- Email: [email protected]
Afterword
Afterword Within the fictional superhero comic book series, Ben Parker advises the young and struggling Spiderman, “With much power comes much responsibility.” Entering into the management profession brings a greater sense of responsibility for organizational outcomes. Management, while filled with many opportunities, also presents challenges unfounded at other levels within the organization. It may be no wonder then that a recent Pew Research Center (2014) study found that only 39% of employed adults wanted to become a boss or top manager some day. It is not a position that all employed individuals strive toward. Yet, the role of manager today is as instrumental to organizational outcomes as it was at its inception. Getting the management role right is necessary for firm survival. Yet, the usefulness of many of today’s dominant assumptions that underpin leading management behaviors and practices have proven to be antiquated at best, and at worse, harmful to longer term value creation. For those who are either entering into the management profession for the first time or for the seasoned manager seeking a new paradigm, the contents of this book sought to bring an alternative perspective to the dominant discourse surrounding many of today’s leading management practices. The traditional management discourse subscribes to the activities proposed in the theory of business administration, which is largely based on rational economic assumptions of how people make decisions and behave in organizations. As discovered, rational economic theory is less helpful to inform our understanding of the way people actually behave within real organizations. The lack of usefulness in rational economics informing management theory is partly based on the complexity and unpredictable markets firms seek to compete in today, and in part, based on the fact that people are not as selfseeking as many of the rational models presume. Within an alternative narrative, the behavioral sciences are leveraged to form a new paradigm on the role of management in today’s firms. This new paradigm marks a profound departure from the time and place where the theory of business administration and management was first considered—in environments that relied on efficiency, routine and low cognitive skills. Therefore, this book proposes that the role of manager moves from one who administers tangible resources in a predictable and controllable fashion to the one who adapts to the complexity of both the environment and people
247
248
Afterword
they manage. Rather than relying on command and control styles of leadership to mitigate agency costs, today’s managers may be better off leveraging the inherent desire for people to grow, develop, and belong by building social capital to lower the costs of doing business and align interests. As a result, the role of manager departs from one who plans, organizes, controls, and directs tangible resources to one who connects, coaches, empowers, and adapts to people and relationships across an ecosystem. This frees the manager from engaging in the command and control style of leadership, which is averse to the development of knowledge and people in today’s workplaces. This new behavioral paradigm of management also requires a newfound understanding of human behavior and the irrationalities, such as implicit assumptions or the power paradox, which can mitigate one’s ability to effectively build social capital in the workplace. As discovered, social capital is built upon a manager connecting employees to shared objectives during the hiring process, coaching with and toward expertise during goal-setting and performance management activities, empowering through reciprocal relationships to foster employee engagement and adapting during times of change. As a result, the manager’s newfound role in organizations consists of both highly cognitive, emotional and relational activities. As Scott (2017) remarked, many of today’s leading management theorists undervalue the emotional toil and labor managers face each day working with people. In addition, to further complicate matters, managers are not immune to the many heuristics that impede rational decision-making in the workplace. While the majority of this book has focused on the importance of engaging in effective talent management through a more thorough understanding of behavioral sciences, it is also important to consider how managers can create their own time and space for development, growth, and a sense of belonging to the broader organizational narrative.
CREATING SLACK FOR MANAGERS TO FLOURISH IN THE NEW PARADIGM Embracing this new way of leading people in the 21st century requires a new understanding of the role of slack in a manager’s day. All too often, slack or simply building in time to think is overlooked and seen as a “nice to have” or luxury in a manager’s schedule, rather than a necessary component to effectively lead today’s workforces. In practice, many managers lament their never-ending schedules, hectic pace, and navigating the overwhelming amount of data and emails that flood their inbox daily. Even as the manager role further evolves to place an emphasis on talent development, the manager will still be responsible for their own work streams and continued maintenance of their own expertise. All of these pressures require greater capacity to make trade-off decisions to lessen the cognitive load required to be an effective manager in today’s complex marketplace. A trade-off decision
Afterword
249
involves evaluating a set of alternatives against one another to determine a course of action. The trade-off decision process involves having to decide to give up one thing in order to pursue or attain something else. Rational economics presumes a cost benefit analysis would be completed, with the decision-maker accurately choosing the option which would maximize their own interest. Yet, we now recognize from behavioral sciences, that relationships, for example, can trump rationality, or that a fear of loss will cause one to prefer a less optimal option. As Simon (1956) remarked, one can only hope to satisfice among a choose of alternatives. The question is how can managers create greater capacity to make better trade-off decisions and maximize their time spent investing in both themselves and their teams? The answer lies in the creation of slack. Mullainathan and Shafir (2013) use the following analogy to illustrate the importance of having slack in one’s day to make better decisions. They provide the following scenario. You and your friend decide to take a road trip across the country. You are given a very small carry on size luggage to pack your items. However, your friend is given an oversized extra-large suitcase. As a result, your friend has room from not only what he needs for the trip, but also throws in some frivolous items just in case you encounter a rainy day on the journey. But, you are forced to make many trade-off decisions as you have no room for extras. In fact, you barely have room for what you may need on the trip. For example, do you pack the umbrella and rain boats or forgo these potential necessities and hope for no rain?
Mullainathan and Shafir (2014) remark that the size of the suitcase either enables or constrains your ability to make good decisions that will benefit yourself and others. As a person with the smaller suitcase, you are required to make predictions about future needs—which behavioral research suggests people are not very good at. However, the slack capacity afforded by your friend’s larger suitcase dramatically simplifies their planning (and ultimately enjoyment) relative to yours for the same trip. Managers are all too often trying to pack in more than a day’s worth of activities in a 24-hour time block, and as a result they lack the necessary slack to make good decisions and develop people in the workplace. The question this illustration poses is, how much space is left in your suitcase at the end of the day? Do you have enough room to make rational decisions and not fall victim to the influence of the many heuristics that can get in the way? Today’s management more closely resembles a long-distance marathon, which requires one to have both the capacity and sustainability to engage in longer term decision-making. Therefore managers must aggressively seek to simplify the more they face complexity in the workplace. One of the best ways to accomplish this is through the creation of slack in the system. In order to adapt to change, think creatively and manage effectively, slack is a necessary component in the
250
Afterword
new paradigm of management. The harder one runs at maximizing efficiency during the day-to-day execution of tasks, the more costs they will likely encounter at an expense to future growth, development and adaptation. In order to effectively engage in the management behavioral activities described throughout this book, the following management tips are provided. 1. Proactively build in buffer times when deciding on timelines, deadlines and meetings. You are likely to be overly optimistic on the team’s ability to accomplish a task, make decisions and engage in productive meetings. A simple way to help plan for the unexpected, and allow the team necessary time to think, is to build in slack time into one’s calendar in order to effectively transition from one activity to the next. Rather than schedule back-to-back 30- or 60-minute meetings, schedule 20 or 45 minutes to allow for slack time. You can then use this intentional slack time to properly reflect and transition into the next activity. 2. Tackle your high priority items at the start of the day. As time progresses your ability to fight back decision-fatigue is going to wane. So, rather than save your coaching and development activities to the very end of the day, do them right upfront. Your best energy and ability to behave rational is when few decisions or actions have been completed. Do not wait until the end of the day to build the necessary social capital required with your team to sustain their performance over the long-run. 3. Make time for your own development that is free of distraction and interruption. Emails and the sound of constant pings from employee instant messengers can highjack the best of intentions. Managers must not be afraid to disconnect—literally—from their technology to reinvest in their own development. This allows employees to act autonomous and be free to make decisions, while allowing you the necessary time to recharge and come back with your best foot forward. The role of the manager is likely to grow in its complexity the more markets and organizations evolve to meet the changing needs of the 21st century consumer and workforce. The manager’s ability to effectively build social capital to lower the costs of business transactions will be instrumental to building and sustaining competitive advantage. Historically, a manager only had to concern themselves with planning, directing, controlling, and organizing resources to achieve this end. Today, managers need to become experts at connecting, coaching, empowering, and adapting. The proper utilization of these skills hinge upon a behavioral understanding of human psychology and behavior. Managers who are able to recognize the humanity within their team by building environments that allow for cooperation and active knowledge sharing, will not only achieve greater organizational success, but also reap the benefits associated with the development of others. Indeed, managers who make decisions based on enlighten self-interest for the development of others will outperform the rational economic manager simply
Afterword
251
seeking to control divergent self-seeking agents in the workplace. This of course requires slack in the system to learn, grow, and adapt. A question to consider, as you contemplate the research and new paradigm presented in this book is, who would you rather work for? The behavioral manager seeking to leverage your innate desire to achieve success and connect with others in the workplace, or the command and control manager simply out to maximize their own interests and mitigate the agency costs you as an employee pose to the firm’s shareholders? Lead in the way you would want to be led—leveraging the very best in humanity at work, while also creating the necessary behavioral guardrails for better talent decisionmaking. Tomorrow’s workplaces depend on it.
REFERENCES Mullainathan, S., & Shafir, E. (2013). Time Books. New York, NY: Henry Holt & Company LLC. Mullainathan, S., & Shafir, E. (2014). Scarcity: The new science of having less and how it defines our lives. Picador Publishing. Pew Research Center. (2014). Why it’s great to be the boss. Retrieved from http://www.pewsocialtrends.org/2014/01/09/why-its-great-to-be-the-boss/. Scott, K. (2017). Radical candor: Be a kickass boss without losing your humanity. St. Martin’s Press. Simon, H. A. (1956). Rational choice and the structure of the environment. Psychological Review, 63(2), 129 138.
247
248
Afterword
they manage. Rather than relying on command and control styles of leadership to mitigate agency costs, today’s managers may be better off leveraging the inherent desire for people to grow, develop, and belong by building social capital to lower the costs of doing business and align interests. As a result, the role of manager departs from one who plans, organizes, controls, and directs tangible resources to one who connects, coaches, empowers, and adapts to people and relationships across an ecosystem. This frees the manager from engaging in the command and control style of leadership, which is averse to the development of knowledge and people in today’s workplaces. This new behavioral paradigm of management also requires a newfound understanding of human behavior and the irrationalities, such as implicit assumptions or the power paradox, which can mitigate one’s ability to effectively build social capital in the workplace. As discovered, social capital is built upon a manager connecting employees to shared objectives during the hiring process, coaching with and toward expertise during goal-setting and performance management activities, empowering through reciprocal relationships to foster employee engagement and adapting during times of change. As a result, the manager’s newfound role in organizations consists of both highly cognitive, emotional and relational activities. As Scott (2017) remarked, many of today’s leading management theorists undervalue the emotional toil and labor managers face each day working with people. In addition, to further complicate matters, managers are not immune to the many heuristics that impede rational decision-making in the workplace. While the majority of this book has focused on the importance of engaging in effective talent management through a more thorough understanding of behavioral sciences, it is also important to consider how managers can create their own time and space for development, growth, and a sense of belonging to the broader organizational narrative.
CREATING SLACK FOR MANAGERS TO FLOURISH IN THE NEW PARADIGM Embracing this new way of leading people in the 21st century requires a new understanding of the role of slack in a manager’s day. All too often, slack or simply building in time to think is overlooked and seen as a “nice to have” or luxury in a manager’s schedule, rather than a necessary component to effectively lead today’s workforces. In practice, many managers lament their never-ending schedules, hectic pace, and navigating the overwhelming amount of data and emails that flood their inbox daily. Even as the manager role further evolves to place an emphasis on talent development, the manager will still be responsible for their own work streams and continued maintenance of their own expertise. All of these pressures require greater capacity to make trade-off decisions to lessen the cognitive load required to be an effective manager in today’s complex marketplace. A trade-off decision
Afterword
249
involves evaluating a set of alternatives against one another to determine a course of action. The trade-off decision process involves having to decide to give up one thing in order to pursue or attain something else. Rational economics presumes a cost benefit analysis would be completed, with the decision-maker accurately choosing the option which would maximize their own interest. Yet, we now recognize from behavioral sciences, that relationships, for example, can trump rationality, or that a fear of loss will cause one to prefer a less optimal option. As Simon (1956) remarked, one can only hope to satisfice among a choose of alternatives. The question is how can managers create greater capacity to make better trade-off decisions and maximize their time spent investing in both themselves and their teams? The answer lies in the creation of slack. Mullainathan and Shafir (2013) use the following analogy to illustrate the importance of having slack in one’s day to make better decisions. They provide the following scenario. You and your friend decide to take a road trip across the country. You are given a very small carry on size luggage to pack your items. However, your friend is given an oversized extra-large suitcase. As a result, your friend has room from not only what he needs for the trip, but also throws in some frivolous items just in case you encounter a rainy day on the journey. But, you are forced to make many trade-off decisions as you have no room for extras. In fact, you barely have room for what you may need on the trip. For example, do you pack the umbrella and rain boats or forgo these potential necessities and hope for no rain?
Mullainathan and Shafir (2014) remark that the size of the suitcase either enables or constrains your ability to make good decisions that will benefit yourself and others. As a person with the smaller suitcase, you are required to make predictions about future needs—which behavioral research suggests people are not very good at. However, the slack capacity afforded by your friend’s larger suitcase dramatically simplifies their planning (and ultimately enjoyment) relative to yours for the same trip. Managers are all too often trying to pack in more than a day’s worth of activities in a 24-hour time block, and as a result they lack the necessary slack to make good decisions and develop people in the workplace. The question this illustration poses is, how much space is left in your suitcase at the end of the day? Do you have enough room to make rational decisions and not fall victim to the influence of the many heuristics that can get in the way? Today’s management more closely resembles a long-distance marathon, which requires one to have both the capacity and sustainability to engage in longer term decision-making. Therefore managers must aggressively seek to simplify the more they face complexity in the workplace. One of the best ways to accomplish this is through the creation of slack in the system. In order to adapt to change, think creatively and manage effectively, slack is a necessary component in the
250
Afterword
new paradigm of management. The harder one runs at maximizing efficiency during the day-to-day execution of tasks, the more costs they will likely encounter at an expense to future growth, development and adaptation. In order to effectively engage in the management behavioral activities described throughout this book, the following management tips are provided. 1. Proactively build in buffer times when deciding on timelines, deadlines and meetings. You are likely to be overly optimistic on the team’s ability to accomplish a task, make decisions and engage in productive meetings. A simple way to help plan for the unexpected, and allow the team necessary time to think, is to build in slack time into one’s calendar in order to effectively transition from one activity to the next. Rather than schedule back-to-back 30- or 60-minute meetings, schedule 20 or 45 minutes to allow for slack time. You can then use this intentional slack time to properly reflect and transition into the next activity. 2. Tackle your high priority items at the start of the day. As time progresses your ability to fight back decision-fatigue is going to wane. So, rather than save your coaching and development activities to the very end of the day, do them right upfront. Your best energy and ability to behave rational is when few decisions or actions have been completed. Do not wait until the end of the day to build the necessary social capital required with your team to sustain their performance over the long-run. 3. Make time for your own development that is free of distraction and interruption. Emails and the sound of constant pings from employee instant messengers can highjack the best of intentions. Managers must not be afraid to disconnect—literally—from their technology to reinvest in their own development. This allows employees to act autonomous and be free to make decisions, while allowing you the necessary time to recharge and come back with your best foot forward. The role of the manager is likely to grow in its complexity the more markets and organizations evolve to meet the changing needs of the 21st century consumer and workforce. The manager’s ability to effectively build social capital to lower the costs of business transactions will be instrumental to building and sustaining competitive advantage. Historically, a manager only had to concern themselves with planning, directing, controlling, and organizing resources to achieve this end. Today, managers need to become experts at connecting, coaching, empowering, and adapting. The proper utilization of these skills hinge upon a behavioral understanding of human psychology and behavior. Managers who are able to recognize the humanity within their team by building environments that allow for cooperation and active knowledge sharing, will not only achieve greater organizational success, but also reap the benefits associated with the development of others. Indeed, managers who make decisions based on enlighten self-interest for the development of others will outperform the rational economic manager simply
Afterword
251
seeking to control divergent self-seeking agents in the workplace. This of course requires slack in the system to learn, grow, and adapt. A question to consider, as you contemplate the research and new paradigm presented in this book is, who would you rather work for? The behavioral manager seeking to leverage your innate desire to achieve success and connect with others in the workplace, or the command and control manager simply out to maximize their own interests and mitigate the agency costs you as an employee pose to the firm’s shareholders? Lead in the way you would want to be led—leveraging the very best in humanity at work, while also creating the necessary behavioral guardrails for better talent decisionmaking. Tomorrow’s workplaces depend on it.
REFERENCES Mullainathan, S., & Shafir, E. (2013). Time Books. New York, NY: Henry Holt & Company LLC. Mullainathan, S., & Shafir, E. (2014). Scarcity: The new science of having less and how it defines our lives. Picador Publishing. Pew Research Center. (2014). Why it’s great to be the boss. Retrieved from http://www.pewsocialtrends.org/2014/01/09/why-its-great-to-be-the-boss/. Scott, K. (2017). Radical candor: Be a kickass boss without losing your humanity. St. Martin’s Press. Simon, H. A. (1956). Rational choice and the structure of the environment. Psychological Review, 63(2), 129 138.