Sunday, November 25, 2018

Does Power Corrupt?

 
Dacher Keltner in a 2016 article highlights how “while people usually gain power through traits and actions that advance the interests of others, such as empathy, collaboration, openness, fairness, and sharing; when they start to feel powerful or enjoy a position of privilege, those qualities begin to fade. The powerful are more likely than other people to engage in rude, selfish, and unethical behavior. The 19th-century historian and politician Lord Acton got it right: Power does tend to corrupt,” (p.112).
 
When you think about ‘power’ it’s a strange attribute – very few people strive for ‘power’ on its own, though I accept there are the exceptions that do exactly that. I believe the majority of people don’t look for the power itself, they look for the ‘position’ whatever that might be – captain of a soccer team; leader in business; leader in their community; leader in government; or even an entrepreneur. As people strive for these positions they are rarely aware of the personal ‘power’ this brings, and believe they think more about the ability to shape the future (in a positive way) – it’s only when they are in these positions that the ease and temptation to use power to get things done, above other more positive traits, starts to raise its ugly head – and people start to change. 
 
Keltner highlights how “in an experiment, Paul Piff of UC Irvine and I found that whereas drivers of the least expensive vehicles – Dodge Colts, Plymouth Satellites – always ceded the right-of-way to pedestrians at a crosswalk, people driving luxury cars such as BMW’s and Mercedes yielded only 54% of the time, nearly half the time they ignored the pedestrian and the law. Surveys of employees of 27 countries have revealed that wealthy individuals are more likely to say it’s acceptable to engage in unethical behavior, such as taking bribes or cheating on taxes. And recent research led by Danny Miller at HEC Montreal demonstrated that CEO’s with MBA’s are more likely than those without MBA’s to engage in self-serving behavior that increases their personal compensation but causes their companies’ value to decline,” (p.113).
 
Its interesting research and each of us will have our own experiences, and hence opinions. For me, I totally agree with the research – I have found people in positions of power to behave more arrogantly and selfishly than those that have less. In fact there was an interesting research study done recently on homeless people begging on the streets of America – and it found that in many cases those that could afford to help didn’t, and passed the homeless person quite aggressively; and it was in fact those that had a little and maybe had once been homeless themselves that would stop and help.
 
Obviously this isn’t a one cap fits all scenario and I know there are many wealthy people who support their communities on a regular basis and don’t look for the recognition of their deeds; more often than not these are the wives, girlfriends and daughters of wealthy people who will support different local causes.
 
Keltner mentions that “the consequences can be far reaching. The abuse of power ultimately tarnishes the reputations of executives, undermining their opportunities for influence. It also creates stress and anxiety among their colleagues, diminishing rigor and creativity in the group and dragging down team members’ engagement and performance. In a recent poll of 800 managers and employees in 17 industries, about half the respondents who reported being treated rudely at work said they deliberately decreased their effort or lowered the quality of their work in response,” (p.113).
 
This is an incredible statistic, yet it probably hasn’t made a dent in the poor behavior and the abuse of power. Why? Because these power players are also good at covering their own backs – it’s never their fault when things go wrong and they seem to be masters at blaming others. Yet when things go well, it’s because of them and their leadership – where they play down the involvement of others. What’s incredible is that the senior leadership and corporate boards of organizations around the world seem to be oblivious to this basic kind of corporate bullshit; and blindly accept these peoples explanations of events – possibly because they are ‘content’ with performance. This sadly raises another key issue for organizations which is too many corporate boards are not fit for purpose; and filled with self-driven egotistical males (in too many cases) who also love the ‘power’ that comes with the role and don’t want to challenge the status quo.
 
So the misuse of power will continue in organizations and suboptimal results will be signed off by boards; until there is a complete shake up in how we conduct business and ‘we’ reintroduce genuine corporate values once again – and hold people accountable.
 
So that’s the bad news – but it doesn’t have to be this way. So what can we do about it? Keltner suggests that “you can outsmart the power paradox by practicing the ethics of empathy, gratitude, and generosity. It will bring out the best work and collaborative spirit of those around you. And you, too, will benefit, with a burnished reputation, long-lasting leadership, and the dopamine-rich delights of advancing the interest of others,” (p.115).
 
It simply goes back to basic values and concepts like treating people as you’d like to be treated. You know what it feels like to be led by a ‘power’ driven leader, the impact it had on your motivation, performance etc – so knowing the impact it had on you, you must know the impact it will have on your employees if you adopt the same approach. There’s no excuse to use power other than you have been over-promoted and are out of you depth. In these situations be honest with yourself and seek advice and counselling outside of the work environment; get feedback from your employees and work to be the best leader you can be.
 
Conversely you know the kind of leader who motivated you to perform, to exceed expectations – the kind of leader that made going to work enjoyable – the kind of leader you wanted to follow and were loyal too.
 
It’s not rocket science and it’s time corporate boards and other key stakeholders demanded leadership excellence in their organizations – as they know if they do, that performance will get even better and the company will become stronger and more efficient. Leaders who misuse power should be counselled and given support to change their style; and if they can’t change over a reasonable period of time then they need to be removed from the organization. This is the only way to change the negative impact of power in organizations.
 
As Jack Welch said “before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others.”
 
References:
 
Keltner, D. (2016). Managing Yourself: Don’t Let Power Corrupt You. Harvard Business Review, October, p.112-115.

Saturday, October 27, 2018

How Good is Your Judgement?

In a 2016 article Paul Schoemaker and Philip Tetlock remind us that “companies and individuals are notoriously inept at judging the likelihood of uncertain events, as studies show all too well. Getting judgements wrong, of course, can have serious consequences. Steve Ballmer’s prognostication in 2007 that there’s no chance the iPhone is going to get any significant market share, left Microsoft with no room to consider alternative scenarios,” (p.74).
 
There’s a direct link between judgement and accountability. For example in our youth our judgement often goes awry simply because we don’t feel accountable for our actions and hence don’t think things through properly. Even organizations have issues with ‘judgement’ because individuals aren’t held accountable; and hence don’t ‘learn’ to think things through quickly. In fact one of the downsides of command and control style leadership is that these leaders use their power to avoid accountability when it comes to ‘bad’ judgements being made.
 
Schoemaker and Tetlock mention “the experience of a UK bank that lost a great deal of money in the early 1990’s by lending to U.S. cable companies that were hot but then tanked. The chief lending officer conducted an audit of these presumed lending errors, analysing the types of loans made, the characteristics of clients and loan officers involved, the incentives at play, and other factors. She scored the bad loans on each factor and then ran an analysis to see which ones best explained the variance in the amounts lost. In cases where the losses were substantial, she found problems in the underwriting process that resulted in loans to clients with poor financial health or no prior relationship with the bank – issues for which expertise and judgement were important. The bank was able to make targeted improvements that boosted performance and minimized losses,” (p.74).
 
There’s the other side of the coin too – organizations that are so ‘risk averse’ that employees make judgements based on ‘fear of failure’ which rarely leads to optimum solutions for the organization in the short or long term. Most of us learn through the mistakes that we make and through the risks that we have taken in our lives. Being able to take risk is based on values like accountability, but also integrity and excellence, and safety where appropriate. Our core values, if aligned correctly, should be enough to allow us to make those judgements that have risk attached but the rewards are worth it; where even failure has a reward, as we learn ‘what doesn’t work.’
 
Schoemaker and Tetlock highlight how “most predictions made in companies, whether they concern project budgets, sales forecasts, or the performance of potential hires or acquisitions, are not the result of cold calculus. They are coloured by the forecaster’s understanding of basic statistical arguments; susceptibility to cognitive biases, desire to influence others’ thinking, and concerns about reputation. Indeed, predictions are often intentionally vague to maximize wiggle room should they prove wrong. The good news is that training in reasoning and debiasing can reliably strengthen a firm’s forecasting experience,” (p.75).
 
A key cognitive bias is the perceived culture of the company and the perceived impact this culture has on the judgements you make. This perceived culture will be different for employees in different departments; or at different levels or at different stages in their career; as well as the personal values of each of the employees in the organization.
 
Schoemaker and Tetlock remind us that “cognitive biases are widely known to skew judgement, and some have particularly pernicious effects on forecasting. They lead people to follow the crowd, to look for information that confirms their views, and to strive to prove just how right they are. Training can help people understand the psychological factors that lead to biased probability estimates, such as the tendency to rely on flawed intuition in lieu of careful analysis. Another technique for making people aware of the psychological biases underlying skewed estimates is to give them confidence quizzes,” (p.75).
 
We live in a world where judgements that are made can impact more than just the individual making the judgement, but can impact the whole world. Take global warming, a scientific phenomenon that if correct and not ‘checked’ will be the end of the world as we know it. Yet recently the President of the United States broke away from the Paris Accord on Climate Change, claiming ‘global warming’ was a politically driven ‘con’ and that because his grandfather was a Professor at MIT, he had an instinct for science – hmmm, making judgement on a phenomenon that could be the end of life on earth requires patience, accountability, integrity and much more serious debate.
 
Schoemaker and Tetlock remind us of the importance of building the right teams. “Whether a team is making a forecast about a single event or making recurring predictions, a successful team needs to manage three phases well: a diverging phase, in which the issue, assumptions, and approaches to finding an answer are explored from multiple angles; an evaluating phase, which includes time for productive disagreement; and a converging phase, when the team settles on a prediction. In each of the three phases, learning and progress are fastest when questions are focused and feedback is frequent,” (p.77).
 
The key to judgement in the 21st century, besides the values already discussed is the concept of trust. We need to recruit the right people with the right experience and values; then trust them to make the right judgement calls and trust them to be flexible in their approach so that they will be honest when things start to go wrong or don’t work.
 
The judgements organizations make today shouldn’t just be about short term shareholder value, but about long term sustainable growth. The UK has seen the ‘high street’ change so much in the last 12 months. Retail stores that have been around for hundreds of years closing their doors for good or closing down a large proportion of their stores laying off thousands of employees. These closures are due to poor judgement and now everyone pays, even the shareholders.
 
As we become more technologically advanced; and as we see the divide between rich and poor become even greater, we need leaders, both from business and politics to make better judgement calls for the world in general – otherwise the future could be very bleak.
 
Finally Schoemaker and Tetlock suggest that “companies should systematically collect real time accounts of how their top teams make judgements, keeping records of assumptions made, data used, experts consulted, external events, and so on. Where well-run audits can reveal post facto, whether forecasters coalesced around a bad anchor, framed the problem poorly, overlooked an important insight, or failed to engage team members with dissenting views. Likewise they can highlight the process steps that led to good forecasts and thereby provide other teams with best practices for improving predictions,” (p.78).
 
References:
 
Schoemaker, P.J.H. and Tetlock, P.E. (2016). Superforecasting: How To Upgrade Your Company’s Judgement. Harvard Business Review, May, p.72-78.

Sunday, September 30, 2018

Do You Believe in Transformational Leadership?

Transformational leaders try to develop their followers’ full potential (e.g., Bass, 1985; Johnson & Dipboye, 2008); therefore, followers tend to feel that their organization is effective and that it can provide future opportunity and development. As such, it is expected that followers will be more likely to stay in the organization because they are satisfying their needs for self-categorization/self-identity, and they have a sense of being unique from other members in society. Organizational identification is therefore likely to be strengthened.
 
Wang and Huang state in a 2009 article, that “in the last few decades, within the field of leadership, transformational leadership behaviour has come to represent the most effective form of close engagement between leaders and followers that motivates the latter to perform beyond their transactional agreements. Robbins (2001) defined transformational leaders as, leaders who provide individualised consideration and intellectual stimulation, and who possess charisma,” (p.381).

It was the late Bernard Bass (founding editor of the leadership quarterly journal) who back in 1990 attributed four behavioural characteristics to a transformational leader: charisma, inspirational motivation, intellectual stimulation and individualised consideration. It was only later, in 2003, when John Antonakis, Bruce Avolio and Nagaraj Sivasubramaniam replaced the characteristic of charisma with, what they termed, idealised influence.

Wang and Huang (2009) remind us that “a leader only possesses idealised influence if his or her followers seek to identify with, and want to emulate, him of her. This type of leader is admired, respected and trusted.” Further, “transformational leaders behave in ways that;

1) Motivate and inspire their followers by providing meaningful challenges;
2) Encourage followers to envision attractive future states, which they can ultimately envision for themselves; and
3) Aim to expand their followers efforts in terms of innovativeness and creativity by questioning assumptions, reframing problems and approaching old problems in new ways;” (p.381).

Research has also linked transformational leadership with levels of emotional intelligence. Where, for example, Wang and Huang mention that “emotional intelligence is an emerging topic within psychological, educational and management research, and that it was Daniel Goldman back in 1995 who suggested that the best predictor of who eventually emerges as a leader is based on emotional intelligence (EI), which includes abilities such as;

Self-Awareness;
Self-Management;
Self-Motivation;
Empathy; and
Social Skills.”
 
John Ryan from the Center of Creative Leadership mentions that "as we explore what's new and meaningful on the frontiers of leadership development, we do know this: the context in which leadership happens is changing every day in every sector. We are living in a VUCA world: one characterized by Volatility, Uncertainty, Complexity and Ambiguity and will be for years to come. In a dizzying swirl of socio-political upheaval, natural disasters and volatile business markets, many of us stay awake at night wondering if our skills and knowledge are enough to see us through tomorrow or the next quarter. Seeing farther than that is even more daunting and yet we have to keep searching."

The findings from Wang and Huang’s study “indicate that leaders exhibit more transformational leadership behaviour when they have the ability to perform self-emotional appraisals; others’ emotional appraisals; regulation of emotions and constructive use of emotions. Their findings support the view that emotional intelligence is an important variable for understanding and predicting transformational behaviour. Their results also contribute further evidence that transformational leadership influences not only individual level consequences, but also group level consequences,” (p.389).
 
Genuine transformational leaders possess great referent and inspirational power (Bass, 1985) which enables them to gain the respect, admiration, and trust of their followers. They are also seen as role models who exert significant and positive influence on followers that creates a sense of meaningfulness (Bass, 1985). Employees who experience a greater sense of meaning from their work are likely to feel more empowered (Spreitzer, 1995) and proud of being a member of the organization, and thereby enhance their identification with the organization (Koberg et al., 1999).
 
In their HBR article from 2012 Boris Groysberg and Michael Slind highlight that “smart leaders today engage with employees in a way that resembles an ordinary person-to-person conversation more than it does a series of commands from on high. Furthermore, they initiate practices and foster cultural norms that instill a conversational sensibility throughout their organizations. Chief among the benefits of this approach is that it allows a large or growing company to function like a small one. By talking with employees, rather than simply issuing orders, leaders can retain or recapture some of the qualities that encourage operational flexibility, high levels of employee engagement, and tight strategic alignment.”

In the last few years transformational leadership has become one of the dominant leadership theories and applications for successful organisational development. Occasionally as a leader, it’s worth stepping back and asking; are you a leader who is admired, respected and trusted by your followers and your peers – do people in your organisation strive to be like you? An honest reflection will help you understand the difference between just being in a leadership position and actually being an effective transformational leader.

References:

Groysberg, B. and Slind, M. (2012). Leadership is a Conversation. Harvard Business Review. July.
 
Ryan, J.R. (2012). What's next for leadership? 5 big ideas. Center for Creative Leadership Annual Report, 2011-2012.
 
Yung-Shui Wang and Tung-Chun Huang. (2009). The Relationship of Transformational Leadership with Group Cohesiveness and Emotional Intelligence. Social Behavior & Personality: An International Journal; Vol. 37, Issue 3, p.379-392.
 
Zhu, W., Sosik, J.J., Riggio, R.E., and Yang, B. (2012). Relationships between Transformational and Active Transactional Leadership and Followers’ Organizational Identification: The Role of Psychological Empowerment. Institute of Behavioral and Applied Management. p.186-212.

Sunday, August 26, 2018

Is Your Leadership Training a Success?

Any form of training and development is an investment, for which there should be a measurable return in the short, medium and long term; hopefully in excess of the original investment. Organizations should spend the right amount of time identifying specific training and development needs; identifying how success will be measured; identifying potential suppliers and gaining the usual three or more quotes, (where the supplier identifies and commits to some form of measurable outcome for their service); and then implementing the solution and measuring the success. But is this what your organization is doing?
 
Michael Beer, Magnus Finnstrom and Derek Schrader in their HBR article write that “corporations are victims of the great training robbery. American companies spend enormous amounts of money on employee training and education - $160 billion in the United States and close to $356 billion globally in 2015 alone – but they are not getting a good return on their investment. For the most part, the learning doesn’t lead to better organizational performance, because people soon revert to their old ways of doing things,” (p.51).
 
What Beer, Finnstrom and Schrader identify is that organizations aren’t identifying specific needs, but instead seemingly responding to an organizational cultural need that simply says (or implies) ‘we have to have done some training this year’ – lets go and spend some money! If you don’t have a specific need in mind that is ‘owned’ by those taking the training and those they report to – is it any wonder ownership, implementation and change don’t take place after the vast amounts of money have been spent.
 
Beer, Finnstrom and Schrader mention how “education with the objective of individual growth is worthy in its own right, of course, and people are eager to acquire knowledge and skills that will help them advance in their careers. However, the primary reason senior executives and HR invest in management training is to make their leaders and organizations more effective, and results on that front have been disappointing. Three-quarters of the nearly 1,500 senior managers at 50 organizations interviewed in 2011 by the Corporate Leadership Council were dissatisfied with their companies’ learning and development function. Only one in four reported that it was critical to achieving business outcomes. Decades’ worth of studies show why it isn’t working, but, sadly, that understanding has not made its way into most companies,” (p.52).
 
In some organizations training just seems to be like a production line, i.e. let’s just show that we’ve put x amount of people through x number of courses and that will impress the bosses. But a good CEO or executive will always ask to see the impact of the return on investment and won’t be fooled by numbers. Great organizations look for quality that makes a real difference, rather than quantity that has no impact, other than on the ‘expenses’ column of the HR budget.
 
Beer, Finnstrom and Schrader highlight how “from all the streams of research we’ve learned that education and training gain the most traction within highly visible organizational change and development efforts championed by senior leaders. That’s because such efforts motivate people to learn and change; create the conditions for them to apply what they’ve studied; foster immediate improvements in the individual and the organizational effectiveness; and put in place systems that help sustain the learning,” (p.53).
 
I know some organizations where their employees have a reputation of being ‘training tourists’, because when they are assigned to a training program they hardly ever show up, as they know they’re not actually expected to ‘change’ once they get back to their organization. Often the training organization doesn’t mind, as they’re getting paid whether the employee turns up or not, so it’s a complete farce all round.
 
Beer, Finnstrom and Schrader remind us how ‘a poor return on investment isn’t the only bad outcome of failed training initiatives. Employees below the top becomes cynical. Corporate leaders may fool themselves into believing that they are implementing real change through corporate education, but others in the organization know better. Why don’t leaders get this? So what happens is HR defines the requisite individual competencies according to the company’s strategy and then sells top management on training programs designed to develop those competencies, believing that organizational change will follow. This widely embraced development model doesn’t acknowledge that organizations are systems of interacting elements: Roles, responsibilities, and relationships are defined by organizational structure, processes, leadership styles, people’s professional and cultural backgrounds, and HR policies and practices. And it doesn’t recognize that all those elements together drive organizational behavior and performance. If the system doesn’t change, it will not support and sustain individual behavior change – indeed, it will set people up to fail. Second HR managers and others find it difficult or impossible to confront senior leaders and their teams with an uncomfortable truth: A failure to execute on strategy and change organizational behavior is rooted not in individuals’ deficiencies but, rather, in the policies and practices created by top management. Those are the things to fix before training can succeed longer-term. It’s much easier for HR to point to employees’ competencies as the problem and to training as the clear solution. That’s a message senior leaders are receptive to hearing,” (p.54).
 
Organizations need strong leaders that demand an ROI on training and development solutions; and leaders that demand that those solutions meet a specific need that is identified and owned by the key players (the employee and their boss); and leaders that hold HR, functional leaders and the training suppliers to account. These three attributes are essential to stop the drain of money and the failing of training solutions.
 
Finally Beer, Finnstrom and Schrader indicate how “part of creating a favorable context for learning is making sure that every area of the business provides fertile ground. Soil conditions will inevitably vary within an organization, because each region, function, and operating group has its own needs and challenges. In our studies of corporate transformations and our work with clients, unit leaders have told us that their companies’ education programs were not wrong in substance but failed to align with their local priorities and stage of business and organizational development. In other words, their groups were not ready for the training yet. So companies should invest in capability development unit by unit. The corporate-level unit links everyone at the top – the CEO, their senior team, and key business units, regional and functional leaders and their key people. Individual units must consider their needs and their capabilities in the context of their own strategies and goals,” (p.56).
 
References:
 
Beer, M., Finnstrom, M. and Schrader, D. (2016). Why Leadership Training Fails – and What to Do About It. Harvard Business Review, October, p.50-57.