Common decision making & problem solving errors #1

Heathrow Terminal 5 Chaos - management and leadership

It opened on time, within budget (£4.3 bn or $10 bn) and to spec, well the technical specifications anyway. A triumph of a new project management (actually on behalf of BAA it was project leadership and management) model that saw the sponsor taking responsibility, leading with vision and humility and not pushing the risk to the contractors in the usual punitive way of management. BAA looked at all the famous project management flops and realised that the often used model of abrogation of risk and responsibility (i.e. no leadership) to the contractors doesn't produce good projects. It is interesting that many managed and not led projects are government programmes, but that's another issue.

It is estimated by the respected transport Journalist Christian Wolmar that if this programme had gone the way of most other large capital projects it should have overrun on costs by about 40%, been about 1-2 years late and an average of 6 workers would have been killed during the construction phase.

As it is the project, one of the most complex yet, didn't have any of these problems and yet we see this happening, delays, the baggage system halted because the loaders couldn't keep up, glitches due to the complexity of the system, check in staff confused about the new systems. There will of course be a post-mortem, many reports and it will be interesting to see what the results will be of these.

However from a preliminary trawl of the media and BAA / BA material (they are staying very tight lipped at the moment, giving quick briefings and walking off before they can be asked any questions, listening to the passengers stories it sounds like the technical systems are working fine. The problems appear to be when humans who didn't design and grow with the technology are suddenly required to operate it all together.
I am reliably told (by a BAA employee) that every system was tested and retested and works. However everything working together with real people and not the experts and designers operating the systems things started to go wrong.

On the face of it the success of the capital part of the project was down to the sponsors bearing the risk, leading as well as managing the project, by which I mean taking responsibility, allowing the risks to be real and not pretending they don't exist or minimising them, keeping communications open at all levels, listening to feedback at all levels as the project progressed and learning as they went along. The failure of the operations appear to stem from the opposite. There appears to been a lot of management and little leadership when it came to the operations side of things. Both need to work together, especially when it comes to people.

The difference between management and leadership and what happens when both aren't operating together came out loud and clear in the very different press briefings given by BA.

The sight of BA Director of Operations Gareth Kirkwood, clearly rattled, giving a press statement to say sorry (which was good) and then walking off refusing to answer any questions (which was not good), did not help. He was clearly trying to manage the situation however in doing so displayed poor leadership and very little emotional resilience, which are closely connected, especially in times of difficulty.

This is in contrast to the performance today of The Chief Executive of British Airways, Willie Walsh, who was composed, honest and human, took responsibility and answered the questions put to him. Leadership matters as does management - they have to work together.

Above average leaders

• Are the people in your organization smarter / better / more intelligent than the average?
• Are your leaders smarter / better / more intelligent than those from most other organizations?
• Are your leaders smarter / better / more intelligent than the rest of your organization, or do they think that they are?
  
• Are you, your team, your organization better at dealing with ambiguity and risk than the average?
• Are you a better driver than the average?

If you answered yes to the last question then you are in good company. A study by Ola Svenson in 1981. ("Are we all less risky and more skillful than our fellow drivers?". Acta Psychologica 47 (2): 143–148.) found that just over 80% of drivers considered that they were in the top 30% of drivers in terms of driving ability.

In 1987 John Cannell published a study in which he found that every state in the US reported that the students from that state had on average scored higher than the national norm in educational tests!

In other studies, project manager's ability to project manage, leaders ability to lead, people's time management capability, sales ability, ability to deal with ambiguity, police officers view of their force and their policing capabilities, military personnel's view of the standing of their service compared to others, etc. all report the same thing. That they are at least above average and usually in the top few percent of the population.

This tendency to overestimate one's achievements and capabilities in relation to others is a common effect especially when people are reporting on traits or attributes of themselves or groups to which they are affiliated. It has it's own name - The Lake Woebegone Effect after a fictional town in a radio series A Prairie Home Companion, where, according to the presenter, Garrison Keillor, "all the women are strong, all the men are good-looking, and all the children are above average."

Obviously with the exception of a couple of mathematical obscurities, only half the population can be above average.

This may account for one of the findings I had recently that most senior (board level) leaders tend not to engage in development activities but require that others below them do.

Most of us are, it would appear, when compared to everyone else, above average!

Leadership development?

What would have to happen for any leadership development to be called a success?
That it develops more knowledge?
or better skills maybe?
Oh and some leadership models or theories maybe?
A mixture of all of these?

Just what are the attributes of a successful leader and how to best develop them?

How many coaches, leadership trainers and lecturers have answers to these questions that they have thought about before you ask them?

I was interested in what would happen if I started to ask such questions of the people who's job it is to develop leaders either in universities or in industry. The results were enlightening and somewhat depressing. Before I go any further this was an informal research project, but as a result of the findings I have started thinking about a more robust and formal exploration of this subject.

I have set about this task in the last couple of months and made a pest of myself with every leadership trainer and lecturer I have met. On the whole they were all happy to answer me. I have spoken to 161 such leadership developers since January. The lecturers from universities were much more likely to have thought about these questions before hand. Trainers and coaches tended, with a few exceptions, to have to think about this on the spot suggesting that they were just running programmes based on the activities and exercises they knew about.
The academics tended to have thought more about the end result and developed material that focuses on that.
It became apparent that trainers split roughly into two: trainers who mainly run set packages and facilitators who tend to work off the data presented to them by the delegates.
The problem with the academic solutions is that they tend to concentrate on the development of knowledge rather than skills.
Neither group had a ready answer to questions about what is their strategy for developing critical thinking, creativity, and autonomy.
When I asked how they helped to ensure that the leaders developed flexible practices and what they did to develop emotional resilience and the ability to deal with ambiguity I drew a total blank. No one had any thought out suggestions.

It would appear that there is a big difference between academic and industry leadership developers in their outlook and scope. Academics focus more on knowledge development, trainers on skills development and facilitators and coaches on personal development. These are not exclusive, just tendencies towards certain development activities.

Academic sources tend to be more up-to-date than their industry based colleagues. Additionally they are much more likely to present counter arguments for certain theories that industry trainers. Academics are also much more likely to have had their thinking and teaching challenged by peers.

On the other hand trainers are more likely to incorporate new material into their programmes than academics, however such material is much more likely to be unverified. In other words trainers will include material that has little or no research backing. This means that what you could get cutting edge thinking or a pile of drivel. Academics however are not immune to this either, but it is less likely to happen.

When asked how they help leaders make better decisions the most common answer was that simply knowing more helps here. Some (all academics) said they included decision making sciences in their programmes but weren't sure if this actually helped.

Lies, Hillary Clinton's Memory and Leadership Issues

A lot is currently being written about H.C.'s memory / lies / stories. Here are a couple more interesting and charitable blogs from a cognitive perspective :

1. http://scienceblogs.com/mixingmemory/2008/03/defending_hillary_clinton_from.php
2. http://www.neurosciencemarketing.com/blog/articles/hillary-kwame-and-our-fallible-memory.htm
   

I think that there maybe other explanations here, and one in particular that I have researched with leaders, particularly when they are reporting on how they see certain situations like the reality of the market conditions for example.
The phenomenon, 'context recollection' incorporates the affect of the emotions on story telling and recounting of memory events. If there is a strong emotional situational context, in which the story is being retold, particularly those contexts that produce euphoria or fear (risk and ambiguity) there is a strong tendency for the story or memory recollection to be molded to the current context to either carry on the euphoric emotions or to mitigate perceived threats.

The tellers of these untruths know and can report that the memory is not real, however the context appears to change the meaning of the untruth to 'not a lie' for the story teller.

Without evidence to the contrary, many leaders will stick to the 'untruth' and force agreement, creating a false certainty, ignoring and filtering out evidence that everyone else knows the veracity of the situation. Denial of this type is typical mode one behaviour.

This has a lot of consequences in situations where leaders are making decisions based on their understanding of the current situation and perceptions of the past. If they make decisions at times of euphoria or fear (even if they are not conscious of the emotion at the time) the decisions are usually awful ones. Their recollection of the success of the decision is likewise altered by the emotions experienced. This is why I place such emphasis on the development of emotional resilience and intelligence for leaders.

Leaders or followers?

Leadership is a difficult activity: You have to work out what the reality of the environment is; try to predict what will happen over the coming period; decide what possibilities exist or what latitude for action exists; work out where you want to take the company, organisation or country; articulate the same in a way that everyone understands and can buy into; decide the appropriate time scale; methods and so on.

It's a difficult job even in the best of times. However when the environment starts to change or become volatile leading gets really tough. Things are made considerably harder when leaders find it difficult to separate reality from perception. Harder still when emotions start to alter our view of reality.

The research (press release here) I referred to in the last blog has showed that whilst just about all leaders say that they make decisions based on the data, 4 out of every 5 leaders recognise that these decisions , especially in uncertain situations, usually have a heavy emotional basis.

My question is how do leaders learn to make decisions in difficult and uncertain situations?
The answer appears to be not through any formal process. One leader told me:

"A university education is a good start and an MBA helps however it never prepares you for dealing with uncertainty. In fact it makes things worse.You tend to leave thinking that the answers are in the data. In hard times all the data in the world won't help you a jot. It's how you see things and how you fool yourself, and we all do, that counts. Their way of thinking is great for stable times but if you follow their guidance when things are less stable you are going to end up in a lot of trouble."

Another leader stated:

"It is important that people believe I know what I am doing. I have to admit that like many people, when things are foggy you can't in all honesty say I do know what I am doing. I think we all just trust to luck a bit and cast about and see what others are doing. I know it's not satisfactory but what can you do when things are changing so fast?"

.

"What I have learned since taking control of the service is that all the research and models you get fed in training and from college are historical. Not one of them tells you what to do when things have changed or when they are changing. New situations need new thinking, not old research and education. I would place the ability to make good decisions in the face of ambiguity and to be able to think new thoughts in new situations as the number one leadership attributes these days, not the degree someone has." Reported a CEO

Agile Leadership is the ability to be able to lead well in difficult and ambiguous situations, the very circumstances others are clueless in. There is precious little formal preparation for leadership in uncertain times anywhere in the world, which is why leaders are increasingly looking to each others for answers. We run Agile Leadership programs and modules (PDF version)designed to fit in with existing leadership training or as stand alone packages, that develop these attributes. The growing popularity of these events is testimony to the need for something different in formal education and training. I am not saying what is going on now is wrong. It is useful and has it's place. It just doesn't equip people for difficult times, dealing with uncertainty and rapid change where they need to solve problems, make good decisions and lead when everyone else is sat around wondering what to do next; just waiting to see what everyone else is doing (just like the current economic situation where rumour and volatility are rampant). That is being a follower not a leader.

Leadership - leading or following?

Does leadership development come up with the goods particularly when it comes to preparing leaders for dealing with a crisis or ambiguous situations?
Do leadership developers (trainers) know how to develop critical and creative thinking?
We are just finishing off a 5 year research project looking at leadership decision making, problem solving and agility in times of difficulty - when things are uncertain and ambiguous (I will post the articles from this when they are ready). What is becoming very clear is that most leaders have no personal strategy for dealing with difficult situations or ambiguous conditions. The study has found that only about 11% of leaders have such a strategy, or even think about it.

What, you may ask, is the number one leader's strategy for dealing uncertainty or difficulty?
The answer is not very encouraging. It is to see what others are doing and copy it. It's a sort of safety in numbers mentality.

Most leaders don't have a personal strategy for what to do when things get difficult or ambiguous

The second most popular response? To collect more data. The problem here is that the leader's report that this is usually self defeating as the data is normally conflicting and the sheer amount available is confusing. The ambiguity of this strategy usually means that leaders end up making a decision about what data to accept and which to omit. As you can probably guess they largely choose to omit the data that is less optimistic, more confusing and that which they don't understand. When they are confused by the data they fall back on strategy 1. See what everyone else is doing.

The current economic crisis is actually crisis of leadership

You only have to have a look at what is happening in the financial markets at the moment to see this behaviour writ large.

This current crisis is a crisis of leadership. It has been leadership decisions both at corporate and governmental levels that lead us into current economic mess.

Over 83% (the sample size for this study was 1628 leaders from business and service industries in 7 countries) said that they they would not consider them selves to be particularly creative or that they struggled with creativity.

We will look in greater depth this week at leadership development and more from the study.

Ambiguity, bad showers, and organizational restructuring II

This is (finally) the follow-on from this article. In the that article we were discussing when it is that the decision is made to engage in some form of organisational change process. Now bearing in mind what I wrote previously about the regression fallacy and in particular the issue that things only come to our notice once they have crossed some threshold (usually a very personal and somewhat arbitrary threshold) and put it together with what I wrote about our perchance for action bias.

There are some considerations here:

1. The first is that when we actually notice a problem we don't notice the problem, rather we notice the symptoms.
   
2. Secondly, by the time that we have noticed the symptoms there has almost always been a time-lag between the problem occurring and us noticing it (usually as it passes a threshold).
3. When the symptoms cross our threshold we almost always jump into action mode or solutionizing as it is known - as happened in this situation and evidenced here.

So what happens is like trying to use a shower I have at home:

The shower in question is the type that sits over the bath and is connected, via a long flexible pipe, to the bath taps, just like the picture above.
Have you ever tried to use one of these contraptions to have a stand up shower with??

You tend to find that you were are constantly juggling the taps as the water osculates between ice and steam with about three seconds in between where the water is the temperature you want. If you have such a shower you will undoubtedly know what I mean.

The key here is the water pressure and length and bore of the pipe. If the water pressure is low, the length of the pipe is long and the bore is narrow (like my shower), the lag between what you do with the taps and what the temperature the water is when it finally comes out of the shower head is quite considerable.

The effect of this long lag between what I am feeling and any actions I take with the taps means it is incredibly hard to get the right temperature. You either have to make the changes really slowly and incrementally and wait to see what effect it has had (got the link with organisational change?), or if you are in a hurry (because things are bad and we need action NOW) you find that you end up over compensating and a couple of minutes later end up with scalding water. Which when you try to compensate for this, a couple of minutes later you are back to freezing water with a 3 second period of just right showering.

All organisational change has a long lag between what we do and their effects.

Just to make matters worse there is a lag at the beginning from the problem occurring, us noticing the symptoms and then any action we decide then to take. This is followed by a delay before we notice finally what effect our actions have had, which may be months or more likely years down the line. By which time we have got impatient and turned the taps again!

Organizational Change - Leaders leading and managers managing

I am frequently asked why we concentrate on leadership and management, especially in organisational change situations. The answer is simple. We make far too many assumptions about the capabilities and beliefs of these key people. When you analyse why change programmes fail outright or fail to excel in delivering real advantage the top three reasons are:

1. Poor Strategy
   
2. Poor Leadership
3. Poor Management
   

As any organisational development / change process is going to depend on Leaders and Managers doing their job and making a positive impact it is essential that any assumption that they are going to do so are true.

It is quite a large assumption that because someone has the title ‘leader’ or ‘manager’ that they will lead and manage, especially in the difficult, uncertain and shifting conditions of change. This assumption is based on the further assumptions that they know what to do, how to do it and have the mindset and willingness to do what is needed, especially in a situation of change when emotions are often running high. These are difficult situations to manage and lead through, and such situations are an entirely different prospect than say leading and managing in normal operational conditions. There are some questions about the leadership and management which need to be answered:

• Do people know how to lead and manage in such conditions? Different thinking is required in such situations.

• Do they have the skills for such situations? Skills don’t transfer very easily from normal conditions especially when the leader’s and manager’s own emotions are likely to be involved.Do they have the required emotional resilience and intelligence? Can they deal with other people’s and their own emotions in a way which creates a positive working environment where change is constructive, rather than just amplifying fears and heightening emotions?
• Do they have the belief in the change and the vision of the future? People’s attitudes are apparent from the behaviour they display. Our attitudes stem from our beliefs. If people really believe in something they will think and act accordingly. Just asking people if they believe is not enough!
• Do they have a ‘can do’ – positive attitude in difficult situations? All change programmes will have difficult times. People who give up when the going gets tough are going nowhere. Leaders and managers who give up or keep their heads down when the going gets tough are of little use in organisational change situations.
• And finally are they willing to grasp the nettle and actually lead and manage in a way which leaves the organisation and their people stronger and more resilient? Leaders and managers who know what to do and when to do it but who don’t actually do anything will at best have no impact and at worst will have a detrimental influence.

Good leaders and managers can make all the difference between change that delivers massive benefits and catastrophic change that weakens the organisation and the bottom line. This means a bit more than just running a few workshops and briefings.

Leadership Resilience - the difference that makes the difference

Yesterday Keith Mcfarland on Inc.Com posted an article about the Polaris Motorcycle Company. As a biker (BMW) the article caught my eye. As a developer of leadership and organizational resilience the article was a great example of a leader being brought in with no knowledge of the industry or even motorcycles and turning a brand from being seen as one of the worst makes in the world to being some of the most desirable (I would have one!), innovative and well manufactured bikes ever and all during a shrinking US and global motorcycle sales market.
Keith McFarlands bottom line? Leadership resilience. Read his fascinating and inspiring article entitled 'You think you have it tough? here. Then come back here for more or better still head over to Centre i for more, or download the 2008 brochure and develop some resilience in your organization now.

Oh I will get round to finishing off the Ambiguity, bad showers, and organizational restructuring blog asap!

Leaders Leading and Managers Managing II

Many people get promoted to positions like manager or leader because they are good at their job. Others end up being the manager because they have been around longer than anyone else. And yet some become leaders and managers because they look or sound good or convincing. There is a question here:

Just because someone is good at their job, have been around longer than anyone else, look good, sound good are more convincing than others, does it necessarily mean that they will be good at being a manager or leader?

We are just finishing a research project one part of which was to look at leadership and management development:

From the preliminary results we estimate that only about 15% of leaders and managers receive any form of development for the role in preparation, before they take on the position.

Additionally and astonishingly, only about 40% of managers and 30% of leaders ever receive any formal development, like training, coaching or mentoring for example at anytime whilst they are in the role. The further up they are the less it appears that they are likely to have had any form of development and the also they less likely to engage in such activities.

Just under 90% of leaders and just over 70% of managers admit that they largely make it up as they go along, especially as far as decision making is concerned.

78% stated that they were aware that they had either frequently or very frequently made decisions based on their emotional reactions to events. Paradoxically 83% of leaders also stated that most of their decision making was based on the data. So maybe the data was sparking the emotional reaction. I'll let you know when the analysis is complete.

Something to think about.

Leaders Leading and Managers Managing

I managed to talk to the leader who sent out the email yesterday. Her responses to my questions were enlightening:
"I know about all the work being done but it was taking far too long"(Urgency and action bias)
"I hadn't heard anything for ages about what was happening in OD, they had just dropped off the planet as far as I was concerned" (Stakeholder management and different perceptions of time)
"Someone had to move things quickly. The company is in a bad state. I saw the last quarters figures. We don't have time to parp about." (Action bias, possibly regression fallacy, certainly lack of emotional resilience - panic)
"The effect? To motivate people I hope and get things moving" (Assumptions of cause and effect)
"Well we do need to shed a load of people. This way we will see who gives up and who floats to the top." (Concept of motivation)
"Nothing really, it's like all leadership decisions - you make it up as you go along. You do whatever you think is right at the time. I am sorry but we don't have time for all that fluffy stuff. We need to move and now." (To the question about how she developed as a leader and learnt to make decisions).
"Yes I suppose I could have done it differently or even better, but if we don't do something now it will be too late. I can see that it was a bit harsh and maybe a bit of a reaction to the figures but someone has to grip this."
"Well they are just going to have to get on with it aren't they? That's what we pay them all for."


Interestingly this has happened at a moment when we are just getting some initial results from some research into management and leadership development which makes for interesting reading coming next and then we will get back to the showers...

Communicating Change

Just a quickie. Sometimes you are left wondering why some companies bother to bring in expertise or even bother with their own OD departments, managers and leaders.

We have been working with a large organization who are about to go through a serious change process. A lot of research and preparatory work is being done at the moment, especially in the area of developing resilience, dealing with ambiguity and opportunity finding prior to any change. An internal taskforce is (was until this morning that is) working on new structures, strategic alignments and organisational/talent development.

This morning everyone in the organisation received an email from one of the board members with a powerpoint attachment. The email was titled 'Organizational Change - new structure'. The powerpoint with the same title comprised of 5 slides with a series of organisational charts. The email said that this was the new organisational structure. There are no explanatory notes to accompany the slides.

The entire organisation has as you can well imagine, now stopped working and are engaged in a process of trying to work out if the new structure includes them or not as no names are supplied just a load of newly named departments and reporting structures.

Many of the managers have managed to work out during the day that the new structure only accounts for about 1/4 of them.

How to stop an entire organisation in it's tracks in 2 minutes flat. Amazing.

Ambiguity, bad showers, and organizational restructuring

You look at your company or organisation. It has grown. Times have been good. Now times are not so good. The profit margin has shrunk. Cash flow is starting to become a problem. You look at your company. The last time you really looked, (you have been so busy making money or providing your service that you haven't really had the time or the impetus to stand back and have a good long hard look) it was smaller and less complex. Now it looks a mess compared to how it appeared before. You are not really sure what everyone is doing. It matters now that everyone is productive. It matters now that in a time of falling income somehow the cash flow situation is made more comfortable. Almost all the data you see is worrying. This is no longer a time of expansion and spend . Spending when there are copious amounts of inflow is easy. You can convince yourself that almost anything is worth a punt when things are good. The risk of loss is low. Even if it doesn't work there is enough money to ride over any errors. Taking risks is easy, the overall impact on the business, when things are growing and going well, of a bad thing happening is minimal. When we are closer to the edge of moving into a loss situation the impact of risks could (perceptually at least) be greater. We are now in a mindset of poverty consciousness as opposed to a mindset of abundance consciousness. This affects our perception of risk and uncertainty.

"a mindset of poverty consciousness as opposed to a mindset of abundance consciousness"

So what are we going to do?

Well it is obvious that if things stay on the current course what we fear is very likely to happen. This is a downwards spiral we need to halt and if possible reverse before things get critical (or even more critical if we are already at a crunch point).

Hmmmm a no brainer really. We need to act fast, work out what bits of the organisation are profitable and which aren't. Then we need to reorganise (reorganize - translation). Simple, neat and logical.

Or is it? This week I will have a look at the thinking, myths and rethinking about organisational change, decision making, the role ambiguity plays and what this all has to do with bad showers (of the bathroom type).