On team structures

In the last post, we looked at setting goals for teams. In this post, we will look at how to structure the team: both in terms of formal structures, as well as through informal roles and norms. We will also discuss the importance of team charters to delivering high performance.

Formal structure in teams

• Departmentation
• A grouping of jobs and activities within the team
• Typically, a team has a leader and team members
• Team members might be subdivided into teams, each with a leader
• Questions: How to subdivide into teams? Generalist team or specialist team?
• Specialist team: works better when tasks are predictable. Efficiency becomes the key here (research here). 
• Generalist team: works better when tasks are dynamic in nature, not readily understood. Enables cross-functional collaboration, as well as quick adaptation to changing situations. 
• Not easy to go from one structure to another (research here)
• Easy to go from specialist to generalist, not the other way around
• Specialists develop norms for communication and collaboration to work across their functional silos, which come in handy when they are put into a generalist structure. 
• Generalists probably have not developed such norms, because they do not need them (as all functions are already present in this structure), and jumping to a specialist structure becomes difficult. 
• Centralization
• Distribution of decision making power: team leader or spread within the team?
• Where tasks are relatively known and efficiency is key, centralized decision making works well. Where tasks require creativity, decentralized decision making is more effective (because of flexibility, multiple inputs etc. Research here). 
• Decentralized leadership typically is typically perceived as being more effective. Likely because there are many faces recognized as leaders, and that reflects positively on the strength of the team (research here). 

Centralized	Decentralized
High interdependence in teams	Low interdependence in teams
Execution-focused tasks	Creativity-focused tasks
Low complexity tasks	High complexity tasks
High diversity in age/experience	Low diversity in age/experience

• Note that in this decentralized leadership, each person is responsible for a different area, and in seeking local maxima, people might not coordinate well. That could explain why decentralized leadership does not work when coordination required is high. 
• Switching from one structure to the other has costs: centralized to decentralized has lower performance drop than the other way around (research here).
• Why? Because the norms people develop in one structure carry over, and new norms require time to take root. 
• Rewards structure
• Should we reward the individual or the team? Should we focus on competition (sales) or collaboration (innovation)?
• If speed is the focus: competition works better (research here)
• If accuracy is the focus: cooperation works better 
• Switching from competitive to cooperative actually improves speed a little, while hurting accuracy (contrary to what is expected; research here). Why is this?
• Norms survived the switch from competitive to cooperative structure (for example, not feeling incentivized to contribute more, given the team as opposed to individual rewards). 
• Change thinking/norms first, and the benefits will follow. 
• Switching from cooperative to competitive reward system actually helps. For the same reason that cooperative norms get carried over. 
• Can we do a mix of individual- and team-based rewards?
• The evidence is mixed:
• Research here shows that it does not work any better
• Research here shows that it works better than group-based or individual-based reward systems, when there is high interdependence. 
• Recognize if you are committing the folly of rewarding A while expecting B. Change accordingly. 
• We want teamwork, while rewarding individual performance. 
• Virtuality
• Teams spread across geographies/nationalities; and/or communicates using technology 
• Research here
• Geographic dispersion
• Lack of contextual knowledge (of local conditions etc.); foster it to make this work!
• Added coordination/communication costs
• National dispersion
• Arrive at a common understanding that respects cultural differences/uniqueness, so the team can work together
• Electronic dependence
• Reduces ability to control/monitor for leaders; increase feedback (bidirectional)
• Reduces richness of communication; increase face-to-face communication, and establish norms for communicating effectively (use video conferencing for resolving sensitive issues etc.) 
• Three strategies to improve performance of virtual teams
• Team empowerment: Low face-to-face in combination with low empowerment is a disaster. High empowerment + low face-to-face can actually be better than high empowerment + high face-to-face (research here). 
• Support structures: Clear task structures and roles, clear reward structures, consistent info. sharing are examples of support structures. For virtual teams, these are key; they don't matter as much for co-located teams (research here).
• Building a safe environment: Where people can speak their mind freely; very important, especially for geographically dispersed teams (research here)

Informal structure in teams

• Team roles (research by Belbin here and here)
• Investigator: explores opportunities, develops contacts, stakeholder insight
• Teamworker: helps team gel and avoid friction, builds trust in team
• Coordinator: Focuses on team goals, draws out colleagues, delegates work etc. 
• Plant: Fosters creativity, solves complex problems, generates ideas 
• Implementer: Turns ideas into action; develops work plans 
• Finisher: Quality control; polishes and evaluates outcomes for quality 
• Evaluator: Objectively evaluates the team's options; logical 
• Shaper: Provides drive and motivation, so team maintains focus and motivation 
• Specialist: Brings expert knowledge of a key area to the team
• Identify critical roles, and roles that are unfulfilled (especially ones that are resulting in underperformance)
• Evidence unclear on whether team roles are distinct, probably because people play multiple roles (research here)
• Team roles have no bearing on salary, promotions, formal power etc. (research here)
• All team roles have weaknesses that need to be managed (research here)
• Team needs to have most of these roles filled for success
• Make sure you identify people who play multiple roles; lot of dependence, what if they leave?
• Either you or someone else should fill missing roles.
• Make sure to discuss team roles, especially when there is a competitive reward structure. Disaster if no such discussion happens in this scenario (research here)
• Team norms (thinking)
• Behavioral patterns that are accepted, relatively stable, and expected by team members
• Norms around accountability, responsibility, ownership, decisions, conflicts, meetings, communication etc. 
• Why care about team norms?
• Positive outcomes for individuals (satisfaction, perceived performance, compensation) when cooperative norms (vs competitive norms) are present (research here)
• Teams with cooperative norms meet early, establish guidelines for cooperation, and are more effective.
• What can leaders do about team norms?
• When team expectations are low, high leader expectations help establish effective norms like accountability, responsibility etc. (research here)
• When team members have high expectations, leader influence is low
• When team norms get set, they are difficult to change. Make sure to crisply define team norms: an opportunity when they are not clearly articulated. 
• If team members have clearly defined low expectations, going to be an uphill battle; takes time. 

Team charters

• It is important to have a shared understanding in the team about roles, norms, expectations, reward structures, processes etc. Team charter is a formal document that captures this. 
• Team goals
• Roles and responsibilities 
• Authority and empowerment
• Resources and support 
• Operations (team meetings, frequency etc.) 
• Protocols for giving/receiving feedback 
• Rewards and sanctions 
• Team charters improve intermediate process outcomes like communication, mutual support, cohesion etc. (research here)
• Team charters can also really boost team performance, even when the strategy is not very effective (research here). Better charter + worse strategy > worse charter + better strategy. 
• Why? Because the systematic approach will help the team discover ineffectiveness of the strategy, and adapt course. 
• Note that charter is in our control, whether a strategy is good may/may not be. 

On setting goals for teams

In the last post, we saw how to compose teams: how to think about team size, diversity in demographics, personality, values etc. In this post, we will examine how to set goals for teams to achieve excellence (you might want to refer to this earlier post on setting goals for individuals).

Does the SMART (Specific, Measurable, Agreed-upon, Reasonable, Time-bound) framework work for teams as well?

• SMART goals work for teams in general! 
• Caveats
• Specific performance goals are better than specific learning goals (research here), especially on complex tasks. Teams do better on both performance and learning when given specific performance goals. 
• Learning goals cause people to be siloed, reducing coordination, communication, and teamwork => Missed learning opportunities => Lesser innovation 
• Set general learning goals, as opposed to specific learning goals for team members. 
• Growth mindset (vs fixed mindset) is important to teams as well to accomplish difficult goals (research here). Learning orientation is better than performance orientation: making mistakes and learning is better than focusing on not making mistakes, proving themselves to others which typically results in restricting team to known tasks.
• High interdependence yields better performance coupled with high commitment (research here). Note that for teams with low commitment, interdependence undermines performance. 

On composing teams

In this post, we will look at how to compose effective teams. We will look, in particular, at optimal team sizes, diversity with respect to demographic composition, team personality, values, and abilities.

Team size

• Why care about team size?
• Team size was the number one positive predictor of creativity and innovation in teams (across 24 studies on 1359 teams; research here). Team size was a better predictor than:
• Other positive predictors
• Job-relevant diversity: team had different functional experts
• Goal interdependence
• Task interdependence
• Negative predictors
• Team longevity
• Background diversity (which school, place etc.) 

• Larger founding teams => Better startup performance (research here)
• Larger size of board of directors => Better stock market and net income performance (research here)
• Smaller companies benefit much more from a large board
• Large teams vs small teams
• Large teams
• More capabilities
• More resources
• More information, input, ideas => more innovation
• Small teams
• More cohesive
• Better satisfaction; people know each other and feel valued
• Faster consensus, move fast
• Better individual contribution; no social loafing
• Is there an optimal team size?
• For optimal team satisfaction, 4-5 team members (research here)
• Note that this is not optimal for effectiveness
• Typically, 5-10 members is optimal for effectiveness
• >10 => more conflict, process costs, social loafing etc. 

Diversity

What exactly does diversity mean?

• Surface-level diversity (Demographic diversity)
• Gender
• Age
• Nationality/race
• Background (educational, job-relevant diversity etc.)
• Deep-level diversity
• Personality
• Values
• Abilities
• Beliefs
• Motives

Why care about diversity?

• Diversity means multiple backgrounds and hence viewpoints; the downside is increased potential for conflict. 
• Deep-level diversity becomes more important for team performance/processes over time (research here).

Demographic diversity

Why is demographic diversity important?

• Background diversity is a negative predictor for innovation (as we saw in the above picture). However, some elements of background diversity like education and functional background have a positive impact (research on the banking industry here, for example).

• Demographic faultlines are more important than mean/variance of a given indicator (research here).
• What is a demographic faultline?
• Multiple subgroups in a team that have similar demographic dimensions (age, gender, education etc.)
• A useful exercise to map out team members on these demographic dimensions, and see if faultlines exist. 
• Demographic faultlines reduce cohesion, and increase conflict. Ability and personality faultlines do not have a similar impact (values > 0.15 or 0.2 can be considered significant; research here).
• With such demographic faultlines, subgroup cohesion might actually be pretty strong!
• These subgroups likely increase conflict. 

• Demographic faultlines in top management teams reduces ability to make strategic decisions/risk-taking/innovation (research here). In particular, such teams were unwilling to expand into novel international territories (presumably, such a decision is supposed to be good). 
• Strong faultlines reduce firm profitability (research here; 42 management teams and 2100 decisions), especially when there is not a shared objective. 
• Strong faultlines actually enhance profitability when there is a shared objective. Note that developing a shared vision is a great way to offset faultlines in teams!
• Other ways to tackle strong faultlines
• Encourage belief in pro-diversity 
• Encourage open communication

Deep-level diversity

• While background diversity is important in a team (as we saw above), we want alignment in personality and values, as we will see below. 

Personality

How do we measure personality?

• Several flavors of personality tests:
• Myers-Briggs: 16 major personality types 
• Big five: OCEAN mnemonic (Openness to experiences, Conscientiousness, Extroversion, Agreeableness, Neuroticism/emotional stability)
• A useful exercise is to map the team members on the big five types, and see how much diversity there is, as well as the average on each dimension. 

Why care about personality?

• Knowing the personality of the team members helps us understand how to work with each other better, how to compose effective teams etc. 
• Team performance with high conflict is better when teams are open to new experiences, and have higher emotional stability (research here). Helps you compose teams with such personalities. 
• Team performance with high confidence is better when there are more extraverted people on the team, and when there is openness to experience (research here). 
• The big-five personality types have a significant impact on team performance (research here). Conscientiousness and agreeableness are very important (you want the minimum level to be high here, not just the average). Emotional stability as well as openness to experience are also important (having a high average is good). Extraversion is useful, especially when the team is high in confidence (it might hurt if confidence in team is low). 

Values

How do we measure values?

• Here's a standard framework (Hofstede's cultural dimensions) to think about values: use CLUMP as mnemonic
• Collectivism
• Long-term
• Uncertainty
• Masculinity
• Power distance 
• A useful exercise to map out team members on these five dimensions, and see how much diversity there is, and the average for each dimension. 
• Here's another similar framework (Tradition, conformity, security, power, achievement, hedonism, stimulation, self-direction, universalism, benevolence).
• Each nation/group holds these values in differing proportions 

Why care about values?

• Enables us to design a team with values that encourage high performance, for example (or whatever other end needs to be met like innovation etc.)
• Collectivism in teams leads to higher performance (research here); having a high average is good. 
• A good leader can encourage collectivism by providing a shared vision, shared goals etc. 
• Person-team/company fit (a team member's perception of their fit with the team or company) is critical to determining job satisfaction, commitment to team, team cohesion, performance etc. (research here). 

On protecting yourself from undue influence

In the last post, we saw how to build a relationship network to enhance influence. In this post, we will look at ways to protect yourself from undue influence.

Why do you need to protect yourself?

• Power can be abused (as we have seen, especially when the moral identity is weak), and it becomes important to protect yourself and your team from unwanted influence. 
• Example: Milgram and Zimbardo experiments
• Thin line between influence and manipulation for personal ends. 
• Manipulation is typically for personal ends, while influence connotes being used for the greater good. 

How do you protect yourself and your team?

• Minimize biases
• Social Proof
• Encourage a private vote, where each person writes their opinion independently. This alleviates the peer pressure. 
• For brainstorming: it's useful to get all the ideas first before discussion
• Build a coalition before entering meetings; do not be a single minority. 
• In Solomon Asch's experiments, 95% gave the correct answer when there were at least two people to support them. 
• Availability
• Keep a continuous record of events, info, that you can refer to
• Hold meetings sometime after events occur, so people have a better perspective
• Ask questions that invite counterfactuals (what-if questions), alternative explanations, counter-examples. 
• Liking
• Minimize face-to-face conversation to reduce dialogue, so you don't develop a liking bias
• Flip the influence tactic on the user 
• Social Proof
• Offer counter-examples
• Show how similar others are not doing what you are being asked to do
• Show how others have taken this approach, and failed
• Show how others have taken a different approach, and succeeded
• Liking
• Affirm the similarities, and then refocus the conversation on differences. This will help reduce the liking bias you might develop. 
• Anchoring
• Ignore the anchor, and focus on the business at hand. It might be hard to realize you are being anchored though!
• Flip the anchor from high to low, or vice-versa.
• Framing
• Ignore the framing. Might be hard to realize!
• Flip the framing from gain to loss (to encourage risk-taking), or vice-versa.
• Scarcity
• Offer counter-examples
• Show the item is not unique
• Show the item is not in limited quantity
• Show time is not limited, from prior experience
• Reframe the power relationship
• Reduce the control the other person has on you, or your dependence on them
• Identify that there are multiple bases of power: personal, cognitive, legitimate
• Use a different base of power to gain the upper hand
• For example, if your manager uses a legitimate base of power, you can try using personal base of power (for example, you are an expert in that context)

On building a relationship network to enhance influence

In the last post, we saw how to influence people without formal authority. In this post, we will see how to build high-quality relationships, that help enhance your influence.

Why are relationships important?

• Org charts only explain part of the organizational network, and the interactions that happen. 
• Controlling for performance ratings, rank, tenure, IQ, grades, school etc., the position in the organizational network predicts promotion, salary, important areas of responsibility, informal influence and power. 

What exactly is a relationship?

• Social exchange of resources/support etc. define a relationship
• Offer something to people to "earn" a network
• What are some categories of resources/support? 
• Task-related currencies
• Resources: Budget, space, personnel, information
• Cooperation: Expediting requests, approvals etc. 
• Relationship-related currencies
• Being a friend, and giving a sense of belonging
• Listening to concerns and issues 
• Providing political/emotional support 
• Position-related currencies
• Advancement and visibility: Opportunity to present to senior management
• Reputation: endorsements
• Social capital: introducing to network
• Person-related currencies
• Providing opportunities for learning: recommending a course, book etc.
• Providing self-esteem or self-actualization: gratitude, appreciation, compliments etc. 
• Use verbal framing to call out the favor you have done (there is no dollar value here!)
• Invest in a relationship before calling favors: reciprocity vs quid-pro-quo

How good is your current network?

• Power audit: Identify the 10 most valuable contacts in your current network
• Rate your dependence on them from 0-10, and their dependence on you as well
• The most fruitful relationships are those where the mutual dependence is high
• When your dependence is high, you could be taken advantage of 
• When someone's dependence on you is high, you could leverage that advantage
• Clear moral reasons not to do so 
• Socio-economically as well, when abuse of a relationship happens, people disengage (find alternatives to replace you etc.) until no more value can be extracted. 
• Look to collaborate, co-create value

What position in the relationship network is beneficial?

• "Hit by the bus" test. If you are removed from the network, would the network be able to sustain itself?
• The network depends on you for information, advice, expertise, gossip etc. 

How to cultivate a high-quality network?

• Engage with people outside the regular circle; broaden your network (typically, people only interact within the same team, physical space, building etc.)
• Have lunch once a week with someone you do not know
• Join a professional association, sports club etc. to build out your network
• Volunteer for a non-profit, for organizing a conference etc.

On influencing people without authority

In the last post, we saw the bases of power, how to build those bases, and to use power responsibly. In this post, we will examine how to influence people without formal authority.

Is there a need to influence without authority?

• Companies are evolving into matrix organizations (from earlier vertical structures). Formal authority does not work across these matrix structures. 
• Innovation is happening a lot in the white spaces between these matrix structures. 
• Companies are increasingly becoming globalized, and there is no formal authority to influence external stakeholders and partners. 

What are some tactics for influence?

• Social proof: The more people think something is correct, the more we believe it. 
• Experiments by Solomon Asch here. 
• Normative pressure: Avoid the discomfort of disagreeing with others
• Informational influence: You believe that others could not be wrong => social proof
• People become influenced without even realizing it. 
• Social proof working negatively: Research by David Phillips on suicide by suggestion here. No more news of suicide on front page. Another example is not helping in emergencies when there are 2 or more bystanders. 
• Social proof working positively: Experiments on using social norms to achieve positive outcomes here. Similar to how Opower built the company here. 
• Tactics (especially when things are uncertain, and opinions cited are from similar people)
• Show similar others are doing what is being asked of you. 
• Show that the majority are in favor of what you want. 
• On the flip side, protect yourself from social proof by asking for a private vote, or face-to-face meetings. 
• Leverage the trappings of authority
• People respect hierarchy/authority (probably because of the way we are brought up). More so, when there are moral/legal justifications. Stanley Milgram's experiments here. 
• People become an agent of another person's will, when that person is viewed as a legitimate authority, and the person is perceived to accept responsibility. 
• Use business attire to convey authority
• Show your connections to high-status people 
• Build reputation as an expert 
• Show your expertise in subtle ways (with jargon in communication, business cards etc.) 
• Protect yourself from such influence, by making sure authority is legitimate and pertinent to the situation at hand. 
• Leverage cognitive biases
• Availability bias: leverage this by creating a memorable story, instead of just showing numbers (Opower TED talk here shows coal literally).
• Show customers a prototype, instead of describing it 
• Bring in a dissatisfied customer, instead of showing declining numbers
• Framing bias: Part of prospect theory of Daniel Kahneman and Amos Tversky. We become more risk-taking to avert a loss, and become risk-averse to lock in a gain. 
• If you want an outcome, frame it as a gain over something risky, or frame it as a path of hope (though it is a gamble) over something worse. Research here. 
• Anchoring bias: When there is an initial position, subsequent discussion revolves around that discussion.
• Advantageous to start negotiation with an offer you have in mind. Subsequent discussion is around that offer. 
• Speak at meetings first, because that gives you an opportunity to anchor the discussion. 
• Leverage sub-conscious biases (fixed-action patterns)
• A lot of our actions are sub-conscious, and we do them without conscious analysis. These actions can be used for compliance, and hence influence.
• Social proof and authority are examples of sub-conscious bias
• More such biases
• Liking
• We say yes when we like someone
• See John F. Kennedy vs Richard Nixon debate, and tv vs radio listener polls.
• Physical attractiveness helps (research here)
• Drawing on similarities (same school, place etc.)
• Engage in dialogue before making requests
• Scarcity
• We want something, when we deem it to be scarce
• Example: Same cookies in smaller amounts were considered more delicious
• Emphasize uniqueness, exclusiveness (information, for example)
• Limited quantity, limited time offers
• Reciprocity
• We tend to repay social obligations 
• Example: surveys returned when sent $5 checks, instead of a promise to send $50 after finishing survey (research here)
• Offer help, resources, collaboration, both at work and outside work
• Leverage network to help other; we often underestimate our networks
• Appropriate messaging and presentation style
• Heath brothers research on sticky ideas here, and a nice TED talk that shows this in practice here
• Simple
• Unexpected
• Concrete
• Credible
• Emotional
• Stories
• Something to finish SUCCESS with :)
• Speed of delivery: 190-195 words per minute considered optimal (research here)
• Considered more persuasive, objective, and knowledgeable at this speed
• At 220 words per minute, people fail to differentiate weak vs strong arguments
• Could be a technique to handwave weaker parts of presentation
• Leverage non-verbal cues and behaviors
• High-power body poses (research here)
• 20% increase in testosterone (energy levels), and 25% decrease in cortisol (stress)
• Power posing (even in private) before a job interview helps (research here)
• Eye-contact considered good (depending on culture; research here)
• Mirroring behaviors cause a perception of confidence and persuasiveness (research here)
• Relaxed facial expression conveys power (research here)
• Hand-gestures cause a perception of competence, effectiveness, persuasiveness (research here, here, here etc.) 
• Illustrational
• Palms up or perpendicular to ground
• Firm handshake considered good 
• Use space appropriately
• Stand up, move around 
• 2-3 ft from people a good distance to maintain 
• > 5ft, and influence drops significantly (research here, here)
• More intimate conversations => better remembrance, expect longer relationships
• Use appropriate time of day 
• People are charged up early morning or after meals; consider presenting then (research here)
• Build a reputation
• Create a perception of being smart, competent => you will not be fought/challenged
• How to build a reputation?
• If you do not advocate for yourself, you will be disadvantaged
• If you do advocate for yourself, you will be perceived as arrogant, self-serving
• Solution: Get others (manager, colleagues, friends) to advocate for you
• Other people own your reputation; they boost it, or bring it down
• Control the narrative
• Give them past accomplishments to talk about 
• Lessons from experience that solve people's problems now
• Energize people around you
• Research on energy networks by Wayne Baker here
• Energizers leave you more motivated, more driven, in a positive frame of mind
• Energizing people have a lot of influence, because they elicit higher levels of discretionary effort 
• People think about the issues you raise, introduce contacts from network, do a little extra work for you etc. 
• How do you become an energizer (research here)?
• Build a relationship in regular interactions
• Show genuine concern for others
• Connect with people beyond their job roles 
• Focus on possibilities at work, not just limitations/constraints
• Asking critical questions is easy, solving problems is hard 
• Maintain high levels of physical and cognitive engagement 
• High-power poses, hand gestures, eye contact etc. 
• Listen well, pay attention, engage in dialogue etc. 

On influencing people

In this and the subsequent posts, we will look at how to influence people. Influencing people is at the core of leadership, and hence is important to leading teams. In this post, we will examine the nature of power, and how to build and leverage power.

There are two categories of power:

• Formal power: heads of state, institutions, businesses etc. 
• Informal power: Mahatma Gandhi, Martin Luther King, Occupy central in Hong Kong, Arab spring etc. 

What are the different types of power?

• Structural bases of power (research here)
• Reward power: Ability to reward etc. 
• Coercive power: Ability to force compliance, or punish 
• Legitimate power: Formal authority by rank 
• Personal bases of power (research here)
• Referent power: Influence by personal connection or shared beliefs
• Expert power: Influence by know-how (doctors, plumbers etc.) 
• Information power: Influence by possessing knowledge (real estate agents, wall street brokers etc.)
• Cognitive bases of power (research here)
• Priming: Inputs we receive from people, and how that makes us feel. 
• Beliefs: Cultural beliefs or ways of thinking, that make us feel powerful or not. For example, men are considered smarter/more powerful than women; so also with more senior people. 

What constitutes power? 

• The potential to influence 
• The ability to carry out one's position, despite resistance (Weber)
• The maximum potential ability of A to influence B (French and Raven)
• The ability to control outcome 
• The ability to control the things other people value, provides influence (Emerson)
• Asymmetric control in outcomes, when compared with others (Depret and Fiske)

What are the key characteristics of power?

• Power is relative: you are powerful wrt some, and some are powerful wrt you
• Power is contextual: Depends on the particular situation
• Power as control over outcomes varies, wrt stability, legitimacy, how formal it is etc. 
• Power varies as different people value different things 
• Power can be actual or perceptual: person and people co-create this perception

What are the benefits of power?

• Power enables action and proactivity (research here). See the blackjack experiment, and risk-taking. 
• Power reduces the need for conformity, and hence enhances creativity (research here). 
• Power reduces the feeling of burden, and challenges are seen as opportunities (research here). 
• Power promotes good health (probably because of the positive mindset?). Research here. 
• Of course, power causes advancement in career, better access to resources etc. 

What are the downsides of power?

• Power causes over-confidence (research here). See the predict-without-information experiment. Potentially, higher confidence in wrong decisions. 
• Power reduces openness to advice (research here, here). More risk that you do not take others' perspectives into account (especially if you think you are the expert) => wrong decisions. 
• Power makes us self-focused, causing us to lose empathy (research here). See the experiment on how powerful people get inspired by themselves mostly (showing narcissism). 
• When a formal leader feels powerful, they increase the amount of talk, causes lower open communication in the team (because you don't give them a chance to talk, especially for ideas that are contrary to yours creating a less safe environment), ultimately causing lower performance => less success for team => less success for you. Research here. 
• Power lends itself to abuse (Zimbardo experiments here). Remember the responsibility that comes with power!

How to build your bases of power?

• Structural bases
• Use symbols and artifacts to emphasize what legitimate power you have 
• Titles in email signatures, wearing medals/emblems, shirts with superstar designations, wearing formal clothes, calling meetings, having an office etc. 
• Make sure to not rub it in people's faces though!
• Emphasize connections to higher-power positions, individuals 
• Utilize non-monetary rewards
• Support: Providing emotional, social, or political support
• Benefits/favors: On the job help etc. 
• Avoid manipulation or coercion
• Short-term benefits, but typically do not work in the long term
• Personal bases
• Develop expertise in an area, and make it public
• Business cards, credentials, diplomas, emblems
• Develop persuasive abilities
• Leverage expertise to craft a story to persuade 
• Become a broker of info. within the company
• Info. that is rare, and that people want
• Develop charisma
• Cognitive bases
• Priming for power
• Open body postures
• Not only signals power to others, but physiologically impacts us positively
• Get feedback or reminders on positions of power 
• Find creative ways to be reminded of this!
• Recall an incident when you exercised power, and remind how you felt
• Challenge constraining beliefs/stereotypes
• Gender, age, tenure etc. 

Using power responsibly

• Power can both corrupt or enable. Research here, where people either took value for themselves, or gave back to others. 
• Depends on the moral identity: whether morality is inherently valued by the person or not
• Develop moral identity to use power responsibly!

On managing talent

In the last post, we saw how to coach people. In this post, we will look at how to create a robust talent pipeline.

What does a talent pipeline mean? 

• Talent pipeline refers to all the systems and processes required to attract talent, select them, onboard them, ensure good performance management, coaching talent, career planning for them, succession planning etc. 
• A good HR management system helps: it enables us to identify the talent in the company, their skills and abilities, the gaps in executing the strategy etc. 

How does a robust talent pipeline help? 

• Enables deployment of the right talent at the right place at the right time, in accordance with strategy. 

What comprises great talent management? 

• Being agile (move at speed)
• Being flexible
• Having good data about talent

How do we identify talent?

• A3E2 (Ability, Agility, Aspiration, Emotional intelligence, Engagement) Model
• Ability: Deliver high performance (exceeding expectations)
• Agility: Bringing to bear experience/knowledge/skills to accomplish a new undertaking
• Aspiration: The drive to accomplish something great
• Emotional intelligence: Understanding one's own and other people's emotions, and leveraging this to help move the team forward (A measure of emotional aperture here). 
• Engagement: Understanding the vision and mission, and committed to making them successful. 
• Know your talent: can you tell a story about them with the A3E2 model
• Paint a picture in another person's mind

How do we nurture talent? 

• Identify where the person falls on the A3E2 model, and identify areas for improvement
• Expose them to more people in the company (talent shines with exposure)
• 70-20-10 (on the job - coaching - curriculum)
• 70%
• New Team, associations, task forces, non-profit boards, projects, culture, process, products
• Closing down some of the above (change management skills)
• 20% 
• Coach/mentor/sponsor
• Coaching: in functional areas
• Mentoring: based on a relationship
• Sponsor: Recognize potential, provide exposure, opportunities
• Listen and observe
• Get into people's minds, understand their needs, and address them 
• 10%
• Leader as a teacher
• Brings you emotionally close 
• Learn better as a result of teaching

How do we keep talent engaged?

• Engaged employees make a significant difference (see here)
• Quality of leadership is key to turnover (differs by industry)
• Costly to replace talent
• Infuse new blood into the team all the time
• Evaluate risk of employee leaving vs impact caused 
• Why do employees leave?
• Relationships: with manager, peers
• Culture fit 
• Life/work event triggers
• Job market situation (competitive market etc.)
• What impact does an employee leaving have?
• Business impact: for the present, and the future
• Knowledge gap created
• Competitor advantage: defecting to competitor, and attracting talent there
• Damaged relationships: with company, partners, team
• A checklist to keeping people engaged
• Talk to employees about career plan, their future 
• Train them to do jobs now, and in future
• Communicate what's happening in team, company etc. 
• Recognize achievements and provide exposure, acknowledge their role in success of team
• Reward good work
• Ensure leads have A3E2
• Create positive energy: teach each other, share their purpose, things they are proud of

How do we measure the performance of our talent pipeline?

• Do an audit! 
• Periodic evaluation of what talent is available, what talent is required, and an action plan to bridge the gap (either by training, or by hiring externally)
• Succession planning
• Identify new roles needed at all levels, and which candidates can fill those roles
• Have the foresight to identify such roles, given the strategy
• Top talent should be moved to new roles at 36 months (start conversation at 24 months)

On coaching people

In the last posts (here and here), we saw how to identify and measure the performance of employees. In this post, we will look at how to develop your employees. This is important for two reasons:

• Good talent management and development directly contributes to better company performance (Jeff Pfeffer's research here? on banks; showed 30% better performance)
• Developing others makes you more successful. Being able to seek feedback, learn from mistakes, and helping others to do so makes leaders successful. See research by Gretchen Spreitzer here, and Project Oxygen from Google here. 

The ACS (Assessment, Challenge, Support) model is helpful to develop and coach employees. 

• Assessment
• What performance dimensions should we assess? Why those dimensions? 
• Know your rationale for assessing stuff. Example:
• A common dimension assessed is personality. 
• Big five are conscientiousness, agreeableness, openness, extraversion, neuroticism. 
• Research here shows, for example, the importance of big five wrt performance. 
• You are interested in performance; hence you are assessing personality traits that have a positive correlation on performance. 
• Do not use single datapoints to arrive at conclusions (stereotyping). For example, do not think INTJs are only bookworms. Use experience and assessments together to identify discrepancies, and to arrive at a person's strengths and weaknesses. 
• Use evidence to validate assessments on the market. Of course!
• Should we focus on a person's strengths or weaknesses? Both?
• Two viewpoints:
• Gap analysis: identify weaknesses, and build them until they become strengths. Makes you well-rounded, but maybe not great at a given thing. 
• This is the traditional/typical approach.
• Strengths-based approach: develop strengths until you are the very best. You will become great at something, maybe not well-rounded. 
• Example: Tiger Woods was good at some aspects of golf, and was able to leverage them to find success. 
• When strengths are leveraged, there is less turnover, better performance, and customer satisfaction (gallup results here). 
• Improve weaknesses until you meet viable thresholds. Then, focus on strengths to attain excellence (when exceptional work is done). 
• Challenge
• Stretching employees beyond their comfort zone is critical to growth and development. 
• When does an experience become developmental?
• Novelty (varies for different individuals)
• Outcome is high stakes
• Requires significant change 
• Requires working across organizational boundaries (teaches influence, rather than authority)
• Exposure to diversity in thinking 
• Identify a great developmental experience, and the discrepancies on the above dimensions (novelty etc.) with the current job. Work on incorporating those dimensions into your/employees' current work. 
• Active learning makes a challenging experience developmental. 
• Two people can learn different things, and in different amounts from the same experience. 
• Depends on the mindset a person brings to the job, the experiences during the job itself, and the reflections on the job. 
• Hence, mindful engagement (and accompanied learning) is important. 
• Feedback (especially 360 degree) while on the job is critically important to success on a challenging job. Not just at the end, but during the job, and in real-time. 
• Performance/fixed mindset vs growth mindset
• Fixed mindset causes you to confuse performance with avoiding mistakes, and to prove to others how good you are => do what you already know. Prevents you from going beyond the comfort zone. 
• Growth mindset causes us to learn from mistakes, makes us more confident, and better performant (research here).
• Note to leaders: 
• Encourage growth mindsets
• Set goals for learning/development, not just performance 
• Use mistakes to teach (of course, accountability for repetitive mistakes)
• Culture of experimentation
• Execution is good for routine. Experimentation is good for learning, innovation, and better performance in the long run. 
• Encourage experimentation, help design experiments for team. 
• Some good strategies/tactics to maximize learning from experiences:
• By oneself
• Expect and tolerate ambiguity
• Revisit learning priorities periodically 
• Keep a learning journal (helps retain learnings longer). The rationale for these blog posts is exactly this!
• Manage energy by focusing on a few learning goals
• Find a balance between learning and execution priorities
• Leveraging others 
• Get advice from someone who had similar experiences
• Seeking feedback makes others like us; we are giving them an opportunity to help!
• Encourage others to hold us accountable
• Meet periodically to discuss stressors that undermine learning
• 70-20-10 system of learning 
• 70% on the job, 20% from others, 10% formal training 
• Typically, no focus on providing the right experiences during 70% on job
• Example: identify next two experiences employee wants 
• Tailor this experience, with support from the 20% and 10% above
• Make time for growth assignments on the job
• Identify growth opportunities (within your role)
• Talk to others how they keep learning
• Look for one or two opportunities with the best ROI 
• Provides focus, and makes it easy to sell your boss on
• Create an action plan to get to the goal
• Set minimum progress goals (say, for each week)
• Prevents you from putting things off, and compounding pays off
• Support
• Create network of advisors (personal board of directors) for the team (and yourself)
• Strive to be on your team's network of advisors; help them learn and get better
• High impact of network on career success
• Quality of network 
• Contacts from diverse functions (marketing, sales, finance etc.)
• Contacts at higher level 
• Benefits
• Access to information
• Access to resources
• Career sponsorship and advocates
• Career success 
• Salary
• Promotion
• Career satisfaction
• Quality of network => greater Benefits => greater Career success
• Organizing your network of advisors
• Sponsors: Who will advocate for you?
• Mentors: Who will you go to for feedback?
• Stretch: Who will challenge you to "think different"?
• Support: Who will provide social and emotional support?
• Structured reflection for the team
• Provide opportunities to the team for reflection at key points in projects 
• Based on after-action review in the military
• Structured reflection process increased peer-rated performance, as also job offers and salary (research here)
• What does structured reflection involve?
• Reflect close to the event 
• Have a structured set of questions for reflection
• Use "what if" scenarios
• Goal is to uncover assumptions, and level-set the team 
• Helps us run through different scenarios of external factors
• Develop "if then" implications 
• Goal is to learn through different alternative scenarios
• Helps us run through the space of our own choices to find optimal point
• Establish accountability for change 
• Use 1:1 to follow up on progress of committed changes 
• Publish learnings goals to team, and engage them for feedback, and keeping you accountable 
• Coaching the team 
• Leader as a teacher
• Disseminate understanding of company's goals 
• Tie the employee's work to the company's work
• Make sure employees are engaged, and enthusiastic
• Holding the employees accountable
• Help unlock potential of individuals, as well as team as a whole
• A framework for coaching people
• Build a relationship first: listen, ask questions, avoid advice too early
• Assess the need of the employee: what are challenges and opportunities? 
• Establish goals and an action plan, based on the needs
• Co-create strategies to achieve goals: ask questions, help develop/articulate strategies and tactics employee will use. Makes employee more committed. 
• Take action: make sure there is focus, and small wins along the way. 
• Evaluate and adapt: after-action reviews, and reinforce accountability. 
• The steps in this framework are continuous (need to keep up the relationship), and cyclical (needs and goals change).
• Good questions to coach people
• What are the activities you should focus on? How do they create value?
• What result do we want? What changes to make to attain that result? 
• Focus more on results, not on actions
• What does your team need from you to be successful? How can it be done better? 
• What is your legacy? How can you change behavior to ensure this legacy?
• What prevents you from working on things you believe in? How can we minimize non-productive work?
• What are your greatest strengths? How can you leverage them? 
• How can I help? 
• A framework for creating personal change
• Focus on one or two goals; focus is key 
• Create an action plan with this table
• Time on x-axis, and Start | Stop | Continue | Who can help? on y-axis

On 360 degree feedback

This is a companion post to the one on performance management here. This one focuses on 360 degree feedback.

360 degree feedback is a popular system to measure performance, behaviors, and competencies. The idea is to get feedback to a person from all stakeholders. Used by the German army during World War II. Makes sense due to matrix structures in companies today, involving multiple locations, business units, teams etc. Sources of feedback for each question/skill/behavior/competency:

• Self
• Manager
• Peers
• Subordinates
• Customers 
• Suppliers 

Why is 360 more useful than just your manager's feedback?

• Provides diverse perspectives from the lens of different stakeholders (for example, your manager might not know how you fare with your subordinates).
• Provides greater number of feedback data points. 
• Provides an avenue for feedback that is typically not given (for subordinates for example, make sure it's confidential)
• Identifies hidden strengths and development opportunities.

A good way to understand 360 feedback is to have a grid; 45% of feedback is typically unexpected (Antonini 1996, Ward 2003), and therein lies the value. 

	Strengths	Development
Expected	Strenghts (25%)	Development areas (20-30%)
Unexpected	Hidden strengths (30%)	Blind spots (15-20%)

How is 360 feedback used?

• Formal evaluation system
• Do not make this the sole source of feedback
• Self-ratings are inflated
• Peer-ratings are inflated in absolute rating, and deflated for forced distribution
• Developmental system (companies use this 3x more than first)
• Raters/ratees typically prefer this

What are challenges with 360 feedback?

• Inexperienced raters
• No accountability for ratings 
• No consistency in ratings 
• Misunderstanding of rating scales
• Key stakeholders not included 
• Low participation rates 

What are good practices for 360 degree feedback?

• Alignment: Make sure skills/behaviors/competencies are aligned with the company's.
• Continuity: Collect feedback continuously (say after each project), not once a year 
• Validation: Make sure to not conflate evaluation and observation (Don't give 1/10, because you have no datapoints on the person).
• Reliability: Need 9 subordinates, 8 peers, 4 managers to get a good set for a 5-point scale. 
• Use olympic judging: throw out highest and lowest scores
• Use intra-class correlation coefficient: > 0.48

Positive effects of 360 degree feedback:

• Helps make us and peers better
• Come up with a development plan, and follow through on it
• 72% thought managers do not follow up on their development plan
• Managers become more receptive to upward feedback, without feeling undermined

On performance management

In the last post, we outlined how to attract, select, and onboard talent. In this post, we will examine aspects of performance management.

Why do we need performance management (when it's actually expensive to implement)?

• Dunning-Kreuger effect: Novices are more confident than they should be, while experts are less confident than they ought to be. People have inflated perception of themselves. Performance evaluation brings this to light. 
• Helps identify who deserves to be promoted, given bonuses, needs development etc. 

How does performance management help?

• Increases motivation and engagement (there is a sense of equity)
• Results in learning and development
• Insight into current talent's skills and competencies
• Better clarity on the state of company's goals
• Can be used to identify discrepancies between strategy and talent (happens often enough with disruptive companies: Blockbuster vs Netflix, Borders vs Amazon)
• Bad performance management can result in outcomes contrary to above, as well as risk of litigation. 

What are good practices for measuring performance?

• Identify several dimensions of performance (based on goals and behaviors)
• Assign scores to each (5-point scale is good: most of the variability of 7-point is captured, while a 3-point scale causes people to feel that it's harder to progress)
• Get a weighted score of the dimensions, to obtain a single overall number
• Do this often, and not just once a year.

What is the scale used for rating? Two fundamental approaches: 

• Absolute rating scale: all employees are compared to a standard
• Comparative rating scale: employees are compared to each other 
• Stack rank
• Order by the single overall number listed above
• Pair-wise comparisons is one way to stack rank: order by number of wins
• Forced distribution approach (10% low, 70% middle, 20% high)
• Jack Welch thought this was kind :) For employees in the low bracket:
• Gives them opportunity to improve
• Gives them a head start for job search
• So, which is better?
• 8% better performance with comparative ratings (research here)
• We work harder when comparisons are done
• Partly because incentives are clear cut between different levels
• Top performers better rewarded, and more motivated 
• Companies do not fare well switching from absolute to forced distribution
• Initial performance improvement, then drops precipitously 
• People get demotivated after the initial rounds of appraisal
• Forced distribution could result in:
• Lack of collaboration (drag others down to get ahead). Seen as a zero-sum game, and highly political process. 
• Unethical practices like cheating, cooking numbers, sabotage etc. 
• Abets extreme risks, especially if rewards are skewed to top 
• Perception of inequity (especially when the curve causes you to push down people), and accompanied low morale
• Another popular system is the 360 degree feedback; you can see a detailed post here. 

What are some rater errors in performance management? 

• Availability error: We overemphasize very available information (typically tends to be recent, or highly marketed). 
• Make sure you track performance over the entire year 
• More frequent feedback helps
• Leniency error: Tendency to inflate errors (especially with absolute rating scale). 
• We want to be liked; reluctant to deliver bad news, avoid escalation
• Central tendency: avoid extremes (no bad news for low performers, no promises for high performers)
• Top performers do not get separated easily 
• Attribution errors: Needlessly stringent ratings, and development plan might not work because of underlying reasons like lack of business unit support etc. 
• Sample size errors: Not having many data points results in extreme judgements. 
• Halo error: Having a good perception in one dimension causes us to rate a candidate good on several other dimensions. 

How to handle rater errors?

• Rater training
• Educate about rater errors, so errors are minimized
• Have a facilitator walk raters through examples, and point discrepancies
• Frame of reference training 
• Establish a common standard of what is good/bad/ugly
• Research here shows what errors are reduced by:
• Rater training: Halo, leniency, better rating accuracy
• Frame of reference training: better rating and observational (how we measure performance) accuracy

The effect of stereotypes

• Gender 
• Women are penalized, especially when they are below 20% of population (research here). 
• Women are perceived more negatively than men when they are autocratic (because they are "supposed" to be nurturing). Gives lesser options to women in terms of styles of leadership. 
• Women receive lesser salary than males. 
• Racial 
• African-Americans receive lesser salary increase than whites (research here)
• Beautiful
• People with "attractive" faces get 3% more salary (research here)
• Players with symmetric faces receive higher salaries
• Order of magnitude higher bias than gender
• Halo factor plays a role here
• Framing the conversation in terms of "Group A has an unfair advantage over group B" helps move discussion forward (as opposed to saying "Group B has a disadvantage over group A"; see research here).

On hiring people

In this post, we will examine how to manage human capital. Managing talent is typically top of mind for most CEOs (along with operational excellence, innovation etc.) Managing talent involves:

• Attracting talent
• Strategy => What positions are required? => What kind of talent is required?
• How do we go about finding this talent? 
• Have a plan! Here are a few dimensions to think about:
• Short-term or long-term (consultant vs employee)
• Current outstanding projects: what are the gaps?
• Attrition (depends on industry)
• Demand forecasting: understand what will be needed, given the strategy and potential changes to strategy.
• Supply forecasting: understand what is available internally and externally. It might turn our your existing folks have all the needed skills! Human capital management systems help with this. 
• What are we looking for in talent?
• Skills
• Experience
• Abilities
• Behaviors
• Expertise
• Special requirements (mobility, hours, environmental concerns)
• Build a recruitment brand (that can attract top talent)
• What's your value add (vision/mission etc.)?
• What differentiates you from competition?
• What are you/want to be known for (values, processes, innovation etc.)? 
• What's your value add to your employees? 
• Any other special considerations? 
• Examples of company brands
• GE: Creation brand (makes CEOs)
• Google: Environment brand (good place to work with great people)
• Walmart: Price brand 
• Apple: Innovation brand 
• Tiffany: Prestige brand 
• Unicef: Legacy brand (leaving the world a better place)
• Everyone/Everything should be aligned to support this brand
• Hiring managers 
• Recruiters
• Employees
• Elements of a recruiting plan
• Who is needed? What positions? 
• What does the position entail? What needs to be done?
• How to go about this process? 
• Recruiters/hiring managers should be able to 
• Attract talent 
• Explain things clearly once talent is in
• Clarity on who the decision maker is
• Where are we going to find such candidates?
• Internal
• External 
• Recruiters/headhunters/gamification (uberdrive)
• Create robust pool of diverse candidates
• Avoid groupthink; happens if we select with our biases
• Jobs website, other websites (linkedin, university), referrals, campus recruiting, your suppliers
• When should we find them? What's the timeline? 
• Selecting talent
• Testing is good
• IQ is a good first-order predictor of high performance (research here)
• But considered to have cultural bias
• And reluctance in western cultures for these tests
• Interviews and work samples viewed better  (research here)
• Ensure positive experience throughout
• Offsets anxiety caused by testing 
• When candidates believe selection process is good, they perform good (research here) 
• Candidates say good things whether or not they are hired 
• Behavioral interviewing is next best predictor of high performance after tests
• Talk for 10min, hear for 50min
• Ask candidates to describe past experiences
• Teamwork
• Creativity
• Conflicts
• Failures
• Learning
• Such questions should allow us to gauge:
• Ability
• Learning agility
• Aspirations 
• Engagement in work
• Emotional intelligence
• Best done by pairs of people (provides two perspectives on each discussion)
• Debrief after interview, and have a rating scale
• On-boarding talent
• Important avenue to assimilate, impart culture, set a positive tone
• 4% leave on first day, 22% turnover happens in first 45 days (Josh Bersin @ Deloitte)
• Assigning a buddy helps
• Full body on-boarding
• Welcome gifts, material, people to meet etc.
• Periodic checkins: day 30, day 90, day 180
• Retaining talent
• Letting people go 

What managers do?

Here are some quick thoughts on what managers should do:

• Setting vision and strategy
• Communicate/reinforce
• Setting goals accordingly
• SMART goals
• Achieve high performance
• Using rewards
• Giving feedback
• Understanding what motivates employees
• Influencing people for positive outcomes
• Managing talent
• Hiring 
• Retaining
• Letting go
• 
  

On high performance - Performance appraisal

In the last post, we discussed how to achieve high performance with the right use of rewards. In this post, we will discuss coaching for high performance, with performance appraisals being a critical component. Performance appraisals have three purposes:

• Evaluate
• Develop
• Motivate

When receiving negative feedback, people tend to shut down (as a self-defense mechanism to protect self-esteem). So, it might be good to break Evaluation and Development into separate sessions.

Why are performance appraisals so difficult?

• Cognitive biases on both sides makes it difficult to reach a shared understanding
• Fundamental attribution error
• We attribute success to our abilities/motivation/hard work etc., and attribute failures to the team, the environment etc. AND at the same time, 
• We attribute others' success to their team, their environment, support from company, while we attribute their failures to their lack of ability, hard work etc. 
• What to do about this?
• Be aware of this bias, especially when communicating evaluation.
• Make conversations more objective; collect objective metrics in preparation for feedback. 
• Illusion of transparency
• We think we are more transparent than we usually are. We assume/expect others to know, even when they really do not. 
• Especially happens when experts talk to non-experts; the curse of knowledge. The knowledge-gap is so great that it takes active effort to bridge. 
• Elizabeth Newton's experiment on guessing the song from a tune. 50% thought others would predict the song, while only 2.5% actually did. 
• What to do about this?
• Listen actively to what the other person is saying.
• Ask questions. 
• Ask the other person to repeat to make sure they understand.
• Self-fulfilling prophecy
• Rosenthal and Jacobson's experiment with school children. When people thought some students selected randomly were gifted, they actually performed better. 
• If we believe someone will be successful, they will be. If we believe they will fail, they will.
• Why? We invest time and effort if we believe. 
• What to do about this?
• Focus on strengths and unique skills, and develop them.
• Reserve negative judgement, especially when not enough data points. 

What are the dangers of not doing appraisals?

• People who need feedback, do not get it.
• Leads to incongruity of expectations.

Here's a good checklist for performance appraisals:

• Don't wait to provide feedback. Give feedback as close to the issue as possible. 
• Focus on behaviors, not on personality. Calling someone lazy is not useful, identify when they have missed some deadlines etc. 
• Focus on few key behaviors. When there's a laundry list, it's hard to improve on everything all at once. 
• Be very specific about the changes you want. Do not sandwich or sugarcoat. 
• Make sure the other person understands you accurately. 
• Follow up with positive reinforcement, when the other person is responding favorably. 

How often should feedback happen?

• As often as needed! Don't wait for an entire year to provide feedback. 
• Actively seek feedback! 
• When leaders seek feedback, they are seen as being more creative, open, caring. 
• Not seen as weak or vulnerable, like we usually assume. 
• Helps get more accurate picture of how others perceive us. 
• Do not seek affirmation; it reduces perception of effectiveness of the exercise (and remember, this becomes self-fulfilling). Be open to critical feedback. 

On high performance - Rewards

In the last post, we saw the factors that motivate people, and how to apply that understanding to motivate teams. In this and the next post, we will examine two means to promote good/useful behaviors (and thus, high performance): rewards and feedback.

Aligning rewards with good behaviors is important for two reasons:

• Provides reinforcement: encourages good behaviors, and dissuades bad behaviors. 
• How many types of reinforcement are there? (research by Ivan Pavlov and B.F. Skinner)
• Positive reinforcement: Good work begets good rewards
• The best type of reinforcement; gets results consistently and continuously
• Negative reinforcement: Good work begets removal of pain
• Punishment: Bad work begets punishment
• Generates resentment, turnover, sabotage, stress
• Behavioral changes potentially unsustainable 
• Use with caution; can be used effectively 
• When you publish guidelines to eliminate bad behaviors
• Racist remarks etc. 
• Apply as soon as transgression is made, and communicate rationale
• Provides encouragement/incentives to employees, and helps maintain high motivation levels. 
• Fairness
• Why is it that this maintains high motivation levels? Let's say we rewarded arbitrarily; it would offend our sense of fairness (because we tend to do social comparisons), and we feel unhappy. 
• See the experiment on capuchin monkeys here. 
• Another example is the outcome at Gravity Payments where a minimum wage was set high enough, and high performers left because they thought it was not fair. 
• See the concept of equity by John Adams. People seek to minimize the ratio of input/rewards, and are "hardwired" to compare their ratio with others. 
• Lack of fairness has several negative consequences
• Burnout
• Stress (directly linked to heart diseases etc.) 
• Absenteeism
• Theft
• How to address a situation where the perception of lack of fairness occurs?
• Get people to shared understanding with respect to inputs (experience, education etc.) 
• Make sure inputs are relevant (effort is not, outcomes are). 
• Make sure rewards are what the person wants (recognition wanted vs pay given is not good)
• Communicate when there is temporary inequity (for example, communicate when only half-pay is given; see research here).
• Make sure to maintain equity in the long run, of course!
• Folly of rewarding A while hoping for B
• We also need to make sure we do not mistakenly/actively reward bad behaviors. This is the folly of rewarding A while hoping for B. Some examples:
• Rewarding short term deliverables, while hoping for long term goods (stock market mentality)
• Stack ranking that dissuades collaboration (bring down others to look better)
• Punishing mistakes/failures, while expecting innovation 
• Rewarding only individuals, while expecting teamwork
• Rewarding meeting goals, while expecting stretch goals (incentivizes people to set small goals)
• Rewarding "yes boss", while expecting candor
• Rewarding patents, while expecting innovation 
• Why does this folly happen?
• Fascination with instant gratification: we want to reward short term success, even though it may or may not be relevant to long term success.
• Fascination with objective metrics: such metrics are hard to devise for long term success, while things like #patents are easy to measure. 
• How do we make sure we do not do this folly?
• Know what behaviors you are rewarding, and identify misalignments. 
• Correct the reward system, to reinforce good behaviors, and dissuade bad behaviors.

Another fascinating question is when and how should rewards be given out?

• Traditional schemes are fixed interval (after certain time), or fixed ratio (after certain amount of work delivered)
• Variable interval, and variable ratios work better (one of the reasons people are addicted to slot machines). 
• Variable interval > fixed interval
• Variable ratio > fixed ratio (see example of grades who got a bonus at variable ratio, even though total compensation is same)
• Ratio schedules > interval schedule. Turns out to be good, but also allows you to reward work done as opposed to effort put in over time. 

On motivating your team

A team can do wonders, when it is highly motivated. There is research (gallup survey in Oct 2013) that shows that when teams are motivated, the firm's profitability increases (20%), productivity increases, quality increases, employee turnover/absenteeism falls (60%). However, the same survey shows that only 13% of employees are actively engaged with their work (63% were not engaged, while 24% were actively disengaged).

What do actively engaged people do to make a difference?

• They are willing to work hard, often working or thinking about work outside work hours. 
• They learn all they can about the work, and push the envelope (improving efficiency, or delivering innovations). 
• They are craftspersons in their field, take pride in their work, and that shows in the quality of their work. 
• They are willing to help the team be more successful. 

So, given the above, how can we get people to be more engaged? It would be good to understand some research and models of motivation, to see what works. There are three models we will look at:

• Maslow's hierarchy of needs (1940s)
• Here's the hierarchy; the claim is that only when one need is met, one thinks/cares about the next level. 
• Physical needs (food, clothing, shelter)
• Safety and security 
• Belonging (being part of a community)
• Esteem (a sense of self, confidence, of having unique skills and abilities)
• Self-actualization (fulfillment of one's skills/abilities)
• It could be that individuals rank this in a different order (belonging more than safety, for example), but the idea is to be aware of these different needs of people, and to use this understanding to motivate different people accordingly. 
• HermanMiller did a similar study across cultures, and found 6 common needs: Security (safety in Maslow's terms), status (esteem), achievement (esteem), autonomy (esteem), purpose (self-actualization), belonging (belonging). 
• If values can be learnt (religions tend to influence values, and there are several religions), how uniform are values across cultures. This research (of ~ 30000 people) shows that across cultures, there are 10 core values ranked in this order: benevolence, independence, understanding/wisdom, security, conformity, achievement, pleasure, excitement, tradition, and power. 
• Millennials value achievement more than security. 
• Inter-generational conflicts decreases productivity by 12% (cref this). GenX, GenMe tend to value extrinsic motivators like bonuses and leisure, more than intrinsic motivators like meaning at work etc. 
• Hertzberg's two-factor model
• Hygiene factors and motivators
• Hygiene factors prevent disengagement, are table-stakes
• Company policy/admin, relation with supervisor/peers/subordinates, work conditions, salary, status, security, personal life
• Motivators actually enable satisfaction, and higher productivity
• Achievement, recognition, work itself, responsibility, advancement, growth
• Deci and Ryan's extrinsic and intrinsic motives
• Extrinsic motives: money, badges, titles, fear of failure, gold stars etc. 
• Intrinsic motives: autonomy, belonging, curiosity, love, learning, mastery, meaning
• Which is more important? In what context? 
• This research on sales people showed that intrinsic and extrinsic motives explain 49% of performance, and intrinsic motivation had 44% more impact on performance than extrinsic motivation. 
• Intrinsic motives can be undermined by focusing only on extrinsic motives. This research shows that while extrinsic rewards can give a short term boost to performance, they do not result in long term increase in performance. Intrinsic motivation is key to achieving long term performance. 
• This research shows that while intrinsic motivation boosts performance (even with no financial reward), direct extrinsic rewards do not go much beyond, while indirect extrinsic rewards (paying for engagement, not outcome) does the best.
• Intrinsic motivation works better for quality, while extrinsic motivation works better for quantity (research by Cerasoli et. al. here). 
• Meaning of work is often considered the most important intrinsic motivation. How can we make the employees feel their work is important? 
• Tie their work to the organization's work (not just a cog in the wheel)
• Remind them of the beneficiaries of their work (radiologist example here, and doctors/nurses washing hands more when patients are involved here).
• It's interesting though that intrinsic motivation can cause dissatisfaction, when you feel a commitment despite the downsides. Some research on zookeepers here. 

Now that we know what motivates people, it's good to be aware of common pitfalls in applying this understanding:

• Social projection: thinking the others are like you. The research here shows that we assume our group shares our values to a greater degree than is true, and that we assume other groups share less commonality than is true. 
• Extrinsic rewards do not linearly increase happiness. This research shows that after a certain point, money does not make us more happy (probably because we compare with others even after reaching a certain class). 
• Using inappropriate rewards for a given context. Extrinsic rewards are more useful for routine jobs; intrinsic rewards are better for innovative jobs (refer to the indirect extrinsic rewards mentioned above). 
• Customizing rewards to the point of being perceived as unfair. Given the above, the natural inclination is to customize rewards to the values of each employee. Need to ensure that rewards are commensurate with contributions, and that they are equitable.