Developing leaders to make better decisions and have better judgment: Some emerging science behind language skills and leveraging collective wisdom
With the recent batch of scandals involving leaders exercising poor judgment, attention has been focused on the blind spots that affect decision-making. The good news is that there are answers and technology that can help. The bad news is that individual and organizational biases too often put the emphasis on a single individual's input. First the good news. As this Wired article "Thinking in a Foreign Language Makes Decisions More Rational" notes, it appears that knowing a second language provides a useful cognitive distance from automatic processes, promoting analytical thought and reducing unthinking, emotional reaction. Why, you may ask? According to the three psychology professors from the University of Chicago, switching languages tends to obscure the framing effect, which is a cognitive bias similar to the way that skewing happens when poorly written survey questions produce bad insight (See Boaz Keysar, Sayuri L. Hayakawa, and Sun Gyu An. (2012) "The Foreign-Language Effect: Thinking in a Foreign Tongue Reduces Decision Biases." Psychological Science 23.4). The bad news is, as Babson and Harvard Business School Prof. Tom Davenport notes, is that too many leaders continue to believe in their own wisdom, while they should be using available technologies to harvest and harness collective wisdom of the organization. What can be done? "Chances are you work in an organization that employs diverse thinkers and collects extensive data. What else is needed to produce good organizational judgment? Two things: clear processes to ensure that both are called upon appropriately, and a culture strong enough to keep people pulling in the same direction." Read Prof Davenport's posting on Harvard Business Review, "The Wisdom of Your In-House Crowd"
What does it take to shake the team at the top out of their risk-averse wait-and-see attitude, even when they know that inertia itself is risky, in order to inspire the requisite boldness so that they act ahead of the need, ahead of the competition — and before hardship or crisis makes action a necessity rather than a choice?
If ever there is a call for bold leadership and decision-making, it’s in times of uncertainty or adversity. Opportunity is ever present, particularly in tough times. With bold leadership, companies can not only prosper, but they can also exploit their competitors' paralysis and make important, even game-changing moves that position them for enduring success. During the Great Depression, for example, companies such as Procter & Gamble, DuPont, and even General Motors took contrarian positions that turned out to be wildly successful. The future is inherently uncertain. Regardless of economic conditions, executive teams shouldn’t fear risk so much as embraces it — that is, after all, what they are paid to do. By acting boldly and clear-sightedly, as Chrysler, General Electric, and P&G did in the 1930s, as Ford did in 2006 — and as "BigBank" and "BigIndustrial" have done even more recently — leaders can capture significant competitive advantage. Their ability to adapt to a changing environment enables them to boldly shape the future, not merely respond to it with hair-on-fire actions. Disrupting leaders’ mental models and helping them visualize positive outcomes can reframe their perception of context — and counteract the paralyzing fear of risk-taking. These tactics, when combined with resetting incentives, are effective ways to shake teams out of their inertia and free them to act. Injecting the personal and the emotional into the process is crucial, because the decision to act when the stakes are high is indeed personal and emotionally charged. There is no substitute for substantive, informed analysis; but sometimes, shifting the perspective is precisely what's needed to help leadership teams get unstuck. Read the BCG article "Is Your Team Stuck?"
Lessons from global industrial company: How putting leadership development at the heart of a major operations-improvement effort can pay big dividends
Too often senior executives overlook the "softer" skills their leaders will need to disseminate changes throughout the organization and make them stick. These skills include the ability to keep managers and workers inspired when they feel overwhelmed, to promote collaboration across organizational boundaries, or to help managers embrace change programs through dialogue, not dictation. One global industrial company tackled these challenges by placing leadership development at the center of a major operational-improvement program that involved deploying a new production system across 200 plants around the world. While the need for operational change was clear — the performance of the company’s factories was inconsistent and in many cases far below that of competitors in terms of efficiency, productivity, and cost — so too were the organizational obstacles. Drives for improvement, for example, carried a stigma of incompetence; current performance was considered "good enough"; conflict tended to be passive-aggressive or was avoided entirely; and shop floor employees felt that they were treated as cogs and that their supervisors were enforcers. The effect of all this on employees was disengagement, a lack of trust in senior management, and a pervasive fear of making mistakes — a worry reinforced by the company’s strong culture of safety and of risk aversion. These challenges were impossible to ignore, and that was probably a blessing in disguise: the senior team had to look beyond technical improvements and focus on helping the company’s leaders to master the personal behavioral changes needed to support the operational ones. To that end, the company mounted an intense, immersive, and individualized leadership program. Read the McKinsey article on "Developing better change leaders"
How can leaders recognize and manage their psychological preferences?
A survey of 75 members of the Stanford Graduate School of Business Advisory Council rated self-awareness as the most important capability for leaders to develop. Executives need to know where their natural inclinations lie in order to boost them or compensate for them. Self-awareness is about identifying personal idiosyncrasies — the characteristics that executives take to be the norm but actually represent the exception. Sometimes self-awareness comes early in one's career, prompted by a comment from a trusted colleague or boss. Throughout your career, you’re going to hear lots of feedback from show-makers and peers and employees and bosses. If you hear a certain piece of feedback consistently and you don’t agree with it, it doesn’t matter what you think. Truth is, you’re being perceived that way. Over the past two decades, companies have increased the opportunities for executives to gain insight into their personalities and receive feedback from multiple sources. These instruments can even be distributed to friends and family, who may be only too pleased to enlighten their loved ones on how they come across. And self-awareness is one of the most frequently cited outcomes of leadership coaching. Read the MIT Sloan Review article "Self-Awareness: A Key to Better Leadership"
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