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Recognizing the emotional side of business Add to ...

harvey@harveyschachter.com

MANAGEMENT REWIRED

By Charles Jacobs

Portfolio, 216 pages, $32.50

If you think that logic leads to better decisions in business than emotions, think again. If you think management's feedback to staff improves performance, again you're wrong.

"It turns out that most of what we knew about management is probably wrong," consultant Charles Jacobs advises in Management Rewired. "Many of the management practices we've taken for granted are not only ineffective, they actually produce the opposite of what we intend."

His comments come after extensive study of the latest brain research, based on watching the mind at work through functional magnetic resonance imaging (MRI).

In mapping the path information travels as we conduct our lives, it has been found that not only are the perceptual areas of the brain involved - our logical self responding to stimuli - but so are the areas responsible for our memories, our feelings, our beliefs, and our aspirations. "Our minds aren't objectively recording our experiences of the world; they're creating it, and that creation is influenced by everything else going on in the brain," he notes.

In other words, he says, we live in a mental world of our own making. And it is shaped by more than objective facts and reasoning. "Objective reasoning has nothing to do with the way we solve problems, make decisions, and plan for the future. At best, logic is just a way to justify conclusions we have already reached unconsciously," he says.

Perhaps logic is preferable to emotions in decision-making, but he is telling us that we aren't ever fully relying on rational logic. Every decision is coloured by emotions, and sometimes for the better, as when past experiences warn us emotionally of danger. "Mental processes we're not conscious of drive our decision making, while the kind of logical reasoning we believe our thinking should aspire to is really no more than a way to justify decisions we've already made. But it's not just our own thinking that is at issue. If we use logic to influence people unconsciously driven by emotion, we probably aren't going to be very successful in getting them to embrace our point of view," he writes.

So try stories, he suggests. Metaphors and stories are the way our minds naturally work, brain science is showing, helping us and others to make sense of the world. Stories determine how we think and act. Effective stories can appeal to people and help them to change their minds through the emotional power those stories convey.

Much of modern management is influenced by Frederick Winslow Taylor's pioneering work at the turn of the last century in which he figured out the most rational, efficient way to carry out work. That scientific management approach, as it is called, led to performance management appraisals. The belief is that objective feedback, coupled with rewards and punishment, will lead employees to perform better.

But Mr. Jacobs notes that a landmark study at General Electric found that the company's performance appraisal system not only didn't work but also produced results that were virtually the opposite of what was intended. "GE found that a manager's praise had no effect on performance one way or the other, while the areas that a manager criticized showed the least improvement," he says.

He delves through a series of psychological experiments for explanations, but essentially it boils down to the fact workers approach their appraisals with dread rather than the enthusiasm for improvement their bosses expect. Indeed, employees may not care for their boss, and question his or her ability to evaluate or the motivation behind the appraisal. Moreover, people tend to be motivated intrinsically - they do good work for themselves, not for others - and the GE study found that extrinsic, outside rewards of praise during performance reviews didn't motivate higher performance.

Add to that the fact that our minds don't objectively record information - everyone perceives things differently - and you realize the 5-per-cent raise you are offering a staff member that you think is fabulous may be way below the 10 per cent she is expecting. So what you perceive as a reward she may perceive as punishment, arousing anger or even aggression against you.

Mr. Jacobs urges you to jettison Aristotelian logic and try a Socratic performance management approach: "Rather than tell employees what to do and create all of the negative relationship dynamics, the manager needs to ask. Rather than hand objectives to the employee, the manager should ask the employee to set them. Rather than give employees feedback on their performance, the manager should ask them how they think they are doing. Rather than tell the employees how to fix a problem, the manager should ask them what they think they should do to fix it."

That's counterintuitive, but he says necessary. It turns the traditional management-employee relationship upside down, which is vital because he says the prime mover of the organization, the employee, should be calling the shots.

In similar fashion, Mr. Jacobs takes us through the implications of brain research for thinking strategically and organizing others. Throughout, we are reminded that people aren't perfectly logical, and that means understanding the role of emotions in the way the mind works, be it in our own staff or the customers we sell to. It can be complicated as he sifts through the psychological studies and evidence of brain patterns, but in the end he keeps returning in essay fashion to a few, familiar themes that managers can profit from considering.

In addition

By now we have all heard of the importance of emotional intelligence and how we can improve our own scores. But how do we do that? Consultants Travis Bradberry and Jean Greaves answer that question in Emotional Intelligence 2.0 (TalentSmart, 255 pages, $26.95) taking you through 66 practical strategies broken down into the four areas of emotional intelligence: self-awareness, self-management, social awareness, and relationship management. The book includes a pass code that allows you to take an online test, which evaluates your emotional intelligence and then recommends some improvement strategies in the book to try.

JUST IN

Consultant Gerald Harris offers lessons from quantum physics for strategy, innovation and leadership in The Art of Quantum Planning (Berrett-Koehler, 154 pages, $23.95)

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