Everything on ‘Corporate culture’

Lack of sleep helps make optimistic decisions

Sleep deprivation makes flipping coin look like good odds

Sleep deprivation makes flipping coin for profit look like good odds

Entrepreneurship is about taking risks. Calculated risks. Top managers take big decisions every day. They have busy schedules and some only sleep a few hours a day. Research now shows that sleep-deprivation makes decision making easier. Not better though. Ever seen a CEO that always presents optimistic plans? It might be because of his lack of sleep.

According to an article in the Journal of Neuroscience described on physorg.com, sleep-deprived individuals in a study “tended to make choices that emphasized monetary gain, and were less likely to make choices that reduced loss”. The study is the first that shows that lack of sleep impacts the way the brain assesses economic value, increasing sensitivity to positive consequences and decreasing¬† sensitivity to possible negative consequences of decisions. » More: Lack of sleep helps make optimistic decisions

Who Moved My Cheese?

Yes I Can

Changing will make you happy

This week I re-read the small but insightful book called Who Moved My Cheese?” by Spencer Johnson. I finished the 90-page, large letter formatted book in less than 1.5 hours, and you might be able to finish it faster.

So what is it about, and what makes is special? It’s about Change. And dealing with it, whether in your personal or professional environment. Change happens everywhere, always. Sometimes we initiate it ourselves, but most of the times it comes to us.¬† The book uses the story of two mice, Sniff and Scurry, and two Littlepeople, Hem and Haw, to explain to be more aware of change, to recognize it in an early stage and to anticipate it. » More: Who Moved My Cheese?

“We hate to do it, but we have to follow procedure” or NOT!

Some quotes from this intriguing speech by Barry Schwartz about our lost wisdom:

  • “You don’t need to be brilliant to be wise” but at the same time “Without wisdom, brilliance is not enough”.
  • “We hate to do it, but we have to follow procedure” some say
  • “Rules and procedures may be dumb, but they spare you from thinking” (Scott Simon)
  • “As we turn increasingly to rules, rules and incentives may make things better in the short run, but they create a downwards spiral that makes them worse in the long run” and “we are engaging on a war on wisdom”
  • “We must ask, not just is it profitable, but is it right” (Barak Obama, 18-12-2008)

Also read my story about rewarding strategies.

Multitaskers perform lousy when multitasking

Multitasking as it should be - Inspector Gadget

Multitasking as it should be - Inspector Gadget

A Stanford study on multitasking performance, published in August and sited in NRC this weekend, showed that frequent media-multitaskers perform less when having to focus on multiple information sources than typical non-multitaskers. This can be explained by assuming that the typical media-multitaskers are actually not good at focusing or concentrating on a task at hand. They basically cannot choose the relevant information sources. Surprisingly the media-multitaskers group indicated to be quite good at handling the different information sources, while the actual results of the study show otherwise.

“We kept looking for what they’re better at, and we didn’t find it,” said Ophir, the study’s lead author and a researcher in Stanford’s Communication Between Humans and Interactive Media Lab.

At the same time, companies are requiring their people to be tuned in to more and more information sources, like email, mobile and even twitter while the research shows it to be counterproductive.

Ask Why? questions!

What’s the most valuable questing one can ask? Yes, it’s not this question. It might very well be the ‘Why?’ question. Why? Because seeking its answer will provide true insight. And insight makes us grow and brings us further (in our professional domain, in life, in our existence, …). One might argue that answers to the ‘How?’ question, which is the current dominant scientific question, provides some kind of insight as well. And this is true.

How does it work? How do things relate? How do I feel?

However, answers to ‘How?’ questions only lets us look at the present and basically lets us stand still. Questions like ‘How can we improve this?’ can only be answered by considering ‘Why do we need to improve this?’ first. The answers to ‘Why?’ questions make us reconsider the present and drive us to consider change and improvement. In business they will define the business case for your projects.

Why must it work this way? Why do things relate this way? Why do I feel this way?

Children of any generation go through a natural phase in which they bombard the world arround them and especially their parents with ‘Why?’ questions. At first parents are pleased by the sudden interest of their child in the world arround them and try to answer the questions, soon finding out that every answer to a Why? question is followed by a new Why? question. In the end many parents either ignore the questions or kill the initiative with the ‘Because this is how it is’ or any other lousy answer. Basically they teach their children not to ask these Why? questions. And yes, with age children and grownups tend to be more reluctant to ask Why? questions and questions in general.

Management guru Eliyahu M. Goldratt wrote an interestion article about empowerment within organizations and related to that, the importance of the Why? question (http://www.goldratt.com/empower.htm). One of the two basic principles for empowerment in organizations (next to matching perceived authority to responsibility) according to Goldratt is that managers should sufficiently explain the Why behind their requests to the people they manage. This will enable them to understand the reasoning behind the request and to contribute beyond purely carrying it out (for example by suggestion an alternative). Of course this does not only apply to the ones we manage, but also to any other people we need to get things done. Goldratt also argues that explaining Why? will shorten learning curves. Often we only ask ourselves why we did things when they went wrong. If we know why we do things before we do them, we can learn from them without making a mistake first.

We might wonder why managers need to remind themselves to explain us why we need to do things? The answer is very simple: Because apparently we do not ask the question ourselves! Now that we understand the importance of the Why? Question, we can of course easily fix this…

Rewarding strategies

Children have a natural talent of seeing the obvious differences between right and wrong. Killing is bad, caring is good. However, in real life it is often more difficult and that’s why already on an early age parents teach their children the more difficult right vs. wrong subtleties. Parents have a natural talent by themselves to use excellent rewarding and punishing systems.

The financial crisis that the world is suffering from at the moment causes new ways of looking at things. Monday the papers reported a new insight on the banking leadership intricacies, and especially the rewarding systems that intended to promote good above bad behavior. And how this system had obviously failed. According to the (Dutch) newspaper article, the bonus system for the banking management was based on growth and in a world market growing to it’s limits, this promoted taking excessive risks. In the end the risks were not containable and in a way the bonus system has contributed to the current crisis.

What is the problem with this bonus system? On it’s own it sounds quite good to promote growth. The issue is that this kind of goals (like growth, or profit, or margin) are very short term goals, focused on high visibility and immediate measurability. It’s very weird that the long term strategies taught to us by our parents, like “what goes around comes around”, are not considered by the financial top management of our world.

Unfortunately it is not just the top management that is measured by short term goals with no stimuli to consider long term consequences. The top management communicates the strategy (or rather short term policy) down to the lower management, which is confronted with one year goals, even if it would like to focus on the future of the company instead.

There is hope however. In a commercial world largely driven by shareholders, especially the shareholders will see that the short term results of a company are not relevant if the long term results are not satisfactory. They will reflect this to the higher management and put an end to short term rewarding systems. That’s why in some modern companies the yearly bonus systems are already being replaced by new systems that take long term strategies and visions into account. Financial institutions and other more traditional companies will shortly follow. Management, but also other employees for example will be given half year goals, two year goals and five year goals, which will secure rapid improvements combined with mid term strategies and long term vision. Companies that do not adjust, will just not make it.


Addition 23-11-2008:
Proffessor Piet Keizer from the Utrecht University suspects a strong correlation between the emerging financial crisis and the fact that the financial world is ruled by mostly men. “Men among each other often show macho behavior, top executives tend to narcissism; the bigger, the better.” [translated from Dutch]. Risky behavior is perceived to lead to prestige, especially in the United States, according to the proffessor who specializes in the relation between economics and social sciences. (Volkskrant, November 2008)