Robert Shiller is the Arthur M. Okun Professor of Economics at Yale University. In this 7 minute video interview from the McKinsey Qurterly, he describes the role played in our economy by “animal spirits,” the subject of his new book written with George A. Akerlof, the Koshland Professor of Economics at the University of California, Berkeley. The text below is adapted from Animal Spirits.

Adam Smith saw that human beings rationally pursue their economic interests, and his economic theories explain what happens when they do. But they are also guided by noneconomic motives—“animal spirits”—which Adam Smith and his followers largely ignore. Sometimes people are irrational, wrong, shortsighted, or evil; sometimes they act for action’s sake; and sometimes they uphold noneconomic values like fairness, honor, or righteousness.

The research is pretty clear. We make totally irrational emotional decisions about almost everything – unless it is insignificant and then we let logic rule. However, once we have made that instant emotional response, we let our minds believe it is analytical and devise reasons to “make it so”. (While a google search will come up with a number of articles on this, I am still trying to locate the source that I prefer to reference.)

Theoretical economists who struggle to understand how people handle uncertainty seem to be converging on behavioral economics. Jack: Straight from the Gut, the title of the autobiography of former GE chairman Jack Welch, sums up this reality: investment decisions are intuitive, not analytical. Intuition, a social process, follows the laws of psychology—indeed, of social psychology. Asking why capital expenditure fluctuates from year to year is a bit like asking why beer consumption fluctuates from one poker party to another.

What all this got to do with Sustainable Change?

We talk about planning change as if we can take into account all the facors. Even if we could anticipate all the possble logical and some of the emotional reactons and develop contingency plans, it may be a futile effort”. (This following in fact not the original quote from To A Mouse by Robbie Burns but the colloquial phase. The proper verse can be listened to by clicking this link.)

The best-laid plans of mice and men often go awry.

Even we really want to see meaningful change we had better start figuring ways to tap unto the human spirit and passion. At 1-Focus we are pretty clear about how to do this through genuine engagement.

I don’t do Change Management – never have; never will. 

I have never called myself a Change Consultant but I have slipped into saying that I do “Change Management”. Sometimes it is easier to say that you “do” change management than try to explain OD.  Sometimes it is even easier to say that you do leadership development and training. I had the official title of “Organization Effectiveness Consultant in 1982 for a Hi Tech Telecommunications Company (that recently went bankrupt).  For the past 25 years, whenever I explain to people that specialize in Organizational Development, it seems that their eyes glaze over. It isn’t that I can’t define it quite succinctly. I have always used Dick Bechard’s definiton – which may be slightly dated but still holds the essence of OD:

Organization development is an effort (1) planned, (2) organization-wide, and (3) managed from top, to (4) increase organization effectiveness and health through (5) planned interventions in the organization’s “processes,” using behavioral science knowledge. (Richard Bechard, 1969)

I will come back to what I think needs to shift in the definition in today’s environment but first, let me explain why I do not like the term “change management”. The concept of OD is very specific, if not complicated, but “change management” is a moving target. Historically, change management has taken a mechanical perspective that “focuses on observable, measurable business elements that can be changed or improved, including business strategy, processes, systems, organizational structures and job roles.”

Today it is far more nebulous – like empowerment, leadership or engagement. It can be all things to all people. Today it encompasses both the human aspects of change as well as the technical side. A good and simple explanation of this evolution can be found here. The human side of change was only appropriated when those engineering the change finally realized that their efforts were failing.

In ten years we will still be talking about “it” but “it” will be called change leadership! However, I would like to take OD to the next level and maybe it will be called Iterative Sustainable Change.

What is missing in OD today?

The process can no longer be planned nor take the length of time it has in the past. It needs to be designed, co-designed. (Hence, interventions may be planned.) It needs to happen fast, which will be more transformative and truly systemic. This means that it has to be a collaborative process like we have not seen. It will not be managed from the top but lead by each person and managed through out the organization. This means everyone, and I do mean everyone, has to be engaged. Engagement does not mean “involved” or “participating”. I repeat, it will be co-designed by everyone. It will be iterative and sustainable because it happens from the inside out. And my role and the role of all “change consultants” or “change facilitators” will be to help create and hold that safe space.

Please share your thought.

]]> http://1-focus.com/sustainingchange/archives/298/feed 0 http://1-focus.com/sustainingchange/archives/464 http://1-focus.com/sustainingchange/archives/464#comments Fri, 24 Apr 2009 11:38:21 +0000 Roberta Hill http://1-focus.com/sustainingchange/?p=464 Wednesday April 22nd was Earth Day and to be honest, I didn’t do anything particular to celebrate or honour it. I was too busy blogging, driving kids from activities, fixing meals, doing laundry, changing light bulbs and arranging my next trip to Canada. So when this video crossed my desk this morning via Twitter, I thought it was a great way to both acknowledge the importance of Earth Day – everyday AND a good follow-up to my post from yesterday about personal safety and change.

Although the environmental and human rights movements are sometimes perceived as two different things – especially in many developed countries like the United States – in much of the world they are closely intertwined.

As part of their 30th-anniversary issue, Inc. asked Jim Collins, author of Good to Great and Built to Last, what we might expect in the next 30 years. His answer: uncertainty, chaos, turbulence, and risk.

In the end, I think we need to have absolute faith in our ability to deal with whatever is thrown at us. And we need to have a complete, realistic paranoia that a lot can be thrown at us. It’s our ability to put those two contradictory ideas together: We need to be prepared for what we can’t predict and, at the same time, have this total, unwavering faith that we will find a way to deal with all of it. And I believe we will.

I never felt anxious or fearful walking alone at night in the city.  I have been known to hitchhike in the city during a transit strike. Canada has always been a “safe” place and here in Switzerland one gets the same feeling that it is OK that our kids can play outside around the neighbourhood.  I had the privilege of always feeling personally safe.

This is simply not the case for many people around the world and perhaps even someone you know living next door.  Domestic violence, sexual abuse, slavery, political torture and ethic genocide are all closer than we may realize.  Fear is an amazing tactic to keep us silent.  I don’t think I fully grasped the significance of this until I was recently reminded of something. 

Have you ever been harassed via email? I have. It was back in 2003.  Something of mine had been published online out of context and I sent a private email to ask that a correction be made.  This resulted in a series of bullying emails that were scary due to the craziness and menacing style. I disengaged and began to step back from my online presence.  The author of these emails had a large database and I was afraid of what he might do to my reputation.  For the first time in my life I was fearful and acted like a victim.  Life goes on and the feelings receded in my mind.  

This very same person has recently requested to connect with me through Facebook, Twitter and LinkedIn. It is as though we are colleagues with some sort of good relationship. I simply ignored them.  I was very surprised to find these old feelings of anger (fear) surface a few days ago when this person began sending replies to ask me why I hadn’t followed back on Twitter.  The person was suspended later that day and then opened up another account.

Sure I could have just blocked the identity but this could go on forever.  I then got thinking about all these other “crazies” out there who might follow me or even if they didn’t a search is easy enough to do and find my tweets and read them anyway.  I could be retweeted out of context AGAIN.  

Stay cool, don’t let someone (or something) rent space in your head. (Robert Bacal)

The post mentioned below had been circulating in my mind since I had read it a few months back. So I decided to re-evaluate my strategy for social networks – specifically Twitter and decided to remove myself from the public timeline. I still maintain a strong online presence and will continue to do so but I decided that I had the right to be in control of who could or couldn’t pester me.  I have no need to be famous. 

Which brings me back to the point I wish to make about personal safety and change . . . I have a new found respect for anyone in the pubic eye – regardless of the reason or how I may feel about them.   It is easy for us to remain silent, feeling safe and secure knowing that no one can point at us directly.   German anti-Nazi activist, Pastor Martin Niemöller (in his often misquoted speech that I too have misquoted) gave us the best reason not to remain silent.  ”Then they came for me - and by that time no one was left to speak up.”

If one is sane, to stand up to opposition and be counted takes a tremendous amount of courage. So it seems to me that courage is a precursor for change.  And I know that this is scary.  Change always comes at a cost or a loss.  Don’t let anyone tell you otherwise.  AND it is worth it. 

I suppose too, that when someone asks what “I do” or “we do” at 1-Focus International, our response is pretty consistent.  We say that we help create and hold a “safe space” for people to do their work and thereby the group or team can co-develop their shared vision of the future and begin the process of sustainable change.  And as coaches we do the same.  We my ask powerful questions but first we establish the safety to explore ideas or places that are unfamiliar. 

While not about harassment on Twitter, this is a must read: Why my Twitter updates are protected by Melanie McBride.

Barry Schwartz shows us examples and clearly states that the key to “practical wisdom” is the development of character. This has to begin in the classroom and teachers (and parents for that matter) must embody character. The question remains – what constitutes “character”?

It Takes More Than Competence

Everyone is talking about competencies, which are a combination of knowledge, skills, experience, and abilities that have been acquired over the lifetime of a leader’s career. Competencies are critical to performance and are indicative of the CAN DO aspects of the leader. We believe that competencies are the standard expectation today and leaders won’t survive long without them. But, there is something very important missing from the equation if the primary focus is all on competencies.  Most of the competency models out there are missing a comprehensive approach to the aspect of leadership that is MOST critical to sustainable leadership success…namely, who you are being as a person in fulfilling your leadership role.

Rapid change, demands a leader who has character…

The world of work has dramatically changed in the last decade. Leaders with good character are the ones who will make it during a tough downward cycle so those are the leaders we are looking to. Tilt is the only leadership 360 measuring trait-based character strengths.

We are  pleased to announce 1-Focus International as a fellow with Tilt Inc. as a Preferred Independent Consultant in Europe.

==================================

Date: Monday, January 26th, 2009
Time: 2pm Pacific/5pm Eastern
What: Get in the Game with LinkedIn,
        An Interview with Roberta Hill, MCC

        of 1-Focus.com

Register:
http://readytoevolve.com/membership/roberta.htm

==================================

So, do you know how Kim and I met?  On Twitter of all places.  I had seen postings of hers on a Discussion Forum where we were both members and I decided to follow” her on Twitter.  All of this brings me to discuss: Why Social Media Is Worth Anyone’s Time – including mainstream executives and leaders.

A year ago, BusinessWeek updated and republished there article from May of 2005, Social Media Will Change Your Business and you ain’t seen ‘nothin’ yet.  This month Steve McKee wrote: Why Social Media Is Worth Small Business Owners’ Time.  He argues that the biggest reason to use social media is that it is free.  This may be helpful for small businesses on a budget but it should not be the primary motivator.

“Because what is louder than a shout? A whisper. Social media is a way to get next to your customer and speak only with them. Whispering is intimate. It’s done up close. And it’s closely related to listening.”  Valeria Maltoni

The above is a great quote from her blog post on Convesation Agent.  And here is why everyone from the individual member of society to the Member of the Board in the Executive Suite needs to know about Social Media . . . it is all about communications.  And communications is all about Trust.  And this brings me full circle to the blog article The Power of LinkedIn and The Speed of Trust by Paul Allen.  Here he draws parallels to Stephen M. R. Covey’s best-selling book in 2006 called The SPEED of Trust.

I am not going to list all the things you SHOULD be doing if you choose to use the various internet social networks. There are enough articles out there to keep you reading for a week.  What I do want to point out to leaders is that this is a tool that will help you listen and if you so choose understand what engages people.  More on communications and leaders in future posts.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

To stress the fact that Social Networks and Media are forces to be addressed the following came across my desk as I write this:

How Many Millions are in Your Network?

- so starts the Executive Book Alert from Soundview Executive Book Summaries. This is a quick review of a new book 33 Million People in the Room:  How to Create,

Influence, and Run a Successful Business with Social Networking by  Juliette Powell.  Here is one point that I allude to above that is well worth mentioning:

Powell devotes some page space to the internal uses of social networking, as well. This is an often-overlooked area of this technology. Executives would do well to pay extra attention to this chapter, as it may help them increase communication between various levels in their organization.

The definition of the first category is particularly interesting: Drivers of Change

Bold drivers of change see opportunity where others see only danger and are not afraid to transform their company and even their industry. They are not afraid of change and they are decisive. A bold mergers and acquisitions transaction, for example, is one that has the potential to transform the company that undertakes it – allowing it to dominate its own sector or to move into new ones. 

I suspect that the example of a bold M&A is in part in response to one of the sponsor, ArcelorMittal.  At 1-Focus, we have been following ArcelorMittal.  We have written before about how impressed we have been in their approach and integration strategy.  It follow the process that we have developed and it took into account (either by plan or default) the five critical factors.  I was amused by the first part of the definition.  For the past 20 years, all I have heard about is that change is always with us.  ”Not afraid of change.” Interesting. . .  ”Decisive” . . . Interesting.  Draw your own observations.

There will also be a special Readers’ Award, which will be voted for by readers of the Financial Times and FT.com. A shortlist of five companies that have shown boldness, leadership and embraced innovation in the last twelve months have been selected.  They are:

• Nintendo
• Twitter
• American Apparel
• HCL Technologies
• Santander

Read about the reason for their selection. Alternatively, you can vote for your own company by emailingboldness@ft.com

The original was posted in February of 2007 and has been viewed by over 4 million people.  Personally, I enjoy this one – probably because of the powerful music behind the presentation. For those who do not like to read, there is an auditory version.

• We are cutting down on business travel across the board, except in situations of absolute necessity — 415 votes, 38.1% 
• We are encouraging greater use of video/tele/Web conferencing as an acceptable substitute and a way to limit travel — 285 votes, 26.2% 
• Our current levels of business travel are still essential for business development and deals — 246 votes, 22.6% 
• We are cutting back by sending fewer people on a given trip — 98 votes, 9% 
• We expect business travel to increase in the next year or two — 46 votes, 4.2% 

Let’s face it.  No surprise here.  We all know that the first things that get cut in any kind of business downturn are training and travel.  What is different than even 10 years ago, is the improvements in alternate conferencing technologies.  Even with good cash flow, often video/tele/Web conferencing makes good business sense.  Think of all the time “lost” in traveling thereby productivity.  These technologies do not have to be a poor substitute.  With proper design and delivery, they can be a very viable choice.  

For this reason, 1-Focus International has begun to offer short teleclasses that can be attended live or listened to via audio at a future date.  Roberta has been trained in teleclass delivery and has been offering teleclasses for more than six years successfully.  Our initial series is based on EFT: “Living in Your Limelight.” For more information and registration instructions click here.

By the way, we love these short takes on Leadership from SmartBrief.  

I confess that I have not read the book.  While not a fan of Tichy, I am a fan of Bennis.  (I find Tichy uninspiring to read and everything by Bennis of value so there is my bias.)  In this short interview below, Tichy discusses the leadership role that A.G. Lafley took in heading up the Proctor & Gamble acquisition of Gillette and the success.  I noticed that he did refer to it as an acquisition and not merger which may explain why the decision and implementation has been labelled a success BUT the integration of the employees and culture remains to have challenges.   Leaders need to take a closer look not only in their role to support implementation but to create a Culture of Engagement through systematic integration right from the start.