JWI 510 Leadership in the 21st Century - Week 5 Summary - 5/6/12
This was another extraordinary week of learning.
(1) I am now aware of the existence of the mind traps and the defense techniques to use and steer clear of them. In particular, due to my "i" type DiSC style, I understand I will
especially need to look out for Anchoring, High confidence, Status Quo,
Confirming evidence traps.
(2) I am reminded by Jack Welch's video that Work is and must be fun.
(3) The Vroom Yetton model gives a powerful and systematic framework to make important decisions as a leader. It helps with recommendations to decide by myself or consult with some
of the members or to allow the Group to own the making of the decision.
I also recognize that the model is not perfect and there will be times
when I must trust my gut instinct and decide on what is in the greater
good of the organization.
(4) As a member of Team C, where members are helping to bring out the
best leadership qualities in each other, I am learning how to approach
the Chattanooga ice cream division's turn around.
This is clearly one of my best learning experiences ever.
Dr DP
Leadership in the 21st century - Week5 Summary 5/6/12
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This is a starting point for a long journey of self-understanding encouraged by the Jack Welch MBA program
I. Problems in Effective Decision Making
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Mind Traps exist - they arise from mind tricks such as misperceptions, biases, assumptions
In isolation or in combo they can trap and trip you and influence the choices and estimates you make
Be Aware & Take Right Action
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=> uncover errors in thinking & eradicate distortions in the way the mind works
=> judge carefully and make effective decisions
(A) Interesting to see my propensity to the following and how they can actually cascade with devastating long term impact:
Anchoring Trap - High
Overconfidence Trap - High
Confirming Evidence - High
Status Quo Trap - High
ie due to my "i" personality, I may tend to get anchored early on to a
position, being overconfident I look for confirming evidence, and latch
on to status quo.
(B) Also interesting to understand my spirituality and upbringing that make me less prone to the following traps:
Sunk Cost Trap - Low
Framing Trap - Low
Prudence Trap - Low
Recallability Trap - Low
Here are my observations based on John H, Ralph K, Howard R et al, HBR, Sept 1998
"Hidden Traps in Decision Making"
(1) Anchoring Trap - Mind disproportionately weighs first impression, estimates, data
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- view a problem from multiple points of view
- Think on your own, don't be anchored by others' ideas
- Be open minded; seek opinions from different people
- avoid anchoring your advisors, consultants, counselors
- be wary in negotiations
My Tendency to fall into this trap : High
With my "i"type personality I tend to seek opinions from others in my
group and network and try to think from multiple points of view.
Though I think deeply on my own, my personality type therefore tends to
put me at higher risk of getting anchored by others' ideas.
There are at least three major decisions I took in my life that steered me in radically different directions.
Had I been aware of the Anchoring Trap mechanism I would have been more careful.
But the scars are great teachers and there to remind me for the rest of
my life "the danger of being too open minded that the brain falls out".
(2) Status Quo Trap - strong bias to alternatives that perpetuate status quo
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- deep reason: mind is seeking comfort from lower psychological risk
& less effort; regret & criticism also come from taking
responsibility & action
- Remind yourself about the ultimate objective
- never think status quo is the only choice
- avoid exaggerating cost of switching
- think about future value of alternatives; not just the present value of alternatives
- Force yourself to choose a superior alternative
My tendency to fall into this trap: High
There have been instances where I was strongly anchored to my pet ideas and exaggerated the cost of switching to an alternative.
In fact at work at IBM also I found instances where the managers were
sticking to producing a known loss making product rather than attempting
something new that is riskier but had a chance of being profitable. I
have to learn to think about the future value of alternatives over and
above the present value alone.
(3) Sunk Cost Trap - make choices in a way that justifies past choices
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- could be psychological or economic
- free yourself from commitment to past decisions; admit to mistakes;
recognize that some good ideas will end in failure in an uncertain world
- seek & listen to those uninvolved with earlier decisions
- when in a hole stop digging
- look out for biases in decision & recommendations from subordinates
My tendency to fall into this trap: Low
I do not hesitate to change course if I think it is the right thing to do given the current realities.
This is probably stemming from my exposure to Hindu and Buddhist philosophies that say "nothing is permanent".
I have internalized that "Change is the only constant".
(4) Confirming evidence Trap - Weighing supporting info more, dismiss conflicting info
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- Be sure it is a smart choice
- Check, examine all evidence with equal rigor
- Avoid tendency to accept without questions
- consider pros and cons; play devil's advocate
- be honest: are you making a smart choice honestly or simply seeking confirming evidence ?
My tendency to fall into this trap: High
My tendency to get Anchored to decisions early on, predisposes me to fall into this confirming evidence trap a lot more.
If I pause before getting anchored, and examine evidence with equal rigor, I can steer clear of this trap.
This means I have to learn to go slow and keep my instinct for speed at check.
(5) Framing Trap - framing of the question can distort decision making
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- a frame can establish status quo, anchor, highlight sunk cost or lead to confirming evidence
- beware of frame as gains vs losses; frame with different starting points
- Do not accept initial frame of the problem as given to you; look for distortions caused by frames
- Try different reference points
- Challenge others when they recommend decisions; examine their frame
My tendency to fall into this trap: Low
I am pretty good at using my own mind in making major decisions, after listening to inputs from all others.
Still this is a key trap to watch out for in any situation.
(6) Estimating & Forecasting Traps - Estimates in the face of uncertainty vary
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(6a) Overconfidence Trap - Considering only a narrow range of possibilities
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- missing the upsides or underestimating the down side
- consider extremes; low end & high end; Avoid anchor to initial estimate
- challenge overconfidence
My tendency to fall into this trap: High
I try to use data to guide my forecasting and estimates but I have struggled with overconfidence.
In certain environments such as manufacturing, this actually helps a lot as customers want to see confidence in their supplier.
I have won bets at work for landing exactly where I projected months earlier. So I have also been accurate many times.
But there have been times I have been off as well. Especially in
technology development environments where pace of change is high and
unknowns are many more, the error bars are wide and optimism does not
pay. I have since learned to add error bars to my estimates (as
recommended in this lecture).
(6b) Prudence Trap - overcautious to be on "the safe side"
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- using worst case scenario with high costs and little benefits
- State assumptions honestly
- Test the estimates
My tendency to fall into this trap: Low
I am optimistic by nature and am predisposed to walk the wild side.
However at work, being aware of my nature, for key business commitments I
provide bed rock estimates (worst case scenario), nominal estimate
(likely to occur) and best case scenario (best case scenario if all
stars line up). This covers the spectrum and helps with a robust plan.
(6c) Recallability Trap - overly influenced by dramatic & traumatic events
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- distorted ability to recall events in a balanced way
- examine your assumptions
- drive with data and not with memory alone
My tendency to fall into this trap: Low
I don't recall having a bias of this kind but I will be careful in the future.
II. Jack & Suzy Welch Video, "It does not have to be Lonely at the Top"
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CEOs complain it is lonely at the top
But this is a silly notion
Friends you hired, people with common interests
Get their inputs and hang out with the team
If not delivering then separate
There is nothing like a great team, fun of winning with a great team, or
losing with a great team and resolving not to lose again
WORK IS FUN !!!, not some drudgery
It's a Bunch of people getting together & making decisions, coming
to right conclusion based on lots of inputs, driving business forward
Don't be alone, don't make all the big decisions alone - don't be a stiff
Relax the team, make them be open with you, don't miss the interaction from the team, the interac
III. Decision Making Model (Self, Consult or Group)
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One of a leader’s key responsibilities is to determine, with each new
decision, whether to go it alone or bring people into the process.
The model directs leaders to:
(a) make the decision alone, either with or without obtaining relevant information from subordinates;
(b) share the problem with subordinates and get their ideas, either one-on-one or in a group, before making the decision; or
(c) present the problem to the group, and inform them that if they can agree on a solution, it will be accepted.
Vroom-Yetton Contingency Model
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Quality of Decision (Q) * Level of Acceptance (A) = Effectiveness of Decision (E)
Example of “Q” activities: downsizing, de-layering, and divestiture of unprofitable businesses.
eg. Welch declared that GE’s businesses would be #1 or #2 in any market they were in, or he would “fix, sell, or close” them.
Employees in some businesses rattled after experiencing the scope of the
changes and the downsizing of many of their colleagues.
Welch consciously turned his attention to high-acceptance, employee-empowerment initiatives like Work-Out.
When High charging in business, realize:
High Q, Low A = Bad Idea
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Super brilliant idea that team members hate & oppose & subvert =
bad idea to go forward with; think long & hard, sacrifice some Q if
needed
Low Q, High A = Poor Results
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Low quality "just do it" idea without regard to wisdom, high acceptance rate = disappointing results
Quality Requirement: How important is the technical quality of the
decision? (Does the question have a right answer, say, from a technical
standpoint?)
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A. Is there a quality requirement such that one solution is likely to be more rational than another ?
Leader Information: Does a leader have sufficient information to make a high-quality decision?
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B. Do I have sufficient information to make a high quality decision
Problem Structure: Is the problem well-structured? (Is it clear and
well-defined? Does it lend itself to statistical tools and quantitative
analysis?)
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C. Is the problem structured ?
Commitment Requirement: Is employee commitment to the decision critical for effective implementation?
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D. Is acceptance of decision by team members critical to effective implementation ?
Commitment Probability: If the leader makes the decision without
employees’ input, is it reasonably certain that people will be committed
to the decision?
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E. If you were to make the decision by yourself, is it reasonably certain that it would be accepted by your team members ?
Goal Congruence: Do employees share the organizational goals to be attained in solving the problem?
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F. Do team members share the organizational goals to be obtained in solving this problem ?
Employee Conflict: Is conflict among employees likely to occur in the preferred solutions?
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There are two instances when a leader may want to go against this model:
(a) when time is scarce
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Consultation (“C”) takes more time than deciding alone (“S”), and group decision-making (“G”) takes even longer.
Going slow at the start can allow you to go much faster later, because everyone is on board.
Participation, empowerment, and democracy take time.
(b) to develop team
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although you can sometimes make a competent unilateral decision with no negative consequences,
in cases where developing your team members is important, you may prefer to employ consultative or group decision-making,
to give staff enough autonomy to make, and hopefully learn from, their mistakes
Limitations of the Model
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The model has no memory
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It treats each decision as an isolated case, without considering what the leader did on previous occasions.
If leader's behavior swings drastically from autocratic to empowering
leadership, others will view them as acting inconsistently and
unpredictably.
Leadership style
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While the model recognizes that many situations call for democratic
leadership, the leader always decides which style to use in a situation.
Some ineffective leaders are never able to actually empower any employees.
According to them, the members of their teams were somehow always too
new, or time was too scarce, or the cost of being wrong was too high,
or some other reason stood in their way.
Q, A factors may not be readily available
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The model works best when the facts pertaining to the quality and acceptance of decisions are known and readily available.
In many cases, the likely quality and acceptability of a decision cannot be known in advance.
In such cases, even the most data-driven leaders should be comfortable relying on their instincts.
“No amount of sophistication can allay the fact that all your knowledge
is about the past and all your decisions are about the future.”, Ian
Wilson
Jack Welch gives his take here as “going with your gut.”
References
Maier, N. R. F. (1970). Problem solving and creativity in individuals and groups. Belmont, California: Brooks-Cole.
Tannenbaum, R., & Schmidt, W. (1958). How to choose a leadership pattern. Harvard Business Review, 36(2), 95–101.
Vroom, V. H. (1997). Can leaders learn to lead. In Robert P. Vecchio
(Ed.), Leadership (pp. 278–291). IN: University of Notre Dame Press.
Vroom, V. H. & Jago, A.G. (1988). The new leadership: Managing
participation in organizations. Englewood Cliffs, NJ: Prentice-Hall.
IV. Chattanooga Ice Cream Division Case
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Team C worked on Analysis of the case.
Team thinks the CEO's style violated Jack Welch's leadership principles
and we are evaluating whether to recommend replacing him.
We also think some employees have violated the sacred principle of trust.
The CICD Group's dysfunctions have been noted and we are working on remedies to turn around.
Team C members are a tight knit group that truly want to enhance each other's learning experience.
