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August 12, 2009

Organizational Behavior in the Stone Age – How Evolution has Shaped and Biased our Behavior

Jim Neroda and I are writing a paper on how human nature impacts strategy formulation and implementation.  While doing research on this topic, we found an excellent Harvard Business Review article titled “How Hardwired is Human Behavior?” by Nigel Nicholson, July-August 1998.  This article is far superior to most Organizational Behavior literature and should be required reading for every manager.  The paper can be purchased and downloaded from Harvard Publishing at:


http://harvardbusiness.org/product/how-hardwired-is-human-behavior/an/98406-PDF-ENG?Ntt=hardwired
 

The basic premise is that although humans have developed highly advanced technology and complex organizations, our intellectual capacity is still based on what evolved during the Stone Age.  The author draws on the concepts of evolutionary psychology to explain how behavior that evolved in a hunter-gatherer society leads to many of the quirks we see in how people interpret information and make decisions in an organizational setting.  As the author puts it, “You can take the person out of the Stone Age … but you can’t take the Stone Age out of the person.”  Observations include:


Emotional Filter – As humans evolved, using instinct to react immediately to danger was key to survival.  The residual effect today is that no matter how hard we attempt to apply logic and reason, we always have an emotional filter that reacts first to information.  In particular, this filter is tuned to avoid danger and reacts to bad news first and most aggressively.  Hence the ‘shoot the messenger’ reaction we see in some executives.


Aversion to Loss – When we existed at the edge of survival, our behavior was asymmetrical depending upon whether we were above or below subsistence.  Above subsistence, we were extremely reluctant to change lest we disrupt what was working.  Below subsistence (faced with a starvation, disease or a predator), we would take immense risk to try and stay alive.  The modern equivalent is that when we are comfortable, we avoid change that seems risky.  Yet when we feel threatened, we’ll behave irrationally – such as coming apart emotionally if we’re laid off or compounding investment losses in our portfolio when the market drops. 


Overconfidence – Confidence was undoubtedly an asset in the Stone Age – it helped ensure rapid decision making and attracted tribe members.  Today confidence is still an essential element of successful leadership.  The downside is that it can cause leaders to ignore warning signs and forge ahead regardless of negative feedback – believing “…there isn’t a problem they can’t control…”


Classification – Early humans needed a simple way to understand their environment without the help of science.  Understanding which plants were edible or which people could be trusted required quick interpretation of visual cues.  The carryover today is that people still sort others into groups based on quick assessment of their looks and actions – making effective teamwork between different departments and business cultures a real challenge.


Gossip – Our Stone Age ancestors lived with frequent changes in leadership due to injury and disease.  Knowing what other clan members were thinking helped them anticipate and influence changes in the hierarchy.  Today’s equivalent is the “rumor mill” – which is still a tool for getting early information and shaping opinions.


Empathy – Empathy is a corollary skill that supports gossip.  Clan members are more likely to share information with understanding people.  Those who can anticipate how others are feeling will ask more pertinent questions.  In general, people have always been co-dependent for survival and rely on friendly exchange of information and favors.  The modern downside is that empathy causes us to believe that others are more like us than is really the case and we make excuses for weaknesses rather than addressing them head-on.


Public Contests – In ancient societies, status was determined by the strength, skill and aggressiveness of group members.  This ingrained behavior persists (largely in males) in the form of public displays to demonstrate virility and competence.  Even when all “…would benefit from cooperation, men frequently choose competition.”


Tribalism – According to research, the human brain is only able to really know and understand about 150 other individuals.  Coincidentally, Stone Age clans appear to have been limited in size to about 150 members.  In addition, throughout history and across cultures, family businesses typically have no more than 150 members.  The implications for modern organization are that similar sized groups are both inevitable (defined by departments or cliques) and are generally most productive.


Hierarchy – Social status based on wealth and behavior was important in the hunter-gatherer world since it lead to being sought out for alliances or leadership.  This inbred desire to obtain status carries over to the business world - humans expect and will create an informal hierarchy even in temporary work groups.  This behavior supports the use of rewards and recognition as management tools.


The author closes by stating that we ignore evolutionary psychology at our peril.  “…encouraged by the optimistic recipes of management cookbooks or constrained by technological and economic imperatives – (managers) falsely believe that with commitment, resources, and ingenuity, anything is possible.  In this spirit, time and time again we have tried and failed to eliminate hierarchies, politics, and inter-organizational rivalry.  Evolutionary psychology says it’s time to recognize what we are and use this information to live in harmony with our hardwiring.”

April 21, 2009

Inspirational Leadership

I recently attended a Semiconductor industry meeting where one of the speakers referred to the incredible leadership displayed by Bob Noyce.  Bob was a founder of Fairchild Semiconductor and later Intel Corporation.  He was a pioneer in developing the integrated circuit and, in many ways, was instrumental in creating Silicon Valley.  I had the privilege of meeting Bob in the late 80’s when he was President of SEMATECH.  He was, without a doubt, the most impressive person I’ve ever met.  He had incredible “presence” based on his intelligence, articulate way of framing issues, exceptional poise and overall sense of competence.


It’s been reported that another Intel legend, CEO Andy Grove, found Bob’s nice guy attitude irritating and believed that his leadership style was ineffective.  Andy, known for directness in finding fault, had a fiercely competitive and highly demanding leadership style.  According to Richard S. Tedlow in “The History and Influence of Andy Grove”, this created a “pressure cooker” environment within Intel.  Interestingly, just as both Bob and Andy were successful with dramatically different leadership styles, it’s clear that both highly stressful and more constructive cultures can lead to corporate success.


The difference between these cultures is in the secondary or unanticipated consequences of using conflict and criticism to motivate performance.  Along with higher pressure, you also get defensive behaviors – including unwillingness to volunteer new information, unproductive time spend on CYA activities, attempting to win points in meetings at others expense and heightened politics where alliances are used to avoid personal exposure and shift blame.


High expectations, personal accountability, fast decision making and aggressive action are universal requirements for business success.  The fundamental question, however, is whether that pressure is derived primarily from a negative, external stimulus or from a positive, internal drive to succeed.  When leaders create a culture of open communication, cooperation and rational discussion of business problems, they are leveraging people’s internal drive to learn and achieve.  They are leading based on logic and respect.  They are motivating based on appealing to the intellect and positive emotions.  They are inspiring us to our best.  And along the way, they are getting the benefits of improved productivity and decision making.

For additional details, see a white paper at:

http://www.strat-edg.com/files/Inspirational_Leadership.pdf