The human factors bedeviling successful management
It would be easier, sometimes, if we could get people to behave a little more like machines. Not like that exasperating copier sitting in the corner with kick marks around its base, but like a logical, straightforward computer. If this, then that, a series of inputs with consistent outputs. Instead, we’re, well, human. And we don’t always behave according to plan. Managers who can embrace that uncertainty and respond to their employees’ needs will have a great deal more success than those that treat their people like computers — pushing the same button and expecting consistent results.
An example I see all the time of this unproductive “push-the-same-button” behavior is the misuse of personality tests. How can you tell if a personality test will help you pick the best job candidate? Here are some key questions to ask:
What question was the test designed to answer?
What kind of sample was used to develop it?
Is it reliable — does it produce the same scores when it is repeated?
Is it valid — does it measure what it says it measures?
Does it have predictive validity — do the test results actually predict future behavior?
If all of this sounds very technical, you’re right — it is. A personality test has to be calibrated for all the nuances that individual people exhibit. Otherwise you’re testing them like a computer. That’s why it makes sense to use a consultant with training in test construction and analysis to help you select the tests that will work best for your company.
Another example: Most mergers fail to deliver the projected financial results that inspired them. In spite of careful financial due diligence up front, thoughtful financial modeling, high-priced consultants who come in to “connect the pipes” of the two companies, in spite of all of that, ultimately the merger fails to meet expectations. In fact, in many cases the merger fails entirely, and two previously successful companies go under. What’s happening here? In almost every case, the leaders have failed to pay attention to those bedeviling human factors. Values, symbols, rituals, cultures, organizational histories — all those and many other factors need alignment for a merger to succeed. For specific examples, check out “The Seven Deadly Sins of Merger Integration.”
If people were fully rational, unused vacation time would immediately stop being a problem. Americans are notorious for not taking vacation time, even though the number of vacation days we receive is low compared to other countries. In fact, when companies give their employees unlimited vacation time, many people take even fewer days! And yet we all know that employees are more productive and more creative when they take regular time off. For some tips on how to manage vacation time so your employees will act rationally and take time off, read this article.
It’s not just the workplace where we can see our irrational behavior on display. The red-hot field of behavioral economics has developed a growing body of data that shows our financial decisions are based on all kinds of non-rational factors. For example, as the days get shorter in the fall and winter, people tend to make more conservative investments. As business leaders, we must be aware of these kinds of biases in order to consciously control for them.
What’s the take-away? When you hear a business leader complain that he or she doesn’t like dealing with the “people side” of the business, take note. You are probably listening to an ineffective leader. It seems totally obvious — businesses are made up of people. Understanding them in all their glorious irrationality is what one of the keys to great leadership.
