Business Psychology

Majority of Company Strategies in Jeopardy

by Sarah Thrift on December 18, 2013

Strategies are so often put at risk because it’s not really understood or known by those who actually have to implement it day-to-day.

Read more in the article below, which features today in Silicon Valley Business Journal, Yahoo! Finance, and Strategize magazine amongst others.

Majority of Company Strategies in Jeopardy

Business Leaders Need to Better Align Employees with Overall Vision

SAN FRANCISCO, Dec. 18, 2013 – Too many company strategies falter due to poor leadership alignment and low employee engagement, according to strategy expert Sarah Thrift.

A staggering 95% of a company’s employees are unaware of, or do not understand, the strategy, according to research by Robert S. Kaplan and David P. Norton . Even among high performing companies with “clearly articulated public strategies,” recent research by Timothy Devinney suggests that only 29% of their employees can correctly identify their company’s strategy out of six choices.

If a strategy is to succeed, every member of an organization needs to understand his role in making the strategy a reality, says Thrift, whose organization Insight Consultancy Solutions, Inc. has partnered with organizations across North America and Europe.

“It does not matter how clever your strategy is, if employees don’t understand what it is, then there is no chance for their actions to be in line with what needs to happen.” Thrift says. “Each person needs to continuously ask themselves how the work they do relates to the strategy. If there is no clear link, then don’t do it.”

Part of the challenge is a poor understanding of what it means to create support behind a vision. Research published by Julie Straw et al. suggests that that only 47 percent of leaders have a clear understanding of what “building alignment” means.

Mary Barra, the new CEO of GM shared in a YouTube interview with Fortune Magazine a breakthrough moment as a leader. She was running a GM assembly plant and realized “I’ve got to motivate everyone to want to pull in the same direction and not just naturally assume that it’s going to happen like it might in a small team.”
A starting point towards better employee engagement is for organizations to gauge the leadership team’s level of alignment around the strategy, says Thrift who helps organizations transform through periods of change.

“If the leadership team is not pulling in the same direction, there is no chance for the rest of the organization to do so” says Thrift.

“Sometimes the leadership team knows it is not in alignment and that differences need to be addressed” says Thrift. “The silent killer is when leadership teams assume they are in alignment when they are not.”
“Differences between leaders may seem small, but these differences can become very big when projected through layers of an organization. Before you know it, each division is leaning in a different direction, which is death for the strategy,” Thrift says.

“The best leaders I have worked with are the ones who make it a priority to create alignment with their peers and in their teams. They are the ones who make the objectives of the organization really clear and make sure that everyone knows how their individual role ties-in.” she says.


Honing your Decision-Making Skills

by Sarah Thrift on August 12, 2013


I have just been reading the new book by Chip and Dan Heath: “Decisive: How to Make Better Choices in Life and Work”. It is a fascinating read, with a review of “villains” of decision-making, and a process to avoid them.

The authors identify four villains of decision-making:

  1. Narrow framing makes us miss options
  2. We gather self-serving information
  3. Short-term emotions (which will fade) dictate our choices
  4. We are overconfident about how the future will unfold (having too much faith in our predictions)

To make better decisions, they recommend the WRAP process:

  • Widen Your Options
  • Reality-Test Your Assumptions
  • Attain Distance Before Deciding
  • Prepare to Be Wrong

The bulk of the book talks you through the WRAP process, with plenty of juicy anecdotes to illustrate villains and process at work.

One of the most provoking things for me was thinking about villain 3, the impact of short-term emotions on our ability to make sound decisions.

George Loewenstein and Jennifer S. Lerner in their paper “The Role of Affect in Decision-Making” divide emotions during decision-making into two types:

  • those anticipating future emotions i.e. expectations of how the person will feel once gains or losses associated with that decision are experienced; and
  • those immediately experienced while deliberating and deciding. These may be connected to the decision at hand, to the current environment, or the dispositional affect of the person.

This leads me in two directions. The first is how much can we master ourselves to be aware of our emotional state? And how much of our emotional state is below the level of our conscious awareness and/or mastery?

Mastering ourselves, while very desirable, is unfortunately pretty challenging. As Leonardo Da Vinci said, “One can have no smaller or greater mastery than mastery of oneself.”

Let’s not lose hope here – but for most of us, we shouldn’t pin all our hopes on this either.

As for the second direction: there are lots of practical tips for mitigating the role of our emotions in decision-making, for instance:

  • Sleep on it: Yes, we all know this one, but do we really do it? Very few decisions have to be taken on the spot, yet so often we can act like urgent and immediate action is required.
  • 10-10-10: Use Suzy Welch’s 3 questions to create distance and perspective (see March 2013 for more details):How will I feel about this decision 10 minutes from now?
    How will I feel about it 10 months from now?
    How about 10 years from now?
  • Imagine you were advising your best friend: what would you tell him/her to do in this situation?

No rocket science here, but simple questions and tips to help us detach from our emotions and achieve the clarity we need for good decision-making.


Decision-Making Traps

by Sarah Thrift on July 12, 2013

Lost and with a Decision to Make

“The greatest deception men suffer is from their own opinions.”
Leonardo Da Vinci

The 1998 article by John S. Hammond, Ralph L. Keeney, and Howard Raiffa on the “The Hidden Traps in Decision Making” (reprited in HBR in 2006) continues to be a really good reminder for me of the subconscious things we do in making decisions – the way we convince ourselves we are right, bias evidence and seek opinions accordingly.

Hammond, Keeney, and Raiffa refer to specific traps of decision-making including:

  1. The Anchoring Trap: When considering a decision, the mind gives disproportionate weight to the first information it receives and anchors there e.g. previous sales volumes as a predictor for the future.
  2. The Status-Quo Trap: a strong bias toward alternatives that perpetuate the status quo. In business, where sins of commission (doing something) tend to be punished much more severely than sins of omission (doing nothing), the status quo holds a particularly strong attraction.
  3. The Sunk-Cost Trap: Make choices in a way that justifies past choices, even when the past choices no longer seem valid. Why can’t people free themselves from past decisions? Frequently, it’s because they are unwilling, consciously or not, to admit to a mistake.
  4. The Confirming-Evidence Trap: The confirming-evidence bias not only affects where we go to collect evidence but also how we interpret the evidence we do receive, leading us to give too much weight to supporting information and too little to conflicting information.

Which got me thinking…

How often do we convince ourselves that we’re gathering information when we’re actually fishing for support?
How often do we dismiss contrarian views, rather that ask, “what would need to be the case for this to be true?”
How often does our fear subsconsciously prevent us from stepping out of the past and the status quo?

I know for myself that the answer to each of those questions is: Much more often than I’d really like to admit. Which means I’ll be keeping my checklist of questions at the front of my mind going forward.