Dr. Heidi Grant

Why Some Leaders Don’t Learn From Their Mistakes

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In prepared remarks before the panel investigating the roots of the financial crisis, former Federal Reserve Chairman Alan Greenspan blames the subprime crisis on foreign investors, nonbank lenders, the spread of securitized mortgages and financial firms for failing to manage their risk. The one person he did not blame was himself, or his institution — the Fed.

– Shahien Nasiripour, The Huffington Post, reporting on Greenspan’s testimony before the Financial Crisis Inquiry Commission on April 7, 2010

Despite the fact that the Federal Reserve, as the nation’s largest bank, did not take any significant action to curb the reckless lending that precipitated the Great Recession, Alan Greenspan seemed to apportion blame everywhere but to himself.  At one point in his testimony, he even appeared to blame the fall of the Berlin Wall.  (His logic:  seeing the truly awful job the Soviets were doing running their economy brought about distrust of “central planning” of any kind.   So evidently, the excesses of Capitalism are Communism’s fault.)

Alan Greenspan was instrumental in determining U.S. financial policy for 19 years, but he doesn’t feel that he was responsible for the failure of the policy he helped create, or that it’s failure was to some extent avoidable.  Is he crazy?  Actually, no.   Did he consciously and willfully mislead the Commission (and the rest of us)?  Very probably not.  Without actually being Alan Greenspan, I can’t say for sure, but the odds are good that he really does believe he’s not to blame.  And as much as we might like to think otherwise, many of us would feel the same way if we were in his shoes.

Psychologists call this the self-serving bias – the tendency to see ourselves as responsible for our successes, but to see other people or the circumstances as responsible for our failures.  We reason this way to protect our self-esteem, and to protect our image in the eyes of others.   We also do it because it really feels right.  Think of an actor on stage – as a member of the audience, you are focused on what he is doing, but if you’re the actor, you see everything but yourself.  You see your fellow actors, the scenery, the audience, but you can’t actually watch you.  Because of what’s called the actor/observer difference, it’s easy for Alan Greenspan to look back over his 19 years at the Fed and see all the factors that played a role in screwing things up, and harder for him to see his own role in it.

Psychologist Tony Greenwald’s 1980 American Psychologist article on this topic cited some very amusing examples of the self-serving bias, taken from a San Francisco Sunday Examiner and Chronicle article on the explanations drivers gave to their insurers after an accident.  You’ll notice that some of these people went to remarkable lengths to deflect blame:

As I approached the intersection, a sign suddenly appeared in a place where a stop sign had never been before.  I was unable to stop in time to avoid an accident.

The telephone pole was approaching.  I was attempting to swerve out of its way when it struck my front end.

A pedestrian hit me and went under my car.

My car was legally parked as it backed into the other vehicle.

Studies show that in fact, nearly us fall victim to this kind of bias (though we tend to think that only other people do – yet another example of the bias at work.)

The upside of all this self-protection is that we don’t feel so bad when things go wrong, and can stay optimistic about our future chances for success.  The downside, particularly for the leaders on whose judgment we must rely, is that we don’t learn anything from our mistakes if we don’t recognize that we made them in the first place.  How can you do a better job next time if you won’t even admit you did a bad job this time?

From a motivational perspective, the best way to handle a failure is to look honestly at how your own actions contributed to the outcome, emphasizing what you can change so that your performance improves from now on.  And even though, in his mid-80s, Alan Greenspan is unlikely to serve a second round as Fed Chairman, he would probably like to get an accurate handle on what went wrong – something he will never do unless he admits that he was actually driving.

How Long Will This Take? 3 Steps to Being a Better Judge of Time

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From my Fast Company blog:

Every Saturday morning, while my husband JD is eating his cereal and attempting to fully awaken, I ambush him with the list of household chores and errands I’ve been making all week (and saving for when he’ll be home to help me.)  Every single time, an argument ensues.  At its core is JD’s unshakeable belief that any task, no matter how complex or difficult, can be completed in about 15 minutes.  “Let’s go out and have some fun, “ he’ll say, “and we’ll tackle that stuff when we get back this afternoon.”  “But there won’t be enough time!” I reply, with mounting frustration.  “It will be fine,” he says.  More often than not, he is wrong.

As much as I enjoy giving him a hard time about his total inability to judge how long something will take, the truth is that most people aren’t much better at it.  In fact, human beings are generally pretty lousy when it comes to estimating the time they will need to complete a task.  Psychologists refer to this as the planning fallacy, and it’s an all too common problem – one with the very real potential to screw up our plans and keep us from reaching our goals.

Studies show that the planning fallacy can be attributed to several different biases we have when estimating how long it will take to do just about anything.  First, we routinely fail to consider our own past experiences while planning.   When my husband tells me it will take him 15 minutes to vacuum the carpets, he is ignoring the fact that it took him an hour to do it last time.   And as any professor can tell you, most college seniors, after four straight years of paper-writing, still can’t seem to figure out how long it will take them to write a 10-page paper.  We just don’t take our past into account the way we should when thinking about our future.

Second, we ignore the very real possibility that things won’t go as planned – our future plans tend to be “best-case scenarios.” So running to the store for a new vacuum cleaner might take 15 minutes – if there is no traffic, if they carry the model we’re looking for, if we find it right away, and if there aren’t long lines at the register.

Lastly, we don’t think about all the steps or subcomponents that make up the task, and consider how long each part of the task will take.   When you think about painting a room, you may picture yourself using a roller to quickly slap the paint on the walls, and think that it won’t take much time at all – neglecting to consider how you’ll first have to move or cover the furniture, tape all the fixtures and window frames, do all the edging by hand, and so on.

So while we all tend to be prone to the planning fallacy to some extent, some of us fall into its trap more often than others. People in positions of power, for example, are particularly vulnerable, because feeling powerful tends to focus us on getting what we want, ignoring the potential obstacles that stand in our way.  A recent set of studies by Mario Weick and Ana Guinote shows that such a narrow focus does indeed turn powerful people into very poor planners.

In one study, half of the student participants were made to feel powerful (by being told that their opinion would influence the course requirements established for future students).  Next, all students were asked to estimate how long it would take to finish an upcoming major assignment.   Everyone was overly-optimistic, but the powerful ones were significantly more so.  Powerful students estimated that they would finish their assignments 2.5 days before they actually did, while the control group was on average only 1.5 days late.    So feeling powerful makes you think you’ll take a whole day less to complete the assignment than you would have guessed had you been feeling a little more ordinary.

A second study induced feelings of power by having some of the participants recall a time in their past when they felt very powerful, and this produced a similar result.  Powerful participants estimated that it would take them only 4 minutes to complete a proofreading task that actually took 9 minutes, compared to the control group’s estimate of 6.5 minutes.

In a third study, participants who were made to feel powerful thought it would take them less time to write an essay, get ready for an evening out, shop at the supermarket, and prepare a 3 course meal, than the control group.   Importantly, these effects completely disappeared when powerful participants were explicitly told to recall how much time these activities had taken them in the past, and use that information to make their estimates.  So when powerful people are forced to focus on all the relevant information, their planning is far more accurate.

When you’re making a plan and estimating how long it will take, be sure to stop and 1) consider how long it has taken you in the past,

2) identify the ways in which things might not go as planned, and

3) spell out all the steps you will need to take to get it done.

This is particularly important when you are in a position of power, so make sure that there are safeguards or reminders in place to help you to consider all the information you should.  Otherwise, you may fall victim to the everything-takes-15-minutes kind of optimism that can lead to disaster.

How to Walk Away When It’s Not Working

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Sometimes, you don’t know when to throw in the towel.   As time passes, it becomes clear that things aren’t working out as you planned.  You realize that pursuing whatever it is that you’re pursuing, whether it’s being successful in your current career, mending a troubled relationship, or renovating your house from top to bottom, will cost you too much financially or emotionally, or take too long.  But instead of moving on to new opportunities, all too often you simply stay the course and sacrifice your own wellbeing in the process.

You aren’t alone.  Most of us know what it’s like to stay in a job or a relationship long after it has ceased being satisfying, or to take on a project that’s just too big for us and be reluctant to admit it.  CEOs have been known to allocate manpower and money to projects long after it’s become clear that they are obviously failing, digging a deeper hole rather than trying to climb their way out of it (Remember how long it took to get rid of New Coke?)

The costs to the person who can’t see reason, in terms of time, effort, and lost opportunities for happiness, can be enormous. We recognize this kind of foolishness immediately in others, but that doesn’t stop us from making the same mistake ourselves.  Why?

There are several powerful and largely unconscious psychological forces at work here.   We may throw good money after bad, or waste time in a dead-end relationship, because we haven’t come up with an alternative, or because we don’t want to admit to our friends and family, or to ourselves, that we were wrong.   But the most likely culprit is our overwhelming aversion to sunk costs.

Sunk costs are the resources that you’ve put into an endeavor that you can’t get back out.   They are the years you spent training for a profession you hate or waiting for your commitment-phobic boyfriend to propose.  They are the money you spent on redecorating your living room in the hot new style, only to find that you hate it living in it.

Once you’ve realized that you probably won’t succeed or that you are unhappy with the results, it shouldn’t matter how much time and effort you’ve already put into something.  If your job or your boyfriend have taken up some of the best years of your life, it doesn’t make sense to let them use up the years you’ve got left. And an ugly living room is an ugly living room, no matter how much money you spent making it so.

The problem is that it doesn’t feel that way.  Putting in a lot only to end up with nothing to show for it is just too awful for most of us to seriously consider.  We worry far too much about what we’ll lose if we just move on, and not nearly enough about the costs of not moving on  – more wasted time and effort, more unhappiness, and more missed opportunities.  So how can we make it easier to know when to cut our losses?

Thanks to recent research by Northwestern University psychologists Daniel Molden and Chin Ming Hui, there is a simple and effective way to be sure you are making the best decisions when a things go awry:  focus on what you have to gain, rather than what you have to lose.

As I’ve written about before, psychologists call this adopting a promotion focus. When we think about our goals in terms of potential gains, we automatically (often without realizing it) become more comfortable with making mistakes and accepting the losses we may have to incur along the way.

When we adopt a prevention focus, on the other hand, and think about our goals in terms of what we could lose if we don’t succeed, we become much more sensitive to sunk costs.

For example, in one of their studies, Molden and Hui put participants into either a promotion or prevention mindset by having them spend five minutes writing about their “personal hopes and aspirations” (promotion) or “duties and obligations” (prevention).  They also included a control group with no manipulation of mindset.

Next, each participant was told to imagine that he or she was president of an aviation company that had committed $10 million to developing a plane that can’t be detected by radar.  With the project near completion and $9 million already spent, a rival company announces the availability of their own radar-blank plane, which is both superior in performance and lower in cost.  The question put to participants was simple – do you invest the remaining $1 million and finish your company’s (inferior and more expensive) plane, or cut your losses and move on?

Molden and Hui found that participants who had been put in a prevention mindset  (focused on avoiding loss) stayed the course and invested the remaining $1 million roughly 80% of the time.  The control group, included to provide a sense of how people would respond without any changes to their mindset, was virtually identical to the prevention group.  This suggests that when things go wrong and sunk costs are high, most of us naturally become prevention-minded, and more likely to try to keep waging a losing battle.

The odds of making that mistake were significantly reduced by adopting a promotion mindset (focused on potential gain) – those participants invested the remaining $1 million less than 60% of the time.*

When we see our goals in terms of what we can gain, rather than what we might lose, we are more likely to see a doomed endeavor for what it is, and try to make the most of a bad situation.

It’s not difficult to achieve greater clarity if you make a deliberate effort to refocus yourself when making your decision.  Stop and reflect on what you have to gain by cutting your losses now – the opportunities for happiness and growth.  If you do, you’ll find it much easier to make the right choice.

*Why not a bigger drop? Good question.  Remember that promotion focus was manipulated very indirectly through a totally unrelated writing task.  If you adopt a promotion focus directly with respect to the decision itself, considering what you could gain by moving on from your failure, the effects should be even stronger.

A Simple Fix for Miscommunication Part 2: Putting It Into Practice

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(From my Fast Company Blog)

A couple of weeks ago, I wrote a post on miscommunication in the workplace, and how so much of it is caused by the fact that people routinely fail to realize how little they are actually communicating. We think we’ve said a lot more than we actually have.  As a result, our colleagues are left guessing as to what we meant, or what we want from them.  All too often, they guess wrong.

Judging by the popularity of the post, Fast Company readers can relate.  You know how frustrating it is to be on the receiving end of communication that is confusing or vague.  But most of us have no idea that we are guilty of the same crime.  It’s easy to see why – after all, we know what we mean.  Unless we are confronted directly about how poorly we are communicating (something people are generally loathe to do, for a number of reasons), how are we to know if we’ve said enough?

I received a number of emails asking how to put the insight gained from the last post into practice on a daily basis.  Here are three strategies you can use to make sure that you are saying everything that needs to be said.

1)    Take a few moments before communicating to identify the key points you need to get across. Write them down if you think you might forget something when you are actually conversing (this is very common).  If you think any of your key points “go without saying,” you are probably wrong.

2)    Create a process for assessing understanding.  Everyone on your team needs to participate – don’t single anyone out.  When you communicate something to a team member, end the encounter by asking them to summarize in their own words what they heard.

For this to work well without anyone feeling patronized, you need to make it clear that this is not a test – your concern is that you didn’t communicate effectively, not that they weren’t paying attention.  Also, it has to work both ways.  When your team member brings something to your attention, you should summarize what you heard as well.

Without direct feedback, there is no way to figure out if the message was fully received.  But people are reluctant to provide this feedback if there is no explicit process in place.  They worry about looking foolish, or irritating the communicator (particularly when the communicator is the boss.)

3)    Invite questions should they arise.  Sometimes, you don’t realize that you didn’t understand what a colleague asked you to do until you actually try to do it.  At this point, it can be embarrassing to go back and admit “I don’t get it.”  Take the embarrassment out of it by reminding your team members that you are always happy to answer any questions that may come up later.  When you are asked for clarification, provide it with enthusiasm.

I know that all of this seems like a lot of work, and it is.  But the extra time and effort you put in to improving your team’s ability to communicate will be well worth it.  You’ll spend far less time fixing mistakes and putting out fires.  Your team will be more motivated and productive.  And you’ll have confidence that everyone is finally, and permanently, on the same page.

Giving Employees the Feeling of Choice, When You Are Really Pulling The Strings

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A Guest Post for SmartBlog on Workforce:

Most managers and leaders have, on a regular basis, the unenviable task of trying to get other people to adopt particular goals.  Companies have agendas, and employees need to support those agendas if the company is to succeed.  But if you want your employees to live up to their full potential, it’s not enough that they do what you tell them to – that they work hard and meet deadlines because you said they have to, and you are watching.  Ideally, you want the members of your team to see that the goals they are pursuing have real value.

In fact, you want them to make the goals their own – and with good reason.  Again and again, studies show that the greatest motivation and most personal satisfaction comes from those goals that we choose for ourselves.   Self-chosen goals create a special kind of motivation called intrinsic motivation – the desire to do something for its own sake.   When people are intrinsically motivated, they enjoy what they are doing more, and find it more interesting.  They feel more creative, and process information more deeply.  They persist more in the face of difficulty.  They perform better.  Intrinsic motivation is awesome in its power to get and keep us going.

Autonomy is particularly critical when it comes to creating and maintaining intrinsic motivation.  But in the workplace, goals have to be assigned.  What’s a manager to do?

It turns out that it isn’t so much actual freedom of choice that matters when it comes to creating intrinsic motivation, but the feeling of choice.  Choice provides a sense of self-determination, even when choice is trivial or illusory.

The good news is, while true autonomy in the workplace can be hard to come by, the feeling of choice can be created fairly easily, using these three tips:

Tip 1: First, and most obviously, your employees need to understand why the goal they’ve been assigned has value.  Too often, managers tell their employees what they need to do, without taking the time to explain why it’s important, or how it fits into the bigger picture.  No one ever really commits to a goal if they don’t see why it’s desirable for them to do it in the first place.  Don’t assume the why is as obvious to your team as it is to you.

Tip 2: When the goal itself is predetermined by Management, allowing your employees to decide how they will reach the goal can create the feeling of choice necessary to be intrinsically motivated.  Allowing them to tailor their approach to their preferences and abilities will also give them heightened sense of control over the situation they find themselves in, which can only benefit performance.  (If you can’t give them total free reign, try giving them a choice between two options for how to proceed.  If even that is not possible, skip directly to Tip 3.)

Tip 3: If you have to assign both the goal and the method for reaching it, try creating the feeling of choice by inviting your employee to make decisions about more peripheral aspects of the task.  For instance, if your employees have to attend weekly team meetings to improve communication and collaboration (with both the goals and method for reaching it predetermined), you can have team members take turns deciding what the topic of the meeting will be each week, or even what kind of lunch will be ordered in.  Studies show that these more peripheral decisions create a feeling of choice, even when the choices aren’t particularly meaningful or relevant to the goal itself.

Take time to reflect on how you might be able create a greater sense of autonomy in your own workplace using these three steps. Choice is incredibly motivating – to bring out the best in your employees, harness its power.

Why Letting Yourself Make Mistakes Means Making Fewer of Them

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Think back to the last time your boss assigned you a new project or task at work, or the last time you tried to tackle something really difficult in your personal life.  How did it feel?  I’m guessing scary, right?

While some people seem eager to tackle new challenges, many of us are really just trying to survive without committing any major screw-ups.    Taking on something totally new and unfamiliar is understandably frightening, since the odds of making a mistake are good when you are inexperienced.  Small wonder that we greet new challenges with so little enthusiasm.

How can we learn to see things differently?   How can we shift our thinking, and approach new responsibilities and challenges with more confidence and energy?

The answer is simple, though perhaps a little surprising:  Give yourself permission to screw-up. Start any new project by saying  “I’m not going to be good at this right away, I’m going to make mistakes, and that’s okay.”

So now you’re probably thinking, “If I take your advice and actually let myself screw up, there will be consequences.  I’m going to pay for it.”  Fair enough.  But you really needn’t worry about that, because studies show that when people are allowed to make mistakes, they are significantly less likely to actually make them!  Let me explain.

We approach most of what we do with one of two types of goals: what I call be-good goals, where the focus is on proving that you have a lot of ability and already know what you’re doing, and get-better goals, where the focus is on developing your ability and learning a new skill.  It’s the difference between wanting to show that you are smart vs. wanting to get smarter.

The problem with be-good goals is that they tend to backfire when things get hard.  We quickly start to doubt our ability (“Oh no, maybe I’m not good at this!”), and this creates a lot of anxiety.  Ironically, worrying about your ability makes you much more likely to ultimately fail.  Countless studies have shown that nothing interferes with your performance quite like anxiety does – it is the goal-killer.

Get-better goals, on the other hand, are practically bullet-proof.  When we think about what we are doing in terms of learning and improving, accepting that we may make some mistakes along the way, we stay motivated despite the setbacks that might occur.

Just to give you an example, in one study I conducted a few years ago with my graduate student, Laura Gelety, we found that people who were trying to be good (i.e., trying to show how smart they were) performed very poorly on a test of problem-solving when I made the test more difficult (either by interrupting them frequently while they were working, or by throwing in a few additional unsolvable problems).

The amazing thing was, the people who were trying to get better (i.e., who saw the test as an opportunity to learn a new problem-solving skill) were completely unaffected by any of my dirty tricks.  No matter how hard I made it for them, students focused on getting better stayed motivated and did well.

Too often, when the boss gives us an assignment, we expect to be able to do the work flawlessly, no matter how challenging it might be.  The focus is all about being good, and the prospect becomes terrifying.  Even when we are assigning ourselves a new task, we take the same approach – expecting way too much too soon.

The irony is that all this pressure to be good results in many more mistakes, and far inferior performance, than would a focus on getting better.

How can you reframe your goals in terms of getting better? Here are the three steps:

Step 1:  Start by embracing the fact that when something is difficult and unfamiliar, you will need some time to really get a handle on it. You may make some mistakes, and that’s ok.

Step 2:  Remember to ask for help when you run into trouble.  Needing help doesn’t mean you aren’t capable – in fact, the opposite is true.  Only the very foolish believe they can do everything on their own.

Step 3: Try not to compare yourself to other people – instead, compare your performance today to your performance yesterday.  Focusing on getting better means always thinking in terms of progress, not perfection.