Monday, April 8, 2019

How to Lead Millenials!

Herding cats is easy compared to keeping a bunch of smart millennials motivated for long enough to make a meaningful contribution. Yet, fast-growing, agile, entrepreneurial organisations need this kind of sustainable energy to do good things for clients and communities. What's the secret? 

It turns out this is exactly the same problem faced by professional service firms - the McKinseys, Deloittes, and BCGs of the business world. They have to entice a group of disparate professionals to give up autonomy in return for a group share of the profits, while at the same time maintaining the bonds of a matrix-structured organization which threatens to fly apart at any moment under the centrifugal force of massive ego! Have they cracked the code? 

Laura Empson, Professor in Management at the Cass Business School, London, and Ann Langley, Professor of Management at HEC Montreal think they have. Their model of the professional service firm (2015) is an elegant guide in how to use multiple manifestations of influence where direct authority is limited or questionable (think millennials). So how does it work?

It's a 9-box matrix which spells out what you can do to keep millennials corralled yet happily productive. 

Firstly, at the individual and group level you can apply your Professional Expertise through:

  • Coaching and mentoring millennials, which goes beyond a simple transfer of technical skills to encompass more personalized coaching in interpersonal skills. This is a key theme in how to lead professionals, so if you don't have the requisite skills perhaps now would be a good time to get yourself trained!
  • Balancing the competing economic and organizational interests of the company with the expressed need of professional millennials. This requires subtlety and persuasion based on your experience of what and who works best for all concerned.
  • Championing projects undertaken by professional millennials to help get them more embedded into the organization and better recognized by clients and stakeholders.

Secondly, you can utilize Political Interaction at the organizational level through:
  • Nurturing your millennials by making them feel valued, supported and cared for and removing obstacles to getting their work done. The idea is to build trust, loyalty and cohesion through connecting them with key influencers in the company.
  • Enabling their initiatives - without drawing attention to yourself - through removing roadblocks and promoting their entrepreneurialism.
  • Consensus-Building with your peers to help resolve the inherent tensions between the needs of your millennial professionals and the needs of the collective.
And thirdly, you can employ Personal Embodiment at the strategic level by:

  •  Role-modeling what is expected of professionals in the company; demonstrating passion and belief; treating everyone with dignity and respect; demonstrating the highest integrity; giving credit to others and taking responsibility for failure.
  • Meaning Making through framing and defining the reality of the environment and providing personal support and opportunities for millennials to make sense of their surroundings.
  • Visioning - articulating and enacting your vision for the company; building on your own credibility and reputation; and providing a beacon of common values which will entice professional millennials to want to be associated with you.
Don't expect millennials to follow you unless you are willing to devote your personal resources and your energy to supporting and encouraging them. It takes considerable effort, but the rewards to you and your company will be immeasurable!

Tuesday, March 19, 2019

Wisdom and the Rise of AI (Artificial Ignorance)!

Artificial Intelligence is already here, we just don't notice it yet. All around us, the invisible algorithms of social media and countless online platforms are shaping our buying habits, our values, and our beliefs. Should we be concerned?

The Power of The Algorithms

The algorithms exploit our cognitive baises and effectively hijack our minds without us even realizing it:

  • Our devices have the same conditioning effect as poker machines, keeping us hooked on content through Intermittent variable rewards.
  • FOMO (Fear of Missing Out) becomes an addiction to living moment to moment online.
  • Our social approval is primed by how many tags and likes we get. 
  • Our need to reciprocate social gestures is exploited to keep us on the platform for longer (looking at you LinkedIn).
  • Automatic feeds and autoplay are like consuming a bottomless bowl of soup - we will always consume more than we need.
  • Message interruptions are an effective way of capturing our attention since we're primed to notice something different or novel.
  • The algorithms want to convert our reasons for using the app into their reason, which is to maximize the time we spend consuming things.
  • It's always easier to subscribe than it is to unsubscribe, so most of us don't.
We tacitly buy into this because the benefits seem to outweigh the costs. The content streamed to us seems to happily coincide with our interests (cat videos, anyone). But the algorithms have a dark side. They steer us toward edgier content, a loop that results in more time spent on the app, and more advertising revenue for the company. Platform incentives polarize opinions, viewpoints, beliefs and ideologies. They nudge us toward a more strident version of our existing beliefs. 

It's unfair to blame the internet for this, but the algorithms behind the platforms inadvertently create and reinforce extremist beliefs. They become a place where people with hateful and violent beliefs can feed off one another. This is an emergent AI, but not some technological dream of a Utopian future. What we are breeding is Artificial Ignorance

AI (Artificial Ignorance)

As Margaret Wheatley observes in her 2017 book, Who Do We Choose To Be?"This is the age of retreat: from one another, from values that held us together, from ideas and practices that encouraged inclusion, from faith in leaders, from belief in basic human goodness".

Artificial Ignorance is everywhere: the lack of political courage, the building of walls against collaboration across national boundaries, self-interest and greed which supersedes compassion. We have seemingly lost the ability to solve the global problems of our time. 

But there is an antidote to ignorance, and the antidote is wisdom. So much is possible if we can step away from the addictive torrent of information and consciously and wisely choose who to be in this moment, and the next.

What we need is a WISE template for making more considerate decisions for ourselves, our communities, our businesses, our government and political institutions, and for the planet. Our survival may very well depend on it.

A Template for Making WISE Decisions

Use this template to guard against bias, assumptions, and fallacies in making critical decisions in times of uncertainty and complexity:

Widen your framework: 

  • Avoid "either/or" and "whether/or not" decisions. Think AND not OR.
  • Ask yourself, "what different outcomes or solutions could there be?" Generate a list of options.
  • Ask yourself, "could my opinion on the situation be incorrect?"
  • Find someone who has solved this problem before, or Google keywords related to the issue.
Interrogate reality:
  • If you think your best option is correct, consider, "in what ways might this be the wrong decision?"
  • Ask yourself disconfirming questions such as, "What's the biggest obstacle to this being the right decision?" "In what ways could I fail?"
  • Ask yourself, "what would have to be true for each of these options to be the best possible choice?"
  • Ask yourself, "can I accept that there may be information to which I do not have access?"
Sense what is emerging:
  • Ask yourself, "what do I notice when I put myself in the other person's shoes?" "What might be that person's perspective?"
  • Ask yourself, "What might other people think or feel if they were watching the situation?"
  • Retreat from the issue and allow time for stillness and reflection; let your awareness redirect itself; allow the inner knowing to emerge.
  • Ask yourself, "what is waiting to emerge into being through this decision?" 
Enact a way forward: 
  • Take the first step in the direction of the decision. Don't procrastinate or wait for more data or analysis, it may be too late.
  • Experiment and prototype, learn through action: "fail forward and fail fast".
  • With each action, ask yourself these four questions: "What just happened? Why do I think it happened?What can I learn from this? How will I apply these learnings?"
  • Take action from the predicted future state, as if you are already there.

We are immersed in a matrix of Artificial Ignorance and it's unlikely to get better. The best we can do is cultivate our own "islands of sanity" in Margaret Wheatley's words. A template for practicing wisdom and making wise decisions may be our best resource!

Thursday, February 7, 2019

Bank On It: How the Financial Services sector must bring wisdom to decision making

The Hayne Royal Commission in Australia has upended the central myth of the financial services sector that "greed is good". As if we learned nothing from Gordon Gecko, the central character portrayed by Michael Douglas in the 1987 movie "Wall Street", and by Stanley Weiser in the 2010 sequel. The script is too real to be entertaining any more.

The Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was released this week, and it presents an eye-watering litany of misdeeds, misappropriations, mismanagement, and missed opportunities for reform. Both business and government leaders appear to have been sitting on their hands while customers were routinely fleeced of their money. How did this become so seemingly normal?

Cognitive Bias

In 2010, German researchers found strong evidence that cognitive bias most likely contributed to the decision making which led to the global financial crisis of 2007-2009. The Hayne Royal Commission report arrives at a similar conclusion that business-as-usual clouded judgement at best, and at worst led to intentional deception.

While the report's recommendations call for regular checks of culture and performance bias, in practice this goes to the heart of how we make decisions, for whom we make decisions, and the context of our decision making. In 2011, Daniel Kahneman, the father of behavioural economics, popularised the idea that we think both fast and slow about problems before we make decisions. He described System 1 thinking as intuitive and quick to make assumptions, while System 2 thinking is rational and calculating and therefore slower. Both systems are subject to bias, particular when our environment is loaded with cues about how we are expected to behave in order to fit in. But is it possible to exert enough willpower to overcome cognitive bias each time we make an important decision?

The Third System

Contrary to Daniel Kahneman, there is a Third System of thinking, which my colleague Dr Barry Partridge and I discovered while researching decision making bias at the University of Wollongong, 2010-2015. System 3 turns out to be slow and calculating like system 2, but it has some of the emotional characteristics of system 1. Depending on the nature of the decision, it seems we first jump to conclusions based on our experience (system 1), then we analyse the problem to rationalise our conclusions (system 2).

However, if the problem is outside our experience, or is intractable, or if we are faced with a dilemma for which there are no clear right or wrong answers, then system 3 kicks in. This is where we "think from the heart" using a first-person perspective to sift the data through our emotions, discern the reality of the various impacts of the decision on others and ourselves, and consider deeply the wider consequences both short and long term.

Our blindness to this Third System of thinking leads us to either make intuitive leaps of faith, or overly rely on analytical tools when confronted with complex problems. Experience teaches us how to use system 1, and business schools train us in system 2 approaches. But there is no training for how to apply the Third System. Japanese business experts, Ikujiro Nonaka and Hirotaka Takeuchi nominated this deficit in training as one of the foremost reasons for the global financial crisis. We have forgotten it seems, to train for wise leadership, and we need it now, more than ever.

Wisdom > Ethics

Ethics training for business leaders is a necessary but not sufficient prescription when it comes to preventing the kind of ongoing toxicity and corruption unearthed by the Hayne Royal Commission. But it's a system 2 approach to changing corporate behaviour, and so far it hasn't worked, at least not sustainably.

Of greater effect would be training in the Third System of thinking. This is more likely to lead to the type of decision making Aristotle referred to as phronesis, or practical wisdom - the ability to make prudent judgements and take actions based on the reality of the situation, guided by values and morals; to know what is the right thing to do for the right people at the right time. But can practical wisdom be trained?

Yes, it can!
  • Pioneer researchers in the field of wisdom psychology, Paul Baltes and Ursula Staudinger from the Max Planck Institute for Human Development in Berlin developed the "Berlin Wisdom Paradigm" in the 1990s and conducted experiments in how to boost wisdom-related performance.
  • Howard Nusbaum, Director of the Center for Practical Wisdom at the University of Chicago and his colleagues have been researching ways in which wisdom can be developed in professional and public life since 2007.
  • Igor Grossmann, Director of the Wisdom and Research Lab at the University of Waterloo in Ontario, Canada shows how the ability to think wisely varies dramatically from one situation to another, and he presents experimental evidence for ways to buffer thinking against bias.
  • And at the Stein Institute for Research on Ageing at the University of California San Diego, Director Dilip Jeste and his team outline 6 components of wisdom, all of which can be developed over time.
Building on these and other discoveries, my own research and practice in the field of wisdom psychology suggests that system 3 thinking is made up of 9 capabilities which can be developed in much the same way that emotional competencies can be enhanced through training and coaching.

Developing the Third System

The 9 capabilities of the Third System are:

1. Social Advising
Experience is a necessary but not sufficient condition for wise thinking. Martin Seligman launched the field of positive psychology, demonstrating ways in which we can curate our memories and appreciate the course of our own life as a useful guide to what it means to live a flourishing life. By recognising the normal trajectory of human development through our own and others' biographies we may come to be relied on for giving advice about life problems.

2. Decisiveness
Paradoxically, an important capability of the Third System is acknowledging uncertainty and ambiguity, yet making quick and effective decisions; not suffering "paralysis by analysis". Under complex conditions decision making is actually a series of experiments in which we learn something new. We should not be fearful of making mistakes but rather accept the entrepreneurial "fail forward" principle. This is also the process of enacting and prototyping advocated by Otto Scharmer in his Theory U.

3. Emotion Regulation
Daniel Goleman popularised the notion of emotional intelligence in the 1990s. It turns out one of the most critical capabilities of the Third System is to recognise your feelings, yet not be overwhelmed by them. Control over emotions is not the same as the absence of emotions but rather having control over the intensity and variation in them, which yields a kind of contentedness.

4. Pro-Social Behaviours
System 3 thinking emphasises understanding how others are feeling, imagining what it must be like for them, and being prepared to take action through a strongly held sense of fairness. Robert Sapolsky from Stanford University School of Medicine leads other Evolutionary Biologists in observing that cooperative prosocial behaviours are more favoured in primate and human groups than competition and violence.

5. Tolerance for Divergent Values
Chris Petersen and Martin Seligman founded the Values In Action Institute after identifying 24 character strengths and virtues we all possess to a greater or lesser degree. Acceptance of diversity allows for our own unique signature strengths, but also opens us up to understand why someone else might rely on different strengths. The key to system 3 thinking appears to be having strong values "weakly held" which means we are more prepared to change our mind if new information presents itself.

6. Self-Transcendence
"Man's Search for Meaning" is a 1946 book by Viktor Frankl chronicling his experience in Nazi concentration camps during World War II, and describing his psychotherapeutic method, which involved identifying a purpose in life to feel positively about, and then imagining that outcome. Finding meaning in the midst of disruption and volatility is about moving beyond the physical and the ego, and knowing the inner spirit essence of life, it is about seeing the world from a universal perspective. Self-transcendence is a spiritual concept that looks at the true meaning of life and the infinite consciousness.

7. Insight
Insight is the capability to see into a situation, to apprehend the inner nature of things. It includes self-reflection, which is the ability to acquire an authentic and meaningful perception of a thing or an individual, including yourself. Leadership experts, Jack Zenger and Joseph Folkman present empirical evidence for why it is important to know yourself in order to make accurate assessments of your impact on others and to make better quality decisions.

8. Mindfulness
In their 2018 book, "The Mind of a Leader", authors Rasmus Hougaard and Jacqueline Carter  highlight the debilitating effects of distraction on decision making effectiveness. Mindfulness is the skill of applying sustained, focused attention to meaningful tasks and activities, balancing mental activity with mental control. Cultivating the ability to find mental stillness in the midst of noise can enhance productivity and creativity.

9. Compassion
According to His Holiness the 14th Dalai Lama of Tibet, compassion is the key to happiness. Compassion is the feeling that arises when we are confronted with another's suffering and feel motivated to relieve that suffering. While empathy refers to our ability to feel the emotions of another, compassion is when those feelings and thoughts include the desire to help.

Taken together, these 9 capabilities represent an altogether different way of thinking and being when faced with complex issues and wicked problems. We still need systems 1 and 2 for simple and complicated problems, but as we face technological breakthroughs and digital disruptions with unintended consequences for ourselves and for the planet, we are going to have to get proficient at fully utilising the Third System.


Through training and coaching I have found it is possible to improve the capability of individuals to successfully apply the Third System of thinking when faced with a dilemma. Although life is uncertain and there are no guarantees that any given decision will work out for the best, accepting that condition is in itself a hallmark of the system 3 thinker.

Part of the Wise Decision Making training program involves practicing a template for protecting against bias and encouraging a slower, more considerate approach to both understanding and potentially solving complex issues:

  • Widen your view: Avoid either/or dualities in framing the issue, expand your options.
  • Interrogate reality: Find ways of disconfirming your assumptions, check your sources of information.
  • Sense what is emerging: Go deeper than immediate emotional reactions, patiently observe the possibilities emerging in the short and long term.
  • Enact a way forward: Experiment and prototype possible solutions, take action and learn from each result.

As we have seen this week from the Hayne Royal Commission report, business, community, and political leaders will need to become more sensitive to the total societal impact of their actions. It's no longer enough to justify decisions based on stakeholder sentiment. From now on, business decision makers need to make sure they deliver social as well as economic value. And to do that they will need to become practiced in the Third System of thinking.

Contact me here to book a Wise Decision Making training program for you and your team.

Wednesday, May 2, 2018

Managers Behaving Badly!

Managers are supposed to get stuff done. They're supposed to coordinate resources, build capable teams, and deliver shareholder value. We all work for a manager in one form or another. And while work isn't the sole domain of life, having a sense of meaning and making an impact are reasons #4 and #5 for coming to work. We want to be fairly rewarded for doing good work. And for that, we need good managers.

So how many good managers have you worked for in your career? Probably not that many. In fact, you'll be lucky if you can nominate more than two. And like most of us, you've probably left more than one position due to a toxic boss. What is the cost of managers behaving badly? And what, if anything, can be done about it?

Cost of Bad Managers

What's the cost of bad managers?
Of course, it's naïve to claim these costs are solely due to bad managers. Bad organizational culture, structure and systems contribute their fair share. And industry and market conditions add to these costs. But if there's any responsibility or liability, it invariably gets sheeted home to the managers involved. The 2018 Australian Banking Royal Commission is a case in point. The Commonwealth Bank has been forced to defend itself in court over allegations it systematically breached anti-money-laundering and terrorism-financing laws on nearly 54,000 occasions and could potentially face about $1 trillion worth of fines. These are the actions of managers behaving badly.

Mindless Managers

Managers behave badly when they don't stop to think about their actions or how their behavior might be  negatively impacting their team. They "drive for performance" (a curious term that suggests employees are more akin to vehicles). When managers lose focus on what really matters, and when their situational awareness becomes too narrow they behave mindlessly. They "go with the flow" even if that flow is unethical. They choose the path of least resistance even if that means riding roughshod over team members. Mindless managers behave badly because they are self-centered; they are preoccupied with their own agendas, and unable or unwilling to consider how their actions might affect others. Self-centredness arises because of (1) insecurity: they lack confidence and react emotionally to real or perceived threats; and (2) arrogance: They are overconfident and see people as objects to be used for their own purposes.

Mindful Managers

Managers behave better when they develop focused attention on what really matters, and when they become aware of how others are behaving and feeling. The key is how well managers manage distraction. A recent survey of more than 30,000 managers from thousands of companies in more than a hundred countries found that 71% of managers feel distracted from their current task either "some" or "most" of the time. Sources of distraction included:
  • Demands of other people (26%),

  • Competing priorities (23%),

  • General distractions (13%), and 

  • Workloads that are overwhelming (12%).
Overcoming distraction isn't the only thing that good managers do of course. But the ability to understand and manage attention keeps managers from behaving badly. How?

Mindful awareness helps managers to get in the driver's seat of their own mind and see more clearly what is the "right" thing to do for the benefit of all stakeholders. Mindful focus helps managers to be more efficient and consequently achieve better wellbeing.

But it takes training. We are hard-wired for distraction. Focus occurs in the prefrontal cortex, which is the centre of deliberation, reasoning, and choice. Through training and practice it is possible to develop the skill of sustained, focused attention on a chosen task or object. Through training and practice it is also possible to gain self-awareness and develop a more considerate and compassionate approach to others, realizing what is most likely the best choice for all concerned.

To stop managers behaving badly we need to include the skills of mindfulness in any management or leadership training curriculum. The linear MBA-trained logic is necessary but no longer sufficient if it comes at the cost of other skills like self-awareness. The cost of managers behaving badly is just too great to put up with anymore.

Monday, March 26, 2018

You Want Performance? Here's How!

The performance dilemma
“Our latest staff engagement results were really quite bad” admitted the HR Director of a mid-sized Asian Financial Services company when I met with her recently. “Staff are really disappointed with their managers”, she shared with me. “Yet, many of those same managers have been sent on very expensive leadership programs in Europe and North America”, she declared. “And now I don’t have enough budget left to get performance up!”
Of course, there is great prestige in sending managers away to a castle in Europe or to an Ivy League campus in the USA for a week. But what’s the return on investment? Could that same budget have been spent more effectively?

In the “open source era” HR Directors are finding themselves backed into a corner. Their companies are demanding higher performance targets despite sluggish economic growth almost everywhere. And the workforce of the future – the millennials – are questioning whether they even want to be part of a company structure when they can more easily launch their own start-ups. This makes talent retention a key issue for HR Directors. Companies want the performance dividend that comes with talented people, but they are reluctant to invest too much in case they leave.

How do you get performance up when the budget is down?


But coaching is too expensive you say. And anyway, does it even work?

The need for speed
It turns out the open source era is a key driver of the rapid rise of coaching engagements globally. Digital disruption, AI, blockchain, and the shift to platform-based business models are some of the factors contributing to heightened uncertainty and demand for an agile and innovative workforce. Coaching is increasingly seen as a flexible,individually-tailored business performance intervention and an accelerator of organisational learning – a crucial component for enterprises to thrive.

Older generations who currently occupy senior leadership positions want different things from work than younger generations. Millennials value work where they can be acknowledged, find enjoyment and fun, have opportunities to give back to others, work in collaborative environments, and have a sense of stability.

Guess what, they want coaching!

In the US, 93% of US-based Global 100 companies use executive coaches. In the UK, 88% of organizations use coaching. In Australia, 64% of business leaders and 72% of senior managers report using coaches. Seventy-one percent of these Australian respondents also stated that having a coach was an important factor in their decision to stay with their organisations.

Coaching has moved away from being remedial. In the past if you were told you needed coaching you assumed there was a problem. Now coaching is viewed as an important constituent of the company’s overall human capital development strategy.

So, what is coaching?
It is a one-to-one learning and development intervention that uses a collaborative, reflective, goal-focused relationship to achieve professional and personal outcomes valued by the person being coached. Coaching – when done well – can inspire and empower people, build commitment, increase performance and productivity, grow talent, promote success, and build high performing teams. It is, quite simply, a way of facilitating positive change faster than it might happen on its own.

In the open source era people are willing to fail fast to learn quickly. The need for speed in learning means people are more willing to seek the help of coaches to understand themselves and to grow and develop rapidly in their working environment. Being allocated a coach is now associated with being singled out as someone of worth to the company.

By estimates of product growth cycle coaching has not yet entered the maturity phase in any market. Coaching will continue to grow in North America, Europe, UK, and Australia. But it is set for rapid growth in Asia, particularly China.

Yes, but does it work?

Accelerating Performance
People who have experienced coaching overwhelmingly report that they were satisfied and would recommend it to others. Various assessments of return on investment (ROI) report the return to be at least equal to the investment, and by some estimates up to seven times the cost of coaching.

Even though coaching is a highly individualized human change methodology there is a consistent body of research that supports the positive effects of coaching as an approach to employee learning and development in organisations, and leadership effectiveness. According to a 2015 review of the research, coaching is the only organisation consultancy intervention known to have proven efficacy!

In a 2016 study of one-to-one executive coaching (conducted by a panel of 11 professional coaches) for 49 program managers and directors of an Australian state government health agency over 6 sessions each, the following outcomes were noted:
  • Anxiety: 41.21% reduction
  • Goal attainment: 37.26% increase
  • Stress reduction: 28.34% reduction
  • Leadership self-efficacy: 27.04% increase
  • Tolerance of ambiguity: 13.89% increase
  • Self-insight: 10.59% increase
  • Solution-focused thinking: 8.86% increase
  • Perspective taking capacity: 5.30% increase
  • Resilience: 4.49% increase

Coaching works!
But it’s expensive isn’t it? Well not when you compare it to the cost of training and the inevitable drop off in retention. Coaching following training is significantly more effective than training alone, and gains from coaching have been sustained even 18 months after the end of coaching.

Coaching delivers more bang for the training budget buck, particularly in the areas of self-management, leadership effectiveness, and preparing for succession. Coaching is an individually tailored learning agenda that helps to fast-track development.

And it rubs off on others! Managers who receive coaching are more likely to use coaching approaches with their team members and generate higher performing teams. And higher performing teams are the nucleus for organisational growth and productivity.

Investing in coaching has a multiplier effect. Not only does it contribute to more effective individual leadership, but it also promotes better communication both within business units and across boundaries. And as the quality of conversations change the culture changes.

If you want to improve the performance of your organisation and the engagement of your employees, and if you must do it quickly, then professional coaching is the answer!

For more information, contact the author at: