Posted tagged ‘President Obama’

How the Obama Administration Motivates Behaviors

May 26, 2009

The Time Magazine article was extremely instructive in helping us to understand the behavioral science oriented steps being taken by the Obama administration. In this post we’ll focus on a number of them. Specifically, they are:

  1. Supplying knowledge
  2. Making it easy
  3. Creating social norms
  4. Legislating the activity

According to the Time Magazine article, studies suggest that better information can help us make better choices. This information can be disseminated in the forms of public service announcements (PSA’s) or appeals from well respected figures (remember our discussion about the use of Hubs in building communities) and even serial dramas.

What this means is that aggressive rules for disclosure and clarity will likely result in people making more informed and better choices. Documenting best practices will also produce meaningful results.

The second way to influence behavior is to make it easy for those who wish to make the choice that you wish them to make. This is why default options – opt-out instead of opt-in – are very successful. The push to create an electronic health record (EHR) is one step along the path of making generic drugs our default prescription of choice.

The creation of social norms is yet another way to influence what we choose. An appeal to conformity is very effective as we are a herdlike species. If our peers are obese, we are more comfortable choosing to be that way. What works is creating a sense that choosing not to participate in an effort sets us apart from social norms and therefore, we will take steps to be in sync with our peers. This is a technique that has been used successfully even in forwarding goals that are inappropriate or morally wrong (think McCarthyism).

The last factor that the Time Magazine article addresses is what happens when a nudge is insufficient. At that point, a strategy of making something mandatory is very useful. That’s why there is interest in taxing undesirable behaviors such as cigarettes, alcohol and even trans-fats consumption and subsidizing desirable behaviors such as weatherizing a home or the purchase of fuel efficient cars.

Now, when we hear a new initiative being proposed by the Obama Administration, our awareness to the work of the behavioral scientists will be present. Let’s hope that these efforts though are used to move us in the right directions.

In the ensuing posts, we’ll look at like some of the other models and variants that allow us to influence others.

Understanding the Science of Change

May 22, 2009

I have always been a big believer that the universe has a tendency to bring ideas, concepts and even people to you when you need them to be in front of you. When that occurs in my life, after I finally recognize that it is happening – and yes, sometimes it takes me a while to notice — I begin to immerse myself in the idea or get to know that person better.

Lately, a new concept has been showing up and so over the next few posts, I’m going to write about it. I’m also going to read about it and share what I learn along the way.

In the April 13th, 2009 edition of Time Magazine, there was an article by Michael Grunwald called “How Obama is Using the Science of Change.” The article cited the work of behavioral scientist Robert Cialdini who found that that the most powerful motivator was that “people want to do what they think others will do.” Cialdini is the author of the best seller “Influence.” (For what its worth, Cialdini is the name that keeps popping up…more on that in the next few posts)

According to Time, Obama leans heavily on the work of the behavioral scientists to understand what makes people tick and then, using this knowledge, he intends to spur behavioral change throughout the country. He’s leveraging what he learned about people to move forward his agenda on the economy, healthcare and energy.

The power of these nudges is huge. For example, is there a difference in the number of people who participate in a 401 K plan if they have to sign up or would that number change if they were signed up already and had to opt out? Well, a 2001 study showed that only 36% of women joined a 401K plan when they had to sign up for it…but when they had to opt out, 86% participated.

The implications of using behavioral science in our business and personal lives are huge. This notion affects sales, marketing, management, leadership and even how we lead our communities or exist within our families.

So how is the Obama Administration using what they have learned? Consider the way Americans received the $116 billion in payroll tax cuts from the stimulus package. Obama chose NOT to send one lump sum check even if that would have put the money in the hands of Americans faster. His administration was concerned that a lump sum check might be viewed as a windfall and deposited in a bank account instead of being spent to rev up the economy. Instead, the money is being released through decreased payroll withholding. Smaller amounts spread over time are more likely to be spent. The idea is to subtly nudge us to spend the extra cash.

Make no mistake – this is a radical departure from the way that we have let the free market dictate how things work. Some might call this “manipulation,” but to change our ingrained behaviors, this might be necessary. And we may discover that behavioral science is compatible with free market thinking as it may prove to be an accelerator in how we interact with the free markets.

The Time magazine article goes on to highlight several elements that help us to change behavior. And that will be the subject of the next post.

Courageous Leadership? On the Line at GM

February 23, 2009

After a recent session that I presented on success measures, I was asked by one of the participants about the fiscal crisis plaguing our three major United States automakers, Ford, General Motors and Chrysler. The person was wondered why these three manufacturers, with all of the many intelligent and professional leaders in their employ, continued to build cars that the American public did not want to buy.

I responded by explaining that the automakers knew what they were doing and how their cars were being received.  In fact, the problems plaguing the car manufacturers were not one of knowledge but rather of courage.

Paul Ingrassia, Wall Street Journal writer and bureau chief, articulated this issue as it relates to GM beautifully in his Journal opinion column on February 19th.

According to Ingrassia, there are several issues that have created this predicament. Here are two.

(1)   The car manufacturers agreed to let auto workers retire with full pension and benefits after 30 years, This means that it is very conceivable for an employee to be paid for thirty plus years and not contribute to the end product. Couple this scenario with greater life spans and rising costs in health care and the cost structure take a painful hit. Add in the nation’s desire to have smaller cars with smaller price tags and competitive margins and the problem is exacerbated. One can only surmise that new and fresh ideas and the investment in R&D was limited because of these cost factors.

(2)   GM continued to keep two losing brands alive – Saab and Saturn – even though it was costing them money to do so. This was done because the company had spent $1.3 billion dollars to shut down its Oldsmobile brand in a way that allowed them to comply with state-dealer franchise laws.

Could this crisis have been averted? Very possibly but it would have required courageous leadership to take on the unions early on and absorb the short-term losses inherent with shutting down a failing brand early on.

Some weeks ago, we spoke about the concept of false kindness and the consequences of putting off uncomfortable decision s regarding staff. The car crisis today is yet another example of the need of leaders to be willing to do unpopular things, when they need to be done.

Developing Success Measures

February 18, 2009

One of the more pressing questions asked of President Obama recently was how the American people could tell if the stimulus package was effective. What he was actually being asked to address was the concept of success measures.

In the business world, success measures are what we call “goals.”

Here’s why goals are so important.

  • Goals and objectives are the links between the organizational vision and the new environment.
  • Goals clarify expectations about what needs to be done to help the organization make the transition into the envisioned environment.
  • Goals give direction to individuals and teams for planning and executing change.
  • Goals tell us what we need to do. As such, goals must be measurable.

We measure for a variety of reasons:

  • Tells us if we are winning
  • Defines performance and gives people an observable and quantifiable way to measure progress over time
  • Tells people what really counts and is desirable
  • What gets measured is what gets done
  • Publishing measures makes things change – it shines a light
  • Measures make commitments real – otherwise it may be perceived as a wish or a good idea
  • Forces confusion and misunderstanding into the open by creating an opportunity for alignment
  • Pulls people together

Without goals, we are like Alice in Wonderland as she asked directions of the Cheshire Cat. “Would you please tell me please, which way I ought to go from here?” “That depends a good deal on where you want to get to,” said the Cat. “I don’t care much where,” said Alice. “Then it doesn’t matter which way you go,” said the Cat. “As long as I get somewhere,” Alice added as an explanation. “Oh, you’re sure to do that,” said the Cat, “If you only walk long enough.”

Negotiating Success

January 30, 2009

According to Professor Watkins, to succeed with a new boss (the American People?)  or  for that matter, a new Congress, it is critical to invest the time in the relationship up front. Your new “boss” (and here you can substitute the word “Americans” to relate to President Obama’s situation) sets your benchmarks, interprets your actions for other key players, and controls access to the resources that you need. This person will have more impact than any other individual on your eventual success or failure.

Negotiating with the boss is about determining the shape of the game so that you have a fighting chance of success in achieving your desired goals. It is here that realistic expectations are established, consensus is reached, and resources secured.

If you are in realignment, you need the boss to help you make the case for change. In a sustaining success situation, you need help to learn about the business and avoid early mistakes that threaten the core assets. In start-ups, you need resources and protection from too much higher-level interference. In turnarounds, you may need to be pushed to cut back the business to the defendable core more quickly.

There are certain dos and don’ts concerning how to build a productive relationship with one’s boss.

Don’ts

Dos

  • Don’t trash the past. Understand it instead — and concentrate on assessing current behavior and results and making the changes necessary to improve performance.
  • Take 100% responsibility for making the relationship with your boss work. The responsibility rests with you.
  • Don’t stay away. Get on your boss’ calendar regularly. Be sure that your boss is aware of the issues that you face and that you are aware of the boss’ expectations and how they are shifting
  • Clarify mutual expectations early and often. Begin managing expectations right away.
  • Don’t surprise your boss. Report emerging problems early enough. The worst scenario is for your boss to learn about a problem from someone else. Give him or her a heads-up as soon as you become aware of a developing problem.
  • Negotiate timelines for diagnosis and actual planning. Do not let yourself get caught up immediately in firefighting. Buy yourself some time to understand the organization and come up with an action plan.
  • Don’t approach your boss with only problems. Bring along a plan as well. This does not mean that you need full blown solutions every time. The key is to give some thought to how you plan to address the problem, to your role, and the help that you will need.
  • Aim for early wins in areas important to your boss. Figure out what the boss cares about the most. One way to do this is to focus on three things that are important to your boss and discuss what you are doing about them every time you interact. However, do not take actions that you think are misguided.
  • Don’t run down your checklist. Running through a checklist of what you have been doing is inappropriate. However, updating on what is being attempted and how the boss can help is appropriate.
  • Pursue good marks from those whose opinions your boss respects. Be alert to the multiple channels through which information about you reaches your boss.
  • Don’t try to change the boss. Adapt to his or her style and idiosyncrasies.

There are five conversations that should be held on an ongoing basis.

1)      Situational Analysis Conversation. It is important to understand how your new boss sees the business situation. How did the organization reach this point? What are the challenges? What resources can be drawn upon?

2)      Expectations Conversation. What does your boss need you to do in the short-term and medium-term? What will constitute success? How will performance be measured? When? Are there any areas that are untouchable? Learning the answers to these questions will allow you to reset expectations. If you are operating from different perspectives, it is critical that you have a conversation that creates alignment. Be conservative in what you promise and focus on over-delivering. If you have multiple bosses, it makes sense to bias your efforts to the one who has substantially more power early on, as long as you redress the balance, to the extent possible later on. If you cannot get agreement working with your bosses one-on-one, it is appropriate to bring them to the table together to avoid getting pulled to pieces.

3)      Style Conversation. This is about how you and your boss can best interact on an ongoing basis, i.e., in writing, face-to-face, voice-mail, and/or email? How often? On what kind of decisions does s/he want to be consulted and where can you make the call yourself? How are your styles different and what are the implications of those differences?

4) Resources Conversation. This conversation is essentially a negotiation for critical resources and should be had once you have agreed upon the diagnosis. The first step is to identify what resources are needed given the state of the business. In turnarounds and realignments, the need for resources is far greater because different skills and experiences are required. A menu approach that reflects different results based on different levels of commitment may be appropriate. Focus on the underlying interests of your boss and tailor resource requests accordingly. Look for mutually beneficial exchanges that support both of your agendas.

5) Personal Development Conversation. This conversation should only be held once your relationship has matured. In what areas do you need improvements? What actions or courses could you take? Discipline yourself to be open to learning about new skills that are required for the new role.


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