What is Leadership

Leadership is not just about formal authority, it is really about influencing others. Today’s business environment is fast – things happen very quickly, you have to react quickly. Technology has made it faster to connect to people anywhere in the world, that can bring customers but also competitors. Agility is a social process, it comes from managing the workforce more effectively. The best manager achieve agility by influencing that gets people working together effectively. This is leadership.

Managers rely on authority to implement, to get things done. On the other hand, leaders rely on persuasion to implement. Transformational leaders achieve this by making the goal of the reward, they make you feel that that is in your best interest for you to achieve. Transactional leaders reward you in exchange for achieving the goal that they are intending. The essence of good leadership is you do not rely on authority, you get people to want to do the things you need them to do.



Two critical tasks

  1. make decisions (where to go, how to get there)
  2. implement decisions

Managers often overestimate their ability to make high-quality decisions without input of others. The biggest lever is (representative) inclusiveness, which is opening up the channels of communication, getting other people involved in a leader’s decision making. This immediately offers 2 kinds of benefits:

  1. information benefits (the head of effective leadership)
    • more information means better decisions, because everyone brings to table a unique constellation of expertise, experiences and perspective.
  2. motivation benefits (the heart of effective leadership)
    • ownership via participation breeds enthusiasm and support.

The spiral of despair happens when people are not involved in decision making, and become alienated from the organization. Participation in decision making prevents alienation.

Decision analysis

Making decision is about selecting the best available option for getting you to your goal. Goals are outcomes you want to achieve. Options are actions for getting you there. Decision analysis provides a framework for thinking about making decisions. What makes decision-making difficult is uncertainty. A decision dilemma occurs when you make decisions under uncertainty. We have to manage 3 elements:

  1. Outcomes
  2. Actions
  3. Probabilities

Decision analysis allows us to calculate the expected outcomes for action options and to select the action option with the best expected outcome. But the problem of decision analysis is that it assumes a lot. Usually we aren’t given options, outcomes or probabilities – we invent or estimate them, we have to decide what information we have.

Subjectivity

Subjectivity means that the information that goes into decision-making is often as much about the decision-maker as it is about decision. When we inject subjectivity into decisions, we rely on heuristics. Heuristics are cognitive shortcuts that help us fill in blanks when there is too little information, and limit our search when there is too much information. In the process of using heuristics, our subjectivity creates bias, which reflect our tendencies and prejudices.

Anchoring is a biasing heuristic. Anchoring means being influenced by a reference number when estimating. We often latch on to clues to resolve our uncertainty. Framing is another biasing heuristic. It means being influenced by whether choices is being presented in terms of losses or gains. Most people are risk-averse to protect gains, most people are risk-seeking to prevent losses.



Group Decision Making

No one knows everything, so we use groups. Groups offer 2 critical benefits to the quality of decision making:

  1. More information, which means more informed decision.
  2. More perspectives, which means less biased decision.

Sometimes groups do not take advantage of information and perspectives available by other people in the group. That is known as process loss. There are 3 sources of process loss:

ProblemsHow to overcome?
Composition

– How we form groups.
– How we look for information.
– We are attracted to and comfortable with people who are like / similar to us.
1. Select decision-making groups for diversity
2. Avoid the usual suspects
3. Go out of the comfort zone
4. Think about what constituencies need to be represented
Participation

– Spectators: group members who do not participate in the group deliberations.
– Air-time is often at a premium.
– Some cultures are less participative.
It is important to structure interactions in groups to ensure that everyone gets involved and participates the discussion.

1. To break into smaller groups to increase air-time.
2. Get everyone talking
3. Vigilant about spectators
4. You don’t have to be the leader to be a leader in the group.
Influence

– We look to others to solve uncertainty, we want to be influenced.
– We may change the way we think.
– Last person’s “unique” information was actually influenced by others.
– It is difficult to voice public disagreement in the group.
1. Get people provide info before they find out what other people think.
2. Try writing before discussing.
3. Encourage those susceptible to influence to talk first.
4. “Devil’s advocate” – make disagreement more comfortable by legitimating dissent.

Groups offer the promise of more informed decision via a diversity of information and perspectives not available in one individual. But the promise is not realised when there is process loss.

Managing Motivation

The Law of Effect says: effort is controlled by the consequence that are contingent on it. Motivation is about 2 things:

ConsequencesThe things we get.
– Extrinsic: rewards we get in exchange for the outcome
– Intrinsic: reward are the outcome
ContingenciesThe if-then relationships that determines when we get those things.

The Expectancy Theory suggests a modification to the Law of Effect. Expectancy Theory says it is not just consequences and contingencies that control effort (that motivate people engage in behaviors that we need them to engage in), it is also what people think about these consequences and contingencies. It makes you think your effort controls whether you are rewarded or punished. Motivation is a function of what consequences you think your effort controls.

When would you put out more effort for a contingent reward? There are 3 key perceptions that control whether or not the contingencies and consequences can actually influence your behavior:

ExpectancyIf you think you are capable of performing well enough to be rewarded.
InstrumentalityIf you think good performance will be rewarded.
ValenceIf you value the reward offered.

Those are the cognitive qualifications, “the beliefs” that determine whether contingencies and consequences actually affect behaviors appropriately.



Self-efficacy

The extent to which people is interdependent to other individuals really affects their “beliefs” that whether and how their effort will be translated into (or is likely to control) rewards.

We can think about motivations as managing perceptions. A critical perception must be managed by the leaders is called self-efficacy (believe in one’s ability to do the work). Individuals have to have self-efficacy. They have to believe in their ability to do their work.

In this sense, training takes on 2 critical roles:

  1. Training provides individuals the skills
  2. Training also provides individuals the confidence.

Social Dilemma

An organization’s work is interdependent, no one can achieve the goals without help from others. But other individuals become uncertainty in your ability to translate effort into rewards. Social Dilemma has to do with how individuals allocate resources (time, effort, etc) between individual and group tasks / initiatives. The problem is other individuals become a potential disruptor of your perceived control between your effort and your reward.

A social dilemma arises when the choice or behavior that is best for the individual results in undesirable consequences for the group (or society), should all members behave similarly.

Sheppard, 1993, p.68

Social dilemmas give rise to problems because of two things: free riding and social loafing.

Free ridingWhen people simply don’t invest in group effort, and get benefits without costs.
Social loafingWhen people pretend to be doing their fair share of the work, but in fact they don’t actually.

Free riding and social loafing both are examples of defection, which is when people decide they are not going to do their fair share of the work. Defection is actually occurring for 2 reasons:

  1. Offensive defection – when people is trying to behave opportunistically.
  2. Defensive defection – when people are afraid others are not going to contribute and don’t want to be taken advantage of by others.

Either free riding or social loafing decreases the ability of the group to create value. When the group fails to create value, the group suffers as a whole. The uncertainty that other people will do their fair share of the work can dramatically decrease motivation because it decreases the perception that my effort controls the consequences.

Motivations as Managing Perceptions

So motivation is not just about contingencies and consequences, it is about the perception of them. People’s beliefs in themselves (self-efficacy) and beliefs in others (social dilemmas) are critical to their willingness to expend effort.

Process Revolutions

Some groups struggle to turn the information and perspective advantage of groups into a high-quality decision. Groups often start having a good idea of:

  1. how much progress they have to make, and
  2. by when they want to reach a timely decision.

Unfortunately, once they start deliberating, the group’s progress often falls short of expectations – the group falls behind. There is often a point at which people realize “we need to change”. This is Process Revolution. The process revolution that happens once a group realizes its process is not working. It represents a salient punctuation point for assessing how the group is doing – and whether the groups will meet its deadline.

When a midpoint transition occurs, the group typically decide that it needs to do things a little differently. Often however these process revolutions come too late for the change to allow timely completion of the group’s work. The solution is to create intermediate deadlines – progress milestones, that allows the group to assess the effectiveness of their progress.



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