POINT OF VIEW

Rotman Management Magazine - - CONTENT - An­drew Atkins

NO ONE WOULD EVER DIS­PUTE that Cal Cham­bers was the smartest guy in the room, least of all Cal. As Chief Sci­ence Of­fi­cer of Ob­sid­ian Phar­ma­ceu­ti­cals, Cal holds mul­ti­ple patents and has been re­spon­si­ble for de­vel­op­ing the core bi­o­log­i­cal plat­form on which all of Ob­sid­ian’s ther­a­pies are based. To a re­searcher like Cal, sci­ence isn’t just the fo­cus of his work: The pur­suit of sci­en­tific truth is foun­da­tional to his iden­tity and val­ues. To ques­tion his con­clu­sions in any mat­ter, sci­en­tific or oth­er­wise, is to be­tray one’s fool­ish ig­no­rance and Cal’s re­sponse is of­ten with­er­ing. A bril­liant sci­en­tist who has de­vel­oped clin­i­cal break­throughs, he also pro­duces break­downs in the work­place, through both his re­flex­ively com­bat­ive and harsh in­ter­per­sonal be­hav­iour and his mi­cro­man­age­ment-in­duced bot­tle­necks in pro­cesses and re­port­ing.

Cal’s in­ter­per­sonal chal­lenges haven’t been lim­ited to his own team: They also com­pli­cated his work­ing re­la­tion­ships with the rest of the Ob­sid­ian lead­er­ship team. Put sim­ply, few on the team would trust Cal to have their back. Cal has of­ten lamented that things would be so much eas­ier if other peo­ple would just be as ra­tio­nal and thought­ful as he is. Iron­i­cally, de­spite his con­sid­er­able in­tel­lec­tual gifts, Cal has been no more ex­empt from ir­ra­tional­ity and bi­ases in mak­ing de­ci­sions than any of his col­leagues.

Through­out this ar­ti­cle, I will use the real-life case of ‘Cal’ and ‘Ob­sid­ian’ (names changed) to ex­plore ap­ply­ing in­sights from Be­havioural Eco­nomics in coach­ing lead­ers to greater ef­fec­tive­ness. Af­ter a brief ori­en­ta­tion to lead­er­ship-rel­e­vant Be­havioural Eco­nomics prin­ci­ples, I will de­scribe how we set out to help Cal in two ar­eas: man­ag­ing his be­havioural trig­gers and build­ing trust among co-work­ers.

First, though, a ques­tion: Has any­one ever met Homo Eco­nomi­cus — that won­der­ous Eco­nomics avatar en­dowed with per­fect in­for­ma­tion, flaw­less logic, and a re­lent­less drive to max­i­mize util­ity? While Eco­nomic the­o­ries pro­vide use­ful guide­lines in the ab­stract, our daily de­ci­sions are typ­i­cally coloured by the myr­iad bi­ases and ir­ra­tional­ity de­scribed by Be­havioural Eco­nomics. The ap­pli­ca­tion of these prin­ci­ples pro­vides per­spec­tives on both what drives lead­ers and how to help them.

Man­agers at­tend to re­li­able ex­e­cu­tion of the day-to­day, but we look to lead­ers to take us to new places. What dis­tin­guishes a leader from a man­ager is the leader’s abil­ity to in­flu­ence and pro­vide di­rec­tion and per­spec­tive. In our on­go­ing work with lead­ers, we call the fac­tors that dis­tin­guish a leader from a man­ager ‘Ex­ec­u­tive Pres­ence’, and it is these fac­tors that or­ga­ni­za­tions typ­i­cally seek to de­velop in lead­ers by hav­ing them work with a coach or par­tic­i­pate in lead­er­ship-de­vel­op­ment pro­grams.

Most peo­ple think of Ex­ec­u­tive Pres­ence (EP) as ‘charisma’ or ‘own­ing the room’. While these fac­tors are im­por­tant, they only tell part of the story. EP en­com­passes the qual­i­ties that help a leader en­gage, align, in­spire and move peo­ple to act, and these qual­i­ties fall into three broad di­men­sions. I have al­ready de­scribed this frame­work and Bates Ex­ec­u­tive Pres­ence In­dex (EXPI) on these pages [see

“So You Think You Can In­no­vate,” Rot­man Man­age­ment, Win­ter 2016], so I will just briefly sum­ma­rize the three di­men­sions:

CHAR­AC­TER, which af­fects the con­nec­tion peo­ple feel with the leader and in­cludes a leader’s au­then­tic­ity, in­tegrity, con­cern for oth­ers, re­straint and hu­mil­ity;

SUB­STANCE, which af­fects cred­i­bil­ity, in­cludes a leader’s prac­ti­cal wis­dom, con­fi­dence or bias for ac­tion, com­po­sure un­der pres­sure, res­o­nance and vi­sion; and

STYLE, or the ap­proach to ex­e­cu­tion, in­cludes a leader’s ap­pear­ance and readi­ness, in­ten­tion­al­ity in align­ing ac­tions, in­clu­sion of oth­ers in de­ci­sions, the qual­ity and quan­tity of in­ter­ac­tiv­ity, and as­sertive­ness in man­ag­ing con­flicts.

When ex­ec­u­tives de­velop flu­ency in all three di­men­sions, they dis­tin­guish them­selves as lead­ers rather than man­agers and are able to help or­ga­ni­za­tions cap­i­tal­ize on new op­por­tu­ni­ties.

Coach­ing a leader usu­ally be­gins with pro­vid­ing feed­back, of­ten from in­ter­views, but even more pow­er­fully when it in­cludes a quan­ti­ta­tive 360 as­sess­ment. Fre­quently, the feed­back re­ceived in­cludes ar­eas where a leader tends to re­act im­pul­sively. Help­ing that leader gain aware­ness of what trig­gers these re­ac­tions is an im­por­tant first step to gain­ing greater con­trol and demon­strat­ing re­straint and com­po­sure.

In Think­ing Fast and Slow, Daniel Kah­ne­man de­scribes two thought pro­cesses of the hu­man mind: Sys­tem 1 think­ing is quick and re­ac­tive, and in­volves lit­tle con­scious thought. It is use­ful, es­pe­cially in rou­tine sit­u­a­tions, but is prone to er­ror and bi­ases. Sys­tem 2 think­ing is also re­spon­sive to the sit­u­a­tion, but is much more mea­sured. It comes into play when we are learn­ing to do some­thing or when we are be­ing more de­lib­er­ate. For ex­am­ple, ex­pe­ri­enced driv­ers in North Amer­ica use Sys­tem 1 think­ing most of the time, but would likely re­vert to Sys­tem 2 when driv­ing in the UK for the first time.

In coach­ing lead­ers, we al­ways ex­plore, In which sit­u­a­tions will they be most prone to re­act­ing un­pro­duc­tively? Iron­i­cally, some of the trig­gers lead­ers have de­velop as a re­sult of hav­ing an ‘over-strength’ — or too much of a good thing. For in­stance, high lev­els of pro­fes­sional com­pe­tence, par­tic­u­larly in tech­ni­cal ar­eas, and a strong com­mit­ment to one’s cho­sen dis­ci­pline can re­sult in an in­di­vid­ual treat­ing their ex­per­tise in much the same way as they treat their val­ues: Ques­tion­ing their pro­fes­sional con­clu­sions feels tan­ta­mount to ques­tion­ing their in­tegrity. In these sit­u­a­tions, lead­ers of­ten re­act de­fen­sively and may dig in and stall progress.

In our as­sess­ment work with the EXPI, we have seen this re­flected in rel­a­tively low cor­re­la­tions be­tween In­tegrity (ac­tions con­sis­tent with prin­ci­ples) and Con­fi­dence (bias for ac­tion).

The Sys­tem 1 re­ac­tive process is sim­i­lar to the Lad­der of In­fer­ence model by Chris Ar­gyris, which de­scribes how feed­back loops from our ‘noble cer­tain­ties’ can cause us to be­have re­ac­tively. As with all bi­ases, aware­ness of the dy­namic is the first step in slow­ing down the process, shift­ing from Sys­tem 1 to Sys­tem 2 think­ing, and be­com­ing re­flec­tive rather than re­flex­ive to sit­u­a­tions.

In Cal’s case, his iden­tity is in­ex­tri­ca­bly linked to his deep tech­ni­cal knowl­edge. His en­cy­clo­pe­dic com­mand of the in­tri­ca­cies of sci­ence and drug de­vel­op­ment com­pels him take a stand on mat­ters across the or­ga­ni­za­tion—in­clud­ing ar­eas out­side of his dis­ci­pline. His strong sense of his own su­pe­rior ex­per­tise has be­come such a fun­da­men­tal part of his self-per­cep­tion that any dis­agree­ments with his point of view are ex­pe­ri­enced as per­sonal af­fronts, and he re­acts bit­terly.

In coach­ing Cal, we worked on de­vel­op­ing his aware­ness of how ques­tions about his opin­ions act as trig­gers to his neg­a­tive re­ac­tions. With in­creased self aware­ness, Cal was able to rec­og­nize sit­u­a­tions where he was get­ting trig­gered and, with prac­tice, to slow down and re­spond in­ten­tion­ally rather than re­act­ing im­pul­sively. The re­sult: Oth­ers no­ticed his im­proved abil­ity to tem­per his re­sponses, and his col­leagues be­came more open to work­ing with him.

Our as­sess­ment of lead­ers across the 15 facets of the EXPI en­tails mea­sur­ing 90 spe­cific be­hav­iours. Look­ing at data from thou­sands of as­sess­ments over the past cou­ple of years, we have been able to iso­late and com­pare two co­horts of lead­ers: Those who are highly trusted and those who are not trusted. Com­par­ing these co­horts, we found a sta­tis­ti­cally-sig­nif­i­cant dif­fer­ence: Highly-trusted lead­ers out­per­formed un­trusted lead­ers in 86 of the 90 be­hav­iours on the EXPI.

Clearly, trust is foun­da­tional to a leader’s abil­ity to in­flu­ence, and each of the 15 facets con­trib­ute to build­ing it. Trust comes in the fol­low­ing two forms:

1. RE­LA­TIONAL TRUST. Some ex­pe­ri­ences of trust are al­most vis­ceral or au­to­matic. They in­volve a strong sense of con­nec­tion or re­la­tion­ship with the other per­son. This ‘re­la­tional trust’ op­er­ates through Sys­tem One: We pick up on ini­tial cues in an in­ter­ac­tion and con­sider some­one trust­wor­thy. Re­la­tional trust is about in­ter­per­sonal con­nec­tion and is af­fected by be­havioural bi­ases such as rep­re­sen­ta­tive­ness (per Kah­ne­man and Tver­sky), whereby we ex­pe­ri­ence some­one as hav­ing qual­i­ties

we value and this af­fects the over­all as­sump­tions we make re­gard­ing that per­son.

2. TRANS­AC­TIONAL TRUST. Other ex­pe­ri­ences of trust are more mea­sured, and in­volve a will­ing­ness to put our­selves at risk, based on the other per­son’s ac­tions. This is ‘trans­ac­tional trust’, and it of­ten op­er­ates through Sys­tem Two. The risk as­sess­ment as­pect of trans­ac­tional trust echoes Kah­ne­man and Tver­sky’s work on Prospect The­ory, which de­scribes our be­hav­iour around risk. Sim­ply put, we are of­ten loss averse and will do what we can to pre­vent loss — even at the ex­pense of re­al­iz­ing po­ten­tial gains. Where trans­ac­tional trust is con­cerned, we base our de­ci­sions on three fac­tors:

• our past ex­pe­ri­ence with the in­di­vid­ual;

• our per­cep­tions of their ex­per­tise or ca­pa­bil­i­ties; and

• our sense of shared pur­pose or align­ment around goals.

In short, we reg­u­larly make de­ci­sions to trust or not to trust, and those de­ci­sions can be re­flex­ive (Sys­tem One) or re­flec­tive (Sys­tem Two). In ei­ther case, they are prone to bi­ases — like any other de­ci­sions. For in­stance, the loss aver­sion de­scribed in Prospect The­ory can con­trib­ute to a gen­eral re­luc­tance to trust.

The clear dif­fer­en­ti­a­tion be­tween trusted and un­trusted

The loss aver­sion de­scribed in Prospect The­ory can con­trib­ute to a gen­eral re­luc­tance to trust.

lead­ers serves to il­lus­trate how lead­ers can build or un­der­cut both re­la­tional and trans­ac­tional trust. Now, let’s re­turn to Cal’s case, to il­lus­trate some of these be­havioural in­sights in ac­tion.

Highly-trusted lead­ers out­per­formed un­trusted lead­ers in 86 of the 90 be­hav­iours on the EXPI.

BUILD­ING RE­LA­TIONAL TRUST. The sub­lim­i­nal sense of con­nec­tion that un­der­lies re­la­tional trust is fa­cil­i­tated by the EXPI’S char­ac­ter facets and oth­ers with a so­cio-emo­tional el­e­ment. Col­leagues ex­pe­ri­enced Cal as au­then­tic in that he was gen­uine in his in­ter­ac­tions, and this con­trib­uted to their per­sis­tence in work­ing with him; his strong sense of the val­ues of sci­en­tific in­quiry were un­ques­tion­able — though we’ve noted that an over-strength in in­tegrity con­trib­uted to a lack of emo­tional re­straint and loss of com­po­sure when un­der stress. Cal’s pro­tec­tive­ness of his team was a demon­stra­tion of con­cern, as was his ad­vo­cacy for the pro­fes­sional and tech­ni­cal de­vel­op­ment of some favoured re­searchers. Con­se­quently, some on his team were fiercely loyal to him.

How­ever, Cal’s al­most com­plete lack of hu­mil­ity was off-putting and dam­aged his re­la­tion­ships. Al­though he had suf­fi­cient res­o­nance to rec­og­nize what oth­ers were think­ing or feel­ing, his com­mit­ment to his own ideas in­ter­fered with any ten­dency to ac­knowl­edge other’s point of view. Mean­while, Cal’s com­mit­ment, en­ergy, and prepa­ra­tion pro­jected an ap­pear­ance of thor­ough pro­fes­sion­al­ism. Given this mix of qual­i­ties, it is not sur­pris­ing that peo­ple of­ten felt a strong ini­tial trust­ing con­nec­tion with Cal that waned as they gained more ex­po­sure to him.

BUILD­ING TRANS­AC­TIONAL TRUST. The con­tribut­ing el­e­ments of trans­ac­tional trust are present in all three Ex­ec­u­tive Pres­ence di­men­sions (Char­ac­ter, Sub­stance and Style), and in each case, Cal’s be­hav­iour within each of these di­men­sions af­fected peo­ples’ will­ing­ness to trust him. Re­search shows that we trust peo­ple based on our past ex­pe­ri­ence with them be­cause we be­lieve they are more likely to dis­play that same be­hav­iour again. We noted above that ex­po­sure to Cal’s off-putting be­hav­iours de­creased ini­tial Re­la­tional Trust, be­cause this ex­pe­ri­ence in­creased the risks as­so­ci­ated with trust­ing Cal in the fu­ture. Sim­i­larly, past ex­pe­ri­ence with his low re­straint and com­po­sure led peo­ple to ex­pect emo­tional out­bursts, which eroded trust in Cal. While his de­ci­sive­ness and bias for ac­tion in the facet of con­fi­dence and his as­sertive­ness in tak­ing a stand en­hance trust, Cal’s in­abil­ity to ef­fec­tively man­age con­flicts aris­ing from his as­sertive­ness and dif­fi­culty in main­tain­ing a re­li­able pat­tern of in­ter­ac­tiv­ity in com­mu­ni­ca­tion worked in the other di­rec­tion.

Be­ing the smartest guy in the room in shar­ing his prac­ti­cal wis­dom added to per­cep­tions of Cal’s ex­per­tise and com­pe­tence, which bol­sters trust. Sim­i­larly, Cal’s con­fi­dence in mak­ing de­ci­sions con­trib­uted to his per­ceived ex­per­tise: he was vis­i­bly com­mit­ted to a vi­sion of Ob­sid­ian’s po­ten­tial and painted a com­pelling pic­ture of the prom­ise of their ther­a­pies. Cal was also au­then­ti­cally trans­par­ent about his pas­sion and com­mit­ment, mak­ing his in­ten­tion­al­ity abun­dantly clear. Oth­ers were able to clearly see how they and Cal had a shared pur­pose and trusted Cal to act in align­ment with those goals. On the other hand, Cal’s be­lief that he alone needed to be the fi­nal ar­biter on de­ci­sions de­creased the sense of in­clu­sive­ness oth­ers felt and bot­tle-necked the in­ten­tion­al­ity in work pro­cesses, cre­at­ing ex­e­cu­tion risks and de­creas­ing trust.

In work­ing with Cal on his re­la­tion­ships with his team and peers, we were able to help him ap­pre­ci­ate that trust was some­thing he could build in­ten­tion­ally by work­ing across many of the Ex­ec­u­tive Pres­ence In­dex facets. Work­ing across these 15 facets de­creased the like­li­hood of Cal’s trig­ger­ing risk-averse re­sponses, and from a Be­havioural Eco­nomics per­spec­tive, al­lowed him to lever­age Prospect The­ory in­sights to in­crease trust. The re­sult: Cal’s col­leagues were able to bet­ter ap­pre­ci­ate his un­der­ly­ing mo­ti­va­tions and he was able to build bridges across dis­ci­plines dur­ing a crucial phase of Ob­sid­ian’s growth.

In clos­ing

Be­havioural Eco­nomics has en­hanced our un­der­stand­ing of de­ci­sion pro­cesses and in­di­vid­ual be­hav­iour in many ar­eas of busi­ness. Go­ing for­ward, lead­ers can only gain from in­sights into the bi­ases and men­tal habits to which we are all prone. The case of Cal pro­vides a win­dow into how to shift from be­ing sub­ject to those bi­ases, to be­ing able to use them con­struc­tively to shape your lead­er­ship be­hav­iour.

An­drew Atkins is Vice Pres­i­dent of Client Ex­pe­ri­ence at Bates Com­mu­ni­ca­tions, based in Welles­ley, Mas­sachusetts. In 2014 and 2015 he was named a Top 100 Thought Leader by Trust Across Amer­ica.

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