Dan Erwin

Dan Ariely and Business (Economic? Personal?) Optimism

If you like Martin Seligman (Authentic Happiness, etc.) and David Goleman (Emotional Intelligence, etc.,etc.), you'll really like Dan Ariely (Predictably Irrational).  In contrast to Seligman and Goleman who begin with psychology and suggest its applications, Ariely begins with an ordinary subject like sex, gambling, economics and then brings the psych research to bear on it.

Case in point:  Optimism.  The August 24 and 31 issue of Business Week is devoted to the case for optimism.  Ariely brings basic psych research to his intriguing and enlightening article:  The Curious Paradox of 'Optimism Bias.  With his background in behavioral economics and the financial meltdown, he's regularly asked about his attitude toward the future.  He sees two question in the inquiry:  Where does he fall on the optimism spectrum?  And, can we be optimistic in the face of the recession? 

Ariely responds with a discussion of the optimism bias:

The basic idea is that when people judge their chances of experiencing a good outcome—getting a great job or having a successful marriage, healthy kids, or financial security—they estimate their odds to be higher than average. But when they contemplate the probability that something bad will befall them (a heart attack, a divorce, a parking ticket), they estimate their odds to be lower than those of other people.

 

Your question might be so what?  Obviously, the bias can both help and hurt us.  We can suffer because we're too optimistic and end up poor and in the bankruptcy courts.  Yet, as Ariely argues, society often benefits from behavior "spurred by upbeat outlooks." 

 

What would our nation be like without entrepreneurs willing to risk creating startups, developing new medicines or openning new businesses?  In spite of the fact that the success rate of start-ups is very low, people start them all the time.  Optimism is a half-full glass.

 

But as this meltdown has shown, optimism can also be folly.  Thankfully, we can and do learn from these failures.  Some of the new banking regulations, for example, will be found to be useful.  As Ariely concludes, changes like these "are unlikely to prevent all future financial shenanigans."  Yet he's optimistic about the ability of at least some of the regulations to have a positive impact.

 

If you're an optimist like me, how do you check your occasional over-optimism?  I have a wife, a smart daughter, clients and friends that give me feedback on my ideas.  I'm proactive about getting it.  I've learned that a "filter" to push back can be very useful.

 

On the other hand, what do you do if you're regularly "under-optimistic?"  In today's world, the need to manage ambiguity and an optimistic outlook to support your creativity is one of the few differentiators in business.  I'd spend time around the over-optimists to see what I can learn from them.

Gen-Y Skill: How to Choose Your Careers

Yesterday's blog challenged the traditional perspective of choosing a career.  I pointed out that the traditional way of choosing a career won't fit for the volatile, unpredictable 21st century.  You or I do not have one true self.  Instead we are a lot of selves.  We have identities for the future, some of which we may not even be able to imagine.  As my protege, Liam O'Dea, that English major from the University of Virginia put it,

I entered business as a temp in June 2006 because I did not want to work nights waiting tables while I pursued my writing ambitions.  I sought predictability in both schedule and income.  After a few months I was hired on as a permanent employee for a well-respected financial institution.  As an English major, I assumed this would NOT be the environment in which I would thrive. 

But thrive is exactly what he has done.  He took a job largely for a predictable salary, and started exploring.  He has a lot of possible selves competing for his attention and most lack detail and contour.  After less than three years, he's found that some appeal to him more than others. 

Finding a new self for Liam is not dropping one self in favor of another, but a process of tinkering with a whole set of possiblities.  As Herminia Ibarra writes, he's already trying new selves on for size, elaborating on some, dropping others, getting rid of outdated images.  Over the past two years he's spent a great deal of time junking a few ways of thinking and acting that he's decided don't fit some of the new selves he's interested in becoming.  And he's also trying on new ways of thinking and acting both at work and in his social life.

What's important to understand is that only by testing do we learn what is really appealing and feasible.  In that process he and all of us can create our own opportunities. 

FYI:  The research by Ibarra shows that the traditional career approach of planning and thinking is not very effective.  Instead, we adults are actually much more likely to act our way into thinking than to think our way into acting.  As she points out, the logical sequence of reflect then act: plan, then implement is reversed in career development because the kind of knowledge we need is built upon real exploration and experience, not upon introspection or planning.

In the 21st century that's far and away the most useful means for beginning the career choice process--no matter at what stage we find ourselves:  Gen-Y, Gen-X, Boomer and older.

In the 21st century, we also need to deal with the new economy and the new career environment.  Indeed, we need to look at career not from the perspective of banker, marketer, retailer or etc.  But instead from the standpoint of criteria that are now valued and will be in the future.  That will change the shape of careers.

GRADUATING GEN-YERS: HOW TO CHOOSE A CAREER

Recently I’ve noticed a number of blogs and sites oriented to choosing your career.  Without exception, the format is a traditional list of vocational choices:  banking, marketing, finance, medical or even your dream career.  Though this process made sense in the 20th century, in the new normal--the 21st century economy of chaos, volatility and uncertainty, that traditional model will not stand up to serious scrutiny. 

There are a number of reasons, some well-researched, why the traditional model of career choice lacks validity.

 

Traditional career advice is linked to personality testing and is based on the belief that who we are is defined or explained by an “inner core” or a “true self.”  Traditional psych tells us that we’ve formed a relatively stable personality structure with specific attitudes, preferences and values.  If you’ve been through a college career testing program you know the tests are largely about your “preferences.”  And, as the theory goes, they’ll help you determine a good career fit.  Whether you’re introverted or extroverted, analytical or intuitive, like structure or a more chaotic environment, knowing your true self will help you avoid a dead-end pursuit of fame and fortune. 

 

Still another flavor of career advice stems from development theory which says that people go through a series of age-related phases.  Progress increases with each developmental stage causing us to shift priorities, “eventually attending to values and interests we had previously ignored.”  As you get older, theoretically, you realize that many of your career choices were the result of your parents’—or teachers, spouses or friends’ recommendations.  Eventually, as you mature, you become your own person—if you pay close attention to your development.

 

As Herminia Ibarra writes, the real weakness of both these theories is that they are built on a static view of the person.  Your task, the advisor tells you, is to dig down into your core, find out who you are and follow your passion.  To be blunt, the real truth of the matter can best be explained this way:  digging down is peeling away the layers you’ve accumulated.  But when you peel away enough layers, it’s like peeling away the layers of an onion.  When you get to the bottom there’s nothing there.  Aaaargh!

 

The fact of the matter is a very different understanding of identity and it tells us that we are not one true self, but a lot of selves.  Furthermore, those selves exist in the past and the present, but we can barely forecast what they’ll look like in the future.  In other words, as Hazel Markus of Stanford tells us, there’s a whole cast of characters in our hearts and minds.

 

So here’s the big question:  if we are a whole cast of characters, how can we even begin to make a career choices?  The good news is that new research has shown us ways to get at career choice that can give us far more job security and a better future, even in a highly chaotic and unpredictable world.

 

Stay tuned.  I’ll work on the answer to that question in detail tomorrow.

 

- - - - - - -

I’m really curious about the questions this blog has surfaced. I'd appreciate your comments.

Gen-Y Competencies (Part 2): Six Relational Skills

In an earlier post I pointed out that though we might think from our college experience that functional skills are key to success, that's false.  It's those six relational skills that make possible nearly all business expertise--from managing up or building a network to taking advantage of entrepreneurial opportunities resolving interpersonal conflicts--or just learning new technology. 

The capacity to initiate conversations with individuals who do not know you is an inevitable requirement in the business setting.  Of course, not everyone has a strong, charismatic personality that includes the necessary people skills.  Still, all of those initiating skills are quite learnable. 

The place to begin is with the assumption that people around you want to get to know you and want to lend a hand when you need it.  Upper Midwestern humility is a good characteristic, but it will hamper all kinds of opportunities if you keep thinking, "I don't want to be presumptuous and assume that someone wants to get to know me."

If you're still uncomfortable, become a really good noticer.  Watch how other people introduce themselves.  Pay attention to what works best and what doesn't.  All of us humans learn by mimicking, so plagiarize the language you hear until you're comfortable with it.  Try it on in a secure setting, outside of work, at the mall, the garage or the grocery. 

The largest warehouse grocery in our community has a highly diverse customer base, so I take advantage of opportunities there to get to know the immigrant community and practice my initiating skills.  Here's my secret:  the best place in a large grocery is the produce section where people are pawing the vegetables and fruit and taking their time.  I'm curious about the Muslims, Indians, Ghanians and Southeast Asians that I see there, so I engage them in a conversation.  I've never been turned down for a conversation, even by Muslim women in hijab.  As soon as you gain one level of comfort, move on to still others.  Keep moving out of your comfort zone as you gain skill.

I lay out both the protocols and scripts for initiating relationships in still another post on the specific communication skills.  It's really basic/basic, and you'll want to move on as quickly as you have some comfort with it.  However, it's a tried and tested model that clients all over the nation have found successful.  By the way, all kinds of people including senior officers at major corporations are very uncomfortable initiating conversations.  About ten years ago the CFO at a Fortune 50 corporation hired me for maximum fee to help him learn to do one thing:  initiate conversations at a cocktail party.  His job required conversational skills that he'd previously avoided.  If you're uncomfortable learning initiating skills, you're certainly not the only one.

Talk first, and don't wait for others to intiate the conversation.  At work it's important to learn to initiate conversations with peers and bosses you'll be dealing with.  Don't get in the traditional habit of waiting for your manager to initiate conversations.  And get to know senior managers in other parts of your firm, and ask to learn about their side of the business. 

Learn to lean on people without thinking of it as a burden.  It's actually a chance to build bridges and relationships.  Clearly, the people who are most successful in business have concluded that asking for help gives the people you ask an opportunity to share their "goodies."  There are few people who don't want to advise.  They genuinely appreciate the opportunity to help, especially if you have some great initiating questions. 

Gen-Y Skill: Productive Use of Personal Complaint

Over time I've developed a number of aphorisms, concise statements in easily memorized form of an original thought that I share with my clients.  Inevitably they are counter-intuitive and broadly relevant to a number of situations.  Thus, I've come up with one very important aphorism about the clients who all of us service:  If your client doesn't complain to you, you're probably in deep trouble (I prefer the obvious expletive--it travels better).

I use the term client to refer broadly to anyone on whom we are dependent.  Thus, all of us in business have clients, whether informal like our boss, subordinates or peers, or formal as in internal clients in other disciplines or external clients that are revenue producing customers.  Finance, for example, serves clients and is dependent on other divisions of an organization such as manufacturing or marketing or even sales.  Sales and marketing have external clients or customers for whom they're responsible.

Why is that aphorism so important?

Let me give you some background.  Many of the better corporations have customer relationship groups whose sole task is to respond to the client, resolve the problem for them, and pass on the issues to the relevant internal group for assessment.  You may know that organizations have changed products, services and even strategies as a result of the input from customers.  One of my first corporate clients, Mary Ellen Jenks of PIllsbury (now retired) was the first woman in the company to be rewarded with a vice-presidency.  She received the promotion in the late 1970s as a result of her insights into the strategic value of her customer relationship group.  Originally, she managed the nationally famous Pillsbury Bake-Off, but by recognizing the value of customer complaints, she was able to provide a far better strategic service to her company.

It was the firm's clients, she realized, who keep the company posted on its products.  Before she fully understood the value of the complaints about Pillsbury products, she resolved customer problems by sending the caller refunds and coupons for other Pillsbury products.  Over time, she realized that those complaints were of much strategic value to her company.  The complaints made it possible to better understand client needs and expectations.  With in-depth analysis of the complaints she was able to make important, often strategic recommendations about the company's products and services.  As a result of the complaints the firm reformulated some products, added new products and repositioned still other products.   

As you can tell from Mary Ellen's experience, by using complaints wisely they are a key not only to the customer's needs and wants, but also to future business opportunity.    

What's true of a company's products or services is also true of the individual servicing of our own clients.  It is Inevitable that clients will experience at least minor frustration with our service of them, whether over misunderstanding, failure to check in or failure to perform at the level of defined expectations.  Misunderstanding is simply part of being human.  In fact, it's impossible to service a client without some level of client frustration over time. 

However, some clients refuse to  complain.  These are the clients that I label "stamp savers."  They're passive-aggressive and they store up their frustration--until it explodes.  At that point it's often too late to satisfy and retain the client.  If your clients are internal they may complain to senior management and switch providers.  If they're external, they may simply cut you off from business with them.  None of that is good for your career.

It's important that we learn to get smart about the potential for client complaints.  Periodically, I simply ask for complaints if they're not being volunteered.  Simple questions such as, "What's going well with this project?" or "What needs to go better on this project?" make it possible for me to pick up a lot of information.  The questions used wisely will give your client the opportunity to complain. 

When a client complains to you, smile and realize that he/she actually trusts you enough to believe that you can fix the problem.  Admittedly, your first response to a complaint may be defensiveness or anger, but get beyond that.  It's a great opportunity to learn a lot and build a far better relationship.  By the way, you're liable to be rewarded for that kind of unique ability.

This belongs on your front lobes:  If your client doesn't complain to you, you're probably in deep trouble.

Gen-Y Skill: How Are You Gonna Choose Your Career?

Saturday's Financial Times had an insightful article by Edward Luce on how President Obama is approaching the rowdy healthcare protests.  As Luce suggests, "by far the largest chunk (of protesters) know little about the proposed reforms and have no intention of of rectifying their ignorance."  A significant proportion of the protesters believe that Obama was born outside of the states, that he is trashing the Constitution, that he intends to take their guns away from them, make everyone support abortion, and most flagrantly, establish death panels to determine whether or not Grandma should receive health services.  If you've had speech 101 you know that these are all emotional arguments, completely void of fact-based thinking.

Like Luce, I have no intention of taking a position or arguing the healthcare reform.  Instead, I want to focus on Obama's approach to the issue and ask whether, whatever your perspective on healthcare reform, he should use emotion-based or reason-based arguments against protesters who are already convinced that the president is intent on doing them harm.  In short, I want to talk about process, not substance.

Luce makes a significant point:  "Mr. Obama, along with other educated liberals, shares with the Clintons the belief that the fight is won or lost over the quality of reason."  What's clear, however, is that whenever an audience has internalized its perspective, NO AMOUNT OF REASON, will have the slightest impact.  As the colorful Luce, puts it, "for all their impact, reasonable people may as well be living on Venus."

What does Luce recommend?  Quit trying to reason with the crowds.  Tell the story about your grandmother being denied healthcare by the insurance companies when she was dying of cancer.  Tell it.  And tell it again and again.  In the final analysis, the side (insurers, neo-cons, traditional liberals or the president) that identifies with Americans' emotions will get the upper hand.  In other words, you're going to have to use emotion to deal with emotion.  Reason won't work.

As I reflected on the accuracy of Luce's conclusion, I segued immediately into a totally unrelated issue:  the bulk of the Gen-Y, Gen-X workforce seems to be caught up into a highly emotional basis for career decision-making.  Wherever I turn I'm faced with the settled conclusion that the best way to make a career decision is to "follow your passion."  Whenever I suggest that following your passion is a highly questionable model, I'm met with rejection, turned off and viewed as a visitor from Mars.  I seem to make little to no headway with the majority of the population on that subject.

Following Edward Luce and persuasion theory I've decided that in the future the best way to deal with the subject is to relate the truth of the matter in story after story with this single line:  "If you follow your passion, you're liable to end up on the streets, jobless and poverty-stricken."  There are very few people on God's green acre that will have the good fortune to be able to follow their passion and succeed in life. 

The fact of the matter is that if we want a decent income, some job security and a work future, we're going to need to use the gray matter, get as good an education as we can possibly manage, make learning central to our life the rest of our life and make our careers and career changes a strategic decision.  LBJ once said the only way to deal with Congress is "continuously, incessantly and without interruption."  The only way to succeed in this highly chaotic and volatile 21st century economy is to be sure that we know how to think and that we're thinking "continuously, incessantly and without interruption" about our careers.

Stay tuned.

See also:  Gen-Y Squishy Skill #3: Adventurous

Gen-Y Skill: Identifying Organizational Power

Sunday's NYTimes had an excellent reminder on where to look for the power in organizations.  As the writer, Daniel Sorid, an MBA student at Columbia reminded us, the basic way of viewing power was laid out by the social psychologists, Raven and French.  

I learned years ago that in the American culture "power" is essentially a dirty word, the equivalent of four-letter expletives.  Yet the truth is that until a person learns to identify, manage and develop power on his/her own, the world will remain pretty small.  Formal power or what's called "vested power," the kind that shows up organizational charts doesn't always work--maybe, rarely works--with peers or superiors.  Our American culture has made this a pretty flat world and few pay much attention to hierarchy other than lipservice. 

Informal power can be much more effective.  Furthermore,it's the only recourse for 95% of the workforce.  In the article, Sorid identifies several types of informal power.

Sometimes personal characteristics give a person power, especially when those characteristics are valued by the organizational culture.  In the Upper Midwest, for example, you don't tout your wealth, your abilities or your connections.  Humility is the watchword.  Years ago I worked with an IT director in Minneapolis who had been acquired from a St. Louis company.  The IT director's problem?  According to the Minneapolis culture he was a frustrating braggart.  He talked about how much he'd paid for his car and his new home.  The people with power in Minneapolis worked on a reputation as humble, caring individuals, and those who manifested those characteristics and were technically competent had a leg up on the rest of the population.  When your personality harmonizes with the culture, you're setting yourself up for opportunity if you can match the personality characteristics with competency.

Control over resources often grants an individual significant power.  This can be as insignificant as the withholding of a signature on an expense form, control over meeting agendas, access to senior execs or even information about how to use a certain piece of software.  Ever noticed how a manufacturing slowdown gives power to a few people with the right problem-solving skills?  When a company makes significant IT changes, the people with the right knowledge-base automatically have the controls.  Pay attention to who's yelled for whenever certain kinds of breakdowns take place.  Those few people are collecting IOUs that they can cash in sometime in the future. 

Finally, effective power brokers build a broad base of alliances throughout the organization.  They don't get caught up in the "birds of a feather syndrome" by making colleagues of like-minded people.  They go cross-disciplinary, and build relationships with others who have power, often ignoring whether or not they happen to like that person. 

I've saved two issues for future blogs.  How do you counter entrenched power in an organization and how do you pay off your indebtedness?  The use of power works like banking.  You can't withdraw, unless you make deposits.

For those who like to bone up on the best stuff, here are two resources:

Jeff Pfeffer, Managing with Power and Robert Cialdini, Influence: Science and Practice  

Here's a related post:  Who Should Be in My Network?

 

Quotation of the Week: Bazerman and Malhotra

It's not news that people are irrational and sometimes make mistakes.  What is news is that, in the context of decision-making and negotiation, many of the mistakes people make are systematic and predictable. 

                From Negotiation Genius, by Max Bazerman and

                Deepak Malhotra

                

Street Smarts and Getting Smarter Every Day

I've been musing for some time over an intriguing question a bright Gen-Yer asked.  Barely a year out of college, and an obvious fast-tracker, Joe had this question:  "It's obvious that I've got a lot of things to learn.  Too many.  So where do I start?"

There's a huge opportunity for learning in the daily routines so I quizzed Joe on what he'd learned from his work setting.  He was comfortable that he'd learned everything he needed for his current job, but he wanted to move on to a better opportunity within the organization.  

FYI:  Since the 1970s, learning theorists have argued that the more relevant the learning to an adult's life, the longer the learning sticks.  Put it this way: In contrast to children who'll learn what you tell them to learn, adults only learn those things that they perceive to be immediately relevant. 

Here's the rule for the Joes of this world:  Focus your learning first on those areas in which your improvement will directly impact the success of your project, your organization or your firm's business. 

For many new employees, if not most, there's little awareness of what skills will directly impact the relevant organization.  That's because few people understand an organization's strategy.  Historically, issues of strategy don't come up until you've been a manager for some time.  However, in the new economy, it's important for all employees to make an understanding of the firm's business and its customers a priority.  You're better able to focus your work, your learning and your creativity with that knowledge base.  

Back to Joe.  He needed a real update on the firm's business.  And that was the first learning on his new list.  And that's pure street smarts.

If You Want to Be Creative, You'll Need to Learn to Ask Questions

I don't usually open a book of lists, but Alan Webber's provocative new book, Rules of Thumb:  52 Truths for Winning at Business is worth a great look-see.  Although it's primarily oriented to organizations, I found myself applying his insights to careers.  As Bob Sutton pointed out, one of the most relevant is this rule:  A good question beats a good answer.  (This is the reason Nobel Prize winners most often give for their success.)  Webber puts it this way:  “If you want your company to be committed to innovation, you need to be a questions company much more than an answers company.”

To a great degree your work opportunities and success are going to be tied to your ability to be creative.  So take Webber's statement about innovation and apply it to yourself.  Why are questions so important?  Questions are how we learn.  And that means that questions are how we create. 

Here are a few suggestions for sharpening your ability to ask questions.  These are the really, really basic questions.  But they've got to asked before you can get to the kind of questions that lead to creativity.

Awareness.  What are the most important things you need to know?  

Ability.  Who has the expertise to answer your questions?

Answer:  Are the responses you've received verifiable?

Action:  Do your questions have real-world consequences?

What happens when you take your idea to the extreme?