Archive for category business psychology
When an organization moves from a “Go-Go” phase to the next level, “Adolescence” (Adizes, 1999), the founder is faced with new organizational challenges. In the Go-Go phase the organization was making money, had few administrative departments, had few polices or formalized strategies in place, and had little management structure with defined accountabilities and authority. During the transition it is not uncommon for the founder to disengage then re-engage and disrupt the transition plan and team. This may be due to a number of factors from a need to be in control, disagreement with the policies and procedures being put in place, and regression, to the “that is not how we got where we are” syndrome, anxiety, distrust, and a sense of uncertainty about the future.
The impact on organizational performance and individual performance can be significant. First, the organization will be less profitable as it moves into adolescence almost by definition. The reason is that administrative staff such as HR, mid-level management, and other support staff are being added to move to the next level, and therefore, profitability percentages will drop. Second, the organization may drop in other areas of performance such as customer service and responsiveness because this value and behavior now needs to be systemized and made scalable where before it used to reside in individual staff and in the group norms as a smaller organization. Productivity definitions may change during this transition. When the organization was smaller, productivity could be measured by a few variables rather than a multivariate approach. As the organization gets larger, a multivariate model may emerge.
Individual performance can also be negatively impacted during this transition. Staff who had the skills to perform successfully in a smaller organization may not have the skills to perform in the larger organization. Changing them out or redefining their roles may result in stress for all involved as they were valued employees and now they may not be perceived that way by the new management. New employees may start under-performing as well because they came in full of hope and high expectations and then experience an organization that is giving mixed messages. The psychological impact of this is that these employees may start to be discouraged; feel helpless, angry, anxious, or depressed; lose focus; or engage in counterproductive communication and behavior, among many other negative psychological states.
As your organization goes through transitions like this, it will be helpful to keep these elements in mind when you encounter performance problems. Having a testable hypothesis is the first step to managing the changes.
Have a day filled with equanimity,
Robert A. Mines, Ph.D.
CEO & Psychologist
Adizes, Ichak. (1999). Managing Corporate Lifecycles. Santa Barbara, CA: Adizes Institute.
I had the opportunity to observe an organization as its leader became seriously ill, recovered, then got ill again (different problem, serious again). While this was going on the organization was at a standstill on the strategic and executive level. Operationally, it still delivered what it was supposed to. But in the meantime, the board kept waiting for the CEO to get well. Strategic marketing initiatives were put on hold, revenue was diminishing, cash reserves were being used at an unprecedented rate, and the organization was eventually on the brink of extinction. This organization had been in existence for over 40 years. The board was long-standing. Staff had been with the organization for extended periods exceeding 8 plus years. So how did it get to this point? What were the psychological factors that could account for this? Could something have been done sooner?
Wait until so and so gets better. We will get back on track then…. (This did not happen).
Diffusion of responsibility. Staff did not have the authority or accountability, and as the Board of Directors was volunteers, they had no day-to-day authority. Everyone kept waiting for someone else to do something. Finally the President of the Board did step in.
Misinformation to the Board. The Board received information that key reports were completed and that action was being taken. This information was incorrect. Nothing had been done and the board had not done “truth through verification.”
Negative momentum in the community. The community resources were being compromised by rumors that the organization was going out of business which then created more momentum for it to go out of business. Damage control was started months after it could have been.
Not my problem. Ultimately, many individuals said, “It’s not my problem.” They quit the Board to allegedly avoid liability, did not roll their shirt sleeves up to help raise revenue, and became indifferent or apathetic.
Could this have been avoided? Absolutely. Hindsight is always 20/20. What is useful about this case study is for all of us to start pressing earlier for the plan B, C, or D when a leader becomes ill. It is important to have sufficient bench strength for staff to step up when a leader is ill, even if they are coming back. How does your staff and organization measure up?
Have a day filled with kindness,
Robert A. Mines, Ph.D.
CEO & Psychologist
MINES’ communication theme for July is “Fortifying the Family.” For BizPsych, this theme in particular brings up some fascinating thoughts regarding organizations and organizational development/business psychology. Many of our clients like to think of their businesses or their teams as a “family.” Typically this is when things are going well or were in the past – “we used to be like a family.” I suppose that means that when things are not going well it is like a dysfunctional family, although since none of us really want to associate with that we tend to say “we are no longer like a family,” or “we have lost the family atmosphere.” Even in these references it is clear that a business may feel like a family, but is not a family. In this post, I would like to explore some of the important differences and similarities between family and business.
First, what are the essential differences between family and business? Here is a quote from The Family Business Magazine (Summer 2011 issue):
“… families by definition are the bearers of legacy. Their mandate is to perpetuate and teach familial characteristics – beliefs, morals, assumptions, standards, history, trauma, intimacies, triumphs and failures of past generations. The difficulty lies in the dissonance between these characteristics and what is required for success in the business world.”
The current Wikipedia definition of “business” is as follows:
“A business (also known as enterprise or firm) is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, in which most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit or state-owned. A business owned by multiple individuals may be referred to as a company, although that term also has a more precise meaning.”
These are vastly different basic foundations. What is the mission or purpose in a family as opposed to the mission of a business or organization? In my view, a healthy family provides support to each individual within the context and relationship to the roots and primary environment of that individual. One of the essential purposes of the family is to create a bond and environment that supports the success of the individual and helps perpetuate a legacy to the future. In the case of a business or organization the primary purpose is to foster the success of the business in meeting the need of its clients or customers. The ultimate goal of the business may be to make profit, or in the case of nonprofits, to maintain and grow the capacity to serve the needs of its clients and the community.
This essential difference leads to what is targeted as a primary difference between family and business and that is the principle of loyalty. Interestingly enough, this is a principle that has shifted significantly in business in the last thirty years. It has become evident that businesses cannot and do not maintain loyalty to its members (i.e. staff) at the expense of the “bottom line.”
“But saying your business is like a family raises expectations that most companies are unwilling to meet. As former New York Knicks coach and basketball commentator Jeff Van Gundy told the New York Times concerning the rash of NBA coaches already fired this season: “It’s always intriguing to me that everyone preaches we’re all in this together, we’re a family. The difference is we are in this together only when it’s going good.” (Fredric Paul InformationWeek December 17, 2008 05:05 AM).
One of the first things families do when they bring a child into the world is to sacrifice one of their most precious assets i.e. sleep for the benefit of their newborn. That is loyalty. The marriage contract typically asserts, “in sickness and in health… till death do us part.” Families stick together “through thick and thin.” Of course this is not always nor should always be the case. Couples divorce, family members become estranged, and teenagers sometimes get “kicked out of the house.” However, this is typically not because of lowered productivity, substandard performance, or to maintain profit margins. We have recognized that in many cases maintaining loyalty over excellent performance can be extremely damaging to business and the organization. Often times in families, loyalty over performance yields positive results for both the individual and family system.
Then there is the middle ground i.e. family business. Much has been written on this topic as well. Several of my consultant friends specialize in family business consulting. Herein may lay the key to understanding some of the essential differences. Typically the articles on this subject differentiate private business from family business. Here are some of the differentiating characteristics that have been identified between family business and “private business:”
- Different Goals: Many times small business owners may have different goals other than their company’s success. There may be certain charities which the owner feels strongly about, but, cost the company more than it can afford. Publicly owned companies are not in position to do this, because of legal reasons, and negative criticism that they will receive.
- Nepotism: Sometimes the owners of family businesses feel an obligation to hire family members rather than hire someone else who may have better credentials. This causes many problems, and can even cause a company to go out of business. There are sometimes fights within the family.
- Less Profit Margins: Public companies have an easier time producing mass number of items, and thus they can get larger profit margins. Mostly the profit margins are twice as large in public companies.
- Less Care about Profits: Many small business owners, specifically family businesses, have a tendency to search for non financial things. They often try to do things that don’t bring profits to the company. They will often try to lower their price to make there customers happy, even though they can’t afford to do so which is not the right business strategy.” (John Elton Article from articlesbase.com)
The article goes on to identify some of the strengths of family-owned businesses:
Strengths of family-owned businesses:
- Teamwork: In family businesses members don’t doubt other’s intentions because they are related, and thus working for a common purpose. In public companies however they may try to do things that hurt others in order to get ahead and gain promotion.
- Greater Sacrifice: In family businesses family members are often willing to work longer hours with efforts for less pay, because they know that they are doing it for the family, and that they are making the company stronger for their kids and grand kids.
- Loyalty: In family businesses it is rare to find turnover, specifically in management, which makes it easy to keep employees for a long period of time, who know what they are doing. In non family businesses employees/managers will often go to a different company for better services and salary and may start off their own company in direct competition to yours. Even if a family member does decide to quit their job, it is very unlikely that they will compete against you.
- More Concerned Employees: In small family businesses the employees are concerned about their company’s success rather than their own success. In public companies the employees often just expect to work for a 40 hour workweek, and then go home, not thinking about their job until when they go back the next Monday. The commitment difference is seen from this.
It is necessary that small businesses recognize their strengths and weaknesses so that they are able to move in the right direction. (John Elton Article from articlesbase.com)
In sum, there are many essential differences between a “healthy family” and a “healthy business.” It is important to keep these essential differences in mind lest we create expectations that are not realistic or helpful to the business (or to the family for that matter). It is also important to recognize some of the similarities and characteristics that are constructive in both families and business.
Consider these tips for communicating with aging parents from ones of MINES’ July newsletters: (Source: Parlay International ©2010 from MINES and Associates’ July 12, 2011 Weekly Communication)
- Set aside appropriate times to talk
- Talk about one thing at a time
- Equal time for talking and listening
- Avoid blame
- Avoid exaggerations
- Focus on problems and solutions
Hmmm, this is an article about family, but seems to identify some of the communication tips we often share with managers and employees in business. Seems it pays to be mindful of both the similarities and differences between family and business – whether private, public, or family-owned.
Patrick Hiester, MA, LPC
Vice President, BizPsych
We had an interesting discussion in our BizPsych meeting today. We were reviewing a recent organizational intervention and attempting to list the number of concerns that we had addressed and helped this particular business with. The list kept growing and was getting rather long when it occurred to me that a central theme had developed – most concerns had to do with helping the business acknowledge and address conflicts that they were avoiding. In fact, this seems to be the case in many of our interventions. We encounter various organizations facing:
- Potential harassment
- Workaround accommodations
- Money left on the table from dropping the ball
- Potential lawsuits
- Bypassing communication
- Difficulty managing change
On some level, just like individuals and families, organizations are conflict avoidant and can waste innumerable dollars by not addressing these uncomfortable issues from the start.
With our theme of “Worry-Free Finances” for the month, my first thought was, “Finances are never worry-free in companies and organizations.” So, on a personal level, what can make finances “worry-free?” It’s precisely taking care of business by being proactive in managing ourselves and our finances so they don’t end up becoming a “worry.” In doing so, we must address the conflicts or potential conflicts that lead to financial worry and potential ruin. We can’t ignore:
- The harassing bills
- Working within our budget
- Leaving savings and earnings on the table
- Financial protections
- Bypassing communications
- The unexpected
Look familiar? Perhaps not exactly the same, but ultimately, we help organizations address the pain or conflicts they continually avoid or just cannot solve on their own. Just like in our personal lives, the more proactive we are in addressing these potential conflicts, the more “worry-free” our financial states remain. When organizations call us in for proactive and preventative projects, the result tends to be much less expensive than it would have been should they have waited to search for solutions until things “blew up.” Even if they wait and call us in just at the last minute, the outcome is still far less costly than if an incident were to occur, such as: law suits, turnover, public scrutiny, bankruptcy, etc. We have saved organizations huge sums of money by helping them address conflicts prior to these potential occurrences. The irony is; we don’t always know how much we have actually saved them, because fortunately, these things don’t end up occurring.
Moral of the story: If you want “worry-free finances” in organizations, don’t avoid the looming conflicts.
Patrick Hiester LPC
Vice President of BizPsych
MINES & Associates
How to make 2011 a successful year for you and your employees
Dr. David Javitch wrote a wonderful article published at Entrepreneur.com that I would like to share. As resolutions/goals are a popular topic at years end, his highlights can give a a great foundation for setting goals relative to your employees.
For example, he mentions that cross training employees can help motivate them and allow them to assist collegues in completing new tasks. Their value and and responsibility will naturally increase while motivating them.
You can find the entire article and the other tips here.
Posted by Ian Holtz, Manager at MINES and Associates.
Posted by minesblog in Anxiety, BizPsych, business psychology, C Level, Centering, CEO, education, Employee Assistance Programs (EAP), Leadership, Managed Behavioral Health Care, Management, Meditation, Mines and Associates, Parenting, Psychology of Performance, Stress management, substance abuse, Supervisor, The MINES Team, Tips, Work Performance on October 21, 2010
Gina Kolata wrote an outstanding article in the New York Times on the psychological and behavioral aspects of the psychology of performance that I want to pass on to you. She has a number of points that are useful in business as well as personally.
Have a day filled with equanimity
Robert A. Mines, Ph.D.
CEO and Psychologist
Posted by minesblog in Alcoholism, Anxiety, BizPsych, business psychology, C Level, Centering, CEO, depression, Employee Assistance Programs (EAP), Leadership, Managed Behavioral Health Care, Management, Mines and Associates, Psychology of Performance, Stress management, substance abuse, Supervisor, The MINES Team, Tips, Work Performance on September 20, 2010
In his book The Mindful Therapist, Dr. Dan Siegel discusses the role of mirror neurons in actions that have a perceived intention behind them. He stated that the mirror neurons function as a bridge between sensory input and motor output that allows us to mirror the behavior we see someone else enact (p.36). Practically this means that when we see someone drinking from a glass, the mirror neurons become activated (firing off electrical currents called an action potential). If we were to drink from the same glass, the same specific neurons that fired when we saw someone else drinking also become activated. Dr. Siegel said “We see a behavior and get ready to imitate it,” (p.36).
The implications of this line of research are significant for performance. For example, if you watch a movie with alcohol being consumed and you are in recovery, now you have internal neuronal firing similar to drinking the alcohol yourself. Now you have to override the neuronal firing with “white-knuckling it,” or better yet with mindful awareness, or you will increase your probabilities of a relapse.
The upside of this research is that seeing others perform a behavior successfully – mentally rehearsing the image – would theoretically strengthen the neuronal firing and increase the probabilities that you will execute the behavior successfully. This concept is foundational to performance coaching. As coaches, therapists, and bosses we need to think about our current training techniques and how they incorporate watching, rehearsing, and doing as part of the sequence.
Have a day filled with Mindfulness,
Robert A. Mines, Ph.D.
CEO & Psychologist
MINES and Associates
In our consulting through BizPsych (www.BizPsych.com), organizations ask us to assess and intervene with vertical relationship conflicts as well as cross-departmental conflicts on a regular basis. These conflicts are often rooted in unclear accountability and authority for the C-level, vice-presidents, managers, supervisors and front line producers. This creates significant performance and execution problems throughout the organization.
Elliot Jacques, in his numerous publications defined accountability and authority for management at all levels. Accountability and authority establishes where people stand with each other. They determine who is able to say what to whom, and who under given circumstances must say what to whom. They establish who can tell who to do what, especially, in the managerial hierarchy, if one person is being held accountable for what another person does or for the results of what the other person does.
Accountability and authority define the behaviors that are appropriate and necessary in the vertical relationships between managers and their subordinates, and in the horizontal, cross-functional relationships between people. The vertical relationships are the means by which the work that needs to get done is assigned, resourced, and evaluated; cross-functional relationships are the means by which the flow of work across functions gets processed and improved through time.
He noted that it is absolutely imperative that organizational leaders be clear not only about their own decision-making accountability, but they must also make it equally clear for each and every manager below them in the organization. All of these managers must also meet regularly in two-way discussions about major issues with their immediate subordinates, in order to get their help in making decisions for which the manager alone must be accountable. In discussions between managers and subordinates, it is always the manager that is ultimately accountable for decisions. Even when the subordinate has more knowledge than his or her manager on a given matter and tells the manager what he or she thinks should be done; if the manager accepts the subordinate’s view then it becomes the manager’s decision. There will be times in an organization’s growth or life span when a manager may have multiple roles/levels that they are accountable for. The manager may be a manager, a supervisor and a front line producer on a given day if the department or work group is small enough or does not have the resources to accommodate separate levels and roles. This is a situation referred to as “down in the weeds”, “wearing many hats”, or “collapsed strata (time span).” This is not ideal; however, at times it may be the best we can do.
How does your organization define accountability and authority at each role? What impact has the clarity or lack of clarity had on your organizations effectiveness and performance?
Have a day filled with equanimity,
Robert A. Mines, Ph.D.
CEO & Psychologist
Mines and Associates