Jeffrey Saltzman's Blog

Enhancing Organizational Performance

Archive for March 2010

Honest Expectations and Dishonesty

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“…I heard the Chaplain say, Women and Children and Chaplains First”

Harry Chapin from Dance Band on the Titanic

People pause just a bit upon hearing the words to Harry Chapin’s song, Dance Band on the Titanic due to the violation of social norms implied by the chaplains’ words. In a civilized society the strong are supposed to look after the weak, parents (or parental figures) look after their children (or child-like figures), in the world of work organizational managers are not only assumed to be looking after the organization’s health but the well-being of organizational members. Those who genuinely aspire to look after our spiritual well-being (if not charlatans) are also tasked by their followers with looking out for how we behave ethically as individuals and collectively as a society – especially if it is a “calling” to which they are drawn rather than something they do simply for profit. Violation of those precepts, or violation of the moral obligations by those to which others look towards as standard bearers, placing in them their confidence and trust, leads one to look closer at what is occurring, and whether the trust that was given was misplaced.

Consider a male physician who is paid in a transactional way to look after the physical well-being of a male lawyer (treating him for say a nasty fungus). The expectation that a male physician would give up a seat on the Titanic’s lifeboat for the male lawyer who happens to be his patient is just not there and there would be no moral obligation for him to do so. The physician violates his moral obligation to the lawyer only if he violates his occupation’s ethical rules, or the societal rules surrounding the physician/patient relationship, such as treating the lawyer’s fungus with a cure that he knows to be worthless or charging for treatments that did not occur. 

Contrast that to higher order social “contracts” which are performed not for the sake of earning a living or barter of some sort. These social contracts will often create a much stronger bond between the parties involved in the contract/relationship. For instance, a parent/child relationship (or between parents and society regarding how they should behave with their children) creates much stronger expectations regarding certain protective behaviors then one done for compensation, such as between the physician and the patient, even when the child is adopted and does not carry the parents genes. When a violation of the societal norms occur in the parent/child relationship/contract, as in the case of child abuse, society may step in to protect the child, the weaker party in the transaction. People devote themselves to their community, causes, political party, religion, heritage, etc. generally without the expectation of financial gain, but never-the-less creating very strong attachments and social contracts to the various groups and with those strong attachments come expectations. When those expectations are clearly shown to be violated, people’s attachments (first after potential denial) can be severely weakened.  

Another implication of Chapin’s Titanic song is that somehow the chaplain, possibly of weak character, also considers himself more worthy of saving than others and this just does not sit well, a violation of fairness and situational efficacy – the potential of the situation to lead to success for an individual. In the workplace, the managers who consider themselves more worthy of or more deserving of special favors, the accumulation of wealth or organizationally bestowed benefits given to them at the perceived expense of other employees, fall into the same category. When one of them gets caught up in scandal, ethical violations, or illegal activity, once again attention is focused, and people can feel like fairness and situational efficacy are being restored.

What are some of the differential drivers of when various social norms, honesty or ethical behavior apply? One aspect seems to be time pressure. Benno Torgler examined the behaviors of those sinking on the Titanic, which took 2 hours and 40 minutes to submerge into the ocean’s depths and compared it to those on the Lusitania, which sank in 18 minutes. Published in the Proceedings of the National Academy of Science and reported in Science News, Torgler found that on the Titanic healthy young men were more likely to go down with the ship while women and children (doesn’t say anything about chaplains) where significantly more likely to have made it into a lifeboat. In fact, women were 50% more likely to survive then men. Young men between the ages of 16 and 35 were 7 percent less likely to survive than a referent population (those over 35, childless and traveling in 3rd class). On the Lusitania, with much less time for social norms to kick in, “an every person for themselves” mentally seemed prevalent, with young men being 8 percent more likely to survive, while women in total faced the same odds as men. Children on the Titanic were 31 percent more likely than the referent population to make it into a life boat, while on the Lusitania they fared slightly worse than the referent population. (This is the same methodology that I use to conduct diversity studies in organizations and it works well.)

Society’s and individual’s expectations of what is proper normal behavior, ethical or honest behavior is not independent of the circumstance in which people find themselves, but rather is heavily influenced by the unique circumstances in which people or a workforce is enmeshed. And what is normal or acceptable may also look different in hindsight when compared to the pressures of the moment.

Why would an organizational manager for instance “cook the books”, thinking that they could get away with falsifying something that becomes memorialized and is available for detailed inspection over a lengthy period of time?  As in the Lusitania sinking, one possible answer to behavior that upon a lengthier period for reflection might be viewed as unacceptable are the time pressures that managers feel in order to “make their numbers”, the pressure of the here and now. But other factors show up as well. One study on dishonest behavior on the part of managers in organizations comes to the conclusion that the opportunity to cheat and behave dishonestly is able to explain dishonesty and cheating more than any of the other factors or characteristics of the manager, in other words simple access to the opportunity to be dishonest. Checks and balances anyone? Regulatory oversight?

Elizabeth Scott and Karen Jehn of the University of Pennsylvania and The Wharton School respectively, define dishonesty as occurring when “a responsible actor voluntarily and intentionally violates some convention of the transfer of information or of property, and, in so doing, potentially harms a valued being.” They then refine this definition to differentiate among various categories of dishonesty, such as theft and deceit. James Eck from Washburn University demonstrated that those with dishonest characteristics can not only cause organizational failure but by measuring the lack of honesty in management you can predict organizational failure 3-years out. He determined that most failures of property-liability insurers resulted from dishonesty and the removal of assets from the company and into the possession of management. And that an approach that measured honesty, rather than relying on loss reserves and loss ratios on the balance sheet, as is done today, was successful in correctly classifying 88% of the firms three years prior to their liquidation. Measuring organizational members, their attitudes, characteristics and behavior as a way to determine organizational success, has been demonstrated time and again as a powerful predictive tool, rather than simply relying on the numbers kept on the balance sheet.

The likelihood of managers (or others) being dishonest can increase after they observe dishonest behavior on the part of others. This is especially so if those engaged in dishonest behavior view the benefits received as greater than the costs associated with dishonest behavior. For instance, if a manager observes another manager cooking the books, and that manager is rewarded for doing so, then observing another manager benefit from dishonest behavior will increase the propensity of otherwise honest managers to also act dishonestly (Becker).  Managers it was also found increase dishonest behavior when dishonest behavior is condoned by the peer group to which the manager belongs. (Cialdini &Trost).

When the group being observed as being dishonest is not considered a peer group (a group that the manager considers him or herself similar to) by the observer, a contrasting effect may emerge. Observation of a dishonest act in this case may increase the awareness of the dishonest behavior as something to be avoided, for who want to be like those that are observed as dishonest (Gino, Ayal & Ariely).  Additionally, increasing the perceived costs of acting dishonestly with a swift and a forceful reaction may increase the perceived costs of the dishonest behavior and reduce the occurrence of dishonesty.  

Honesty and dishonesty, what is perceived as acceptable vs. violation is not only influenced by societal norms and values, but also by basic underlying characteristics that as human beings we all contain. Those characteristics are not binary with for instance, someone being either honest or dishonest, truthful or a liar, etc. but rather exist along a continuum. Someone who is normally quite honest when placed in an inappropriate enough situation may lose their honesty, at least temporarily. And it has been shown that cheaters in academic or business situations, may be willing to cheat just a little bit, but of course even cheaters have their standards and will not violate them by cheating to an extent that violates those standards. As humans, gathering and processing the daily doses of information that impinge, we tend to categorize and paint with a broad brush, everything can be seen as either black and white, but often that is just not the case. The path to increasing honesty and fulfilling our expectations around honesty can be impacted by:

  • increasing the amount of measurement on the “honesty” component within organizations
  • removing the opportunity for dishonest behavior – installing checks and balances or oversight within organizations
  • not looking upon dishonest individuals as peers, but rather have peer groups in place that exhibit honesty – changing the norm
  • not allowing a “pass” on the part of those behaving dishonestly, in effect rewarding dishonesty; but rather rewarding honesty
  • allowing time for adequate reflection on the consequence of behaviors; avoiding snap or time pressured decisions.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Visit www.orgvitality.com

Ask Your Doctor If You Are Healthy Enough For Employee Engagement

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There is a magic bullet available for companies struggling with their performance. Available by prescription only, the engagement pill will give your company an immediate performance boost, while a slow release caplet can provide a performance boost for up to 36 hours. You never know when the moment is right for employee engagement, and now with the new 36 hour slow release caplet you can take advantage of spontaneous moments where employee engagement can be enhanced.  

No more need for having a clear vision and effective leadership, informing people how they contribute, how they fit into the larger picture and making them feel valued. No reason to provide people what they need in order to perform their jobs with high quality, in a fashion which creates pride. With the engagement pill, performance feedback is not necessary nor is the need for recognition for a job well done. Developing people so that they can perform better? Don’t worry about it. Planning for and communicating about the future? It is a thing of the past. Innovation and risk taking? Why take a chance?  

Don’t be fooled by knock off engagement pills or generics that you can buy through the internet. Only actual engagement pills, with the prescription available from your engagement specialist, will have the lasting desired effect you and your organization have been searching for. Before taking engagement pills, make sure you ask your doctor if you and your organization are healthy enough to begin a regimen of sustained engagement.

Warning: If your engaged workforce lasts for more than 4 hours please seek out immediate assistance to prevent long-term negative effects. Side effects may include setting engagement score goals simply for the sake of having a measurement rather than actually using the potential of engagement to achieve organizational goals and blurred vision, which can include a loss of focus.  

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Visit OV:  www.orgvitality.com

Written by Jeffrey M. Saltzman

March 23, 2010 at 7:20 am

Are we ready to eat the dog yet?

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The family dog is outside playing, runs in to the street and is killed when it is struck by a car. The owners of the dog having heard that dog meat is delicious, cut up the dog, cook it, and serve it for dinner. Most people recoil at the imagery that those sentences conjure up. While many find it difficult to point to a specific rule or principle being violated in the scenario, most will say that there is something inherently wrong with eating the family’s pet dog. That inherent feeling of wrongness without pointing specifically to rule violation is called moral dumbfounding. Jonathan Haidt used the findings of his moral dumbfounding experiments to build a model of morality and argue against increased levels of rationality, or more sophisticated reasoning, as leading to higher levels of morality, an alternative paradigm proposed by Lawrence Kohlberg.   

Haidt stated that since people inherently just “knew” that certain things “felt” wrong and could not specifically state why, that morality was not being driven by rational thought, rather we first judge and then latter on attempt to build a logical case around that judgment. We need to build the logical case in order to justify the judgment we made to ourselves (settling cognitive dissonance issues) and to convince others to our point of view (which helps us confirm to ourselves that we were right all along and builds self-esteem). The bottom-line is we don’t tend to use facts or figures or carefully considered arguments as we judge what is moral or immoral, rather we first judge and then later on work to justify that judgment. Yet it is clear that people can have differing definitions of morality based on their world-views, and once judgment is made then the race is on to justify that judgment post-hoc and to win over others to your point of view. Intuitive moralistic judgments affect the political sphere, business decisions, social codes and mores, nationalistic tendencies, as well as notions of bigotry, bias and hatred driven by rationales conjured up by people that often boil down to “it just is” or “because” when all other rationales are stripped off.

There is great power over individual behavior and what people are willing to do or not do, when the moral code of a person or group of people is manipulated or coerced, often for the benefit (i.e. power, accumulation of wealth, shaping society to their worldview) of others. What was once grossly unacceptable behavior can move towards acceptability or even normalcy under the right circumstances.  For instance, if a group or organization is able to get members to commit acts that are generally considered immoral by outsiders, it will more strongly bind members to the group or organization, since those acts become “normal” group behavior and are justifiable in member’s heads by buying into the belief system or morality standards of the group. If they remove themselves from the group or organization they can fear being judged by others as acting inappropriately and become an outcast of both the group they were a member of and the larger society as a whole.

An illustration of that point comes from Congo where a war has been raging. As reported in the NY Times, February 10, 2010, a new set of vocabulary has been created in order to describe some of the atrocities being carried out there. For instance, some of the military leadership have coerced soldiers to cut off chunks from living people and then to make the victims eat their own flesh. In order to describe this, the term auto-cannibalism has been coined. In addition to being repugnant and morally abhorrent, getting soldiers to perform this grizzly act binds them to the unit, for where else in civil society would they ever again find acceptance other than in the unit in which their behavior was committed by themselves and others? They have nowhere else to go. These military leaders rather than being viewed as irrational, immoral madmen for this behavior, are crudely calculating how to increase the cohesion of the forces they are leading. They may be immoral and capable of great crimes (as so many others have been before them), but it would be a mistake to think that they are stupid. They know just what they have to do to hold onto power.

How many soldiers in how many armies over the course of humans making war on humans have been bound to their military, by finding acceptance of certain behaviors within the military unit in which it occurs? How much rationalization regarding such behaviors as necessary in order to achieve important goals has occurred? And how many whistle blowers of unacceptable behavior, within any organization, have been ostracized for publically describing practices that should never have occurred in the first place? I have great respect for certain militaries, when they are run as professional organizations with full knowledge of the inherent risks of and avoidance of inappropriate conduct.     

There is an ad being played on the local TV stations for an insurance company which shows people walking through a city and doing the right, morally correct behaviors.  Vignettes spill from one to the other with the person on the receiving end of a good deed, performing a good deed in the next vignette because it simply is the right thing to do. The implication is if you help others they will in turn do their share and so on and so forth. The company of course is implying that they to will do the right thing by you if you buy their product. This is not the insurance company trying to invent a new notion but rather they are tapping into a feeling that most people desire to experience. Moral sustainment or elevation is caused by the pleasure derived by doing the morally correct things and feeling good about it. In wanting to reproduce that pleasurable feeling of doing good, they do good again.

It was not long after the earthquake in Haiti and the scenes of chaos emerged that the money and help began pouring in. Even in a time of recession and needs at home, record amounts of cash were raised to help those less fortunate and in need of assistance. On the down side, there was a record number of charity scams aimed at taking advantage of people’s desire to do the right thing. Contrast Haiti to Chile where much less money and assistance has been delivered to help after their own earthquake. When you ask people why they did not give money and are not as moved by Chile’s plight as by Haiti’s the answer I get is that Haiti needs more help. Chile can stand on its own.      

While the notion of moral sustainment and moral dumbfounding can be written about in a rather black and white fashion, sometimes moral choices, both the dramatic ones and some that are more mundane, are not as clear cut.

Consider the morality of the following cases:

  • An employee of HSBC was recently arrested by the French police for stealing information on 24,000 customers with secret Swiss bank accounts, some of which are suspected of being used for tax evasion. The French government is now using that stolen information to hunt down the tax evaders. Is using the stolen information the morally correct thing for the French government to do or should they have pursued the information through legal means?
  • A ship is attacked by pirates off the coast of Somalia. The ship’s owners have to decide whether to pay ransom, knowing that if they do so their other ships will routinely be hijacked. If they choose not to negotiate with the pirates there is a good chance their employees will lose their lives. Save lives now and put future lives in peril, or put lives in peril now but perhaps save lives in the future? What is morally correct? Most ship owners do the math and do not provide security aboard their vessels, finding that simply paying ransom for the occasional ship a cheaper solution. Is that morally an easier or acceptable solution?
  • A manager is working 60+ hours per week to get her job done but reports only 40 hours, as she is worried about giving the appearance of not being able to get her work done within a reasonable time period during a economic cycle in which people are getting laid off. She is worried enough about the morality of the situation, lying on her weekly time reports that she writes into The Ethicist at the New York Times looking for advice. Is it morally ok to routinely lie on order to protect your job? What are the implications on others who report accurately? What would you say?
  • An organization lays-off a woman who is seven months pregnant at the start of what is generally acknowledged to be a severe recession in order to cut labor costs (no pun intended). Clearly she will not be able to pound the pavement looking for a job at this advanced stage of pregnancy. She had previously received good performance appraisals and the layoff appears unjustified and unnecessary. Is this a moral outrage?
  • The research on environmental change is strong despite the recent hullabaloo over a few mistakes in some research. If acting on environmental issues was a neutral event, with no downside to anyone, would the reaction of today’s opponents to notions of limiting the pollution we spew into our environment be any different than it is? Is their opposition to protecting our planet for future generations based simply on current economic gain and comfort for themselves today? Have both sides in the argument made moral judgments as to what is right and wrong? The consequences of being wrong if the planet is not in peril is the perhaps the loss of some economic performance or some discomfort as we move to a new economy. And while no one knows for sure, the consequences of being wrong if the planet is in peril is perhaps the loss of humans as a species and potentially the Earth itself as a place that can sustain life. What is the morally correct choice?

Standards of morality do change over time and vary by culture. Slavery for instance was once acceptable in the USA and is now generally frowned upon (even though it still occurs). Suffrage, which person has a right to vote in society and is given a voice, has been a moving target over the years within the United States and elsewhere. Standards on whether gays have a right to and should be allowed access to the happiness that heterosexuals enjoy by entering into marriage is changing right now in our society. At what age should children be allowed to work, to drink alcohol, to vote, to die for their country? Some of the rationales for these decisions are based on the physical and psychological development of the children and some simply on what is perceived as morally correct.

Standards of morality do change and vary by culture, but as humans the physical and psychological mechanisms that cause us to judge some behavior and positions as moral, while others are judged as immoral are unlikely to. Knowing and understanding these mechanisms can perhaps lead us to making better moral judgments, and perhaps to a better understanding and more toleration of those who disagree with our own points of view.

I can see the family dog sitting on the floor next to me as I write these words and I give her reassurance that she has nothing to fear about becoming the next meal for this family, unless of course she really misbehaves or our moral standards significantly change. Just kidding.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Visit www.orgvitality.com

Written by Jeffrey M. Saltzman

March 15, 2010 at 9:52 am

Increasing the Wealth of Organizations

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How do you measure an organization’s wealth? Is it based on a company’s stock price or total return to shareholders? Is it in the organization’s book value – essentially what an organization’s physical assets are worth? Most will add in a component called “good will”, a concept that is notoriously difficult to measure as it is more or less the value of one’s reputation. Many organizations will say that its value resides within its people and from that their value springs. Interestingly while “good will” can actually show up in an organization’s valuation, employee valuation – or employee goodwill does not. I wonder if that is why phrases like “employees are our most important asset” ring hollow in some organizations.

What would it take to have a component of organizational culture, employee attitudes, become a concept so well entrenched and valued, so well recognized that it became standard practice to have it show up on a balance sheet or company valuation? Would a company be worth more in a merger situation if it could show its employee valuation to a potential acquirer? Would mergers and acquisitions proceed more smoothly if beyond financial calculations and “books of business” that organizational culture fit were taken into consideration?

What about organizational growth or a track record of success? While a track record may be taken into consideration by those buying shares, a track record of success does not often get into the measurement of value; rather it is earnings and expected earnings. But what if an organization had a procedure to more successfully expand its offerings and be more successful as it considered its expansion opportunities? A more scientific approach to deciding on product development and growth may be in the works and if utilized by organizations may lead to more reliable product and expansion outcomes increasing the wealth of the organization.   

Poor or developing nations often depend on a single or small number of critical products to earn currency. Crops such as coffee or sugar or natural resources such as timber or diamonds or some other more limited resource are exploited to provide a source of income. Some countries depend on income sent home by workers based overseas or across borders in foreign lands. A common theme is that the economy of these poorer nations is not broadly based. This pattern has been well known, and countries have tried to break this pattern by attempting to branch out into other industries trying to diversify their sources of income. Most have not truly succeeded in this effort and the poverty stays stubbornly entrenched.  A group of economist and physicists are trying to chart a path out of this poverty and have developed a technique and some lessons from which all organizations can learn. They have determined that a country’s prosperity can rise along well-define paths much as disease can spread along social networks (Science News, Sept. 1, 2007).

In more traditional work, economists look at what is called “factors of production”, infrastructure such as roads, airports, ports, and talent sources such as labor pools and educational institutions to determine the products and industry that a country could attempt to expand into. The notion was that if a country had a specific asset, such as good ports that other industries that also needed good ports could flourish there. When the actual record was looked at for attempted expansion using that method the most common finding was one of failed growth. What traditional theory and practice failed to take into consideration was the “distance” between the two products.

So for instance a country with a skilled group of engineers able to produce and export computer chips are not able to capitalize on that skilled group to produce and export cars, because the “distance”, the needed capacities to produce the two products, was too large. The country therefore that thought it was playing to its strengths was actually not.  In order to improve this modeling and better predict economic expansion success, two researchers, Ricardo Hausman and Baily Klinger, attempted to map “distances” between products, suggesting that the closer a product is to one another the more likely it is for a country to successfully expand into that new product or market niche and increase the nation’s wealth. For instance one of their findings was that a country that was successful at exporting fresh fish would be more likely to succeed at exporting fresh produce, because both require ports, refrigerated storage, and agencies to monitor food safety, making the distance between the two products not too great. It is the large number of similar traits and characteristics between the two products that make them either similar or dissimilar not necessarily that they come from the same industry.

The two researchers mapped out the distance between 775 types of goods and each grouping of products became a node. When nodes where mathematically close, these represented products or industries that could more successfully branched into. Where the nodes were more distant the likelihood of successfully branching into those products or industries was lower.  By examining 20 years of data using this approach the researchers came upon a pattern showing that the most successful countries are the ones that have expanded from one node to the next closest node. Less success is seen when a country tries to expand from industries clustered around a node into industries from a non-adjacent node.

At first this may sound like the traditional advice of “sticking to one’s knitting”, but it is much different. It is more akin to analyzing and utilizing the skill sets and capabilities of the organization in complementary products and services that need those similar skill sets, capabilities and infrastructure components. Expansion into new products, markets, geographies etc. using one lens, may seem eminently sensible, while under another lens somewhat questionable using this technique.

One question is the transportability of the technique from the country level to the smaller organizational level. One thing though that I have noticed is that when “truths” are finally defined that they tend to be very robust and transportable across a large variety of situations. 

The credit market turmoil leading to the recession of 2008-2010 was partly causes by lending institutions expanding into marginal home mortgages. Under the traditional lens, the institutions saw the expansion as simply more of the same, increasing their portfolios to an expanded market, namely those with more marginal credit – the sub-prime market. They were already serving the home mortgage market, so an expansion to this more marginal group was a natural extension of current practices, fattening up market share and securing growth for the organizations. “Liar loans”, so called because they entailed no income verification became common. The banks and the borrowers were living in a dream world assuming that their economic circumstances would improve or at the very least not diminish. They failed to take into consideration that market conditions change, the housing bubble might burst removing equity, while at the same time interest rates could increase making paying off that higher loan much more difficult. Many trapped in this position can not even simply sell the house to pay off the debt as the amount of debt for many is higher than the current value of the house.  Bankruptcies are on the rise.

The same business opportunity viewed through a non-traditional lens, the distance between their old products, the more traditional mortgage loans, vs. the new products, loans to the sub-prime market, can cause a different picture to emerge. One the face of it the distance between the two products would not seem too great, but you might find that differing standards and skills are needed to successfully lend to a sub-prime population. For instance, predicting the ability to repay a loan when the loan is made with a differing set of standards in place may require skills that were not necessarily available within the banks.

Did the banks examine their ability to function in this new space to successful serve it, or was the thinking much more simplistic – make more loans, expand the portfolio? Certainly one could criticize this logic for having the benefit of hindsight fairly easily. But this whole approach, of looking at the distances between new products and markets, prior to jumping into them, both at the country level and the organizational level would certainly seem worthy of more thought and study as it might prove powerful in helping organizations successfully expand and increase their wealth.           

© 2010 by Jeffrey M. Saltzman. All rights reserved.

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Written by Jeffrey M. Saltzman

March 13, 2010 at 7:14 am

No Turn on Red

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Speed Limit 30 MPH, my daughter instructed me from her booster seat in the back as I maneuvered down the road at a speed slightly higher than that. I slowed the car down. Her sense of right and wrong, sometimes somewhat misplaced, is very strong. Once when I had to pick my wife up at the train station at about 9:00 pm or so, I pulled into a deserted parking lot and parked next to the stairs from which she would descend and proceeded to wait for the train and her to put in an appearance. My young daughter pointed to a blue sign in front of the car with a wheel chair on it and asked me what it meant. I told her that it meant that the space was reserved for handicapped people. She told me to move the car. I told her we were the only car in a lot that could hold several hundred cars, which had about a half-dozen other handicapped spots, all empty, and if someone pulled in looking for a handicapped spot I would move. My daughter, who was 6 or 7 at the time, gave me the eye. I moved the car. Now that she is a pre-teen instead of the “eye”, I get the “rolling eyes”, usually followed by an “oooh…dad.”

Signs, messages, warnings, suggestions, advance notices, advice, rules, regulations, commandments, moral codes, prohibitions, commentary, talking heads, pundits, product labels, warning labels, calories counts, advisories, report cards, performance appraisals, performance management systems, traffic tickets, parking tickets, parables, all of these things have something in common. While some document current behavior or aim to punish or reward current behavior, to inform or increase your safety and perhaps extend your life, all of these things also aim to influence our future behavior.

We are surrounded by scads of information and processes that are squarely aimed at influencing our future behavior. A speeding ticket for instance is not only punishment for going too fast (or at least faster than the rules say you should), but it is also trying to send the message that the behavior of speeding should not be repeated. The point system, whereby if too many violation points accumulate on your license leads to suspension of the license, simply reinforces the behavior change aspects of the process. Warning labels on some products are there to inform and attempt to influence – use this product at your own risk, as are performance appraisals which attempt (most rather poorly) to document current performance and to influence future performance – sort of like attaching a warning label to a person’s forehead. Warning: this person’s current performance is sub-par; please keep clear so as not to be unduly influenced yourself.  

What if all this information which bombards us and attempts to influence our behavior was to suddenly disappear? Would we be floundering in a sea of confusion, not knowing how to behave? Would civilization, as we know it, collapse? What if every stop sign, every speed limit sign, every prohibition, every code of conduct, every warning label on every product you purchased, every pundit who interprets events for us were to disappear. Would we be better off or worse off? Would we be walking around in a stupor wondering which actions we should be taking? Would we have no sense of direction, not being sure of what to eat or how to interact with others? Or are we more capable than the way we have developed as a society gives us credit for?

When someone moves from one country or culture to another, how much of the assimilation process, and the success or failure of that assimilation, is due to successfully understanding and knowing how to behave regarding all of the messages that bombard you in everyday life? What if I had no idea that the guy wearing the orange vest and standing in my lane waving the red flag was telling me to stop so that cars could make it safely through a construction zone? What if, based on my experiences, that particular set of symbolic indictors all pointed to a robbery or carjacking attempt was about to occur? Might I react differently? How about when one moves from one company or organization to another? The information flows are likely more subtle, but a portion of whether that new employee will be successful or not in the new organization with its own unique culture may depend on how successfully that person is at interpreting and heeding the information flows that impinge.

Fundamentally, searching out information to help you interpret and guide you through the events surrounding you is likely an in-born survival mechanism, fulfilling a need in humans to create order out of disorder. We automatically develop rules-of-thumb or heuristics to help us interpret events, situations and people. As our environments get more and more complex the need for information to successfully navigate that environment grows. Yet it was not too long ago that we got by with substantially less information flows than what we experience today. A farmer just 50 years ago, living in a rural area, making a living from the land did not have nearly the amount of information stimulus that we have today. But the farmer’s children might dream of moving to the big city where life would be more “interesting”. And those in the big city dream of a vacation, “getting away from it all”, and perhaps unarticulated in that notion of “all”, is away from the constant bombardment of information and its attempted influence on us which needs interpretation and digestion.       

I have spent a good deal of my career collecting information from employee or customer surveys and helping organizations interpret that information as a way of dealing with the environments in which they find themselves. I work to increase their performance and to help them and their employees thrive. For me, having information is a critical component of my success in working with clients, and in fact when I am asked questions about the usefulness of employee survey data to achieving business success, my response usually includes the notion of increasing the chances of success by managing with information rather than without. And while I may find the amount of information and processes that impinges on me daily at times to be intrusive, the lack of that information would likely leave me looking for sources of information to help me interpret the complex environment in which I find myself.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

http://www.orgvitality.com

Executives from Pfizer, Cisco and Yale University Press Join OrgVitality’s Advisory Board

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OrgVitality has established an Advisory Board to help guide product development and service delivery, and selects individuals with diverse backgrounds and experience as members.

 

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White Plains, NY, March 01, 2010 –(PR.com)– OrgVitality forms an Advisory Board which will provide valuable guidance and support in chartng a sustainable course for innovation and growth. Upon establishing its Board, three key members were inducted. Mariangela Battista, Ph.D. will serve as Advisory Board Chair, and brings 15+ years’ of corporate experience having worked in the Talent, Organizational Capability and Research functions of IBM, Pepsi Bottling Group, American Express, Starwood Hotels & Resorts, Inc., the Interpublic Group of Companies (IPG) and Pfizer, Inc.

Also joining are Bryan Maach, Vice President of Market Research & Analysis at Cisco Systems, Inc., and Michael O’Malley, Ph.D., Executive Editor at Yale University Press. At Cisco Systems, Mr. Maach is currently responsible for leading a community of research professionals whose mission is to provide actionable information to Cisco’s senior executives. He also brings with him a decade of experience working for IBM, where he held a number of research and intelligence positions including Asia Pacific Director of Market Intelligence. Dr. O’Malley is currently the Executive Editor for Business, Economics, and Law at the Yale University Press where he has published several award-winning books. His teaching and research interests parallel his thirty-year career in academia and human resource consulting, in which he has advised over 200 companies and written extensively in the areas of organizational change and leadership.

Ann Tedesco, Partner and Vice President of OrgVitality stated, “We are very honored and excited to have created an Advisory Board consisting of members with such a diverse range of experiences. Each member offers a unique perspective which will help us further enhance our unique blend of Human Resources and Market Intelligence offerings”.

About OrgVitality, LLC:
OrgVitality is a management consulting firm focused on helping organizations make sustainable improvements in their operations and offerings, increase their Vitality and empower them to excel in their unique organizational strategies. The firm consists of highly experienced and respected professionals in Human Resources and Marketing with technical expertise in Industrial Organizational Psychology and research with an average of 15+ years of experience in their respective fields. For more information, please visit http://www.orgvitality.com, email contactus@orgvitality or call (914) 595-4866.

Written by Jeffrey M. Saltzman

March 2, 2010 at 1:27 pm

Forecasting Individual and Organizational Performance

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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.

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