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 21^st 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.

Do You Let Bias Effect Your Decisions?

Decision making and leadership are not mutually exclusive. Make effective decisions and your team will be motivated and more productive; and the implementation of the decision is more likely to be a success. Yet if you keep making ineffective decisions, eventually you’ll demotivate your team (probably quite quickly), productivity will fall and implementation is less likely to succeed.

 

For decades, behavioural decision researchers and psychologists have suggested that human beings have two modes of processing information and making decisions. The first, System 1 thinking, is automatic, instinctive, and emotional. It relies on mental shortcuts that generate intuitive answers to problems as they arise. The second, Systems 2 thinking, is slow, logical, and deliberate.

 

To find out how much you rely on each mode of thinking – intuitive System 1 or more deliberate System 2 – try this cognitive reflection test, below, before reading on (answers at the end of this article).

 

1 A bat and ball cost $1.10 in total. The bat costs $1.00 more than the ball. How much does the ball cost?

 

2 If it takes five machines five minutes to make five widgets, how long would it take 100 machines to make 100 widgets?

 

3 In a pond is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire pond, how long would it take for the patch to cover half the pond?

 

See the answers at the end of the article to see if you were right?

 

It’s worth noting that each of the two models of thinking has distinctive advantages and disadvantages. In many cases, System 1 takes in information and reaches the correct conclusions nearly effortlessly using intuition and rules of thumb. Of course these shortcuts can lead us astray. So we rely on our methodical System 2 thinking to tell us when our intuition is wrong or our emotions have clouded our judgement, and to correct poor snap judgements. All too often, though, we allow our intuitions or emotions to go unchecked by analysis and deliberation, resulting in poor decisions.

 

But of course it’s not quite that simple. Psychologists and behavioural economists have identified many cognitive biases that impair our ability to objectively evaluate information, form sound judgements, and make effective decisions. Where an effective leader is aware of their biases and when they may affect their judgement for the worse; and of course where the ineffective leader is often in complete denial of their own biases, refusing to look at themselves in the mirror, instead insisting it’s those around them who need to look in the mirror (as they couldn’t possibly be at fault).

 

These ineffective leaders, who are in denial about how biases effect their judgement, can be in positions of power for years before they are identified as the problem. This is because they are naturally manipulative and divert the problems on to other people; and where their bosses are also blind to the problems they are causing in their organization.

 

Below are several biases that can have a negative impact on both our decisions and our employees.

 

Action-orientated biases include excessive optimism and overconfidence. Where with excessive optimism we are overly optimistic about the outcome of planned actions. We overestimate the likelihood of positive events and underestimate that of negative ones. And with overconfidence we overestimate our skill level relative to others’ and consequently our ability to affect future outcomes. We take credit for past positive outcomes without acknowledging the role of chance.

 

Biases relating to perceiving and judging alternatives. Where firstly with confirmation bias we place extra value on evidence consistent with a favoured belief and not enough evidence that contradicts it. We fail to search impartially for evidence. Secondly with anchoring and insufficient adjustment we root our decisions in an initial value and fail to sufficiently adjust our thinking away from that value. Thirdly with groupthink we strive for consensus at the cost of a realistic appraisal of alternative courses of action. Finally with egocentrism we focus too narrowly on our own perspective to the point that we can’t imagine how others will be affected by a policy or strategy. We assume that everyone has access to the same information.

 

Biases related to the framing of alternatives. Where firstly with loss aversion we feel losses more acutely than gains of the same amount, which makes us more risk-averse than a rational calculation would recommend. Secondly with sunk-cost fallacy we pay attention to historical costs that are not recoverable when considering future courses of action. Thirdly escalation of commitment where we invest additional resources in an apparently losing proposition because of the effort, money, and time already invested. Finally controllability bias where we believe we can control outcomes more than is actually the case, causing us to misjudge the riskiness of a course of action.

 

Stability biases, where with status quo bias we prefer the status quo in the absence of pressure to change it; and present bias where we value immediate rewards very highly and undervalue long-term gains.

 

Beshears and Gino found that “holding individuals accountable for their judgements and actions increase the likelihood that they will be vigilant about eliminating bias from their decision making. For example, a study of federal government data in the USA on 708 private-sector companies by Alexander Kalev and colleagues found that efforts to reduce bias through diversity training and evaluations were the least effective ways to increase the proportion of women in management. Establishing clear responsibility for diversity (by creating diversity committees and staff positons, for example) was more effective and led to increases in the number of women in management positons.”

 

Answers to Cognitive Reflection Test:

 

1 Correct Answer: Five Cents

 

The intuitive response is to assume that the bat costs $1.00 and the ball costs 10 cents. But if you engaged System 2 and did the math, you’d see that this couldn’t be true. There’s a dollar difference between the two, so the only set of prices that meets all the requirements in the problem is $1.05 for the bat and $0.05 for the ball.

 

2 Correct Answer: Five Minutes

 

It’s easy to get this one wrong, because our minds spontaneously pick up a pattern that is misleading. We assume that if five machines make five widgets in five minutes (5-5-5), by analogy 100 machines would make a 100 widgets in 100 minutes (100-100-100). But if you’re using System 2, you see that each machine takes five minutes to make one widget. Think of it this way: if it takes nine women nine months to give birth to nine babies, how long would it take 100 women to birth 100 babies?

 

3 Correct Answer: 47 Days

 

If you jumped to the conclusion that half the pond would be covered in half the time (48/2 = 24 days), you neglected to account for exponential growth, a type of reasoning that requires cognitive effort (and, thus, System 2 thinking). The correct answer is 47 days, because if the pond is half covered by then, a doubling over the next (48th) day will result in the pond being entirely covered with lily pads. By the way, ‘one day’ is also a correct, albeit uncommon, response. It takes one day for the lily pads to cover the second half of the pond. If that was your answer, you deserve extra credit for creativity.

 

References:

 

Beshears, J. and Gino, F. (2015). Leaders as Decision Architects. Harvard Business Review, May, p.52 – 62.  

Why Do Mergers & Acquisitions Fail?

“Mergers and Acquisitions is a mug’s game” according to Roger Martin “in which typically 70%-90% of acquisitions are abysmal failures. Why is this so? The answer is surprisingly simple: Companies that focus on what they are going to get from an acquisition are less likely to succeed than those that focus on what they have to give to it.”

 

The logic is sound and sensible, yet in a world of corporate greed the trend has become more towards the former, i.e. ‘what are we going to get from this?’ It’s sad, to say the least that today’s leaders are more business savvy; and some notable failures include, “in 2015 Microsoft wrote off 96% of the value of the handset business it had acquired from Nokia for $7.9 billion the previous year. Meanwhile, Google has unloaded for $2.9 billion the handset business it bought from Motorola for $12.5 billion in 2012. HP has written down $8.8 billion of its $11.1 billion Autonomy acquisition; and in 20111 news Corporation sold My Space for a mere $35 million after acquiring it for $580 million just six years earlier,” (p.44).

 

The problem was “Microsoft and Google wanted to get into smart-phone hardware, HP wanted to get into enterprise search and data analytics; and News Corporation wanted to get into social networking. When a buyer is in take mode, the seller can evaluate its price to extract all the cumulative future value from the transaction – especially if another potential buyer is in the equation. Microsoft, Google, HP, and News Corp paid top dollar for their acquisitions, which in itself would have made it hard to earn a return on capital. But in addition, none of them understood their new markets, which contributed to the ultimate failure of those deals,” (p.44).

 

One issue with the approach of seeking acquisitions for the sole reason of what the organization thinks it can get from it, means that it’s unlikely the organization will ask ‘how can we contribute to its future growth’ and ‘do we have compatible cultures so that the leadership will fit and be a positive influence (rather than a destructive force)’ – all they see is their ‘dream’ of dollar signs and just lose complete focus in the frenzy for profit maximization.

 

Sadly the focus on mergers and acquisitions has become very polarized – taking place for two very basic reasons (1) the perceived financial gain for the ‘buyer’ (and often, only, with a short term focus) and (2) the feeling of power it brings to the ‘buyer’ – i.e. I’m more powerful than you – I’m buying you. The very real danger with this approach is that the culture of the acquisition company has often already turned negative on the ‘buyer’ long before the acquisition is finalized and is often so ‘broken’ that the acquiring company don’t have a chance of turning the culture around.

 

It’s simple human psychology – but since the buyers ‘eyes’ only see the dollar signs, they forget that it’s the human capital that makes the company a success. Failing to ‘buy over’ the employees with the deal ultimately leads to a total disaster and a lose-lose for everyone involved; and yet too many organizations, who should know better, continue on this destructive path.

 

The current trend on only focusing on short-term wealth creation loses sight of the very basic human aspect of all successful businesses and is a sorry reflection on how blind today’s corporate boards and shareholder institutions have become to the very basic fundamental ingredients of business success.

 

Yet as Martin highlights “if you have something that will render an acquisition company more competitive, however, the picture changes. As long as the acquisition can’t make the enhancement on its own – ideally – with any other acquirer, you, rather than the seller, will earn the rewards that flow from the enhancement. An acquirer can improve its target’s competitiveness in four ways: by being a smarter provider of growth capital; by providing better managerial oversight; by transferring valuable skills; and by sharing valuable capabilities,” (p.44).

 

This is where the smart money should be investing in organizations and their leaders who look at how they can add true value to the acquiring organization. This is the win-win scenario and if ‘sold’ correctly during the acquisition process will lead to a positive culture and an excited ‘joint’ workforce – looking to be ‘stronger’ together than they were apart. This isn’t about ‘power’ but synergy.

 

Finally Martin mentions how “right now, CEO Mark Zuckerberg is hailed as a business genius, Facebook has become one of the most valuable companies in the world, and his shareholders are perfectly happy to watch him fork out $21.8 billion for a company (WhatsApp) with a handful of engineers and $10 million in revenues. As long as the stock price keeps rising because the base business is prospering, acquisitions don’t have to actually make sense. But history shows that when things turn sour for the base business – think of Nortel, Bank of America, WorldCom and Tyco – shareholders start looking more closely at acquisitions and asking, What were they thinking? That’s why it pays to have a strong strategic logic for your acquisitions, even when the market isn’t asking for it. And what the acquirer puts into the deal determines the value that comes out of it,” (p.48).

 

References:

 

Martin, R. L. (2016). M&A: The One Thing You Need to get Right. Harvard Business Review, June, p.42-48.

How Good Are You At Problem Solving?

Problems, problems, problems – life can be full of them, and how we approach them can make a huge difference to our productivity, both at work and in our personal lives. Get caught up with a problem for too long and it can have dramatic effects on the business environment as well as negatively impacting the relationships of those involved in the problem (both directly and indirectly).

 

In the Jan-Feb 2017 edition of the Harvard Business Review, Thomas Wedell-Wedellsborg highlighted how a survey of 106 C-suite executives, representing 91 private and public sector companies in 17 countries showed that 85% of them agreed or strongly agreed that their organizations were bad a problem diagnosis, and 87% agreed or strongly agreed that this flaw carried significant costs.

 

It’s good to see that these organizations aren’t afraid to be transparent about their weaknesses and the impact this has on their organization, albeit that the question seems very generic. I imagine their response doesn’t correspond to every problem they encounter and further detail would be very illuminating, as to what kind of problems organizations struggle with the most and at what levels these problems occur. Although I can think of 10 times that amount of companies that would never even admit a weakness such as this.

 

Wedell-Wedellsborg highlights how “it has been 40 years since Mihaly Csikszentmihalyi and Jacob Getzels empirically demonstrated the central role of problem framing in creativity. Thinkers from Albert Einstein to Peter Drucker have emphasized the importance of properly diagnosing your problems. So why do organizations still struggle to get it right?”

 

One answer will be that many organizations do not create or encourage ‘creativity’ across the organizational spectrum, to the extent that in too many organizations creativity is smothered as soon as it raises its head, forming a restrictive top-down driven culture.

 

And then another “part of the reason” as Wedell-Wedellsborg sights “is that we tend to over-engineer the diagnostic process. Many existing frameworks - TRIZ, Six Sigma, Scrum, and others – are quite comprehensive. When properly applied, they can be tremendously powerful. But their very thoroughness also makes them too complex and time-consuming to fit into a regular workday. The setting in which people need to be better at problem diagnosis is not the annual strategy seminar but the daily meeting – so we need tools that don’t require the entire organization to undergo weeks-long training programs” (p.78).

 

Which is so true, as many industry sectors don’t have the luxury of being able to allow for lengthy problem solving approaches and need fast track solutions or else they can start to lose market share virtually immediately. Where it’s not just the process but those involved in following it that impact the attention to detail and the time wasted on non-productive factors.

 

As Wedell-Wedellsborg mentions ‘even when people apply simpler problem-diagnosis frameworks, such as root cause analysis and the related 5 Whys questioning technique, they often find themselves digging deeper into the problem they’ve already defined rather than arriving at another diagnosis. That can be helpful, certainly. But creative solutions nearly always come from an alternative definition of your problem” (p.78-79).

 

This is when leadership skills succeed or fail – a great leader will always be able to solve problems in the optimum time, gaining consensus on the way, and hence ensuring successful resolution once the implementation takes place. Rush the diagnostics part to much and the ‘celebrations’ for solving the problem quickly will be short lived as the implementation phase starts to stall and falter.

 

Wedell-Wedellsborg suggests seven practices for effective reframing of a problem, which are quite effective in practice;

1. Establish legitimacy. It’s difficult to integrate a method if you are the only person in the room who understands it;

2. Bring outsiders into the discussion. People who will ‘think outside the box’ and speak freely;

3. Get people’s problem definitions in writing. It’s not unusual for people to leave a meeting thinking they all agree on what the problem is after a loose oral description, only to discover weeks or months later that they have different views on the issue;

4. Ask what’s missing. When faced with the description of a problem, people tend to delve into details of what has been stated, paying less attention to what the description might be leaving out. To rectify this, remember to make sure to ask explicitly what has not been captured or mentioned;

5. Consider multiple categories. Powerful change comes from transforming people’s perception of a problem. One way to trigger this kind of paradigm shift is to invite people to identify specifically what category of problem they think the group is facing. Is it an incentive problem? An expectations problem? An attitude problem? Then try to suggest other categories;

6. Analyze positive expectations. Look for instances when the problem did not occur, asking ‘what was different about that situation?’ Exploring such positive exceptions, sometimes called bright spots, can often uncover hidden factors whose influence the group may not have considered;

7. Question the objective. Are their different personal drivers involved? For example, imagine two people fighting over whether to keep a window open or closed. The underlying goals of the two turn out to differ: One person wants fresh air, while the other wants to avoid a draft. Only when these two hidden objectives are brought to light through the questions of a third person is the problem (potentially) resolved – by opening a window in the next room, for example.

 

However I suggest the final important ‘practice’ to effective problem solving is to always to debrief afterwards;

What went well?

What didn’t? and

What can we do differently next time?

 

Organizations have to learn from each problem solving situation; as well as each and every step of the way – helping them become better pro-active problem solvers – which should be the ultimate goal.

 

Reference:

Wedell-Wedellsborg, T. (2017) How good is your company at problem solving? Harvard Business review, Jan-Feb, p.76-83.

 

Do You Still Use SWOT?

Some of the old business principles are still the best. Over the last 30 years many business theories have changed – but sadly, in many cases, not for the better and mostly for personal and/or commercial gain. Where academics and consultancies have re-packaged great business principles that should have been left alone and worse still repacked them as mediocre replicas just either to get their name associated with something supposedly new or for consultancies to try to make a quick buck with weakened solutions for business, or both.

 

One outstanding business tool for assessing an organizations; departments or even individuals current business environment, and at the same time helping develop a solid short/medium term strategy is the good ol’ SWOT analysis. This business tool, when used properly, has stood the test of time and when used correctly, as originally developed, adds real value to any organization.

 

SWOT stands for Strengths, Weaknesses, Opportunities and Threats and if done properly gives a solid insight into your organization and offers immediate detailed focus for solving current issues and for developing genuine workable strategies – where the operative words are ‘if done properly’.

 

Sadly most people who use SWOT no longer use it correctly and hence don’t get the benefit from this great business tool.

 

There are certain ‘criteria’ that must either exist or be applied for SWOT to work properly; and if any one of them are missing, then you will either get a sub-optimal or manipulated outcome, both of which are totally worthless.

 

Two of the criteria that must exist for SWOT to be meaningful are;

 

A Transparent Culture: Whether the SWOT is being completed by an organization, a department or an individual it will be worthless if the analysis is not completely honest. Often individuals and organizations find it hard to be honest about their weaknesses and threats; and can embellish their true strengths and weaknesses just because it makes them feel good – but of course this is meaningless for the genuine future of the business and gives a false picture and worse still a false sense of security.

 

Honest analysis of weaknesses, however hard these may be to hear at the top need to be welcomed; and teams and employees should be recognised and thanked for honest input – as these strong leaders know, anything else but raw honesty will have a detrimental impact on their future growth.

 

It is in your interests to ensure the SWOT is brutally honest and if it is the results will be ‘gold dust’ for the future of the organization. Employees are not fools and will give their full support to an honest SWOT analysis. Even more an ‘honest’ SWOT will build morale, trust and a cohesive working environment, regardless of how ‘bad’ the current business environment may be. Employees are ‘attracted’ to organizations and leaders that genuinely want to know what they can do to solve their employees problems; and who show an interest in what employees think the future could hold. This small step alone has a huge impact on building a positive culture and encouraging innovative thought. What employees genuinely dislike are organizations and/or leaders that embellish their strengths and refuse to admit their weaknesses – and this will ultimately lead to a dysfunctional relationship throughout the organization.

 

 

 

Completing SWOT Company Wide: A SWOT must not just be conducted at the top of an organization – but should be done bottom-up, involving the whole company, for it to have any genuine meaning. In fact some organizations that use SWOT well, even include other stakeholders in their SWOT in order to get a full picture from all perspectives. This takes strong and confident leadership and when applied develops even stronger stakeholder links; as they all feel part of the organization and genuinely appreciate being asked ‘what they think’.

 

Too many organisations still think SWOT is only a high-level exercise and often take themselves off to some luxury hotel for ‘Strat Sessions’ thinking they are the best people to decide the future of the organization. But without input from the grass roots these short-sighted organizations will never really understand their own organization and it’s real environment; strategies will be weak and won’t be owned by the employees and leadership will be command and control driven, as the employees haven’t had a voice, so they need to be told what to do, often without the ‘why’. And if they survive, these organizations will survive more by luck than good business or effective leadership, if they survive at all. What these organizations never realise is that they never reach their true potential.

 

Some really large corporates take this high-level approach and though their stakeholders may think they are operating well – they will never really be operating at their optimal level. I smile when I realize just how blind these leaders are to their mediocre success; even organizations that are revered in the press, often have dysfunctional management/employee relationships because they don’t involve their employees in the future of the organization.

 

So there’s no time like the present to start performing a SWOT correctly and if and when you do, you will and your organization will never look back. Done correctly and it will immediately have a positive impact on your organizational culture and all your future strategies and sustainable growth.

 

Some further quick tips and tricks would include;

 

A. Build the SWOT bottom-up;

B. Capture the results by department and form a matrix in the shape of your organizational pyramid;

C. Look for common themes with respect to the SWOT across the horizontal and vertical structure;

D. Where there are unique differences – find out why and where possible do a quick fix; maybe seconding employees from other areas to help;

E. Your short term is viewed by your current strengths and weaknesses; along with short term threats; but your medium and long term can look at removing/minimizing weaknesses and using your strengths to the maximum or developing new strengths to ‘capture’ an opportunity;

F. Keep the whole organization informed every step of the way; and remember

G. This is a dynamic tool – not a static one – once you’ve completed a fully comprehensive SWOT you should be able to review this on an annual basis or by exception as your environment changes.

Are You Good At Giving and Seeking Advice?

In an excellent HBR article entitled ‘the art of giving and receiving advice’ David Garvin and Joshua Margolis highlight how “seeking and giving advice are central to effective leadership and decision making. Yet managers seldom view them as practical skills they can learn and improve. Receiving guidance is often seen as a passive consumption of wisdom. And advising is typically treated as a matter of ‘good judgement’ – where you either have it or you don’t, rather than a competency to be mastered.”

 

There are many influencing factors that influence our basic desire to seek advice, just as much as they influence how we give advice;

 

Our upbringing – i.e. were we encouraged to seek advice when we were growing up, or did we ‘learn’ that asking for advice was often seen as a weakness and hence we’ve taught ourselves that it’s better just to ‘keep quite’ and appear smart. This influencing factor has a huge impact not just on how individuals avoid seeking advice, but also significantly impacts how these individuals give advice and their perception of those that ‘seek ‘ advice from them.

 

Organisational culture influences employees ‘desire’ to both seek and give advice. Some organisations encourage an open and transparent environment where employees are encouraged to seek advice from as many quarters as possible and this is seen as a strength. Also in these cultures ‘leaders’ are keen and available to give advice but not from a position of power and/or telling, but based on the situation – where for example they might counsel; or coach; or mentor depending on the situation and the type of advice being sort.

 

Age will influence an employee’s desire both to give and seek advice. It wasn’t that long ago – before the advent of social media and the like, that age equated to wisdom. In fact it wasn’t that long ago that age equated to seniority and hence perceived experience – and this is still true in some cultures today. But organisations have learnt that age and historical experience don’t on their own equate to genuine wisdom as business is constantly evolving and changing over short time intervals. So the wisdom resides with those that have learnt to adapt to different business scenarios and who are up-to-date with current business skills.

 

But because of the above, there will be some who have been in business for a long time who genuinely believe that they know best; and what they don’t know isn’t worth knowing. And then at the other end of the spectrum there will be those who have been in business for a long time who are nervous about seeking advice as they fear that it will be perceived as a weakness rather than a strength – but this links more to culture than age.

 

As Garvin and Margolis mention “advice seekers and givers must clear significant hurdles, such as deeply ingrained tendency to prefer their own opinions irrespective of their merit, and the fact that careful listening is hard, time-consuming work. The whole interaction is a subtle and intricate art. On both sides it requires emotional intelligence, self-awareness, restraint, diplomacy, and patience. The process can derail in many ways, and getting it wrong can have damaging consequences – misunderstanding and frustration, decision gridlock, subpar solutions, frayed relationships, and thwarted personal development – with substantial cost to individuals and their organisation.”

 

Even then, it is not a ‘black and white’ scenario – some employees may be good at asking for or giving advice in certain situations and not in others; good at giving or receiving advice on certain topics and not on others; etc. Just the daily pressure of work can significantly influence the quality of advice given or received.

 

Garvin and Margolis remind us that “whether you’re receiving or giving advice, flawed logic and limited information complicate the process. Advice seekers must identify their blind spots, recognize when and how to ask for guidance, draw useful insights from the right people, and overcome and inevitable defensiveness about their own views. Advisors, too, face a myriad of challenges as they try to interpret messy situations and provide guidance on seemingly intractable problems.”

 

When you’re seeking advice, watch out for these common obstacles;

 

1) Thinking you already have the answers;

2) Choosing the wrong advisers;

3) Defining the problem poorly;

4) Discounting advice;

5) Misjudging the quality of advice;

 

And when you’re giving advice, watch out for these common tendencies that can cause problems;

 

1) Overstepping boundaries;

2) Misdiagnosing the problem;

3) Offering self-centered guidance;

4) Communicating advice poorly;

5) Mishandling the aftermath;

 

Garvin and Margolis mention that “though seekers and advisors work together to solve problems, they have different vantage points. Recent social psychology research shows that people in an advisory role focus on overarching purpose (why an action should be performed), whereas recipients of advice – who usually face an impending decision – are more concerned with tactics (how to get things done). An individual is likely to think idealistically as an advisor but pragmatically as a seeker, even when confronting the same challenge.”

 

You’ll often find that those who are best at giving advice are those that regularly seek advice themselves, regardless of their level in the organisation – and that’s what makes them extra special advice givers. They appreciate that asking and giving advice is an art – and they are keen to perfect it.

 

Garvin and Margolis conclude that “overall our guidelines for both seekers and advisers amount to a fundamental shift in approach. Although people typically focus on the content of advice, those who are most skilled attend just as much to how they advise as to what they advise. It’s a mistake to think of advice as a one-and-done transaction. Skilled advising is more than the dispensing and accepting of wisdom; it’s a creative, collaborative process – a matter of striving, on both sides, to better understand problems and craft promising paths forward. And that often requires an ongoing conversation.”   

 

The danger is that future generations aren’t being encouraged to ask for advice face-to-face; but are being taught at an early age that they can get advice remotely – without being able to check whether the ‘adviser’ is qualified or whether advice is accurate or not, often until it is much too late. The art of seeking and giving advice needs to be an integral part of the educational curriculum so that ‘we’ can teach future generations the importance of seeking and giving the right advice.

 

References:

 

Garvin, D.A. and Margolis, J.D. (2015). The Art of Giving and Receiving Advice. Harvard Business Review. Jan/Feb, p.61-71.