Archive for the ‘Selection’ Category
Daniel Kahneman coined the acronym WYSIATI which is an abbreviation for “What you see is all there is”. It is one of the human biases that he explores when he describes how human decision-making is not entirely based on rational thought. Traditionally, economists believed in the human being as a rational thinker, that decisions and judgments would be carefully weighed before being taken. And much of traditional economic theory is based on that notion. Dr. Kahneman’s life’s work (along with his co-author Dr. Amos Tversky) explodes that notion and describes many of the short-comings of human decision-making. He found that many human decisions rely on automatic or knee-jerk reactions, rather than deliberative thought. And that these automatic reactions (he calls them System 1 thinking) are based on heuristics or rules of thumb that we develop or have hard-wired into our brains. System 1 thinking is very useful in that it can help the individual deal with the onslaught of information that impinges on us each and every day, but the risk is when a decision that one is faced with should be thought through rather than based on a knee-jerk reaction.
System 1 decisions are easy, they are comfortable, and unfortunately they can also be wrong. But wrong in the sense that if one learned how to take a step back and allow for more deliberative thought prior to the decision, some of these wrong decisions or judgments could be avoided. A simple example from Dr. Kahneman’s book “Thinking Fast and Slow” will illustrate the point.
“A bat and a ball together cost $1.10. The bat cost $1.00 more than the ball. How much does the ball cost?” Fifty percent of the students who were posed this simple question, students attending either Harvard or Yale got this wrong. Eighty percent of the students who were asked this question from other universities got it wrong. This is System 1 thinking at its finest and most error prone. It is fast, easy, comfortable, lets you come up with a quick answer or decision, but one that is likely wrong. Knowing who reads this blog I’ll let you figure out the answer yourself.
WYSIATI is the notion that we form impressions and judgments based on the information that is available to us. For instance we form impressions about people within a few seconds of meeting them. In fact, it has been documented that without careful training interviewers who are screening job applicants will come to a conclusion about the applicant within about 30 seconds of beginning the interview. And when tested these initial notions are often wrong. Interviewers who are trained to withhold judgment about someone do a better job at applicant screening, and the longer that judgment is delayed the better the decision.
This notion of course flies in the face of Malcolm Gladwell’s best seller “Blink” in which he talks about the wonders of human’s ability to come to decisions instantly and a whole generation of manager’s have eagerly embraced his beliefs - including a few CEO’s I know. Why? It is easy, it is intuitive, it is comfortable and it plays to the notion that I am competent and confident in my work. The only problem is that when put to serious scientific scrutiny, it is often wrong.
A few months ago I introduced this concept to an HR group I was talking to. I explained how untrained HR people in a rush to judgment will jump to conclusions about someone, perhaps too rapidly. One 30-year HR veteran insisted that this may be all well and good but of course did not apply to her. After all, with her 30 years of experience her rush to judgment was of course going to be accurate. She “just knew” who were going to be good employees. I let it drop, and I think I was labeled a trouble-maker by the group. That is a label I can embrace.
We tend to develop stories based on the information at hand; piecing the information we do have into a narrative, often without asking the question, “what information am I missing”? In the area of survey research I have often seen researchers confidently presenting the “drivers” of one type of behavior or another. Say for instance, the drivers of employee engagement. But since the analysis is based on a “within” survey design, the only drivers that can possibly emerge are those that you asked about in the survey in the first place. So the researcher, in designing the 30-50 item survey, is limiting the drivers to those items that they decided to ask about in the first place. The researcher likely has in their head a model of what is important in driving engagement when designing the questionnaire, a model that was designed based on another 30-50 item or fewer questionnaire. It becomes a tautology, it becomes true because I tested it and it came out as true, but the only thing I tested is what I already believed.
There are techniques that can be applied that lead towards more deliberative and better decision-making processes. If you were walking briskly down a busy road and someone asked you “how much is 17 x 24?” you would do what every other human would do to figure that out, you would stop and think.
“As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality.”
The distinction between risk and uncertainty arose from the field of economics and is based on the work of Frank Knight. According to Knight, “risk” refers to a situation in which the probability of an outcome is known or can be roughly determined, while uncertainty refers to an event or an outcome whose probability is not or cannot be known. A common example used to illustrate the point is that games of chance are risky (because the odds of winning vs. losing can be calculated) and the outcome of a war with its multitude of changing environmental situations on the ground is uncertain. But it is not as simple as all that, it certainly can be very confusing, and a deeper understanding of risk vs. uncertainty can help people make better decisions.
People board airplanes routinely, strapping themselves into what is essentially a lounge chair (even if it is an uncomfortable one), inside of what is little more than a controlled missile, whose paper thin walls of plastic and metal guard you against external conditions that could not possibly sustain life, while jet engines furiously burn enormous quantities of highly explosive fuel within a few feet of your location, hurtling you and your lounge chair through the sky at hundreds of miles per hour, with thousands of pounds of airplane coming back to the earth with a typically ungraceful thump, on small rubber wheels (which always look flat to me), and then hoping that the plane will somehow slow down and avoid plunging into the water (I land at LaGuardia), or worse. Why in the world would they do that? Because it is not all that risky. Airplanes have very good track records and there are very few accidents. We can manage risks, uncertainty is more difficult.
But what about Wilber and Orville when they first attempted flight? They were not dealing with risk they were dealing with uncertainty, for there was little real understanding of whether man could build airplanes that could stay aloft for a period and then safety return the occupant to the ground. There was no track record to calculate risk upon, there were no computers to run simulations, there were no wind tunnels which could test airplane models. Yet facing this uncertainty they persevered. Events can begin with uncertainty and then as track records about them build they can become simply risky. Though, some people who treat a situation as risky, when it is actually uncertain, can accumulate really awful track records of performance.
For instance, Gerd Gigerenzer of the Max Planck Institute analyzed the performance of 22 major international banks on predicting currency fluctuations. These annual forecasts of currency values which occurred from December of 2001 to December of 2010 were used by the banks to guide their investment decisions. These annual forecasts were wrong, very wrong, for nine out of those ten years. Gred’s conclusion about the track record of the people who produced these annual guides to currency values was that “highly paid people produced worthless predictions.” He went on to explain that based on his analysis the risk modelers at the banks didn’t distinguish appropriately between risk and uncertainty. They treated the currency fluctuations as risky but in fact “it is uncertainty that rules in the real world, where risks can’t be known in advance because of a complex tangle of factors triggers new, extremely unlikely hazards.” What he meant was that many factors that could affect currency values, (e.g. oil shortages, war, weather, natural disasters, deepening recession) were not adequately accounted for in the prediction model and in fact could not be known as they were uncertain. The analysts at the banks though treated them like risks, however, with underlying probability distributions and they got it wrong.
When Steven Jobs, who famously stated that “people don’t know what they want until you show it to them”, produced his first computer he had no idea if people would be able to see its promise, what they could accomplish with it and whether they would buy it. Over the years with each new technology his team at Apple developed there was uncertainty, sometimes uncertainty with great consequence, as some of the products rolled out were “bet the company” kinds of decisions. Steven Jobs reveled in the world of uncertainty and showed that mastering the world of uncertainty can lead to enormous financial reward. But Apple’s ultimate financial success came as those uncertain new technologies became simply risky products. Was there any doubt in anyone’s mind if the iPhone 5 would be a success? The question was not “if”, the question was “how big”. “If” is uncertain, “how big” is risky.
There are hoards of managers out there who want to emulate Steve Jobs, or at least his success or even more precisely his financial success. They look at his management style, which at times bordered on abusive and wonder if that is the path towards their own success. Perhaps if you beat up your employees, driving them really hard, you and your company can also succeed and become like Apple. The scientific literature casts doubt on that approach (big time) as working for the majority of managers (from a risk management perspective). I do know of a few very successful CEO’s whose success could only be described as coming off the backs of their employees rather than through or with their employees. Yet Steven Jobs, with his style, and his ability to deal successfully with uncertainty, like the Wright Brothers, was able to build the most financially valued organization in the world.
In the retail world (and real estate in general) there is an expression, “location, location, location”, meaning that without this fundamental element in place, it simply does not matter if you have great merchandise. You will not be successful. And with Apple it is technology, technology, technology or perhaps product, product, product. The success of Apple should not be attributed to an abusive management style, but rather to Steve Job’s genius in developing technologies and products with an uncertain outcome and turning them into mere risks. Arguments about his management style could be viewed as a red herring – he was successful in spite of it, because of his overwhelming other abilities, not because of it.
If I need to hire 100 people for my sales force and I have developed a predictive analytics approach to helping me select the best 100 out of my applicant pool of 1000, I can determine the likelihood of expected performance outcomes across those 100 new hires by creating a probability distribution. The distribution of job performance across 100 sales people is something that can be known and so my hiring decision can be described as risky, not uncertain. But if I want to know and predict how a specific sales person will perform, that is more uncertain. I can create a probability score for that individual, but I cannot say with certainty what the performance outcome will be as external factors (e.g. a death in the family, a pregnancy, a spouse relocating, a divorce or marriage, a new educational degree, or a new opportunity) cannot all adequately be accounted for. One thing to keep in mind, as the quote by Einstein above describes, is that our models are representations of reality, accounting for only a portion of the variance, they are not reality.
Yesterday, a horrendous crime was committed in Newtown, CT where a 20 year old gunman shot and killed 28 people, 20 of them school children between the ages of six and seven. This was terribly disturbing and I had great trouble concentrating on anything else after I heard the news. As I saw the images of the parents finding out about their children I could feel my heart ache for them. Our own local school, about an hour away from Newton went to a heighten security status. I am concerned that there will be the usual hand-wringing about firearms and second amendment rights and then nothing will be done. This time is has to be different. Our children are dying.
From an uncertainty standpoint it would be very difficult to determine if any one individual is a risk of committing a gun related crime. As with the sales force example above a probability score can be created, but at the individual level what you are dealing with is closer to uncertainty than risk. Common-sense gun laws would suggest background screening and eliminating those with various mental illnesses and track records of violence or abuse from gun ownership.
But beyond that if you look at the methods that can be used to manage risk, and at the likelihood of gun violence, more guns simply provide more opportunity for guns to be used in gun violence. It is a simple relationship. Red herrings are constantly thrown up about arming people to stop the perpetrators of gun violence, as though if we simply have more bullets flying around that fewer people will get injured or killed. Very unlikely. The arithmetic simply does not add up. From a risk management standpoint fewer guns mean fewer gun crimes. Period. End of sentence. Trying to create the odd one-off scenarios whereby having the right person in the right place with the right weapon and the sensibilities to stop a crime in progress without creating further injury to other by-standers is just not logical.
A first step would be to ban the type of firearms that allow for mass-murder to happen within a few seconds without reloading. Our ultimate goal from a risk management standpoint should be to reduce the number of guns available. Period. Given the difficulty of dealing with uncertainty, you cannot accurately reduce the number of guns available to only those who will commit gun violence, you will get it wrong. So the solution must be one that works with the probability distribution. Ultimately, we must reduce the overall number of guns that are floating around in our society. To paraphrase a quote about eating an elephant – how do you remove 300,000,000+ guns from our society? One at a time.
© 2012 by Jeffrey M. Saltzman. All rights reserved.
Visit OV: www.orgvitality.com
“Don’t cry because it’s over, smile because it happened.”
There has been much attention paid to happiness lately. It is a hot topic. Economists have been talking about the role of government in producing happiness and how it could be used to measure the success of an economy. Measures of happiness have been discussed as a supplement to the traditional measure of GDP or even to replace it. The Organization for Economic Cooperative Development (OECD) has a formal program to measure happiness across their member countries and at their conferences there are presentations on the importance of and how to measure “Gross National Happiness”. The United Nations has a Commission on Happiness which commissioned Columbia University’s Earth Institute to create the first World Happiness Report.
Our knowledge of what makes people happy has radically changed over the last 20 years. Positive Psychology has played an important role in the rise of happiness as a measure and one finding is that a significant portion of how happy people report they are has been linked to genetics. There are some people who are simply more inclined, through genetics, to be happier. One question that arises revolves around what can people do, if anything, to influence the natural level of happiness they are born with? Is it all genetics or can the environment or certain behaviors influence your base level of happiness?
From a business performance perspective, do happier employees result in happier customers? Is there a linkage? Do happier employees result in higher levels of organizational performance? And before organizations run off and start looking to hire only genetically happy workers, the latest research findings imply that the happiness gene can be impacted by environmental conditions. Happiness is not a specific set point or a specific degree as determined by your genes, rather it appears to be a range and your environment and your behaviors will determine where you will live within that range. Some people have a naturally higher range and others will have a lower range. A person with a higher natural range who is doing all the wrong things can have a lower happiness score than a person with a lower natural range but are doing all the right things. The interplay between nature and nurture (and other environmental factors – such as drug usage) is both more subtle and more complicated than has been previously thought.
Happiness can be thought of as a formula, as difficult as that may be for some people. Happiness equals your biological set point/range (S), plus the external conditions you are living under (C), plus the voluntary activities you undertake to improve your happiness (V).
Happiness = S + C + V
As I mentioned “S” in the above formula represents your biological pre-disposition and is a range of potential happiness you are capable of experiencing. The level you are experiencing can change day-to-day. For instance, if your son or daughter just got into the college they always dreamed of attending your happiness score will rise (as will your pride in your child), but when you get the first tuition bill your happiness score may plummet (as will your bank account balance). Yet you operate within your genetically determined happiness range.
“C” represents external conditions that matter for your happiness. These fall into 2 main groupings, those you can’t change such as race, age and gender (or at least things you can’t easily change) and those you can change such as marital status, where you live or your income level (sometimes also not so easily changed).
“V” represents thing you choose to or don’t choose to do. These are voluntary activities that can change where you fall in your happiness range. These things can include exercise, education and learning new skills, volunteering your time, charity work, meditation, playing a musical instrument or even taking a vacation. Total immersion in a task that gives pleasure is one sure way to increase the “V” component of happiness.
Things in the above formula can get a bit tricky as we are dealing with complex humans after all. In order to maximize the “happiness effect” of both “C” and “V” you need insure that you do not become adapted to or too used to the activity. If, for instance, you are always on vacation, then taking a vacation loses some of its specialness and the impact on your happiness can diminish over time as you spend more and more time on vacation. Playing a musical instrument may be a real pleasure in your life until you are forced to practice for hours at a time. This pattern of adaptation is why wealthy people tend not to be as happy as you would think. They become acclimatized to being wealthy and it loses much of its impact. But don’t get me wrong it is a lot easier to be happy when you have money than when you don’t have any. And if I had to be unhappy, I would rather be unhappy and wealthy than unhappy and poor. The point is not to look at a level of wealth as a never ending source of happiness. That won’t happen.
Physical pleasures which are voluntary and intermittent, such as eating rich food or having sex (people report the highest levels of happiness immediately after having sex) follow the same pattern. If you become satiated with an activity, but continue with that activity, the ability of that activity to impact your happiness will diminish. And at the extreme level continuing with an activity, perhaps eating ice cream well past the point of satiation, can create a state of disgust, lowering your happiness level.
Within the world of work, happiness can be increased by giving people more control over their work and working conditions. For instance, having an IT department dictating exactly which laptop a worker gets, based on their level or position in the workforce is one sure way to reduce happiness overall. Giving workers a menu of acceptable choices and then giving them control to choose the best choice for their own situation is a very simple example of how to improve happiness. The same holds true if you can give workers more control over their work schedule or locations. In general when people feel that they do not have control over their lives, including aspects of their work situation their happiness will diminish.
One experiment which demonstrated the impact that control over your living situation can have occurred in a nursing home. Residents were given control over relatively simple aspects of the lives within the nursing home (e.g. which art work would be hung on the walls). Nurses reported that residents who were given more control over their living conditions had higher levels of happiness, as rated by the nurses. But beyond happiness these resident also had fewer deaths within their ranks than a control group. So happiness levels that someone was experiencing had a physical affect.
Combine this with the finding that people are more positive about many things when they sense positive movement on an issue, movement having even more of an impact than absolute levels, and you begin to get a sense of what makes an employee and people in general happy. For instance in one ongoing study of employee positiveness, the most positive employees did not come from countries with the highest levels of economic performance or GDP, but rather from those countries with the most rapidly improving GDP levels. In other words things were perceived as getting better for people economically.
A special mention needs to be made about task immersion, a state called “flow” by Mihaly Csikszentmihaly one of the founders, along with Martin Seligman, of Positive Psychology. When someone is in the flow, they are totally immersed in a task that is appropriately matched to their skills. They give examples such as painting, writing, photography, singing and dancing. I could add examples such as solving work related problems, building a house, writing a program, fixing a machine, etc. When a worker is in the flow, happiness will be greatly increased. These are the pleasures a worker experiences in simply doing a good job at work and when the work is matched to the appropriate worker. And as mentioned above however, if the work is past the point of satiation the happiness that the work can bring decreases until the activity can disgust the worker.
There are many ways to impact an employee’s happiness. Among them pay, benefits, job security, recognition, advancement opportunity, respectful treatment, working for an organization that is viewed as having effective leadership all have roles to play. The relatively recent research on happiness implies that increased levels of happiness can also be achieved when a worker is accomplishing something (something they feel is important), learning something (new skills to prepare them for the future), or improving something, moving the outcome in a positive direction (a product, a process or themselves). Happiness is positively impacted by giving people as much control over their environment as possible by making them feel in control of their lives. Happiness is also generally positively impacted if people can help others, building and strengthening social connections.
There is still much to be learned about happiness, especially in the area of its impact on organizational goal attainment and customer satisfaction, but it does seem clear that well-run organizations can benefit from doing some relatively simple things that can increase employee happiness.
© 2012 by Jeffrey M. Saltzman. All rights reserved.
Visit OV: www.orgvitality.com
“Frying it makes it ok.” Those were the words of an emotional commercial fisherman whose fishing grounds were in the Gulf of Mexico, as he was being interviewed by a reporter about how his fishing business had collapsed due to the Deepwater Horizon disaster. He was however still fishing to put food on the table for his family and when asked why he thought it was ok to feed the potentially tainted fish to his family but not sell it commercially, “Frying it makes it ok” was his response.
As I looked at the man being interviewed I could not help but see upon his face a look that told me he did not truly believe what he was saying, but he felt it necessary to mouth words that perhaps justified his actions of desperation, taken in order to feed his family. Upon further reflection I was left wondering if I had read too much into the man’s expression, or perhaps misread it. Maybe this was a case of the fisherman’s knowledge exceeding my own, certainly that would not be hard given what I know about fishing. Or perhaps what I saw on his face was wishful thinking, true belief, illusion born of desperation or simple ignorance. It got me wondering just what is it about the fish swimming in the gulf that made them unsafe to eat and what I found in searching was that there are chemicals in the crude oil called polycyclic aromatic hydrocarbons which have been shown to cause cancer. They are ingested by the fish as they swim through the crude oil and end up in their flesh. So the risk is there, but it still left me wondering about the fisherman’s reaction. Perhaps the fisherman thought that the odds of anything happening to his family were low enough to justify the risk. Or perhaps having already suffered the loss of his business, he felt that the specter of disaster would now pass over his family, not striking twice, even if they ate the tainted food.
What are the odds? Odds are a funny thing, often given to misinterpretation and manipulation. I had some family visiting from a very small upstate NY town a few weeks ago and we did the obligatory New York City sightseeing. We started at Grand Central, took the #4 to Ground Zero, walked over to the Battery and glimpsed the Statue of Liberty, ate lunch in Little Italy and walked through China Town. On the walk through China Town, one of our visitors ducked inside a small bodega, which is a very small grocery-like store. He bought several lottery tickets with money his small-town neighbor had given him. The logic behind why she wanted him to purchase the tickets in NYC was that all the lottery winners seem to come from the big city and not the small town where she lived. The numbers of tickets sold in her small town versus the big city would of course be orders of magnitude different but that did not seem to enter into her calculation. She just figured there were more winners in NYC.
(For some the lottery is as addicting and financially debilitating as smoking or drinking and while we seem to value cutting those additions, we don’t seem to be doing much to cut the addiction to the lottery, rather quite the contrary. The lottery itself is nothing more than a regressive tax on many who can ill afford to pay it.)
People regularly miscalculate odds. Add to that how simple it is to make people feel “special” that somehow some magic is going to shine on them and you get some distorted behavior. A friend of mine ran me through this technique of how you can make someone feel really special while at the same time logic screams at them they should not. Take a room full of people, 100 would do nicely, and tell them that one person in this room is a very special person, possibly the luckiest person on the planet and you can prove it. Split the room in two with roughly half the people on one side and half on the other. Assign one side of the room heads and the other tails. Now take out a coin and flip it. Have the side of the room which matches the outcome of the coin flip keep standing, the other side sits down. Split the room again and repeat the process until you have only one person standing. That person has survived repeated eliminations from the randomness of the coin flip and once they are the only one left standing they will feel that somehow providence was shining down on them. But the reality is that someone in that room had to survive the coin flip methodology, someone had to feel like the luckiest person, and yet knowing the outcome was inevitable they will still feel special, they can’t help it.
Possibly the only good thing to come out of the Deepwater Horizon disaster will be better knowledge and hopefully technology about how to deal with the next oil spill, for the odds are that it is not a matter of if, only when, until the next one. Situations where new actions need to be taken or new technologies developed to solve pressing problems can lead to advances from which benefits can be derived for more ordinary day-to-day problems. Many advances in medicine for instance have come out of the necessity generated by battlefield conditions during times of war and the oil spill in the gulf could easily be thought of as a battlefield. Patterns of behavior, why certain things are done (such as fishing for tainted food) or not done by humans can be exceedingly hard to predict, and harder still to modify, but there is something new on that front that is being worked upon.
There are groups of mathematicians and computer scientists who are using the tools of their trade, equations and algorithms, to predict the expected behavior patterns of terrorists. The techniques sift through vast quantities of assorted data, anything from cell phone calls, email and text messages to shopping receipts and airline manifests to develop the rules by which terrorists behave. The rules are probability driven, and once known, predictions, substantially better than using mere randomness can be made. These new techniques have already been used to uncover who is really making decisions in a terrorist organization, and another method or set of rules has been used to pinpoint hidden arms caches. Arms caches for instance need to be located in certain places to be successfully used. Too close to a target and they easy to find, too far away and the chances of getting caught while transporting them to the target increases. Knowing that terrorists want to strike at vulnerable or high value targets, it is possible to isolate probable locations and to extensively search those areas. So far this method has proven valuable to the army in locating stores of weapons. And importantly once predictions can be made regarding behavior, the next steps can be taken which is prevention or modification of those behaviors.
While these techniques are being developed for war-zone conditions, more widespread use will certainly be possible and that use will include employees at work as well as the customers of our organizations. We will be able to make better predictions regarding customer and employee behaviors and expected outcomes. And with better predictions, more knowledge of the rules that are employed to make decisions, more powerful behavior modifications will be possible as well. What might we want to employ these techniques upon? Better person-job fit, performance prediction and modification, customer preferences and buying intentions immediately spring to mind. But just as war-time advances can be misused if they fall into the wrong hands, these powerful techniques have the potential to be misused as well and will need to be surrounded by ethical guidelines to limit the amount of abuse that we are likely to see.
© 2010 by OrgVitality, Jeffrey M. Saltzman. All rights reserved.
Visit OV: www.orgvitality.com
The executioner climbed up the wooden stairs and took his place on the hangman’s platform, ready to pull the wooden lever on command. A command that would send the man a short distance down to his death, his neck snapped. The accused stood next to the trapdoor on the floor of the platform, the noose snugly around his throat. The day was dry and dusty, and it was hot, really hot. Small eddies of dust danced in the dirt of the town square that contained the mechanism of death by which the hangman performed his work. The relentless sun beat down on the small crowd that had gathered to watch the execution in the center of the rural small town. The accused was urged forward by the executioner’s fingers poking in his back and he shuffled his feet a few paces. He was now centered on the trapdoor, waiting for it to fall away from under his feet and end the nightmare from which he was feverishly hoping to awaken. Just then the cell phone of the executioner rang out through the stagnant air; his ring tone was the melody “I get by with a little help from my friends”. The executioner listened to the small voice at the other end for a few minutes and upon hanging up yelled to the crowd that someone else had confessed to the crime and the man who was about to be executed was innocent. The noose was removed from the man’s neck and as he descended the stairs he collapsed as emotion overwhelmed him.
In addition to our genes we are all products of our experiences and you would have to wonder what the experience above might have on the man who narrowly escaped his demise. What kind of employee or manager would he make? How would he relate to a regimented life in a hierarchical organization? How would he relate to others within the organization? If we postulated at the number of variables that might affect a person and their ability to function in different kinds of organizations we might end up with a very long list in a very short period of time. How about these just for a start? Native intelligence, early socialization factors such as single child or one of many, birth order, number of friends interacted with while growing up, urban, suburban or rural upbringing, whether they were bullied in schooled, were the bully, or just a bystander. Did they have teachers who believed in their ability and pushed them to perform? Were their parent(s) active participants in their early learning? Were they brought up in a single parent household, multiple parents, or divorced parents? Were they raised in a peaceful country or one that had political, economic, social or military upheavals? Was it a struggle to find food and fresh water each day or were they brought up in a “wealthy” environment with their every need provided? Were they loved? Were they ever about to be hanged? The list of factors that can affect who we “are”, how these factors might interact with each other and how we then relate to others is truly staggering and largely unknown.
Industrial Psychologists tend not to look back at these independent variables, these causative factors, but rather tend to say (euphemistically) “look we don’t know how you got there but we are going to measure certain outcomes, for instance whether you are introverted or extroverted, whether you are creative or not, whether you match the existing profile of others who have been successful in the job etc. and use those measures to estimate whether you will succeed on this job”. Developmental Psychologists are more interested in what underlying factors caused you to come out the way you are and Clinical Psychologists try to help you deal with what those underlying factors did to you. So Industrial Psychologists use some simple surrogates to help choose which applicants to an organization should be accepted: type of degree, grades, past work history, references, selection tests, interviews etc. These simple surrogates can only hope to measure a fraction, an approximation of the factors that determine who you are. The goal of the Industrial Psychologist is to utilize the best surrogates that are most predictive of performance outcomes.
Just to compound the problem of determining what is important to measure, what causative factors lead to what outcomes, it is safe to assume that due to individual differences two identical situations on two different individuals may have radically differing impacts and outcomes. Are there other factors that should be utilized other than the commonly used mentioned surrogates above? Possibly, but the enormity of the task and the state of the science makes it a largely untried endeavor.
Let’s say that our goal is to design an optimum organization from both an organizational structural standpoint and a selection standpoint (we will leave optimum processes out for now), optimum here meaning that the structure and who is in each role will lead to a maximization of the performance of the entire entity. Now let’s say we have an organization with 10,000 individuals, not a small but not a huge organization either. Is it possible to appropriately select and configure those 10,000 people to optimize performance based on individual differences, both who is the best fit for what role and how these individuals will interact with the other members of the organization (each with their own complexities), based on the organizational structure that is in place? It becomes a fairly daunting task. We have to assume that each organization out there today has not been able to optimize its performance, to maximize its potential, not from a lack of desire, but from the lack of the state-of-the-art knowledge by which to make these kinds of decisions. Is there any hope on the horizon for organizations desiring to optimize their performance? I think that hope will come from a variety of directions.
While it may be difficult to create the optimum organization with the optimum person filling each and every role, to maximize not only each individual’s performance but also how those individuals interact with others in the organization, there exists a very large number of “good” sub-optimum conditions that allow organizations to function reasonably well. To fulfill the above requirement of the optimum organization with the optimum people in place “perfect knowledge” about each member and potential member would be required and since we are all merely human that is unlikely to happen. You could also argue that the perfect organization could be obtained only if the candidate pool of those you could select into the organization was infinitely large and that is not likely to happen either.
Remember as well that all organizations are working with the same sub-optimum conditions and the same limitations so the winner of the race is not necessarily the organization with the optimum performance but rather the one that out-performs from an organizational standpoint the competition. Your selection procedures and your structure need to be better than the competition rather then “perfect”.
But those words of comfort should not be taken to mean that there is not more that we can and should be doing to maximize our ability to predict and enhance organizational performance. The history of weather forecasting gives provides some insight.
Early weather forecasting or meteorology goes back thousands of years and was initially based upon simple observations of the sky. If it was cloudy and the clouds looked dark it might rain. Early predictions were limited to more or less sunshine in the morning and darkness at night. In 1643 Evangelista Torricelli, an Italian physicist invented the barometer, an instrument designed to measure air pressure. He noted that changes in air pressure often preceded changes in the weather. The hygrometer was invented in 1644, which allowed the moisture content of the air to be measured and in 1714 a German physicist name Daniel Fahrenheit invented the mercury thermometer. These basic tools and those that followed allowed some of the core components that caused weather to be tracked. In 1765 French scientist Laurent Lavoisier began making daily measurements of the weather (temperature, wind speed, pressure, humidity) and that was considered the start of modern meteorology. At first the ability to predict the weather based on these measurements was abysmal.
The next step was taken after World War I when mathematical equations were first attempted to be used to predict the weather by British meteorologist Lewis Richardson. He felt that since the atmosphere is governed by the laws of physics that those laws could be used to predict the weather. At first his complex equations could not be performed quickly enough by hand to allow them to be useful in weather prediction (the storm was over by the time you got the calculation done that a storm was coming). Computers of course solved this dilemma later on, but his initial methodology is intriguing. The earth’s surface was divided up into a grid pattern with each grid length being 80 kilometers long. The atmosphere above each grid has observations of wind, pressure, temperature and humidity recorded at 20 different levels of altitude. Analysis of the data from more than 3,500 observation points on the earth produces a forecast for the next 15 minutes. By tying these observation points together a global forecast can be developed.
Can organizational performance measurement and prediction follow a similar developmental path as weather forecasting? Can we develop the “laws” of organizational performance and then use observations, measurements about the organization to predict future performance? Right now our ability to measure critical components of organizational culture and to predict performance is somewhat better than a prediction of darkness at night, but I am not sure how much better. We seem to be at a point of measuring some of the various attributes of organizations and individuals within organizations but it is still very unclear if we are measuring the “key attributes” and how the history of individual experiences and what is important to measure about them and how they link to organizational performance is still in its infancy. And we are a long way off from having “laws” of organizational performance and using those laws to predict the future of an organization. But maybe we can take a lesson from meteorology and begin our own version of Organizational Meteorology.
© 2010 by Jeffrey M. Saltzman. All rights reserved.
Predictably analogs exist between the natural world and the organizational world. Lessons drawn from nature, when applied correctly, hold potentially great benefits for organizations. One has only to determine how these natural patterns are shared by humans or exist within our “human” environment. Some that immediately spring to mind include the Intentional Stance, an animal’s innate tendency and survival aid to ascribe deliberate intent to movement, rustling noises or other sounds even though those sounds may be no more than the wind or other random event; the development of superstitious behavior in animals, displaying repetitious but inconsequential behavior patterns that animals (an humans) believe will help find food, shelter or a mate (or in the case of baseball players, get a hit or score a run); The science of chaos which can mathematically describe the shape of a leaf and movements within the stock market.
Sometimes what humans develop to help our own decision making process can be used to describe patterns in nature. Take for instance critical mass decision making. Critical mass decision making has been around since WWII. It is a method used to tap into the knowledge that exists within large groups of people and extract useful information. It has been used for tasks as diverse as finding sunken submarines, predicting elections, and determining terrorist targets. I believe that it hold great potential for organizations in helping to tap into the natural intelligence already located with their firms and I am waiting for a biologist to discover that patterns exhibited by groups of animals, herds of zebra, flocks of birds etc. are using critical mass decision making, this hidden group intelligence, to increase their chances of survival.
And then there are fish…What can fish know about employee selection? Well it turns out to be quite a bit. I hope you enjoy this short piece and it leaves you with at least a shadow of a smile.
Fish know a thing or two about employee selection – coral reef fish specifically. They employ a very interesting method to determine whom they should hire while interviewing candidates for a job.
Coral reef fish experience what must be an uncomfortable sensation. Parasites tend to attach themselves to their skins. In order to rid themselves of these parasites they visit and employ “cleaner” fish to remove the parasites. But how does the coral reef fish know which “cleaner” fish will be best at removing the parasites? They have developed some skill at employee (fish) selection, skills that are useful for human managers to understand as they look at potential candidates for a job.
The cleaner fish have a choice as they work on cleaning the coral reef fish. . They can work diligently eating parasites and cleaning off the coral reef fish, while not taking what has been described as a delicious bite of mucous membrane (I assume it hurts to have a cleaner fish bite your mucus membrane), or they can chomp on the membrane and get a more tasty meal then just parasites. It has been shown that when other coral reef fish are nearby (potential customers) and watching the cleaner fish, the cleaner fish are more likely to behave appropriately – foregoing nibbles on mucus membranes. This gives you a sense of what appropriate supervision can do but it also demonstrates that the cleaner fish know what is expected of them on the job. (I wonder who wrote that job description.)
Where it gets really interesting is that coral reef fish who have witnessed the desired behavior on the part of the cleaner fish are more likely to choose those that behave in the desired fashion for their own cleaning. They are in essence interviewing candidates for the position by observing the cleaner’s on-the-job performance and then selecting those that perform best. They seem to instinctively know that one of the best predictors of future behavior is past behavior. (I had to go to graduate school to learn that, so I wonder what that says about me.)
What can we learn from this about employee selection? Human behavior often has parallels in other animals. When psychologists study personality characteristics it has been found that as people age it becomes very difficult for them to change and by 30 years of age or so, personality traits seem locked-in. One theory of personality describes how people can change if they undergo a “unfreeze – change – refreeze” experience, but the “unfreeze” events, events that have the potential to “unlock” personality characteristics or behaviors tend to be of a fairly significant nature for the person. The point being, people tend towards consistency in the experiences they seek out and in how they behave and in fact one of the best indicators of how an employee will perform on the job is past job performance. Don’t expect a 40 year old manager who acts immaturely to suddenly find a mature side or someone who exhibits marginal ethics to suddenly walk the straight and narrow, or an employee who is generally sloppy or last minute in their work to suddenly become fastidious and timely – at least not without a very significant event to propel them. Even then the rates of recidivism will be extraordinarily high.
The goal of psychologists when they construct assessment centers or develop job based testing for selection is the same as the coral reef fish, that is to set up a situation where on-the-job behaviors can be observed in order to get a sense as to how the candidate will perform in the future; in the case of the psychologist from a simulated or historical standpoint and in the case of the fish by direct observation. (The use of biodata, such as job history, promotions, credit worthiness, even speeding tickets etc. are another method to examine past behavior).
Selecting the right employee for the job in the first place, one that fits correctly into the organization and has the necessary skill set is absolutely critical. But do not take the above example about fish and the tendency of people to behave consistently to mean that there is no benefit to developing or training employees. In fact just the opposite is true. Employees can benefit tremendously from having someone “show them the ropes” if you will of how to be a highly performing employee in the organization. They may have in place the correct personality or skill set but they may lack experience or some other component that would allow them to excel, to be a highly performing employee. Development for these people can be very advantageous – especially early in their careers. However if you have an experienced employee or manager who consistently exhibits behaviors that are not appropriate (biting mucous membranes for instance), don’t keep holding out hope that they will someday change their behavior if just given one more chance – it may be a fools vigil.