capable and possessed a different set of traits than fol- lowers. 10 In other words, leaders are born, not made. Interestingly, this approach was popularized by Sir Francis Galton, Charles Darwin’s cousin. Today, this approach remains quite popular and implies that a particular set of traits offers some magic formula for success. This viewpoint can be seen in the titles of many popular books on leadership, which purport to have identifi ed a set number of traits for successful leadership.

Many popular books on leadership make it sound like there is a small set of leadership traits (such as honesty, charisma, extraversion) that make a person into a successful leader. If only it were that easy. This is not to say, however, that a person’s traits do not matter in the leadership process—they do. They just do not matter in the way most people think.

Important Personal Traits in Leadership

Like so many things in life in general, and managerial skills in particular, the evidence regarding traits is a bit more complex than all those popular press book titles suggest. While it is true that leadership is in part who you are, scientifi c reviews of the Great Man theory indicate traits alone won’t guarantee effective leadership. In fact, the association between traits and leadership effectiveness is considered to be weak. Rather than the mere possession of these traits, it’s what people do with those traits that matters most. Traits are, however, good pre- dictors of leadership emergence , rather than leadership effectiveness. In other words, a set of traits has been found to be important in infl uencing others’ per- ceptions of leadership. People who possess certain traits may be more likely to be perceived as a leader by others, but these people are no more likely to be effective in a managerial role. Possession of these traits, however, seems to be linked to who will ultimately attain a managerial role and who will not.

As an example of leadership emergence, think of the last time you were put into a group of people that you did not know well. After interacting for a little while, you formed an idea about most of the people in the group. Now think about what those perceptions were based upon and what type of person you would identify as a leader. A few people probably said very little and just observed while a few others did most of the talking. Of the people that did most of the talk- ing, one or two of them probably seemed to be a bit smarter than the others and were more engaging speakers. When asked who was a leader in this group, very few people would identify the people who didn’t speak or who didn’t seem to be very engaging. As a result, a pretty consistent pattern emerges for the people who fi ll leadership roles, and that pattern is discussed next.

Although it is true that there is no defi nitive set of traits that guarantee leader- ship effectiveness, it is not true to say that personal characteristics do not matter in a well-rounded discussion of leadership. More specifi cally, the following traits have been found to matter in an important way:

• intelligence

• dominance

• sociability

• self-monitoring

KO 9 - 2

“As a young marine I learned

firsthand that leaders are not

born, they are made. Anyone can

become a stronger leader. It’s

your character and abilities that

make you a leader, not your job

title.”

— Courtney Lynch,

organizational consultant

“There are many qualities that

make a great leader. But hav-

ing strong beliefs, being able to

stick with them through popular

and unpopular times, is the most

important characteristic of a great

leader.”

— Rudy Giuliani

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PART TWO Interpersonal Skills316

• high energy or drive

• self-confi dence

• tolerance for ambiguity

All of the preceding traits do a pretty good job of predicting who will rise to a formal leadership position. In looking at this list, these fi ndings appear to be quite reasonable. For example, would you think a person who was bright, self- confi dent, had a high energy level, and so on, would be more likely to both want and be granted a management position than his or her counterparts (people who are not particularly intelligent, lack self-confi dence, are socially passive, and so on)? This does not seem provocative in any way. What is more surprising to most people is that these characteristics do not make a person noticeably more likely to be an effective leader once the person reaches a managerial position. This makes the full range of leadership particularly important when it comes to understanding effective leadership. It goes well beyond the assumption that once a person reaches a formal position he or she will magically be effective.

Characteristics That People Admire

An additional way of looking at leadership traits is to examine the personal char- acteristics that people admire in their leaders. Although this approach may be somewhat problematic because it is not linked to whether the person is actually effective or not, it can still be useful, so we better understand what people are looking for in their leaders. (See Management Live 9.3 for a somewhat surprising characteristic associated with success.)

MANAGEMENT LIVE 9.3

Death as a Characteristic of an Effective Leader? On November 7, 2000, Melvin (Mel) Carnahan was elected to the U.S. Senate as a senator from Missouri. Mel Carnahan had been in a close race with John Ashcroft (who later was named the attorney general of the United States) and trailed by several percentage points in polls taken about two months before the election. During the last few months, however, Carnahan put on a surge and ultimately beat out Ashcroft for the Senate seat. What was Carnahan’s political strategy? What did Carnahan do to overcome his opponent’s lead? Well, Mel Carnahan died in a tragic plane crash just three weeks prior to the election.

Scott Allison and Dafna Eylon of the University of Richmond have been researching just how such an odd turn of events can happen. 11 In laboratory experiments, Allison and Eylon presented study participants with a written description of a man named Erik Sullivan. After providing a list of impressive accomplishments relating to Erik’s role in building a successful company, the researchers manipulated one important piece of information and had half of the people respond to each story. In one situation, Erik died years after he retired, and in the other case, Erik was still alive. The results of this study showed that people formed signifi cantly more favorable impressions of Erik Sullivan when they believed he was dead than when they believed he was alive.

Allison and Eylon use the term “death positivity bias” as the infl ation in ratings associated with a person’s death. The authors suggest a few different explanations of the effect may be relevant. First, the social norm of respecting the dead is very strong in most cultures. Another explanation for the death positivity bias comes from commodity theory, which posits that any commodity’s value increases to the extent it is no longer available. Since the death of a person is clearly an example where the person’s leadership is no longer available, others may value it more highly. Perhaps most importantly, these fi ndings illustrate the often unreliable and biased nature of trait perceptions.

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CHAPTER 9 Leading Others 317

Leadership authors Jim Kouzes and Barry Posner 12 started with a simple idea: They surveyed business and government executives all over the world and asked them, “What values (personal traits or characteristics) do you look for and admire in your superiors?” They have had more than 78,000 people on four con- tinents respond. From those responses, they developed a list of 20 characteris- tics. The top four characteristics (all supported by more than 50 percent of the respondents) were:

• honest

• forward-looking

• inspiring

• competent

For students, the evidence on leadership traits and leadership emergence offers some important lessons. First, this is a prime example of the inaccuracy (or at least incompleteness) of common sense, in that commonly understood leadership traits are not good predictors of leadership effectiveness. Second, it suggests a wonderful diversity in the types of people who have the capability to be effective leaders. Third, traits that people often associate with successful lead- ers (self-confi dence) may just end up being biases or errors people make when they are evaluating others. For instance, how many times do you think someone doesn’t get a leadership position because they didn’t “look or act” like a leader in a job interview? How much real leadership talent goes unrecognized because it is hidden in “packages” that do not fi t most people’s stereotypes of what makes an effective leader? Great managers are able to show people they have what it takes even when they do not fi t the preconceived mold. And the best way to accomplish this is to behave as an effective leader—the topic of the remainder of this chapter.

Transactional Leadership

Now that you have a better understanding of the role that personal characteris- tics play in the leadership process, the foundation-forming leadership behaviors need to be addressed. In the fi nal analysis, the evidence is clear that great lead- ership is more about what one does than who one is. And research has shown that the basic “doing” of effective leadership involves two primary behaviors: (1)  behaviors that focus on the task at hand, and (2) behaviors that focus on the relationship between leader and follower. In other words, leadership involves infl uencing people to attain goals not just by giving them directives (task behav- iors), but also by supporting the employee (relationship behaviors). Though the behaviors we discuss will be a bit more complex, the foundation of great leader- ship is built on these two areas of leader behavior. 13

Leading Through Transactions

Recall that a critically important role of people management positions is to moti- vate others (see Chapter 6). Since many approaches to motivation (especially expectancy theory) view motivation as a process by which people put forth effort due to their belief that something positive will come from their effort, the impor- tance of trust between a manager and his or her employee cannot be overes- timated. Would you expend energy for a person you did not trust? You would probably fear being exploited or taken advantage of by another person. As such, you might do everything possible to minimize your exposure to that person.

“Common sense is the collection

of prejudices acquired by age

eighteen.”

— Albert Einstein

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PART TWO Interpersonal Skills318

Since few people are willing to be infl uenced by someone whom they do not trust or believe does not have their best interest at heart, it is important for managers to build this level of trust in their employees. Transactional leader- ship serves to build these important infl uence components. Transactional leader behavior represents an exchange, or a transaction, between the leader and fol- lower. This exchange pursues a cost-benefi t, or economic exchange, strategy, whereby the leader exchanges rewards and treatment for desirable services (per- formance, effort, participation) from the subordinate.

Leader-Member Exchange

These transactional leadership behaviors are important because they provide a solid foundation for the relationship between the employee and manager, and great managers realize the employee-manager relationship is the most impor- tant relationship to get right. There are numerous benefi ts—to employee, man- ager, and organization—of having a positive, constructive relationship between employee and manager, commonly referred to as leader-member exchange (LMX) . 14 More specifi cally, strong leader-employee relationships have been linked to increased employee citizenship behavior, higher employee perfor- mance ratings, increased employee satisfaction, reduced employee turnover, and a host of other positive consequences. 15 LMX is largely infl uenced by the types of exchanges or transactions that take place between employees and their man- agers. To establish a positive LMX, it is important that an employee can trust the manager (and transactional leader behaviors are important tools to make this happen). Employees who have positive relationships with their leader are referred to as members of an in-group. On the other hand, employees who do not enjoy a high-quality exchange are referred to as members of the out-group. When high-quality LMX occurs, the in-group employees receive increased for- mal treatment (money and public recognition, for example) and informal treat- ment (favorable projects, and so on). 16 These in-group members feel obligated, as a result of positive treatment by their leaders, to respond by working harder to benefi t the leader and others in the work setting as a means of reciproca- tion. 17 Basically, building a strong LMX relationship is central to managerial effectiveness.

Transactional Leader Behaviors

Although numerous behaviors can be considered transactional leader behav- iors , Bernard Bass, the major contributor to the transactional leadership approach, suggests that management-by-exception (putting out fi res and tak- ing corrective action when problems occur) and contingent reward behav- ior (rewarding an employee for doing a good job) are two of the most effective transactional leader behaviors. The important links between these behaviors and motivation are obvious. These behaviors help to clarify exactly what is wanted and what behavior is desired or not desired by the manager. Many people have made the parallel that management-by-exception is generally consistent with the idea of contingent punishment —providing an aversive consequence to reduce the frequency of a behavior. 18

Of these two main transactional leader behaviors, research has shown con- tingent reward behavior consistently results in positive consequences in both employee attitudes (job satisfaction, organizational commitment) and employee behaviors (job performance, organizational citizenship). 19 Further, contingent reward behavior is an important way to build LMX. Management Live 9.4 shows an interesting example of contingent reward behavior in action. Contingent reward is an essential part of effective leadership because it accomplishes the

“Your job gives you authority. Your

behavior gives you respect.”

— Irwin Ferderman, CEO,

Monolithic Memories

“A pat on the back is only a few

vertebrae removed from a kick in

the pants, but is miles ahead in

results.”

— W. Wilcox

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CHAPTER 9 Leading Others 319

important goal of linking performance and rewards for the employee (see the dis- cussion of positive reinforcement in Chapter 6). This linkage is important because contingent rewards serve as a feedback loop that provides learning for both the employee and the organization as a whole. Thus, employees learn to see a positive relationship between what they’re doing right and the rewards they receive (this is also consistent with the social learning approach of Bandura, discussed in Chap- ter 1). In most organizations, leaders control the available rewards to some extent. Since rewards are a powerful tool for showing employees what the leader desires, the use of contingent reward behavior may have important consequences for the company’s overall culture, performance, and, ultimately, its long-term survival.

In terms of being an effective distributor of contingent rewards, we can pro- vide detailed step-by-step guidance. To do this, see Tool Kit 9.1.

Much in the same manner that behavioral researchers know a great deal about how contingent reward should be distributed, the application of contingent punishment is also “tried and true” when it comes to its usefulness in managerial practices. To effectively provide contingent punishment, a manager should take the steps provided in Tool Kit 9.2.

MANAGEMENT LIVE 9.4

It Works for Shamu—Why Not You? Have you ever wondered how they train killer whales to jump over a rope at SeaWorld and other amusement parks? Or for that matter, how they train dolphins to walk on the water and wave to the audience? Do you think they hang a rope 20 feet over the pool and then shout to the whale, “Up, up, up!”? Of course not, but that is exactly how many ineffective managers treat their employees.

The way Shamu (the world’s most famous killer whale) and fellow killer whales are actually trained to jump over a rope is by starting the learning process with the rope under the water. When the whale swims over the rope, it gets rewarded. Then the rope is gradually raised. Each time the whale swims over it again, a reward is given. This continues until the whale is leaping out of the water! Now think how often managers give a reward only when the fi nal goal is reached. Would it be more effective to provide rewards along the way as well? The killer whales seem to think so—and by the way, so do people!

Tool Kit 9.1 How to Provide Contingent Rewards 1. Describe the desired behavior (push high-margin products, help others, share expertise with marketing

task force).

2. Explain the benefi ts that the desired behavior will cause (increased profi ts, happier people, improved cus- tomer service).

3. Explain rewards associated with the desired behavior (increased performance ratings, raises, bonuses, pro- motions, more responsibility, interesting work assignments).

4. Provide examples and answer questions regarding desired behaviors.

5. Monitor behavior and reward desired behavior.

6. Follow through with the reward promised should the desired behavior occur.

MANAGER’S TOOL KIT

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PART TWO Interpersonal Skills320

The Role of Transactional Leader Behaviors

Transactional behaviors play an important role in effective leadership in at least three ways. First, as we have stated, they establish credibility, trust, and respect for one’s manager. 20 When a manager makes promises and more impor- tantly keeps those promises, an employee learns to trust what his manager says. Second, transactional behaviors form the foundation upon which other effective behaviors are built. As we will see, without a trusting relationship, few employees will take a manager seriously—a critical requirement for more advanced leader behaviors. Third, transactional behaviors establish fairness in the workplace. For example, when expectations are not being met (poor performance, unsafe practices, and so on), addressing the problem quickly and fairly is vital to establishing and maintaining a sense of fairness among employees. To ensure that sense of fairness, great managers need to sometimes use management-by-exception, or contingent punishment.

In a plant where one of this book’s authors has conducted a great deal of training, a member of a generally well-performing group engaged in some potentially dangerous behavior while driving a forklift (chasing another per- son and encouraging other forklift drivers to race). In this case, many man- agers make a fundamental error; they ignore the behavior and say, “Overall, he is a good guy. I don’t think he will do those things again.” These types of behavior need to be addressed, and ignoring them is a recipe for failure down the road.

This type of wishful thinking on the part of the manager presents a two- fold problem. It sends a message to the employee that this type of behavior is acceptable—maybe not desirable, but acceptable nonetheless. Second, and more problematic—and consistent with Bandura’s social learning theory from Chapter 1—it can also send a message to others that the workplace is not fair (“He gets away with these things because the supervisor likes him. If I did that, I’d be fi red”). In this case, however, the manager called the employee in, had

“Leadership without mutual trust is

a contradiction in terms.”

— Warren Bennis

Tool Kit 9.2 How to Provide Contingent Punishment 1. Meet privately. Never punish in public.

2. Describe the undesirable behavior (poor customer contact, not meeting sales goals, bypassing safety policies).

3. Explain the problems the undesirable behavior is causing (low employee satisfaction, customer complaints, lost sales).

4. Allow questions and opportunities for clarifi cation.

5. Explain consequences if the undesirable behavior does not change (probation, formal discipline proce- dures, termination).

6. Provide examples and time for questions regarding desired behaviors.

7. Monitor behavior and reward desirable behavior.

8. Follow through with the appropriate response to behavior (aversive consequences if the behavior has not changed, or positive outcomes if the behavior has changed).

MANAGER’S TOOL KIT

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CHAPTER 9 Leading Others 321

a brief discussion where the rules for effective negative feedback were fol- lowed well, and the behavior did not recur. More importantly, the employee understood why the behavior was reckless and others knew the issue had been handled fairly. Thus, great managers get involved early and correct problems before they become too large to handle.

Some people may be surprised that more managers do not intervene early in cases like that described earlier. In our experience, regretfully, early intervention is rare for numerous reasons. One reason is that confrontation is uncomfort- able for most managers, so they look for reasons to avoid potentially diffi cult situations. Further, the manager may believe that the behavior will stop on its own. This is possible and it has probably happened before, so the manager holds onto the hope that a problem will “take care of itself.” Lastly, managers often fail to intervene because they fear that their own manager will not support them. So, while early intervention is certainly the best course of action and actually facilitates addressing problems while they are still relatively small, it is not that surprising that many managers are lulled into a very passive and ultimately self- defeating course of inaction.

When leaders perform these transactional leader behaviors well, they pro- vide themselves with an excellent foundation. At this point, basic performance issues are addressed, relationships should be positive and productive, and employees have a sense they are being treated fairly. Great managers, however, know that what differentiates them from the rest of the pack is the ability to get people to go above and beyond expectations. In other words, it is not about get- ting people to do what is expected of them; it is about getting people to exceed expectations. To motivate their people to do this, great managers know people need to be able to change quickly, adapt to new demands, and seek out new chal- lenges. Transactional leader behaviors are the way to build a solid foundation, but they will not deliver performance beyond typical expectations. Once a solid foundation has been established through transactional leadership behaviors, great managers use transformational leader behaviors to get their employees to go beyond the call.

“No one enjoys addressing others’

deficiencies. But failure to do so

sends the message that people

are on track when they really

aren’t. And that may be the great-

est disservice a leader can do to

someone else.”

— Eric Harvey

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Transformational Leadership: Getting Performance Beyond Expectations

Once a solid foundation has been established, transformational leader behav- iors “seek to arouse and satisfy higher needs, to engage the full person of the follower.” 21 Transformational leader behaviors engage the whole person by ask- ing followers to transcend their self-interest for the sake of the team or organi- zation and by raising employee awareness about the importance and values of goals. It should be noted that many different researchers have derived behav- iors consistent with Bass’s defi nition of transformational leader behavior. The contents of these different models, however, are actually quite similar. Professor Phil Podsakoff and his colleagues at Indiana University noted this similarity and presented a model of six transformational leader behaviors that do a great job of synthesizing the different transformational leadership models: 22

• Articulating a Vision. Behavior that allows the leader to identify new opportunities for his or her group and talk positively about what that means for them.

• Providing an Appropriate Model. Behavior that sets an example for employees to follow that is consistent with the values the leader espouses.

• Fostering the Acceptance of Group Goals. Behavior aimed at promot- ing cooperation among employees and getting them to work together toward a common goal.

• Communicating High-Performance Expectations. Behavior that dem- onstrates the leader’s expectations for excellence, quality, and high perfor- mance on the part of followers.

• Providing Individualized Support. Behavior that indicates the leader respects followers and is concerned about their personal feelings and needs.

• Providing Intellectual Stimulation. Behavior on the part of the leader that challenges followers to reexamine assumptions about their work and rethink how it can be performed.

Transformational leadership was once thought to be a heroic type of lead- ership performed only by gifted people at the top of organizations. More than 30 years of research, however, now suggests it is not restricted to any particu- lar function, managerial level, or type of organization. Most importantly, the six transformational major behaviors just related appear to be quite responsive to learning. All of this is good news when you consider the great benefi ts that follow from engaging in these six transformational leadership behaviors.

For example, in a study of 1,539 people, Podsakoff and his colleagues found the transformational leader behaviors were associated with increased employee satisfaction, employee trust in their leader, and job performance ( Figure 9.1 ). 23 Figure 9.1 shows that transformational leader behaviors are not just “nice to do” but have been shown to signifi cantly improve work outcomes that matter! Other research has shown the effectiveness of transformational leadership in all sorts of industries and organizations. Here is just a sampling of that research:

• Methodist ministers rated high in transformational leadership had greater Sunday church attendance and membership growth. 24

• In multiple banks, fi nancial performance and commitment increased for 20 managers trained in transformational leadership versus the perfor- mance of a group of managers who did not receive the training. 25

KO 9 - 4

D O 9 - 2

KO 9 - 5

“You do not need leadership to

eat a warm cookie.”

— Scott Adams

Practice this! Go to www.baldwin2e.com

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• A positive relationship was found between the transformational leader- ship behavior and organizational innovation for the CEOs of Taiwanese electronics and telecommunications companies. 27

• Transformational leadership was positively related to acquisition accep- tance, supervisor-rated performance, and job satisfaction during a major aquisition. 28

• German bank unit performance was higher in banks led by transforma- tional leaders. 29

• Sales managers who used transformational leadership behavior had sales representatives that had increased sales performance. 30

• Shift teams from a UK chemical processing plant engaged in more proac- tive performance when they received higher levels of transformational leadership from their supervisors. 31

In other words, when leaders engage in transformational leadership behav- iors, employees are more satisfi ed, more optimistic about the future, less likely to leave their jobs, are more likely to trust their leader, and perform at higher levels than employees who work for leaders who do not display these key behaviors.

As we noted, an important consequence of performing transformational leadership is that followers tend to give their transformational leader extra effort or performance beyond stated expectations. As noted in Chapter 7, this extra effort comes in the form of organizational citizenship behavior (OCB) . Again, these are discretionary behaviors (not required to perform one’s job) that are benefi cial to the organization but not explicitly recognized by the formal reward system. Leading OCB researcher Dennis Organ conceptualized the ideas behind OCB and asserted that, overall, OCBs “promote the effective functioning of the organization”—and it is easy to see why.

Articulating a Vision

Articulating a vision has long been recognized as an important leadership behavior. Podsakoff and his colleagues defi ned the behavior as being aimed at “identifying new opportunities for his or her unit and developing, articulating, and inspiring others with his or her vision of the future.” While the ability to develop a vision that will capture people’s hearts and minds may be beyond our scope here, the ability to communicate such a vision is exactly what research

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Satisfaction Trust Performance

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FIGURE 9.1 Average Correla- tions Between Trans- formational Leader Behaviors and Satisfac- tion, Trust, and Job Performance 26

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evidence suggests you can be taught. 32 More specifi cally, to increase your ability to articulate a vision you should:

• Repeat the vision often.

• Explain the signifi cance of the vision.

• Appeal to your audience’s values.

• Use metaphors.

• Use emotional appeals.

• Speak in positive terms.

• Use the term “we” instead of “I.”

Additional research suggests effective visions should be appropriate for the level of the employee to which they are being communicated and that they should not contradict higher-level visions. In other words, when a fi rst-line supervisor communicates a vision to her work team, it should be put into different terms than how the CEO originally presented the company’s vision, but also should not work against it. For example, the vision that Jack Welch presented for Gen- eral Electric—“to create the world’s most competitive enterprise”—would need to be converted into action by the lower levels of the organization. In this case, a lower-level maintenance supervisor may have presented the vision to his employ- ees as “We need to constantly maximize our machine uptime if we are going to make this place as competitive as it can be.”

Great managers also realize visions need to be described in future terms and be short. The best visions tend to lend themselves to creating a mental image in the mind of those who hear them. The mental image helps create enthusiasm and assists in directing the day-to-day actions of the group.

Some additional specifi c techniques for effectively articulating a vision on the job include:

• Create a positive picture of the future for the work group.

• Stand up for what is important.

• Adjust plans and action as necessary in dynamic situations.

• Communicate the strategy of the organization as a whole and make sure your actions are in concert with that overall strategy.

• Involve the right people in developing the strategy for your area.

Providing an Appropriate Model

As mentioned earlier, providing an appropriate model is leader behavior that sets an example for employees to follow that is consistent with values the leader and the organization espouse. Why role modeling is such a powerful tool can be further explained by Bandura’s social learning model (originally discussed in Chapter 1). Basically, role modeling sets an environmental cue in the mind of a person that this behavior is important and should be emulated. Thus, if a leader has done a good job expressing a vision, and then behaves in a way consistent with that vision, these messages come together in employees’ minds and provide a clear message this vision is important and that others are treating it that way. See the following list for how to provide an appropriate model.

• Be clear about your expectations of other people.

• Hold yourself to the same standards and expectations to which you hold others.

• Be consistent in your display of the desired behavior.

“Our vision is to create the world’s

most competitive enterprise.”

— Jack Welch, former CEO of

General Electric

“I remember sitting in the audi-

ence at a meeting where Jack

(Welch) said GE would be the No. 1

market-cap company in the world.

This was at a time when IBM

seemed untouchable. I thought to

myself, ‘I don’t know if that was

brave or delusional, but I will sign

up for that.’”

— Kevin Sharer, CEO Amgen

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• Remember that even small indiscretions can have major consequences. For instance, if you were trying to encourage cost savings, staying in an expensive hotel would undermine your credibility.

• Perform desirable behaviors where they can be observed. If no one sees you doing something positive or knows about the behavior, the positive behavior cannot serve as a model.

Consider for a moment what happens when people in leadership positions do not provide appropriate models to their employees. Assume that the vision of your company is to achieve “success through wasting nothing.” The company posts “success through wasting nothing” banners around the offi ces, you get new business cards with the vision printed on them, and you see the company is recy- cling their paper now to underscore the importance of the vision. Now suppose you learn the CEO and her family are using the corporate jet to take a family vacation to Fiji and that this costs the company $100,000. What would the CEO’s behavior do to your motivation? If you are like most people, this type of behavior would send a message that “success through wasting nothing” must only apply to the average worker. It is also likely you would now view the entire vision as a joke and behave in ways contrary to what the CEO espoused.

Providing an appropriate model is important not only for senior executives, but for anyone in a leadership position. The old adage “Behavior speaks louder than words” is true, and even seemingly innocent behavior can speak volumes. For instance, if you stress being on time to other people, you had better be on time yourself. Kouzes and Posner provide a straightforward prescription for effective leader modeling: DWYSYWD—Do what you say you will do. They point out that DWYSYWD has two essential elements— say and do:

To set an example, leaders must be clear about their values; they must know what they stand for. That’s the “say” part. Then they must put what they say into practice: They must act on their beliefs and “do.”

Fostering the Acceptance of Group Goals

Fostering the acceptance of group goals is behavior on the part of a leader aimed at promoting cooperation among employees and getting them to work together toward a common goal. The most common example of this behavior is the setting of a superordinate goal . Superordinate goals are achievable only when all group members exert effort; individual effort alone will not result in goal achievement.

Importantly, these superordinate goals can be either top-down or bottom-up in nature. For example, a newspaper in Washington was in danger of closing because it was consistently losing money, as most readers in the area subscribed to the much larger Seattle Times. 33 The smaller newspaper’s staff held brain- storming sessions to come up with ways of saving the paper, and a superordinate goal was set around establishing a new identity for the paper. The superordi- nate goal was that the paper should become “the source of news for the county.” In other words, a decision was made to change the emphasis of the paper to county- specifi c news (the county had more than 900,000 residents). As a result, the paper became profi table and remains so at this time.

Fostering the acceptance of group goals works because the process brings people together to accomplish feats they previously thought were not possible. Group goals provide a sense of purpose, a rallying point, and common objectives to groups of people who are all too often caught up in internal competition and political infi ghting. Another specifi c reason getting people to accept group goals works is that the goals have a self-managing feature about them. They serve as

“Nothing is so potent as the silent

influence of a good example.”

— James Kent

“If you’re not excited, how can you

get others excited? People will

know. It’s like how kids and dogs

can sense when people don’t like

them.”

— Carol Bartz, CEO Autodesk

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useful benchmarks to let people know how they are doing by thinking about whether or not the goal has been accomplished (see both Chapter 1 and Chapter 5 for further discussion of the importance of goals). For specifi c guidelines on fostering the acceptance of group goals, see the following list.

• Set a goal that requires people to cooperate.

• Make sure that the goal is SMART (specifi c, measurable, attainable, rel- evant, and time-bound).

• Encourage people to work together by moving them closer together, and by encouraging informal contact (lunches, after-work gatherings).

• Continually remind people that everyone is “in it together” and that suc- cess for each person depends upon the group’s success.

Communicating High-Performance Expectations

High-performance expectations are behaviors that demonstrate the leader’s expectations for excellence, quality, and high performance on the part of follow- ers. In other words, great managers know that if they expect a lot out of people, they are likely to get it. Yet setting high-performance expectations for many man- agers is counterintuitive. They often fall into the trap of thinking, “I’ll set the bar low so my employees can feel success,” or “I’ll meet my quarterly goals by not challenging people and getting some quick wins.” The evidence is clear, how- ever; if you want high performance, setting the performance bar low will do one thing—produce low performance.

The reason why communicating high-performance expectations works is due in part to the Pygmalion effect. Basically, the Pygmalion effect (also called a self-fulfi lling prophecy, and named after the character from Greek mythology who “willed” his stone beloved to come alive) is based on the premise that:

• We form certain expectations of people.

• We communicate those expectations to others through behavioral cues.

• People tend to respond to these behavioral cues by adjusting their behav- ior to match them.

• The result is that the original expectation comes true.

It should be pointed out that self-fulfi lling prophecies have been shown to work across a wide variety of situations. And when we say a wide variety of situ- ations, we don’t just mean with different types of people, doing different jobs, in different types of organizations. While all of these are true, the effect goes much further. Even rats respond to self-fulfi lling prophecies! 34 Further, these self-fulfi lling prophecies are incredibly powerful, as evidenced by the following research fi ndings:

1. High-performance expectations lead to higher performance.

2. Low-performance expectations lead to lower performance.

3. Better performance resulting from high expectations leads people to like someone more.

4. Lower performance resulting from low expectations leads people to like someone less.

Put simply, if you truly think a person will succeed or fail, she generally will! There are several ways to actually communicate to others your expectations of them. When you set challenging goals or express confi dence in another person’s

“You have to expect things of

yourself before you can do them.”

— Michael Jordan

“High expectations are the key to

everything.”

— Sam Walton

“Treat a man as he is and he will

remain as he is. Treat a man as he

can be and should be, and he will

become as he can and should be.”

— Johann Goethe (1749–1832),

German poet, novelist, playwright,

courtier, and natural philosopher

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ability, you are communicating an expectation. When you assign tasks, you are providing a measure of your expectations. Regardless of which of the preceding behaviors you use to communicate high-performance expectations (the more behaviors, the better), you want to be aware of your expectations and engage in frequent checks regarding others’ expectations of themselves. Great managers understand that a key to getting high performance is to set the bar high. When the people around you start to set their own bars high as a result of your actions, consider this the ultimate success of communicating high-performance expecta- tions. For some specifi c suggestions as to how to communicate high-performance expectations, see the following list of behaviors:

• Set high standards for your people.

• Communicate the high standards and your confi dence in their ability to achieve those standards.

• Let people know you are there to help them accomplish the high performance.

• Encourage workers to seek you out for help whenever they feel it would be helpful.

Providing Individualized Support

Providing individualized support is leader behavior that indicates he or she respects followers and is concerned about their personal feelings and needs. It shouldn’t be surprising that this type of behavior is effective; individualized sup- port makes people feel valued, capable, and liked. There is perhaps no more cen- tral explanation to an effective relationship than mutual liking.

Examples of individualized support can readily be seen. Some are heroic in scope, but most are relatively simple. By placing yourself in the position of the other person (using empathy), you are better able to consider what the person may need. If you realize that person has been under a great deal of stress at work, fi nding out what you can do to help is an important means of showing individu- alized support. It requires being attuned to employees’ needs and paying atten- tion to what people are saying and doing. Other everyday examples include:

• Genuinely caring and showing compassion in actions.

• Encouraging continuous development and growth of employees.

• Making interpersonal connections with employees (such as asking about a nonwork activity that is relevant to the person like a movie, sporting event, concert, and so on).

• Sending the message “I care about you and am looking out for your best interest.”

• Being sympathetic to the problems faced by employees.

These behaviors are not complex, yet the payoff for understanding the unique needs of each employee is great. Research shows that providing individualized support can actually serve as a major buffer to employee stress and burnout. Further, individualized support has been shown to be associated with increased employee citizenship behavior, increased employee job satisfaction, enhanced organizational commitment, increased employee organizational citizenship behavior, and improved performance. Here are some further ways to provide individualized support:

• Work to build positive relationships with others so they feel comfortable approaching you.

“You can’t be a good leader

unless you generally like people.

That is how you bring out the best

in them.”

— Richard Branson

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