Blog posts on psychology

Posts selected fromManagement Blog - Engineering Blog - Investing Blog and other blogs

• More Reasons to Avoid Layoffs

  there is a growing body of academic research suggesting that firms incur big costs when they cut workers. Some of these costs are obvious, such as the direct costs of severance and outplacement, and some are intuitive, such as the toll on morale and productivity as anxiety (“Will I be next?”) infects remaining workers.

  …

  research paints a fairly consistent picture: layoffs don’t work.

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• Effective Change Management Strategies and Tactics

  Create systems focused on continual improvement with built in checks for frequent assessment, reflection and adjustment to the changes the organization attempts to make.  This effort should be iterative. 

  Building the capacity of the organization to successfully adopt improvements will directly aid change efforts and also will build confidence that efforts to change are worthwhile and not, as with so many organizations, just busy work.

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• Multitasking Decreases Productivity

  The problems with multitasking are becoming more and more well know, thankfully. Here is another article on the lower productivity multitasking produces...

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• The Importance of Management Improvement

  If organizations just adopt management improvement practices I firmly believe customer service, financial performance and employee satisfaction could be improved. This was a big part of the reason I started to use the internet to share management improvement ideas back in 1996 (plus I find management improvement interesting).

  On the note of making a difference in people’s lives. I have had far more people tell me how my father (Bill Hunter) made a huge difference in their lives than ever tell me anything like that about myself...

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• Data Can’t Lie

  Many people don’t understand the difference between being manipulated because they can’t understand what the data really says and data itself “lying” (which, of course, doesn’t even make sense). The same confusion can come in when someone just draws the wrong conclusion from the data that exists (and them blames the data for “lying” instead of themselves for drawing a faulty conclusion).

  The data can be wrong (and the data can even be made faulty intentionally by someone). Or someone can draw the wrong conclusion from data that is correct. But in neither case is the data lying. It is also common to believe the data means something other than what it does (therefore leading to a faulty conclusion).

  ...

  If all those involved understand how to draw conclusions from data it is not easy to mislead them.

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• Creating an Integrated Life Where Work Adds to Life

  ... I realize doing this to the extent he did is very difficult. But growing up with it I learned that the idea that you could design the whole life (including everything) to maximize life.  And that it may well be that extra effort at work rather than detracting from the rest of life enhances it. For me the key is to focus on maximizing the whole and within that realizing sometimes there are tradeoff (essentially a zero sum game) but there may well be times when you can design the system of your life to find win win solutions.

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• Aligning Marketing Vision and Management

  Why do so many companies market one thing and provide something else? I know it might be easier to sell something different than what you offer your customer today. But if you decide to market one vision, why don’t you change your organization to actually offer that?

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  Treating a marketing message as something separate from management is a serious problem. When your marketing message says one thing and your customers get something else that is a problem. I think the message is often based on what the executives wish the company was (and the outsourced marketers think it should be), but it isn’t the customer experience the management system provides.

  If you believe the vision of your marketing then make sure your organization has embraced those principles.

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• The Management System is the Key

  I think too often people (in relation to management ideas) demand that things be made more simple than is possible to adequately understand the systems involved. This of course leads to problems. A huge value provided by people like Russell Ackoff is their ability to help explain what is needed in fairly simple terms. Still understanding how these ideas are being expressed in our management systems and how to apply the concepts to our management systems is still a challenge.

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  I think one of the big differences between the best lean efforts and the others is the increased value placed on deeper understanding and thinking systemically.

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• Applying Deming’s Management Ideas at the Great Plains Coca Cola Bottling Company

  The difficulty in changing is often mostly about our psychology (not the technical difficulty of operating under changed systems and processes after making adjustments to adapt to take advantage of new opportunities).

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  Results matter but within a context of the process. If I double profits by wagering all the cash we can borrow on the roulette wheel that result isn’t a sign that we are doing much better. Using data wisely requires understanding what the data tells you and what it does not tell you.

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• Psychology Often Drives Decisions Rather Than Rational Thought

  I think that the primary thing to remember is that often people's actions and decisions are guided by psychology rather than thoughtful deliberation and choosing the most sensible option (given that person's desires).  What this means is you can't expect rational decision making to guide others decisions and actions.  You are often better understanding common psychology and how that impacts decision making.

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  There are 2 reasons this is important: first you are likely making decisions this way and can improve your decision making by understanding how you are making decisions.  And second if you are trying to influence others understanding how they make decisions is important.

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• Avoiding Difficult Problems

  Coping with this issue (of avoiding unpleasant, systemic and long term rather than acute problems) is one of the things that separates great corporate culture from decent or bad corporate culture.
  
  If there are fairly obvious or fairly easy improvements those would likely be acted on. There are, rarely, but still sometimes, instances where those vocal or politically powerful individuals who would lose out in a fairly obvious improvement will prevent action.

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  I am not convinced there are not ways to improve the situation. And I am pretty confident it is important enough to try. And I believe (though I might be wrong) with a concerted effort of knowledgable people improvements that would make a big difference in the quality of life could be achieved. I am not so certain those people involved in leading the effort would be seen in great lights though even if they "succeed." People are much more likely to remember negative consequences to them personally, even if they gain much more than they lost overall. 

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• What Loss Will a Business Suffer Due to a Dissatisfied Customer?

  You can’t know how much a dissatisfied customer will cost your business in the long run. You can make statistical judgements about how costly dissatisfied customers are to a business but those are loaded with many guesses. They can give a general indication of the magnitude of the costs but they are largely guesses, not something you can measure.

  Sometimes a business largely gets away poor quality for a long time. The customer doesn’t change behavior, doesn’t complain to others and doesn’t punish the company in the long term. But you never know when one small failure will cause the luck to run out and turn a customer against the business and costing it dearly.

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• CEO’s Given Lottery Sized Payouts

  Today, in the USA, CEOs are basically win the lottery when they start and then either win some more and stay or don’t win and are let go. The lottery performance appraisal aspect Deming talked about (rewarding whoever random variation or macro economic and micro economic trends smiled upon during the period). So if a market (housing, oil, steel, investment banking, microchip, hotel…) is booming why give all the CEO’s in that market huge payoffs?

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• Psychology – Managing Human Systems

  People are not cogs in a machine. Everyone brings extraordinary talents and abilities to the organization. Dr. Deming sought to maximize the value people bring to the organization. This requires giving them pride in their work, freedom to use their brain, tools to be effective and systems that allow people to practice continual improvement.

  Creating an environment where people flourish is key to Deming’s thinking. Deming understood what John McGregor put forth in the Human Side of Enterprise (1960) that people have an innate desire to take pride in what they do. Management’s job was to allow people to fulfill this need, not to attempt to manipulate behavior through external motivation.

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• The Quality of the Entire Customer Experience

  Product quality, in many ways, has been raised in the last few decades and this naturally results in raised expectations. This pattern was well known in the 1960s (and before). Kano’s theory of customer satisfactionexpressed how new features moved from being “delighters” for customers initially and eventually became minimum expectations (you gain no credit for delivering them but will upset customers if you fail).

  It is also true that raising the overall customer experience is more difficult than raising product quality (due to the nature of the systems that deliver the results in each case).

  I do think there is truth to the idea that customers have raised expectations for businesses to improve the entire experience. Customers are less willing to accept excuses about how the provider is not responsible for various aspects of the experience...

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