Redpoint Leadership Coaching helps business leaders achieve lasting, positive change for themselves and their team through pay for results only behavioral leadership coaching.
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Marshall Goldsmith on the value of advertising your leadership coaching goal:
Those of you who are familiar with our leadership coaching (hotlink) know that we don’t coach behind close doors only but make the process of leadership coaching transparent by bringing it out into the organization. Here is what our teacher Marshall Goldsmith has to say about the value if advertising goals in his recent Leading News article :
“It pays to advertise. I know a playwright who never reveals what new work she’s writing. “When you talk about it,” she says, “you’re not writing it. You’re just talking.” That sort of secretiveness may apply to creative work, but it doesn’t apply to rebuilding your reputation. People have preconceptions about you. They not only filter everything you do through those preconceptions, but they are constantly looking for evidence that confirms them. Thus, if they believe you are perennially late, even when you’re only a few seconds late to a lunch date or a meeting they’ll quietly file that away as another example of your tardiness. However, if you tell them you’re making a serious effort to be on time from now on, that bit of “advertising” can change their perception. They’ll be on alert for evidence of your on-time behavior rather than confirmation that you’re always late. That little tweak in perception, created solely by telling people that you’re trying to change, can make all the difference.
The same day Microsoft announced their huge reorganization this month, I was presenting a CEO client the findings of my interviews with his senior management team. The two main points of critical feedback the managers had for my client were:
We operate in a silo mentality
There is a lack of trust ands collaboration across departments. At its worst, we have a blame culture
On the way back from the meeting I got stuck in notoriously bad Seattle rush hour traffic and was listening to the reports of Microsoft’s reorg on National Public Radio. I learned that (my fellow Swiss countryman 🙂 Steve Ballmer’s goals for the reorg were tearing down of departmental silos and creating more cohesive teamwork; hence regaining the spark that has been missing from so many Microsoft products recently. Right there, stuck in traffic, less than 3 miles from Microsoft’s headquarters, it hit me once again how many similarities there are between running a $20m business (my client) and a multi-billion dollar business like Microsoft.
It’s the age old challenge every leaders faces: How do I get everyone to think ‘us’ vs. thinking of colleagues in other departments as ‘them’.
Here’s how Kathleen L. Flanagan, the chief executive of Abt Associates, tackled the issue.
“We’ve grown from $180 million in annual revenue a few years ago to $425 million today. As the company grew, more business units were created, and so we had more silos in the organization. My objective two years ago in coming into this job was to take down the silos. So I reorganized the company. It used to be organized around lines of business — international, U.S.-based, data collection — and there used to be senior vice presidents who led each of those big businesses. I took those senior V.P. positions away and hired one executive vice president for global business who shared my vision for what I call One Global Abt.
(…) I now ask my managers to wear two hats. Everybody’s got their job in the big picture of the company, but they all have to wear an Abt hat. It’s really easy, given the time pressures and the pace of our work, to put blinders on and be very project-focused. It’s harder to take a step back and ask, “How does this apply to the whole company?”
Simplify the Scoreboard
A big part of a leader’s job is to establish a simple set of performance metrics so that everyone in the company can feel as if they’re part of a broader team, and can understand how the work they do contributes to the broader goals. Chief executives have to choose those metrics carefully because, as the saying goes, what gets measured gets managed.
A powerful example of this came from Shivan S. Subramaniam, the chief executive of FM Global, a commercial and industrial property insurer, who shared how his team worked hard to develop very simple goals.
“We call them key result areas, or K.R.A.’s. We’re multinational — we’ve got 5,100 people, 1,800 of whom are engineers. We’re very analytical. But we have three K.R.A.’s, nothing terribly fancy. And everybody focuses on them. One is on profitability. One is on retention of existing clients. And one is on attracting new clients. That’s it.
You can talk to people in San Francisco, Sydney or Singapore, and they’ll know what the three K.R.A.’s are. All of our incentive plans are designed around our K.R.A.’s, and every one of those K.R.A.’s is very transparent. Our employees know how we’re doing. And, most importantly, they understand them, whether they’re the most senior manager or a file clerk, so they know that ‘If I do this, it helps this K.R.A. in this manner.’”
Communicate Relentlessly to the Entire Staff
There’s a reason that so many companies hold regular all-hands meetings (and with technology, it’s possible to do them in large and sprawling companies now). Again, it’s about tribal behavior. You have to bring everybody together and speak to everyone as a group for people to identify themselves with the broadest group. Leaders then have to take their simple plan and hammer it home, again and again, even if they feel like everybody has heard it before a hundred times.
It’s a lesson that Christopher J. Nassetta, the Hilton Worldwide chief, learned over time.
“You have to be careful as a leader, particularly of a big organization. You can find yourself communicating the same thing so many times that you get tired of hearing it. And so you might alter how you say it, or shorthand it, because you have literally said it so many times that you think nobody else on earth could want to hear this. But you can’t stop. In my case, there are 300,000 people who need to hear it, and I can’t say it enough. So what might sound mundane and like old news to me isn’t for a lot of other people. That is an important lesson I learned as I worked in bigger organizations.”
Ask yourself for your own organization:
One Company Culture:
On a scale from 1-10, how do you rate your organization as having a One Company Culture?
How does your org chart support/not support a one company culture? What changes do you need to make?
What language are you using to support a one company culture?
Simplify the Scoreboard
How clear are you personally on the performance metrics for your business? What about your senior managers? What about your front line people?
How can you simplify the metrics down to no more than three?
How will you make your people ‘care’ about those metrics?
Communicate Relentlessly to the Entire Staff
How often do you communicate to your entire staff?
How can you make your message as simple as possible?
How often do you feel you have said the same thing 150 times, seven different ways?
One of the most important tasks you have as a leader is to build a great team. Building a great team, of course, means hiring right! You cannot spend too much time or effort on hiring wisely. The alternative to hiring wisely? Managing toughly, which is much more time consuming, costly, and emotionally draining.
I have always been intrigued by how so many of our clients and colleagues agree with this on paper but then keep doing the “same old, same old” when it comes to interviewing.
Interviews are often poor predictors for how the person will perform at their job. Some subpar candidates interview well while some great candidates simply don’t present themselves well at all during an interview. What to do? Make each candidate perform actual work before you make your final hiring decision!
The New York Times recently featured the CEO of Palo Alto Software, Sabrina Parson, who does it this way: “Everyone who interviews with us, no matter what the position, gets homework. We do an initial phone interview, and then they get homework before the in-person interview. It’s two hours of work. The purpose of it is not to find the correct answer, but more to see their thought process. But more than 50 percent of the people you send the homework to never contact you again. It’s great because we don’t want that person.”
So there you have it: Giving candidates homework weeds out half of the people; the half you don’t want to talk to anyway! The money and time you save with this approach needs to be invested into working with those who actually submit their homework.
Once you are further into the process and you are down to your top three candidates, have them spend a day in your business doing actual work.
Yes, you will have to be somewhat creative here and yes, of course it might feel a bit staged and artificial but being able to observe each candidate at work or – even better – working side by side with each candidate, beats the best interview hands down! Not only are you able to observe the candidate at his or her tasks, you are also getting insights on how the candidate show up in a somewhat stressful situation and – maybe most importantly – how the person interact with your team members.
But you ask: What about more managerial positions?
Remember: leaders and managers get stuff done through people. Most of the work any leader or manager does includes interacting with people (vs. doing stuff). How can you simulate the real work of a leader or a manager? Have them interact with our team! Not just by having a nice chat but by actually battling out some real business problems.
Again, you need to be somewhat creative here. Ask yourself: what are some of the most important things you expect them to do during their first six months in the job?
Developing and implementing a new product strategy?
Have them walk you and your team through their thinking on a white board. Engage them in a hard discussion and observe how they show up. How concisely do they communicate? How do they build on other people’s ideas? Are they able to explain their thinking without getting defensive?
Building a team?
Have them outline their hiring process to you. Have them conduct a meeting with your existing team. How about a one-on-one goal setting meeting with one of their potential direct reports?
Remember, no matter what job position you are interviewing for: by having the job candidate do real work in your business you will significantly increase your chances of hiring right vs. having to manage toughly.
How much has it cost in the past to correct a hiring mistake – in training time, salary costs, and lost energy and opportunities?
How can my organization improve our hiring by making candidates do real work?
What is the one step I commit to implementing in order to make our hiring more effective?
In this edition, I am discussing the following two traps:
THE SUNK-COST TRAP & THE CONFIRMING EVIDENCE TRAP
THE SUNK-COST TRAP
We all sometimes make choices in a way that justifies past choices, even when the past choices are no longer valid.
Imagine you have been standing in line at the post office for 15 minutes. You have a meeting with an important client coming up, and you run the risk of being late to the meeting if you keep standing in line. What do you do?
For many of us the thinking goes something like this, “Well, dam#$^%! I have already been standing in line for 15 minutes; it would be really stupid to give up my space now, so I will stand in line even if I end up being late to the important meeting.” We just fell into the sunk-cost trap. How so?
It’s simple: we are justifying our decision to keep standing in line by what we have done in the past (i.e. standing in line for 15 minutes already) and not by what is best going forward. Even if you have been standing in line for hours, you need to leave the line if your client meeting is more important than mailing those packages. As economists would say: it’s all about maximizing your utility going forward!
Other examples of the sunk-cost trap include business owners who pour enormous effort into improving the performance of an employee whom they should not have hired in the first place. It is also very common in banking. When a borrower’s business runs into trouble, a lender often advances additional funds in the hope that the business can turn around. If the business does have a good chance to do that, this is wise; otherwise it’s just throwing good money after bad.
Why can we not free ourselves from past decisions? Frequently, it is because we are unwilling to admit mistakes. If you, for example, fire a poor performer who you hired, you are making a public admission of poor judgment. It seems psychologically safer to let him or her stay on, even though that choice only compounds the error.
Sometimes a corporate culture reinforces the sunk-cost trap. If the penalties for making a decision that leads to poor outcome are overly severe, managers will be motivated to let failed projects drag on forever – in the vain hope that they will somehow turn around.
WHAT CAN YOU DO ABOUT THE SUNK-COST TRAP?
Make a conscious effort to set aside any sunk cost – whether psychological or economic – that will muddy your thinking about the choices at hand:
Seek out and listen carefully to the views of people who were uninvolved with the earlier decision
Examine why admitting earlier mistakes distresses you. If it’s your wounded self-esteem, deal with it head-on. Remind yourself that even smart choices can have bad consequences and that even the best and most experienced executives are not immune to errors in judgment
Don’t cultivate a failure-fearing culture that makes employees perpetuate their mistakes. Lead by example by admitting your own mistakes
Remember: “If you are in a hole, stop digging.” – Warren Buffet
THE CONFIRMING-EVIDENCE TRAP
Imagine you are the president of a successful, mid-size, Italian shoe manufacturer, considering whether to call off a planned plant expansion. For a while you have been concerned that your company won’t be able to sustain the rapid pace of growth of its exports. You fear that the value of the Euro will strengthen in coming months, making your goods more costly for overseas consumers. But before you put the brakes on the plant expansion, you decide to call up an old business school classmate, the CEO of a similar company that recently cancelled plans for a new factory, to check her reasoning. She presents a strong case that other currencies are about to weaken against the Euro. What do you do?
You’d better not let this conversation be the clincher because you’ve probably just fallen victim to the confirming-evidence trap. This bias leads us to seek out information that supports our existing instincts or points of view while avoiding information that contradicts it. What, after all, did you expect your acquaintance to give, other than a strong argument in favor of her decision?
Two fundamental psychological forces are at work here:
We subconsciously decide what we want to do before we figure out why we want to do it.
Our inclination is to be more engaged by things we like than by things we dislike – a tendency well documented even in babies. Naturally, we are drawn to information that supports our subconscious leanings.
WHAT YOU CAN DO ABOUT THE CONFIRMING EVIDENCE TRAP?
It’s not that you should not make the choice you are subconsciously drawn to. It’s just that you want to make sure it’s the smart choice. Here is how you put it to the test:
Get someone you respect to play the devil’s advocate to argue against the decision you are contemplating. Better yet, build the counter-argument yourself. What are the strongest reasons to do something else?
Be honest with yourself about your motives. Are you really gathering information to help you make a smart choice, or are you just looking for evidence confirming what you think you’d like to do?
In seeking the advice of others, don’t ask leading questions that invite confirming evidence. If you find that an advisor always seems to support your point of view, find a new advisor. Do not surround yourself with yes-men (and women).
When facing major decisions in your business or life, be sure to use the above techniques to avoid falling into the Sunk-Cost Trap and the Confirming Evidence Trap.
This article is based on: “Hammond, Ralph & Raiffa: The Hidden Traps in Decision Making,” Harvard Business Review, January 2006.
If your organization is going to grow and prosper, you know that developing strong leaders is no longer optional, but a strategic imperative.
You’ve found that “on the job training,” mentoring and trial and error isn’t good enough. Nor does existing skill-based training address the behavior development necessary for true leadership growth.
That’s why Urs and I have been searching for a program that would help us help our clients grow their own leadership capacity. We wanted something that met our high standards — it had to be practical, hands-on, no-nonsense and, oh yeah, highly effective.
We are very pleased to announce that we have entered into a partnership with Path Forward Leadership to license their highly acclaimed Path Forward Leadership Workshop Series as part of our own product offering. The Path Forward Leadership series is specially designed to turn managers into strong leaders and enrich and strengthen your entire organization.
It’s not a “one day wonder” but rather a comprehensive approach to improving leadership effectiveness by challenging participants to apply insights to real-world situations, guided by our own expert facilitation and coaching.
Interested? Intrigued? Nervous? (That’s a good sign!) Contact us if you’re ready to significantly improve your organization’s capacity and competitive advantage by investing in leadership development.
Most of us understand the importance of leading by example. Often, however, we forget, that we are constantly on stage. And I mean constantly: from the minute you walk into the office in the morning until you leave at night, you are sending signals to your people about what is desirable behavior and what is unacceptable.
Our colleague and leadership teacher Jim Hessler writes in his excellent book “Land On Your Feet, Not On Your Face, “Just showing up as a leader can be hard work. Think of the thousands of interactions you’ll have with others in the days and months ahead. In the morning you’ll have to choose a parking space: even this is a form of interaction. Perhaps you’ll hold the front door open for a fellow employee-or not. You’ll walk to your desk or office a certain way-briskly or casually, smiling or frowning, greeting colleagues along the way or lost in your own thoughts …”
Leading executive coach Marshall Goldsmith compares leadership to Broadway theater, “I am inspired by great theater. Every night, great performers pour their hearts into each production. Some have headaches, some have family problems, but it doesn’t really matter. When it’s show time, they give it all they have. Although it might be the thousandth time an actor has performed the part, it might be the first time the customer sitting in the fourth row has seen the production. To the true performer, every night is opening night.
Like great actors, inspirational leaders sometimes need to be consummate performers. When they need to motivate and inspire people, they do it. It doesn’t matter if they have a headache. They do whatever it takes to help their organization succeed. When they need to be ‘on’, like the Broadway stars, it’s show time.” Click here for Marshall’s complete article.
Throughout the work day people in your organization will look for clues from you about how you the business is doing, how you are feeling and what it all means for them.
And it does not end there. Think business travel, office parties and semi-social gatherings. Remember: the show is always on and you are constantly on stage!
Have you ever thought out loud in front of your team about the pros and cons of launching a particular new service or product next year?
Later on, were you surprised to find rumors spreading throughout your business that you just decided to launch that very product next quarter? If so, you fell into the trap of underestimating how closely people are listening to every single word you are saying (and then not afraid to put their own spin on it and spread the word).
If you happen to be a leader who thinks through difficult issues by talking about them, you need to be particularly mindful about what, how and with whom you are sharing your ‘thinking out loud’. Remember, you are not thinking out loud from the 20th row but from up on the main stage!
Here are your two take-aways:
Be self aware (maybe the most important leadership skill) that your people are observing you constantly and are picking up on every little thing you do or do not do. They see everything: the good, the bad and the ugly and are constantly asking themselves: what does this mean for me? You are the leader of the pack and NOT one of the pack!
Even the most successful and experienced Broadway actors are nervous before every show. In fact, some argue the nervousness is a key ingredient to really be at their best during the show. Similarly, being on the leadership stage can be scary and uncomfortable. Accept and embrace the tension. It keeps you at your best!
First, Chris is one of the most accomplished ultracyclists in the U.S. and ranks easily in the top 10 world-wide. Among many other accomplishments, he holds the 1,000 km road world record, has won what is probably the most competitive ultra event (other than RAAM), the Furnace Creek 508, and has ridden more than 500 miles multiple times during the National 24 hour race.
Second, Chris is a great friend, an amazing racing and training partner and an incredibly humble human being. Chris and I share many memories riding and racing together. Two that I will never forget: winning and setting the course record in the two man division of the Race Across Oregon and riding through the endless second night of the 1,200 km Boston-Montreal-Boston event.
Third, there are many similarities in mindset and character that are required to compete in an ultra endurance event such as RAAM and submitting yourself to our leadership coaching process and graduating a truly better leader.
Think that is a bit of a stretch? Read on. Early hint: neither RAAM nor our coaching is for the faint of heart!
Do you have what it takes? You do if you have plenty of guts, lots and lots of humility and great dose of discipline!
Why RAAM requires plenty of guts
Imagine you and I are standing at the starting line of RAAM in California at the shores of the Pacific Ocean. Ahead of us are 3,000 non-stop miles across this vast country. We have 12 days to finish. Now here is a sobering statistic for us: half of us standing here will not finish on the East Coast but will have our dream shattered. Somewhere along the way we will dismount our bike and not finish the race. Statistically, it will be either you or me.
For some of us it will be early in the race. Maybe it will be on the first day in the 120 degree heat of the Mojave Desert when half the field will be puking or during the second night and third day in the thin air of the Rockies. Others will be beaten by the monotony of the never-ending plains with failing necks during the middle part of the race. And some of us, with less than a third of the way to go, will find ourselves getting peeled off the bike by our crew and being transferred directly to ICU with fluid-filled lungs, broken pelvises or worse. (This unfortunately is what happened to me in 2005.)
Despite knowledge of all of this, Chris Ragsdale will be at the RAAM starting line in June 2013. For eight months leading up to the start in June he will put the rest of his life on hold to live and breathe RAAM 24/7.
RAAM has more similarities with a mountaineering expedition than a bike race: recruiting and organizing the crew, ordering vehicles, shipping gear, designing the race plan and yes, of course, training (most riders clock between 4,000 and 10,000 miles in the six months leading up to the race).
And then there is the financial aspect. Chris’ RAAM budget is around $25,000, which is average for solo RAAM riders. Know also that Chris is a husband and father of two young boys age 5 and 3, is on-and-off remodeling his house and is not independently wealthy. Both he and his wife Lara work full time.
Taking all this on with the knowledge that he statistically has only a 50% chance of finishing requires plenty of guts no doubt.
Why our leadership coaching process requires plenty of guts
While none of our coaching clients (to date) have either thrown up or ended up in the ICU, plenty of guts are required nevertheless to complete the coaching process.
Our coaching is significantly more transparent than any other leadership coaching we are aware of. We do not believe in simply coaching our clients behind closed doors in their corner office. We take your coaching to your organization and involve your team heavily in your leadership development.
This starts after our initial 360 process in which we interview each of your stakeholders (your bosses, your peers and your direct reports) and then feed back the results to you in a very detailed report. As the leader being coached you will stand in front of your team of stakeholders and share the leadership development goals you are committing to based on the initial 360 results. Let me be even clearer: you will explicitly present to your team of stakeholders which weaknesses you will look at improving. You will also ask them to help you improve.
For most of our clients, this is the scariest part of the engagement. And yet it is incredibly powerful. When is the last time you have seen a leader stand in front of his team acknowledging his/her weaknesses and specifically asking for the team’s help to get better?
Throughout the coaching engagement you will be asking your team of stakeholders for regular face-to-face feedback on your progress towards your goals. You are specifically inviting the good, the bad and the sometimes ugly feedback.
Half-way through and at the end of our engagement, your stakeholders will assess your progress in a very short anonymous s survey. Once again, you will ask them to be brutally honest.
Truly becoming a better leader requires that you put yourself out there. It might not seem as scary as attempting to ride your bike across the United States, however as any of our clients will tell you: Our leadership coaching does require guts. In the words of one of our current clients: ”I have to admit I did not sleep well the night before the stakeholder meeting where I had to present my coaching goals based on the initial 360. However, the feedback after the meeting from my team was so incredibly positive that it was worth the lost sleep. They expressed a true appreciation for my openness and willingness to dig deep in order to become a better boss.”
Over the course of the next few ezines I will share with you how lots of humility and great doses of discipline are required to both compete in RAAM as well as graduating from our leadership coaching process.
One of the default responses many of my clients, colleagues, friends and indeed family members give when asked how they are doing is “Very busy!” “Super busy”, “Totally slammed”. More often than not I suspect it is a boast packaged as a complaint. And I often catch myself giving the implied congratulations response: “Well, better than the opposite.”
I love what Tim Kreider, NYT blogger, has to say about our addiction to busyness:
“Almost everyone I know is busy. They feel anxious and guilty when they aren’t either working or doing something to promote their work. They’re busy because of their own ambition or drive or anxiety, because they’re addicted to busyness and dread what they might have to face in its absence. Busyness serves as a kind of existential reassurance, a hedge against emptiness; obviously your life cannot possibly be silly or trivial or meaningless if you are so busy, completely booked, in demand every hour of the day.”
When I read the above it reminded me of what I sometimes tell my clients: Everyone is busy but not everyone achieves results. It sounds counterintuitive but just ‘sitting there’ is often a necessary prerequisite to achieving great results. There is a reason why we need to have off-site retreats to think strategically: we need to get away from the busyness to think about the important questions.
Again Tim Kreider: “Idleness is not just a vacation, an indulgence or a vice; it is as indispensable to the brain as vitamin D is to the body (…)The space and quiet that idleness provides is a necessary condition for standing back from life and seeing it whole, for making unexpected connections it is (…), paradoxically, necessary to getting any work done.”
It is, in my mind, no coincidence that many of the greatest thinkers like Albert Einstein, Thomas Edison, C.G. Jung and the Dalai Lama spent ( in the case of the Dalai Lama are still spending) many hours alone in quiet meditation…just sitting there.
I am someone who used to keep himself notoriously busy and overcommitted (and no, I am not cured but I am making good progress J!). I have on countless occasions experienced the adrenaline rush of being constantly busy and in demand. It is addictive, no doubt!
What is helping me to combat the addictive need to be busy but rather to focus on what is really important? Here are four things
1. Awareness about what unfulfilled need I fulfill with my busyness.
I have to admit that at times my busyness helps me to not face what I should be facing. It’s often easier to plow rather mindlessly through the to do list rather than stepping back and asking the big, hard questions.
Busyness also provides comfort. The emptiness we face when we ‘just sit there’ can be a scary place. It’s just me facing me and….nothing…pretty scary uh?
Building awareness around what need you are fulfilling by being constantly busy will help you take steps to let go.
2.Regular (2-5x/week) meditation practice
Over the course of the last three years I have started to mediate regularly. There are dozens of studies demonstrating the physical, emotional and mental benefits of a regular meditative practice. And I can attest from my own experience: it is one of the purest ways of ‘just sitting there’.
3. Monthly retreat with self (pen and a note book only)
I take regular time by myself over a coffee or yes, a drink, in a comfortable place, armed only with an old fashioned pen and note book but by design without any wireless connections that would distract me from asking the big question: Am I spending my time and energy with the people and projects that are most important to me? If no, what changes will I make?
4. Most of us keep To Do lists. However, instead of focusing on what “to do”, my “Stop Doing” List encourages me to think of activities I should not do anymore, things that I am doing out of habit, a (false) sense of obligation, and that are not really moving me to where I want to be.
I strongly believe that the world would be a better place if each leader would go through Redpoint’s stakeholder based coaching process (originally designed by Marshall Goldsmith).
Let me explain: Imagine every politician from Obama down, every corporate CEO from Messrs. Balmer and Branson down, every small business owner, community leader, doctor and teacher asking their direct reports, peers, clients, patients and students these two simple questions:
What am I doing well?
What do I need to improve?
And then picking one, and only one thing, to get better at, sharing this goal with these same people, asking for regular feedback (say every month) on their progress. After reflecting on this feedback ,the leaders then work towards changing their behavior. Then, after six and 12 months, asking each of the same people to anonymously assess their progress.
Sounds simple enough doesn’t it? Why aren’t more people doing this? In fact, why isn’t everyone doing this? Here are the top two reasons we find (and no, it’s not really the lack of money or time, it almost never is!):
Leaders think they are already excellent and don’t believe they need to get better. They are notoriously overconfident and sometime even arrogant.
Leaders are afraid to openly admit that they want and need to improve and are leery of the feedback they might get. They are afraid of the truth.
And that in my humble opinion is part of the reason why so many organizations and companies are in such a sorry state.
I believe that if we had only leaders who have (1) the humility to admit that they are not perfect and want and need to improve, (2) had the guts and healthy self esteem to do so publicly to their teams and (3) the follow through to ask for regular feedback months after months, we would have better governments, better businesses and better organizations. In short: a better world. Hence: Better Leaders, Better World!
Now I am the first one to admit that what I am proposing here is not realistic. And yes, we would have some capacity issues at Redpoint :). In the meantime however, we are chipping away at making the world a better place one leadership coaching client at a time.
Here is what some of our current clients are working on:
Delegate more effectively
Treat others with respect
Become a better coach and mentor
Hold others accountable
Utilize emotions effectively/not use anger as a management tool
Listen to different points of view with an open mind before giving my opinion
Address conflict in a constructive and timely manner
And here is what I personally am working on this year:
Improve my ability to prioritize and to say ‘No’
What is it you want and need to improve this year to make you a stronger leader and ultimately make the world a better place? Better yet, what would your co-workers say is the one improvement you should make that would have the greatest impact on your organization’s health?
Making decisions is the most important job of business owners and executives. It is also the toughest and the riskiest. Bad decisions can ruin your business or career.
So where do bad decisions come from?
In many cases they can be traced back to a flawed decision-making process – the alternatives were not clearly defined or the right information was not collected. However, more often than not, the fault lies not in the decision-making process but rather in our mind. The way the human brain works can sabotage decision-making.
Over the course of this and the next edition of ChangeAbility, I will examine four, well-documented psychological traps and tell you what you can do about them in order to make better decisions. These four traps are:
The Anchoring Trap
The Status Quo Trap
The Sunk Cost Trap
The Confirming Evidence Trap
The Anchoring Trap
How would you answer these two questions?
Is the population of Turkey greater than 35 million?
What is your best estimate of Turkey’s population?
If you are like most people, the figure of 35 million cited in the first question influenced your answer to the second question. Studies show that if you use, for example, “100 million” in the first question, the answer to the second question increases by many millions.
This simple test illustrates the common mental phenomena of anchoring: When considering a decision, the mind gives disproportional weight to the first information it receives. Initial impressions, estimates, or data anchor subsequent thoughts and judgments.
Because anchors can establish the terms on which a decision will be made, they are often used by savvy negotiators. The first offer in any negotiation will serve as an anchor. Therefore, it is important to really understand your position before any negotiation in order to avoid being anchored by the other party’s initial offer.
What Can You Do About the Anchoring Trap?
No one can avoid the influence of anchors. They are too wide spread. However, by being aware of the dangers of anchors and using the following techniques, you can reduce their impact:
Think about the problem on your own before consulting others to avoid becoming anchored by their ideas. When consulting others, seek information and opinions from a wide variety of people.
Be careful to avoid anchoring advisors, consultants and others from whom you solicit counsel. Tell them as little as possible about your own ideas or tentative decisions. If you reveal too much, you might simply anchor their thinking.
Think through your position before any negotiation begins in order to avoid being anchored by the other party’s initial proposal. At the same time, use anchors to your own advantage. If you are a seller, for example, suggest a high but defendable price as a first offer.
The Status Quo Trap
When faced with a decision, we all display a strong bias towards the status quo. The source of the status-quo trap lies deep within our psyches, in our desire to protect our egos from damage. Breaking from the status quo means taking action. When we take action, we take responsibility; thus we open ourselves to criticism and regret.
Many experiments have shown the magnetic attraction of the status quo. In one, a group of people were randomly given one of two gifts of the same value: half received a mug, the other a Swiss chocolate bar. They were told they could easily exchange the gift they had received for the other. While you might expect that about half would have wanted to make the exchange, only one in ten actually did. The status quo exerted its power even though it had been arbitrarily established only minutes before.
In business, where the sins of doing something tend to be punished much more severely than the sins of doing nothing, the status quo holds a particularly strong attraction. In merger situations, for example, the acquiring company often fails to take swift action to impose a new, more appropriate management structure early on. “Let’s not rock the boat; let’s wait until things stabilize,” goes the reasoning. However, as time goes on, the existing structure becomes more entrenched and changing the structure becomes harder, not easier. The acquiring company has fallen into the Status-Quo Trap.
What Can You Do About the Status Quo Trap?
Remember that in any given decision, maintaining the status quo may indeed be the best choice, but you do not want to choose it just because it is comfortable. Once you are aware of the status quo trap, you can use the following techniques to mitigate its influence:
Ask yourself whether you would choose the status-quo alternative if, in fact, it weren’t the status quo.
Always remind yourself of your objectives and examine how they are served by the status quo. You might find that elements of the status quo are detrimental and prevent you from achieving your goals.
If you have several alternatives that are superior to the status-quo, don’t default to the status-quo simply because you’re having a hard time picking the best alternative. Force yourself to choose.
When facing major decisions in your business or life, be sure to use the above techniques to avoid falling into the Anchoring Trap and the Status-Quo Trap. In the next ChangeAbility, I will discuss the Sunk Cost Trap and the Confirming Evidence Trap.
This article is based on: “Hammond, Ralph & Raiffa: The Hidden Traps in Decision Making,” Harvard Business Review, January 2006.