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The Rise of Toxic Leaders and Toxic Workplaces

Posted August 30th, 2016 in Articles, Blogs by admin

Books, articles, seminars and speeches abound espousing the virtues of great leaders, effusive in their description of men and women who are selfless, humble, empathetic, compassionate, emotionally intelligent and altruistic. Hordes of consultants, university professors, researchers and coaches make their living espousing the need for choosing these kinds of leaders.

The truth of the matter is that we are hypocrites, and we are witnessing the rise of toxic leaders and workplaces. We tend to choose or follow a very different kind of leader. We hire and promote the psychopaths, the narcissists, the bullies and the autocrats dedicated to self-interest, and whose long-term impact has and can damage and even destroy organizations (and even countries). In my two decades as an executive coach, I have encountered more of the leaders described in this paragraph than those described in the first paragraph. Many people easily forgive these toxic leaders and the harm they cause because they measure their success solely in financial terms or because they bring charismatic entertainment value to the organization.

A Leadership Crisis

Yet even today, despite the collective wisdom of centuries on this topic, confidence in our leaders is low and continues to decline. Those are among the key findings of a nation-wide poll, in 2012, the National Leadership Index(NLI), released by the Center for Public Leadership at Harvard Kennedy School and Merriman River Group. The survey is the seventh annual measurement of public attitudes toward 13 different sectors of American life, ranging from business and non-profits to politics and religion. In only two sectors measured in the year’s report—military and medical—did the leaders receive above-average confidence scores. Ratings for the remaining eleven sectors fell into the below-average range or remained in the below-average range. Wall Street and Congress stood out as the sectors in which Americans have the least confidence—indeed, the confidence rating for these two was barely above “none at all.”

And the failure rate for our leaders is getting worse, not better. The Conference Board reported that CEO tenure has declined since 2000. Consulting firm Booz also reported higher CEO turnover rates among the 250 largest companies. The Center for Creative Leadership reports research that shows 50% of leaders and managers are “estimated to be ineffective, incompetent or a mishire.” A survey by 14,000 HR professionals found only 26% reported the quality of leadership in their company as excellent or very good.

In the past two decades, 30% of Fortune 500 chief executives have lasted less than three years. Top executive failure rates as high as 75% and rarely less than 30%. Chief executives now are lasting 7.6 years on a global average down from 9.5 years in 1995. According to the Center for Creative Leadership 38% new chief executives fail in their first 18 months on the job. And Donald Palmer at the University of California reported of the Fortune 100 firms in l999, 40% of them had engaged in misconduct.

It appears the major reasons for failure has nothing to do with competence, or knowledge, or experience. Sydney Finkelstein, author of Why Smart Executives Fail, and David Dotlich and Peter C. Cairo, authors of Why CEOs Fail: The 11 Behaviors That Can Derail Your Climb to the Top and How To Manage Them present cogent reasons why chief executives fail, most of which have to do with hubris, ego and a lack of emotional intelligence.

The Toxic Organization

In my book, Eye of Storm: How Mindful Leaders Can Transform Chaotic Workplaces, I describe in detail the characteristics of toxic workplaces, and the part that dysfunctional leaders play in creating them.Toxic workplaces can be characterized as follows:

  • All sticks and no carrots. Management focuses solely on what employees are doing wrong or correcting problems, and rarely give positive feedback for what is going right. Or mostly carrots for the best performers, sticks for the the rest;
  • The creeping bureaucracy. There are too many levels of approval and management to get things done and a singular focus on micromanaging employees;
  • The gigantic bottom line. A singular focus on profits, beating the competition and cost cutting without consideration of other bottom lines;
  • Bullies rule the roost. Bullying of employees by management, or tolerated by management when it occurs among employees;
  • Losing the human touch. People are considered to be objects or expenses rather than assets, and there is little concern for their happiness and/or well-being;
  • High levels of stress, turnover, absenteeism and burnout;
  • Instituting internal competition among employees enforced by a performance assessment system that focuses on individual performance rather than team performance;
  • Little or no concern for work-life balance, where a personal or family life must be sacrificed for the job;
  • Overwork or workaholism, commonly evidenced by 50 hr+ workweeks, little or no vacation time and 24/7 availability for work communication;
  • Little evidence of leaders’ compassion and empathy for employees;
  • Little or no commitment to making contributions to the community, worthy causes or making the world a better place.

There has been a decline in civility in the workplace, including the growth of bullying. Christine Porath, Georgetown University business professor wrote a piece in The New York Times about the decline of civility in the workplace: “A quarter of those I surveyed in l998 reported that they were treated rudely at work at least once week…That figure rose to nearly half in 20005 , then to just over half in 2011.” In my article in Psychology Today, “The Rise of Incivility and Bullying in America,” “Repeated public opinion polls have voiced the concern of Americans over the erosion of civility in government, business, media and social media. The most recent poll by Weber Shandwick, reported that 65% of Americans say the lack of civility is a major problem that has worsened during the financial crisis and recession. What’s even more distressing is that nearly 50% of those surveyed said they were withdrawing from the basic tenants of democracy—government and politics—because of incivility and bullying.”

Research conducted in the past decade has shown that employee engagement has declined significantly in most industries, with some research citing as few as 29% of employees being actively engaged in their jobs.

Toxic Leadership

There’s a clear symbiotic relationship between toxic workplaces and the toxic leaders who inhabit them.

Theo Veldsman of the University of Johannesburg has recently published a study on the growth and impact of toxic leadership on organizations. He contends that “there is a growing incidence of toxic leadership in organizations across the world.” Veldsman says that anecdotal and research evidence shows that one out of every five leaders is toxic, and he argues according to his research, that is closer to three out of every ten leaders. Veldsman describes toxic leadership as “ongoing, deliberate intentional actions by a leader to undermine the sense of dignity, self-worth and efficacy of an individual. This results in exploitative, destructive, devaluing and demeaning work experiences.” He goes on to say that a toxic organization is one that “erodes, disable and destroys the physiological, psychosocial and spiritual well being of the people who work in it in permanent and deliberate way.

INSEAD business school Professors Gianpiero Petriglieri and Jennifer Petriglieri, authors of “Can Business Schools Humanize Leadership?” have coined the term “leadership industrial complex,” which they say promotes a view of leadership that is depersonalized and sanitized: “Over one decade of corporate scandals, financial meltdowns and growing inequality has consolidated a disconnect with business and political leaders, as it is in the protests in the streets and squares around the globe.” Leaders now are no longer seen as being role models or stewards of the common good, but rather as predatory plutocrats who profit disproportionately at the expense of the majority of the population. G. Petriglieri and J. Petriglieri argue that we have experienced a “dehumanization of leadership” in which leadership is reduced from a cultural enterprise to a strict intellectual or commercial one, and in which leadership “distances aspiring leaders from their followers and institutions, resulting in a disconnect their inner and outer worlds.”

Robert Sutton was one of the first leadership experts to draw attention to the prevalence of abusive bosses and how organizations should screen them out, as detailed in his book, The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn’t. He points out that tech firms, particularly those in Silicon Valley are where abusive leaders thrive. His article in the Harvard Business Review on the subject received an overwhelming response of affirmation. He says in business and sports it is assumed if you are a big winner, you can get away with being a jerk. Sutton argues such bosses and cultures drive good people out and claims bad bosses affect the bottom line through increased turnover, absenteeism, decreased commitment and performance. He says the time spent counselling or appeasing these people, consoling victimized employees, reorganizing departments or teams and arranging transfers produce significant hidden costs for the company. And he warns organizations this behavior is contagious. Research suggests not only that some bosses are jerks but that many of them are bosses because they are jerks.

Paul Babiak’s book Snakes in Suits profiles how some functional psychopaths can fake it untill they make it up the corporate ladder through charm and guile, pointing out how statistically significant evidence shows psychopaths are overrepresented in Corporate America.

An Interact/Harris Poll was conducted online with roughly 1,000 U.S. workers. In the survey, employees called out the kind of management offenses that point to a striking lack of emotional intelligence among business leaders, including micromanaging, bullying, narcissism, indecisiveness, and more.

Incivility also hijacks workplace focus. According to a survey of more than 4,500 doctors, nurses and other hospital personnel, 71 percent tied disruptive behavior, such as abusive, condescending or insulting personal conduct, to medical errors, and 27 percent tied such behavior to patient deaths.

Swedish researchers, led by Anna Nyberg at the Stress Institute in Stockholm, have published a study in the Journal of Occupational and Environmental Medicine on the issue of leaders’ behavior and employee health. They studied more than 3,100 men over a 10 year period in typical work settings. They found that employees who had managers who were incompetent, inconsiderate, secretive and uncommunicative, the employees were 60% more likely to suffered a heart attack or other life-threatening cardiac condition. By contrast, employees who worked with “good” leaders were 40% less likely to suffer heart problems.

According to a 2010 survey conducted by the Workplace Bullying Institute, 35% of the American workforce (or 53.5 million people) has directly experienced bullying–or “repeated mistreatment by one or more employees that takes the form of verbal abuse, threats, intimidation, humiliation or sabotage of work performance”–while an additional 15% said they have witnessed bullying at work. Approximately 72% of those bullies are bosses.

Jean Lipman-Blumen, in her book, The Allure of Toxic Leaders, describes how toxic leaders create “serious and enduring harm” on their followers, employees and their organizations. Recent polls of the American public shows some of the lowest trust results in decades for elected members of Congress and business leaders. She identifies toxic leaders’ behaviors as follows:

Leaving their followers worse off than when they found them by deliberately undermining, demeaning, seducing, marginalizing, intimidating, demoralizing, terrorizing them;
Consciously feeding their followers illusions that enhance the leader’s power and impair the followers’ capacity to act independently
Playing to the basest fears and needs of the followers;
Threatening or punishing those who fail to comply with the leader or question the leader’s actions;
Misleading followers through deliberate lies;
Blaming others for their mistakes or failures.
Lipman-Blumen contends that even the media has difficulty resisting the seductive appeal of toxic leaders, citing examples from leading publications such as Time, BusinessWeek, Forbes and Fortune extolling the virtues of a number of failed narcissistic and toxic leaders such as Dennis Kozlowski, Kenneth Lay and Al Dunlap.

Narcissistic Leaders

Americans are obsessed with narcissistic leaders, or at least they have an ambivalence between the ones they like and the ones they promote. A case in point is Real Estate baron and presidential candidate Donald Trump. Not that he is alone. At various times, similar attention and popularity have been heaped by the public and especially by the media for leaders such as Steve Jobs, Lee Iacocca and Larry Ellison. Some observers have openly called Trump a narcissist in terms of a classical definition. Stephanie Marsh used the Narcissistic Personality Disorder description contained in the psychologists/psychiatrists Bible, the DSM-V as an assessment for Trump, concluding there was a match with the following traits:

A grandiose sense of self-importance;
A preoccupation with unlimited fantasies of success, power and brilliance;
Believes that he is “so special;”
Requires excessive admiration;
Has a sense of entitlement;
Takes advantage of others to achieve his own ends;
Lacks empathy for others;
Is super-sensitive to criticism.
Not that their hubris doesn’t pay off. According to a research study completed by Charles A. O’Reilly III at Stanford’s business school. O’Reilly and his colleagues surveyed employees in 32 large, publicly traded tech companies. He contends that bosses who exhibits narcissistic traits like dominance, self-confidence, a sense of entitlement, grandiosity and low empathy, tend to make more money than their less self-centered counterparts, even if the lower-paid CEOs exhibit plenty of confidence. O’Reilly says of the narcissists, “they don’t really care what other people think and depending on the nature of the narcissist, they are impulsive and manipulative.” O’Reilly goes on to argue the longer narcissistic leaders are at the helm, the higher their compensation in comparison with the rest of the leadership team, or in some cases the narcissistic bosses fire anyone who dares to question or challenge them. There is a dark downside to this appearance of success however, O’Reilly contends. Company morale often declines, and employees leave the company. And while the narcissistic or abusive leaders may bring in the bigger paychecks, O’Reilly says there is compelling evidence that they don’t perform any better than lower-paid, less narcissistic counterparts.

While Steve Jobs was a charismatic visionary, and brilliant innovator, Walter Issacson’s biography showed him to be rude, controlling and mean-spirited, never hesitating to humiliate Apple employees and take credit for others’ work. Since his death, there has been a flood of articles and books and seminars extoling Job’s leadership style, many of which argue that it’s okay to be an “asshole” as long as you are financially successful. In my article in The Financial Post I make the point: “The concern I have, and that it is reflected by other leadership experts, is the faulty cause and effect, and “ends justifies the means” arguments that hold up Jobs as a leader to be emulated. It goes something like this: It doesn’t matter what kind of boss you are like (meaning abusive), as long as you get results (financial); and any methods to get there are okay, including abusing people.”

While narcissists may look like good leaders, according to a new study by a group of psychology researchers from the University of Amsterdam, they’re actually really bad at leading. The study is in the journal Psychological Science. Here’s the abstract: “Although they are generally perceived as arrogant and overly dominant, narcissistic individuals are particularly skilled at radiating an image of a prototypically effective leader. As a result, they tend to emerge as leaders in group settings. Despite people’s positive perceptions of narcissists as leaders, it was thus far unknown if and how leaders’ narcissism is related to the actual performance of those they lead. We proposed and found that although narcissistic leaders are perceived as effective due to their displays of authority, leaders’ narcissism actually inhibits information exchange between group members and thereby negatively affects group performance.”

Writing in the Harvard Business Review Michael Maccoby identified the weaknesses of a narcissistic leader, including this: “Despite the warm feelings their charisma can evoke, narcissists are typically not comfortable with their own emotions. They listen only for the kind of information they seek. They don’t learn easily from others. They don’t like to teach but prefer to indoctrinate and make speeches. They dominate meetings with subordinates. The result for the organization is greater internal competitiveness at a time when everyone is already under as much pressure as they can possibly stand. Perhaps the main problem is that the narcissist’s faults tend to become even more pronounced as he becomes more successful.”

Tomas Chamorrow-Premuzic has pondered the question of “Why We Love Narcissists.” He argues when narcissists, however productive some may be, “have parasitic effects on society. When in charge of companies they commit fraud, demoralize employees and devalue stock. When in charge of countries they increase poverty, violence and death rates.” Chamorrow-Premuzic analyzed decades of research on narcissistic leaders and concluded these key findings:

Narcissists are masterful impression makers, largely due to their intense self-obsession and self-adulation.
Narcissists take credit for successes and blame others for failures “through a mix of shameless self-promotion and guilt-free, Machiavellian agenda.”
Narcissists fit our conventional stereotype of what a good leader should look like. Perhaps this is the most relevant factor. Chamarrow-Premuzic says in sports, business, education and politics, we value above all else confidence, charisma and egotism rather than humble confidence and altruism and integrity. Today’s business world values rewards, and arrogant self-important people, and our media thrives on covering and promoting narcissists.
Lord David Owen identified hubris—overconfidence and exaggerated pride along with a shaming and contempt for others) as another term to describe narcissistic leaders. He says that, among other character traits, they have a strong belief that any action they take, even if illegal, will be vindicated in legal courts or that of public opinion. He says the “hubris syndrome is a disorder of the possession of power, particularly power which has been associated with overwhelming success, held for a period of years and with minimal constraint on the leader.”

Emma SEPPÄLÄ provides us with hard data on the value of being a “nice boss.” She argues that research shows that “tough managers” often mistakenly think that putting pressure on employees will increase performance, but when it does is increase stress, which has many negative effects. She cites a study that also shows that when leaders are fair to the members of their team, the team members display more citizenship behavior and and are more productive.

Fred Kiel, founder of KRW International, and author of The Return on Character, says there is a widely accepted belief in the business world and business schools that a good leader is a “hard-nosed driver.” Kiel argues the opposite. He contends that jerks who exhibit poor character cost a company money, based on his study of 84 CEOs. Kiel used 25 positive character traits such as telling the truth, keeping promises, admitting mistakes, and forgiving others who make mistakes and measured CEOs against these criteria. He found that “high character leaders and their teams brought in nearly five times the return on assets to the bottom line as did low-character or self-focused CEOs.”

Researchers at Pennsylvania State University found that the firms with narcissistic CEOs did not perform any better than the firms with non-narcissistic CEOs.

Morgan McCall, of the University of Southern California’s business school, in his book, “ High Flyers: Developing the Next Generation of Leaders, says of narcissistic leaders that eventually their flaws catch up with them, particularly when they get in trouble.

What Research Says About Good Leaders

Christina Boedker of the Australian School of Business conducted a research study on the link between leadership and organizational performance and collected data from more than 5600 people in 77 organizations. She concluded that the ability of leaders to spend more time and effort developing and recognizing people, welcoming feedback, and fostering co-operation among staff were critical to success. Moreover, out of all the various elements in a business, the ability of a leader to be compassionate, “to understand people’s motivators, hopes and difficulties and to create the right support mechanism to allow people to be as good as they can be,” had the greatest correlation with profitability and productivity, Boedker concluded.

William Baker and Michael O’Malley, authors of Leading With Kindness, argue that the practice of kindness in corporations has a positive impact on bottom line business results. They argue that a management style, which could be called transformational, that has these traits—compassion, integrity, gratitude, authenticity, humility and humor—improves employee performance and employee retention.

Humble leaders are more effective and better liked, according to a study published in the Academy of Management Journal “Leaders of all ranks view admitting mistakes, spotlighting follower strengths and modeling teachability as being at the core of humble leadership,” says Bradley Owens, assistant professor of organization and human resources at the University at Buffalo School of Management. “And they view these three behaviors as being powerful predictors of their own as well as the organization’s growth.”

The more honesty and humility an employee may have, the higher their job performance, as rated by the employees’ supervisor. That’s the new finding from a Baylor University study published in in the journal Personality and Individual Differences that found the honesty-humility personality trait was a unique predictor of job performance.

“Researchers already know that integrity can predict job performance and what we are saying here is that humility and honesty are also major components in that,” said Dr. Wade Rowatt, associate professor of psychology and neuroscience at Baylor, who helped lead the study. “This study shows that those who possess the combination of honesty and humility have better job performance. In fact, we found that humility and honesty not only correspond with job performance, but it predicted job performance above and beyond any of the other five personality traits like agreeableness and conscientiousness.”

The Baylor researchers found that those who self-reported more honesty and humility were scored significantly higher by their supervisors for their job performance. The researchers defined honesty and humility as those who exhibit high levels of fairness, greed-avoidance, sincerity and modesty.

“This study has implications for hiring personnel in that we suggest more attention should be paid to honesty and humility in applicants and employees, particularly those in care-giving roles,” said Megan Johnson, a Baylor doctoral candidate who conducted the study. “Honest and humble people could be a good fit for occupations and organizations that require special attention and care for products or clients. Narcissists, on the other hand, who generally lack humility and are exploitative and selfish, would probably be better at jobs that require self-promotion.”

Amy Y. Ou and her colleagues at Arizona State University published a study in Administrative Science Quarterly in which they suggested it would be interesting to look at some of the leadership traits that include self-awareness, openness to feedback, and a focus on the greater good and others’ welfare, as opposed to dwelling on oneself have more positive impact on employees and the organization. Together with three other colleagues in the U.S. and China, the researchers wound up interviewing the CEOs of 63 private Chinese companies. They also gave surveys to 1,000 top- and mid-level managers who worked with the CEOs. The surveys and interviews aimed to determine how a humble leadership style would affect not so much the bottom line as the top and mid-level managers who worked under the CEOs. Did managers feel empowered by CEOs’ humility, did they feel as though they were invited into company decision-making, and did that lead to a higher level of activity and engagement? The study’s conclusion: The more humble the CEO, the more top- and mid-level managers reported positive reactions. Top-level managers said they felt their jobs were more meaningful, they wanted to participate more in decision-making, they felt more confident about doing their work and they had a greater sense of autonomy. They also were more motivated to collaborate, to make decisions jointly and to share information. Likewise middle managers felt more engaged and committed to their jobs when the top boss was more humble. “There is a negative stereotype that humble people are weak and indecisive,” Angelo Kinicki, one of the co-authors of the report, “That’s just not the case.”

In an article in The Harvard Business Review entitled “Level 5 Leadership: The Triumph of Humility and Fierce Resolve,” leadership expert Jim Collins argues Level 5 leaders, the best leaders exhibit the following characteristics:

Demonstrate a compelling modesty, shunning public adulation; never boastful.
Act with quiet, calm determination; relie principally on inspired standards, not inspiring charisma, to motivate;
Channel ambition into the company, not the self; set up successors for even more greatness in the next generation;
Look in the mirror, not out the window, to apportion responsibility for poor results, never blaming other people, external factors, or bad luck;
Look out the window, not in the mirror, to apportion credit for the success of the company—to other people, external factors, and good luck.
Rob Nielsen, author of Leading with Humility, argues that some narcissistic business leaders are treated like rock stars but who leaders who are humble and admit mistakes outshine them all. There’s a difference between being a humble leader and being wishy-washy or overly solicitous of others’ opinions, says Arron Grow, associate program director of the School of Applied Leadership at the City University of Seattle and author of How to Not Suck as a Manager. He says being humble doesn’t mean being a chump and describes 6 ways in which leaders can be more effective by being more humble. Elizabeth Salib takes up on this theme in her article in The Harvard Business Review, contending the best leaders are humble leaders. She cites Google’s SVP of People Operations, Lazlo Bock, who says humility is one of the traits he’s looking for in new hires.

A recent Catalyst study backs this up, showing that humility is one of four critical leadership factors for creating an environment where employees from different demographic backgrounds feel included. In a survey of more than 1500 workers from Australia, China, Germany, India, Mexico, and the U.S., Catalyst found that when employees observed altruistic or selfless behavior in their managers—a style characterized by acts of humility, such as learning from criticism and admitting mistakes, they were more positive and committed to their work teams.

Fred Kiel, head of the executive development firm KRW international, recently studied 84 CEOs and more than 8,000 of their employees over the course of seven years. The results, written up in the Kiel’s recent book Return on Character found that people worked harder and more happily when they felt valued and respected. So-called “character-driven” CEOs who possess four virtues—integrity, compassion, forgiveness, and accountability—lead companies whose returns on assets are five times larger than those of executives who are more self-centered, he found.

Researchers at the Wharton School at the University of Pennsylvania and the George Mason University School of Business examined what they call a “culture of companionate love,” which involves feelings of affection, compassion, caring, and tenderness among co-workers at long-term care facilities. Though less intense than romantic love, the strong emotions involved still help create bonds between people. 16 months later the researchers checked in with each group. It turned out that a strong culture of compassionate love predicted benefits all around: less burnout, fewer unplanned absences, more teamwork, and higher work satisfaction for employees; fewer emergency room trips and higher mood, satisfaction, and quality of life for patients; and more satisfaction with the facility and willingness to recommend it for families. Research suggests that compassionate workplaces increase employee satisfaction and loyalty. A worker who feels cared for at work is more likely to experience positive emotion, which in turn helps to foster positive work relationships, increased cooperation, and better customer relations. Compassion training in individuals can reduce stress, and may even impact longevity. All of these point to a need for increasing compassion’s role in business and organizational life.

According to a study by Bradley Owens, of the University at Buffalo School of Management, humble leaders are more effective and better liked. A follow up study that is forthcoming based on data from more than 700 employees and 218 leaders confirmed that leader humility is associated with more learning-oriented teams, more engaged employees and lower voluntary turnover.

David Rand at Yale University argues that employees in all industries increasingly desire leaders who are more like Ghandi and less like the Wolf of Wall Street. The PR firm Ketchum conducted a 2014 leadership survey, and concluded there’s a “seismic move away from an outdated, ‘macho’ model of solitary leadership—a command-and-control approach centered on one-way rhetoric, obsessively controlled messaging and solitary decision-making—and towards a new, more ‘feminine’ archetype.”

So Why Are We Such Hypocrites About Who We Want For Leaders?

Jeffrey Pfeffer, a Stanford University business professor, in his new book, Leadership BS: Fixing Workplaces and Careers One Truth at a Time, describes how we’ve developed a mythology of leadership, arguing that most conventional wisdom about it “BS.” He says “Leaders fail their people, their organizations, the larger society and even themselves with unacceptable frequency.” He points to overwhelming evidence that shows dysfunctional workplaces filled with disengaged, dissatisfied employees who don’t trust their leaders and can’t wait to leave their jobs.

It seems, Pfeffer argues, that there is a clear divergence in the interests of corporate leaders and the groups that study leadership, and the average employee. He says: “Individuals maximize their own survival chances by acting selfishly to acquire at all costs the resources for survival. Group survival, however, depends on individuals sacrificing their own well-being for that of the group.” Perhaps this explains the never-ending increases in CEO compensation and corporate shareholder profits, while average worker salaries stagnate.

What’s the solution to this leadership crisis, and make no mistake we are in the midst of one?

Pfeffer would argue the answer lies in measuring outcomes. He says the current measurement of leadership improvement activities is pathetic. We measure leadership development based on whether the participants “liked” their experience (in University or corporate training programs) versus whether the activities actually made any difference in the workplace.

All too often, the experience of the average worker, or the average citizen is to hear a bunch of platitudinous “inspirational” sound bites from leaders intended—like the football coaches locker room speech—to motivate the troops, with little concrete follow-up or substance. So people become cynical and distrustful of their leaders.

Pfeffer concludes that the leadership training industry itself has failed to produce good leaders. He cites the supporting work of other experts such as Barbara Kellerman at Harvard University.

Herein lies the irony, Pfeffer argues. Despite all the substantial research on what is supposed to constitute good leadership in the past three decades, we still are experiencing “an enormous psychological and even physical toll exacted on employees from bullying, abusive bosses.”

Pfeffer proposes an answer to why this has occurred. He argues that too much leadership development efforts have been more like preaching—“telling people inspiring stories about heroic leaders and exceptional organizations,” while not much has actually changed in workplaces. He provides another sobering conclusion: “the qualities we actually select for and reward in most workplaces are precisely the ones that are unlikely to produce leaders who are good for employees, or for that matter, long-term organizational performance.”

Perhaps the most interesting way of looking at this contradiction is from an evolutionary perspective. Frans de Waal is author of The Age of Empathy: Nature’s Lessons For A Kinder Society. De Waal is a biologist, professor of psychology and director of the Living Link Center at Emory University. In 2007, Time magazine selected him as one of the world’s most influential people. The distinguished scientist says it is long overdue that we jettisoned our beliefs about human nature—proposed by economists and politicians—that human society is modeled on the perpetual struggle for survival that exists in nature. De Waal says this is mere projection on our part. Nature is replete with examples of cooperation and empathy. Given all we know about empathy in other animal species, why do we persist in seeing human existence, particularly in business, as a fight for survival, with winners and losers? De Waal calls this the “macho origin myth” which insists that the human species has been waging war on itself as millennia as a reflection of our true nature. What has been ignored is the fact that empathy has been evident during that entire time. De Waal points to a mass of examples of sacrifice, empathy, co-operation and fairness in humans and other animals’ species.


Several things are clear. First, we are in a leadership crisis when it comes to confidence in our political and business leaders. Second, we say we want empowering, humble, and kind leaders—bolstered by research evidence—but we often choose authoritarian, controlling, narcissistic and toxic leaders. Perhaps it’s time for the general public, recruiters, and leadership development experts to end the contradiction and do what’s best for our organizations and society.

What Will We Do When Robots Take Our Jobs?

Posted August 30th, 2016 in Articles, Blogs by admin

We are in the midst of a revolution, occasioned by the disappearance of a massive number of jobs as we know them. We are experiencing the end of work as we know it.

What do we mean by the expression “the end of work?” It means technology, as defined as Artificial Intelligence (AI) and “robotization,” exerting a slow but continuous degradation on the value and availability of work—in the form of wages and the number of adult workers with full-time jobs. The widespread disappearance of jobs would usher in a social transformation unlike we’ve ever experience or imagined. The issue won’t be saving jobs, it will be saving or recasting the concept of work, which has become a religion in its own right.

Some aspects of the future world of work are already present. In my Psychology Today article, “The End of Jobs As We Have Known Them,” I argue that the jobless future is already here. Futurist Jeremy Rifkin contends we are entirely a new phase in history, one characterized by a steady and inevitable decline of jobs. He says the world of work is being polarized into two forces: One, an information elite that controls the global economy; and the other, a growing number of displaced workers.

Organizational structural changes have altered the nature of careers and jobs . Organizations have become “flatter” with fewer management levels as more work has become knowledge work. Project work and teamwork have also changed the nature of jobs.

Careers that once were viewed as progressions “up” a ladder are now often multidirectional and lateral. Robert DeFillippi and Michael Arthur define these changes as the creation of the “boundaryless career,” where the career path is defined by the individual’s soft and hard skills, not by their formal education or experience.

PWC’s report, “The Future of Work: A Journey to 2022,” a study of 10,000 people in China, India, Germany, the UK and the US, gave their views of the future of work, concluded that increasingly large corporations are turning into mini-countries and will take a more prominent role in social issues, the most important of which be the environmental; the development of more sophisticated measures of human productivity that include psychological and social components, and the disappearance of the boundary between work and personal life.

Economic growth is increasingly not driven by human labor but by Artificial Intelligence (AI) and robots.

In 2013, Oxford University researchers In a published paper titled: “The Future of Employment: How Susceptible are Jobs to Computerization” C.B. Frey and M.A. Osborne, researchers at Oxford University, created a model that calculates the probability of substituting a worker in a given sector. Frey and Osborne conclude machines may replace 47% of active workers in the future. Of 1,896 prominent scientists, analysts, and engineers questioned in a recent Pew survey on the future of jobs, 48% of them said the AI revolution will be a permanent job killer on a vast scale.The Bank of England has warned that within the coming decades as many as 80 million jobs in the U.S. could be replaced by robots.

We are already witnessing chronic unemployment or significant underemployment for adult men and youth. The share in the economy of men in jobs and wages aged 25-54 has continuously declined through good and bad times since the 1970’s. And real wages and employment opportunities for college and university graduates have substantially declined since the year 2000. Only 68 % of men between 30 and 45 who have a high school diploma were working full time in 2013, according to a recent report by the Hamilton Project at the Brookings Institution, a Washington-based public-policy group.

Even the professions are not spared by the impact of economic restructuring that we’ve experienced.The number of hours logged by first-year and mid-level legal associates fell 12 percent from 2007 at some of New York’s largest law firms, says Jeff Grossman, national managing director of Wells Fargo Private Bank’s Legal Specialty. Architecture graduates ages 25 to 29 had the highest unemployment of the 57 degree programs surveyed by the Education Department in 2009. What about the medical profession? CABG rates are continuing to fall, says cardiologist Jack Tu, co-author of the ICES report and team leader of the Canadian Cardiovascular Outcomes Research Team (CCORT). “Anecdotally, a lot of surgeons are concerned they don’t have the [procedure] volume to meet their targets government funding [as a cardiac centre],” says Tu, a senior scientist at ICES and Canada Research Chair in HealthServices Research. Volumes will definitely continue to fall, resulting, eventually, in a surplus of cardiac surgeons, says Tu. “We need to stop training so many. They’re not going to have a lot of work.”

Erik Brynjolfsson and Andrew McAfee, authors of The Second Machine Age, argue computer technology is evolving so rapidly that predicting their capabilities and applications in a decade is almost impossible. Remember it was only 2007 when the first Iphone was released. Look at the capabilities of smartphones now.

Job creation is very different today than it has been in the past. The newest industries being created are mostly related to computer software, telecommunications and like applications, are the most labor efficient and don’t require many people. Economic historian Robert Skidelsky, author of Keynes: Return of the Master, argues, “sooner or later, we will run out of jobs.” If Skidelsky is right, it raises the question of what will our society look like without universal work or even close to it?

The application of AI, robotics and computer software kills a wide variety of skilled jobs.

The replacement of human labor with AI and robotics has expanded from jobs that produce material products to a wide range of services, including the professions such as law, accounting, and health and even psychological therapy. The recession of 2007–2009 may have sped up the destruction of many relatively well-paid jobs requiring repetitive tasks that can be automated. These so-called routine jobs “fell off a cliff in the recession,” says Henry Siu, an economist at the University of British Columbia, “and there’s been no large rebound.” This type of work, which includes white-collar jobs in sales and administration as well as blue-collar jobs in assembly work and machine operation, makes up about 50 percent of employment in the United States.

Siu’s research also shows that the disappearance of these jobs has most harshly affected people in their 20s, many of whom seem to have simply stopped looking for work. Middle-income jobs are disappearing for a wide range of jobs. For example, the number of financial counselors and loan officers ages 25 to 34 has dropped 40 percent since 2007, outpacing the 30 percent drop in total jobs for the profession, according to the Federal Bureau of Labor Statistics. In the investment business we are seeing the replacement of financial analysts with quantitative analytic systems, and floor traders with trading algorithms. Mutual funds and traditional portfolio managers now compete against ETFs (exchange-traded funds), many of which offer completely automated strategies.

The expansion of contingency work for large numbers of people, and continuing development of the “gig” economy.

One in three U.S. workers—53 million people—are now “contingent,” already contending with the changed structure of work, perhaps juggling multiple jobs and serving as temporary, “gig,” or self-employed workers. An increasing number of corporations, government institutions and even colleges and universities have replaced full-time workers with part-time and contract or piecemeal workers, any without any security or benefits. During the recent recession, large numbers of Americans who lost their jobs scrambled to make a living. Simultaneously, Internet commerce was expanding providing the most specialized consumer wants to be met with great efficiency and speed. This provided some enterprising individuals the unprecedented ability to capitalize on their own hands, minds, things, and hours.

Thus, says Jacob Morgan, author of Future of Work: Attract New Talent, Build Better Leaders and Create a Competitive Organization, the gig economy was born: Americans were able to use a craft expertise to an Etsy side job, or a car into a job for Sidecar, Lyft, and Uber for a little extra money. Benefit-less, contractor jobs that fill the gig economy include low barriers to entry and flexibility of schedule.

Sara Horowitz, founder and CEO of Freelancers Union, argues that the jobless future is here. Many people are already combining part-time work just to get by, she notes. In an article in the magazine Atlantic, Horowitz writes that as of 2005, 30% of the workforce has participated in this “freelance economy,” and entrepreneurial activity has reached an all time high in 2010.

In the past decade cloud computing has radically altered the way we work. But it’s the growth of the “human cloud”—a vast global pool of freelancers who are available to work on demand from remote locations, that will shake up the world of work. More and more employers (“requesters”) are inviting freelancers (“taskers”) to bid for each task. Two of the biggest Internet sites are Amazon’s Mechanical Turk, which lays claim to 500,000 “turkers” from 190 countries and Upwork, which estimates that it has 10 million freelancers from 180 countries. They compete for more than 3 million tasks or projects each year, which can range from tagging photos to writing code.

Management consultants McKinsey & Co. estimate that by 2025 some 540 million workers will have used one of these platforms to find work. The benefits to companies is obvious—instant access to a pool of cheap, willing talent without having to go through the lengthy recruitment process, and costly benefits. For the taskers, the benefits are not so good. However, the champions of crowdsourcing argue that it provides a powerful force for the redistribution of wealth by providing a fresh stream of income into the economy. In balance, it’s more likely to increase income inequality and depress wages. The big challenge for governments will be how to codify, and provide ethical, legal standards for this kind of work, to prevent abuses by employers.

What Happens to Education?

The disappearance of work for many people will have a dramatic impact on the nature of post-secondary education. For some time now, the purpose for, and offerings in colleges and universities in North America, have become increasingly skewed towards the preparation for jobs. If that purpose becomes questionable or even redundant, post-secondary institutions will either shrink or possibly repurpose themselves back to classical views of education, emphasizing the enlightenment of democratic citizens. According to Bethany Moreton of Dartmouth College, the 10 fastest growing job categories require less than a college degree. Over 40% of the college graduates are now working in low-wage jobs.

In policy debates, technology is presented as an uncontrollable force for which societies and workers must prepare. While education can allow individuals to improve their well-being by moving to a more lucrative profession, the overwhelming majority of jobs—in developed and developing countries alike —will not improve through more education. Of the current top 10 occupations in the U.S., only one is a highly skilled—a registered nurse. Retail salespersons and cashiers, fast-food workers, general office clerks, customer service representatives, waiters and waitresses, laborers, and janitors are the other top occupations, accounting for more than one of every five jobs in the U.S. in 2014, and not predicted to disappear anytime soon. The average annual earnings in most of these jobs in the U.S. is just under $20,000. More education may help a fast-food worker to leave the sector, but it will do little for the person remaining in that job. In Denmark and France, countries which embrace socialism, retail and fast-food workers are protected by collective agreements, these jobs provide living wages and other social benefits including paid annual and sick leave.

As Jaison Abel, senior economist at the New York Federal Reserve, argues, “A significant challenge is that a large swath of people will be displaced as technology continues to advance, and some kind of retraining will likely be required. And we really have very little understanding about the kinds of retraining programs that are beneficial and would potentially pass a cost-benefit test.”

John Seely Brown, former chief scientist at Xerox, argues that given this era of accelerating change, one in which the half-life of many skills can be as short as five years, corporate training centers no longer work; returning to community colleges every five years is not viable. He argues we must re-invent the workplace as a “learningscape.” He says we can create “Cities of Learning’’—a new movement in which employers, libraries, and museums are wired together to help kids find their interests outside school and pick up new skills—or networks of partners in the corporate world.

A powerful example of this kind of learning is the use of GitHub; another example is being developed by a conservative company, SAP, which has created an extended open source network that has a couple million participants who are learning with and from each other. Another example is Hacker DoJo, a community in Silicon Valley where people share digital technical skills, or the guild networks around massively multi-player online games where thousands of new ideas are created, shared, and tested each night. And the rapid development of MOOCs, and other sources of free education and training through the Internet may make brick-and-mortar educational institutions obsolete.

The traditional answer has been to invest in developing skills that machines can’t replicate—creativity, problem solving, ingenuity, and other higher-order functions. Interestingly, embracing these skills means taking a step back from the idea of the human being that emerged during the Industrial Revolution—cog in a machine, interchangeable, and reproducible—towards the older Renaissance humanism, more prone to seeing people as possessed with unique gifts to create and innovate.

The problem is that public education in the U.S. and much of the world is, in many ways, a by-product of the Industrial Revolution. Education came to be standardized just like production, with students lined up in neat rows of desks and taught a uniform curriculum. An emphasis on memorization and rote learning helped produce a uniform citizenry— literate, compliant, interchangeable—to fill standardized roles in industry, offices, and government.

None of that cuts it in an age when intelligent machines can do anything rote or repetitive far better than we can. Cultivating some of our last uniquely human abilities—namely creativity and social intelligence—requires reimagining education as a means not of reproducing uniformity but of nurturing exceptionalism–in other words, the ability to do things that can’t be codified or systematized.

The Disappearance of Jobs, Income Inequality and the Consumer Economy

Martin Ford in his book, The Rise of Robots: Technology and the Threat of a Jobless Future, asks the question: “What happens to the consumer economy when you take away the consumers who are not working?” And what will happen to much of the infrastructure that supports the world of work as we know it—from the building of suburban communities supported by a commuter working force to the endless rows of office buildings?

It also means, says Richard Freeman, a leading labor economist at Harvard University, that far more people need to “own the robots” inclusive of other kinds of automation and digital technologies in general. Some mechanisms already exist in profit-sharing programs and employee stock-ownership plans. Other practical investment programs can be envisioned, he says.

Whoever owns the capital will benefit as robots and AI inevitably replace many jobs. If the rewards of new technologies go largely to the very richest, as has been the trend in recent decades, then dystopian visions could become reality. But the machines are tools, and if their ownership is more widely shared, the majority of people could use them to boost their productivity and increase both their earnings and their leisure. If that happens, an increasingly wealthy society could restore the middle-class dream that has long driven technological ambition and economic growth.

The concept of a “living income” also allows us to keep the wheels of the economy and innovation turning. “A fundamental insight of economics is that an entrepreneur will only supply goods or services if there is a demand, and those who demand the good can pay,” writes the Center for Internet and Society expert Andew Rens.

Progress depends, in no small way, on people buying stuff, and that depends on them having an income. A living income isn’t completely without precedent. In the 1970s, a five-year basic income program in the Canadian province of Manitoba called Mincome showed promising results. Parents spent more time raising children. Students showed higher test scores and lower dropout rates. Hospital visits, mental illness, car accidents, and domestic abuse cases all declined. And in the end, total working hours only slipped by a few percentage points. In other words, having a basic income didn’t lead to sloth or indolence. It let people spend time on the things that mattered: family, education, health, personal fulfillment.

Whatever the reasons for the disconnect between productivity and wage growth, it’s a problem for everyone, not just workers. Rich people like their money, but who wants to live in a world where the haves hide in cloistered communities defended by private armies, while starving haves-not work for peanuts, if at all? To date, we have chosen to distribute society’s resources largely based on our ability and willingness to work. We appear to be rapidly evolving to a world where assets, not labor, are the primary driver of prosperity. So the question is: How can we move toward an economy that equitably distributes benefits in an asset-based economy?

Jerry Kaplan, author of Humans Need Not Apply: A Guide to Wealth and Work in the Age of Artificial Intelligence, says the problem of the lack of connection between increased productivity and stagnant wage growth is a serious problem for the economy, a trend that feeds income inequality. Do we want to see our society as portrayed in the movie Solyent Green, in which the haves hide in clustered communities defended by private armies, while starving have-nots work for peanuts, if at all?

Will Government’s Role Become More Substantial?

New technologies created by AI and robotics will be fed with capital, so it can be assumed under the current free-market capital system the profits from these industries will accrue to the same wealthy individuals and corporations, and not find their way into the hands of the rest of the population. What then becomes the role of government, one purpose for, is to ensure the well being of all its citizens? One proposal to address this issue is for government to provide a guaranteed income to all adults (who are also consumers).

The concept of a universal income without universal work will be terrifying to many political conservatives. A modified solution could be for government to pay people to do something,–including education– rather than nothing, which again raises the fear of socialism in America. In both the U.S. and Canada, recent debate has raged about the minimum wage. But while the debate on whether or not workers should be paid a minimum wage, Finland is considering giving every citizen, regardless of income or employment status, around $850 a month. The idea behind the plan — called “basic income” — is that it would replace all other welfare and would serve as a replacement for all other government benefits.

Governments will have to deal with the reality of the end of retirement. Forget quitting at age 65. As life expectancy lengthens, people will be expected to work longer. Governments are already struggling to afford pensions for longer living population and people find it harder to make their retirement savings stretch. It’s likely first that retirement will become gradual, and then extended to 67 or 70 within 20 years. This also presents challenges for employers in initiatives to ensure older workers are productive. And there is a myth that older workers are less capable or productive, which is not born out by research.

How Then Do We Define Work and Its Value?

Prior to the 20th century, in English the term “job” connoted fragmented, low-quality piece-work. But through time we elevated some of these to the status of “real jobs” and rewarding the minority who performed them as job-holders.

Peter Frase, author of Four Futures: Life After Capitalism, describes how automation will change North America, based on his argument that human labor will end, along with our belief and commitment to “work for work’s sake.” Many experts would argue that for some time now, jobs have not been motivating or rewarding for most people, as evidenced by studies that how as many as 70% of workers are not engaged in their jobs. The modern quest for meaningful work underpins a paradox—we are both disengaged from our jobs and terrified of losing them.

For decades, psychologists and other experts have demonstrated intrinsic factors—purpose, meaning, creativity, fulfillment and autonomy—are actually absent in the typical job today. Several studies have shown that North Americans place a higher value on work and work more hours than Europeans, and feel guilty when they are not productive. This emphasis will exacerbate the problem of the disappearance of jobs from the lives of many. Will the vacuum be replaced—as has often been forecasted—by leisure time? One such possibility would be the development of creative communities such as “maker spaces” or industrial shops of artisans in small communities.

One theory of work proposes that people see themselves in jobs, careers or callings. People who say their work is “just a job” emphasize that they are working for money rather than aligning themselves with any higher purpose. People who pursue a calling don’t do it for status or pay but for the intrinsic fulfillment of the work itself.

There was a time when work and home were distinct realms. The old industrial clock regulated our lives into discrete blocks of time, and a separation between public and private life. No longer. The constant connectivity of mobile, digital technologies erases the boundaries of the week and weekend, and their characteristic social relations. How will we maintain the line between “my time” and “employers’ time?”

In his Harvard Business Review article, “Create a Meaningful Life Through Meaningful Work,” author Umair Haque writes, “Maybe the real depression we’ve got to contend with isn’t merely one of how much economic output we’re generating – but what we’re putting out there and why. Call it a depression of human potential, a tale of human insignificance being willfully squandered.”

Recent studies from research at McKinsey conclude that providing meaningful work to employees was the most important contributing factor to a high level of engagement. In her book, The Progress Principle, author Teresa Amabile reports that of all the events that can deeply engage people in their work, the single most important factor was meaningful work. According to Amabile, “Beyond affecting the well-being of employees, research shows that the ‘inner work life’ affects the bottom line.”

A Dystopian or Utopian Future?

Concepts of utopia and dystopia represent imaginary societies in which people live their life either in a perfect environment, governed by the laws that provide happiness to everyone, or in an oppressive society that is ruled by repressive and controlled state. Origin of these concepts can be traced to the year of 380BC, when Greek philosopher Plato released his influential political dialogue called “Republic”. In it, he first postulated the main themes of utopian society and his visions of the perfect Greek city-state that provided stable life for all of its citizens.

The modern world “Utopia” came to life during early years of 16th century, in the work of the famous English philosopher Thomas Moore. His description of utopian society gave birth to enormous wave of utopian thought that influenced the life and works of many future philosophers and novelist, and helped in the creation of several important political movements (most notably socialism).

Utopias that were envisioned by the minds of those authors can most easily be divided in several distinct categories, all based on the means of their creation – Ecology utopia, Economic utopia, Political utopia, Religious utopia, Feminists utopia and Science and technological utopia. 19th century gave the birth of the largest wave of utopian thought the world has ever seen. Numerous novelist and philosophers focused their careers on the exploration of those themes, and result of their work influenced the audiences across the entire world. Most notable utopian novel from that period was without a doubt Looking Backward by Edward Bellamy.

Not all examples of utopian life were set in the theory. Some people tried to realize the dreams postulated in the work of several philosophers, and so the age of utopian societies came to life. During the 19th century, over a dozen utopian societies were established in the United States, and few of them managed to survive even to today.

End of 19th century brought the rise of Dystopian thought. Numerous philosophers and authors imagined the dark visions of the future where totalitarian rulers governed the life of ordinary citizens. Their works explored many themes of dystopian societies – repressive social control systems, government coercion of citizens, influence of technology on human mind, coping mechanisms, individuality, freedom of life and speech, censorship, sexual repression, class distinctions, artificial life and human interaction with the nature (and often the consequences of its destruction).

Some of the earliest and influential works of dystopian fiction can be contributed to the authors H.G. Wells (Time Machine), Aldous Huxley (Brave New World) and George Orwell (Nineteen Eighty-Four). Their works paved the way to the numerous other authors, who even today manage to envision some new aspect of life in dystopian societies. In addition to literature, dystopian themes found life in many other types of mediums, such as comic books (most notably V for Vendetta, Transmetropoliten, Y: The Last Man and Akira), music, video games (Fallout, Deus Ex and BioShock ) television series (The Prisoner, Dark Angel, Doctor Who and Twilight Zone) and movies (Metropolis, Blade Runner, A Clockwork Orange and The Matrix).

It is difficult to predict with accuracy how technology will shape our future, to what extent it will be used in favor of the citizen and the public good. What has become clear is that it has fallen upon society to assume responsibility for the way technology is used—including to protect individual identity and privacy from governments and corporations.

Technology is not the solution to hunger, war and poverty, but merely a tool. Society can no longer meekly adopt it without thinking of the repercussions of particular advances. Rather, we must actively ensure that it enhances our quality of life the way we had hoped it would. If not, technology will keep advancing but society will lag behind.

Questions to Consider

“The central question of 2025,” insists GigaOM lead researcher Stowe Boyd, “ What are people going to do in a world that does not need their labor, and where only a minority are needed to guide the robot-based economy?”
How do we keep the economy humming when jobs themselves have grown obsolete?
How do people support themselves?
What does it mean to be productive member of society in a post-job world?
How do we define work?

Why Financial Incentives Don’t Improve Performance

Posted March 10th, 2016 in Articles, Blogs by admin

Performance bonuses for individuals, particularly CEOs, has been the norm across all industries for decades. Yet, increasing evidence indicates this is not a smart practice, that may actually detract from individual and team productivity and motivation.

That may be changing. I’ve talked and worked with an increasing number of executives and professionals who are less motivated by financial rewards as they are with other intrinsic rewards.

John Cryan, the co-CEO of Deutsche Bank, raised eyebrows recently, when he said that bonuses do not encourage bankers to work any harder. The German lender’s boss was reported to have said that he had “no idea” why his contract included a bonus scheme.

What Does Most Research Tell Us?

A new study by researchers in the UK and Australia has found it makes better business sense to reward team performance rather than provide bonuses to the top-performing individuals.

Other new research, based on feedback from 1,091 managers and 1,018 employees conducted by the Institute of Leadership & Management (ILM), found that emotional factors such job enjoyment, getting along with colleagues and feeling fairly treated by managers are the most effective ways of motivating employees for better performance. Only 13% of those surveyed felt that the prospect of receiving a bonus or other financial incentive motivated them to work harder.

Most previous research has found little or no cause and effect between individual financial bonuses and performance. A study by two McKinsey consultants found that shareholder returns were no higher when management had incentive plans. Data from Equilar, a company that compiles data about executive compensation, found no correlation between executive compensation and firm performance. Rewarding executives based on firm wide metrics, such as earnings per share, also famously distorts their incentives, the study found. Research  by Boris Groysberg, at Harvard University, found that bonuses in the financial sector were often unrelated to performance.

Conventional wisdom says that people will work harder and smarter in order to earn more and more money. Turns out that conventional wisdom isn’t just dead wrong; it’s tragically wrong. According to author Dan Pink,  extensive research shows that paying creative people bonuses for good performance not only demotivates them, but almost guarantees they will fail.

As for productivity, at least two dozen studies over the last three decades have conclusively shown that people who expect to receive a reward for completing a task or for doing that task successfully simply do not perform as well as those who expect no reward at all. On Incentives

Rewards and Motivation

It is difficult to overstate the extent to which most managers and the people who advise them believe in the redemptive power of rewards. Certainly, the vast majority of U.S. and Canadian corporations use some sort of program intended to motivate employees by tying compensation to one index of performance or another. But more striking is the rarely examined belief that people will do a better job if they have been promised some sort of incentive.

Where Does the Rationale for Incentive Pay Come From?

We can blame previous psychological theories of behavior. Behaviorist theory—which originates actually from laboratory experiments with animals–was used to develop such practices as piece-work pay for factory workers, stock options for top executives, special privileges accorded to Employees of the Month, vacations, banquets, certificates and commissions for salespeople. And the careers and livelihoods of scores of management and HR consultants has long been based on creating endless varieties of formulas for computing bonuses. Even today I have regular conversations with well-meaning executives and management experts who advocate collaborative teamwork, participative management, continuous improvement, and other progressive ideas, who still believe that the use of financial rewards will cause personal or organizational change.

Here’s the essential question. Do rewards—financial or otherwise– work? Research suggests that rewards (or “the carrot”), like punishment (or “the stick”) only succeed at temporary compliance. However, neither rewards or punishment can produce lasting change in either attitudes or behavior. That’s because, once the reward or punishment stops, or they are not escalated, people will revert back to old behaviors. Financial incentives are extrinsic motivators and they have a limited effect. In organizational terms, they can’t create or sustain a long-term individual commitment.

Incentives Can Damage Relationships

Alfie Kohn, writing in the Harvard Business Review, argues “Everyone is pressuring the system for individual gain. No one is improving the system for collective gain. The system will inevitably crash.” The surest way to destroy cooperation and, therefore, organizational excellence, is to force people to compete for rewards or recognition or to rank them against each other as GE once did, and Amazon still does. Furthermore, when employees compete for a limited number of incentives, they will most likely begin to see each other as obstacles to their own success.

Employee Engagement and Productivity

Employee engagement is declining throughout the world, particularly in the U.S. Depending on the surveys from Gallup and other organizations, employee disengagement levels are somewhere between 50-70%. Yet the typical response to this problem often is to tinker with the employee compensation programs While executives themselves may be equally influenced by other things, they still think that bonuses are the dominant incentive for most people

Bonuses and stock options can lead to unethical behavior, fuel turnover and foster envy and discontent according to Wharton management professors Adam Grant and Jitendra Singh. Instead, they say, employers should pay greater attention to intrinsic motivation. That means designing jobs that provide opportunities to make choices, develop skills, do work that matters and build meaningful interpersonal connections.

In addition to encouraging unethical behavior, financial incentives can create pay inequality, which in turn can cause turnover and harm performance. Numerous studies have shown that people judge the fairness of their pay not in absolute terms, but rather in terms of how it compares with the pay earned by peers. As a result, pay inequality can lead to frustration, jealousy, envy, disappointment and resentment. This is because compensation does not only enable us to support ourselves and our families; it is also a signal of our value and status in an organization.

Notre Dame’s Matt Bloom has shown that companies with higher pay inequality suffer from greater manager and employee turnover. He found major league baseball teams with larger gaps between the highest-paid and lowest-paid players lose more games; they score fewer runs and let in more runs than teams with more compressed pay distributions. Similarly, Phyllis Siegel at Rutgers and Donald Hambrick at Penn State have shown that high-technology firms with greater pay inequality in their top management teams have lower average market-to-book value and shareholder returns.

Lindsay McGregor and Neel Doshi of McKinsey & Company surveyed o (link is external)ver 20,000 workers around the world, analyzing 50 major companies, conducting scores of experiments, and scouring the landscape of academic research in a range of disciplines, concluded that a high performing work culture that emphasized play, purpose and potential for its employees and minimized financial reward were the most motivational for employees.

Focusing on Intrinsic Motivation

We have decades of research to show that intrinsic motivation has a long-term effect both at the personal and organizational level. This issue doesn’t need to be studied more to demonstrate its validity. Intrinsic motivational approaches include job autonomy and mastery, recognition, bringing meaning to the job and many other approaches. And for Gen Y, working for organizations whose culture and values reflect work-life balance and contributions to environmental and social good have equal if not superior attraction for career choices. For example, one senior executive client of mine left his job at a banking firm to move to a very different industry where the firm’s culture was far more progressive, despite receiving financial compensation that was only 50% of what he made previously.

It’s time that senior executives and their consultants came out 20th century business practices, and stopped using financial incentives to motivate employees and improve performance. It’s time to come into the 21st century.Why

The Psychology of Terrorism

Posted November 23rd, 2015 in Articles, Blogs by admin

On November 13,  teams of terrorists attacked six different sites across Paris, leaving 130 dead and more than 300 injured. This barbarous and callous attack on innocent civilians—perpetrated by ISIS (or ISIL) terrorists– is the worst to hit France since World War II, and the most severe in Europe since the 2004 Madrid bombings that killed 191. The attack came just 10 months after the murder of Charlie Hebdo cartoonists by terrorists. The French government, some of its allies and many Western politicians are now demanding and implementing military retaliation, expanded security capabilities and restrictions in individual freedoms.

France’s demographics may be linked to the terrorists attacks committed by Muslims. France has approximately a 7.5% Muslim population and to a large extent they are poor, less educated and overrepresented in the prison population. In France, a poll by ICM Research showed that 27% of young French people, not just Muslims, between 18 and 24 had a favorable attitude toward the Islamic State.

Intense debate and rhetoric now abounds in the U.S. over what should be a response to the terrorist attacks and a long-term strategy, which ranges from restricting Syrian immigration to profiling Muslims to an all-out war in Syria and Iraq.

How Do We Define Terrorism?

Terrorism can be defined as the use, or threat of use, of violence by non-state groups to achieve political change, and in doing so, targeting non-combatant civilians as its immediate victims.

The key to this definition is the combination of small groups killing non-combatants. Terrorism is often the recourse of those desperate for a cause that cannot win by conventional means. But it is worth noting that state terrorism against a state’s own citizens–as practiced by Mao, Stalin, Hitler, and many smaller-league tyrants–has killed millions of non-combatants, whereas the anti-state terrorism we usually focus on, has killed thousands.

Mental illness appears not to be a critical factor in explaining terrorist behavior. For example, most terrorists are not “psychopaths.” There is no “terrorist personality”, nor is there any accurate profile – psychologically or otherwise – of the terrorist. Histories of childhood abuse and trauma and themes of perceived injustice and humiliation often are prominent in terrorist biographies, but do not fully explain terrorism. Terrorist ideologies tend to provide a set of beliefs that justify and mandate certain violent behaviors. Those beliefs are regarded as absolute, and the behaviors are seen as serving a meaningful cause.

The Origins of Terrorism

Modern-day terrorism can be traced back as far as the first century A.D., when Roman occupation forces and their collaborators in the Mideast were attacked. Like other religious extremists, the Zealots rejected the authority of a secular government and laws that did not incorporate their beliefs.

Centuries later the rise of nationalism spawned a new breed of terrorist, such as the IRA or Basques. Most such nationalists aim to create or reclaim a homeland; their actions are designed to garner international sympathy for their cause and to coerce the dominant group to concede to their wishes. Social revolutionary terrorists such as the German Red Army Faction (RAF) and the Italian Red Brigades, on the other hand, have sought to overthrow capitalism and the current social order.

During the 1970’s and 1980’s, nationalists and social revolutionaries were responsible for most acts of terrorism. But in recent decades no one has claimed responsibility for perhaps 40 percent of terrorist incidents, a fact experts attribute to the increasing frequency of terrorism perpetrated by religious extremists. Unlike the more politically motivated factions, these religious terrorists do not seek to change the policies of Western countries or groups but rather desire the destruction of the Western world in the name of God. This motive reveals why they are so dangerous: they are unconstrained by the negative Western political reaction, and instead of fearing death they embrace martyrdom.

The Motivation to Become Terrorists

Determining the motivation of terrorists has been difficult, but increasingly a topic of research by scholars. For one thing, terrorists rarely volunteer as experimental subjects and examining their behavior from afar could produce inaccurate conclusions. Perspective is another difficulty. One group’s terrorist is another group’s freedom fighter, as the millions of Arabs who support Palestinian suicide bombers will attest.

The psychology of terrorism is partly a case of theory and opinion rather than good science. Despite this, psychologists have suggested a view of terrorism in terms of political and group dynamics rather than individual behavior. In addition they have identified a universal psychological principle such as a subconscious fear of death and a desire for meaning and personal significance as having an important place in understanding terrorism.

One researcher, John Horgan at Pennsylvania State University, found that people who are more open to terrorist recruitment and radicalization tend to:

  • Feel angry, alienated or disenfranchised.
  • Believe that their current political involvement does not give them the power to effect real change.
  • Identify with perceived victims of the social injustice they are fighting.
    Feel the need to take action rather than just talking about the problem.
  • Believe that engaging in violence against the state is not immoral.
  • Have friends or family sympathetic to the cause.
  • Believe that joining a movement offers social and psychological rewards such as adventure, camaraderie and a heightened sense of identity.

After examining the detailed records of 400 extremist terrorists, forensic psychiatrist Marc Sageman of the University of Pennsylvania concluded these individuals are far from being brainwashed or socially isolated. Ninety percent of them came from caring, intact families; 63 per cent had gone to college, compared with the 5 to 6 percent background rate in the developing world, according to Sageman. Similarly, the suicide hijackers of 9/11 were well educated–three of them were in graduate school–and offspring of well-off Saudi and Egyptian families. Of course, not all terrorists come from financially and socially solid backgrounds. When Israeli social scientists conducted postmortem profiles of 93 Palestinian suicide bombers, aged 17 to 22, the scientists found that the bombers had been uniformly uneducated, unemployed and unmarried. It may be likely that the Parisian terrorists come from humble or disadvantaged backgrounds.

Some psychologists believe terrorism is most accurately viewed from a political perspective. Psychologist Clark McCauley, (link is external) a co-investigator at START and director of the Solomon Asch Center for Study of Ethnopolitical Conflict at Bryn Mawr College, has come to see terrorism as “the warfare of the weak”—the means by which groups that lack material or political power fight what they see as oppressive forces.

Paradoxically, overcoming an unconscious fear of death may underlie much of the motivation behind terrorism and reactions to terrorism, maintains psychologists Tom Pyszczynski, of the University of Colorado at Colorado Springs, who, along with colleagues Jeff Greenberg, and Sheldon Solomon, have developed a “terror management theory,” which holds that people use culture and religion to protect themselves from a fear of death as a motivation to engage in brutal terror attacks, knowing that they will be killed themselves.

Further research conducted by Arie Kruglanski, co-director of the National Consortium for the Study of Terrorism and Responses to Terrorism, (START), says that a “collectivist mentality” may explain terrorism. His conclusion is based on his surveys of thousands of people in 15 Arab and other countries which found that Muslims who have a more collectivistic mentality are more likely to support terrorist attacks against Americans or Europeans than those with more individualistic leanings. The findings suggest that joining terrorist groups may confer a sense of security and meaning that people do not feel as individuals.

In a more global sense, a fear of cultural annihilation may help fuel terrorist sentiments, says psychologist and terrorism expert Fathali Moghaddam, of Georgetown University’s department of psychology. In “How Globalization Spurs Terrorism: The Lopsided Benefits of One World and Why That Fuels Violence,” Moghaddam argues that rapid globalization has forced disparate cultures into contact with one another and is threatening the domination or disappearance of some groups—a cultural version of “survival of the fittest.” “You can interpret Islamic terrorism as one form of reaction to the perception that the fundamentalist way of life is under attack and is about to become extinct,” he says.

The Causes for Jihadis Terrorism

Steve Taylor, writing in Psychology Today describes how, according to some estimates, at least 500 young British men of Asian descent have travelled to Syria or Iraq to become jihadis in extremist groups. He asks the questions: “What is it that makes young men susceptible to this narrative? Why are they drawn towards it, and why do they allow it to take such a hold over them that they lose all sense of humanity and morality?” Taylor contends, “It’s a mistake to simply label terrorists as ‘evil’ or psychologically deranged– in fact, psychologists who have studied terrorist groups have found that terrorists tend to be stable individuals, not paranoid or delusional. What seems to make terrorists essentially different from others is their ability to “switch off” their sense of empathy in service to their beliefs and goals.” He says that to become a terrorist means disengaging this natural empathy, so that a person can treat certain other human beings – the members of the groups he feels he is fighting against – as objects, and kill them without remorse. It means seeing members of those groups as fundamentally “other” and refusing to connect with them. It is only a complete lack of empathy, which makes it possible for one human being to behead another.

Most terrorists are young men, usually adolescents. Adolescence can be a psychologically difficult period, during which a person becomes aware of themselves as a separate individual, with a sense of vulnerability and fragility. As a result, there is a strong need for identity and belonging. This is why adolescents often join gangs, and become followers of fashion or of pop groups. Belonging to a group helps to alleviate their sense of separateness and strengthens their identity. But it’s also why adolescents are vulnerable to religious extremism. Belonging to a religion, and to a terrorist group within that religion, provides a like-minded community, supporting beliefs and possibly a family-like structure. It also provides status for people who may have little or none in a normal context.

For the members of ISIS, joining the group means promoting the creation of an Islamic caliphate and ridding it of infidels. Vice Media interviewed Iraqi and Syrian children who said they wanted to become part of ISIS so they could kill infidels. ISIS has been particularly successful in recruiting its members through social media. In that sense, terrorism expert John Horgan said, there is a “truly global appeal of ISIS” that is new. “They have become so adept at social media that they are reaching out to disaffected individuals on a global scale,” he said.

What Do The Terrorists Hope To Accomplish?

Clark R. McCauley, a professor of psychology at Bryn Mawr College contends “Terrorism inflicts immediate damage in destroying lives and material, but terrorists hope that the long-term costs will be much greater.” Terrorists want to create fear and uncertainty far beyond the victims and those close to them and want the enemy to spend time and money on security. The costs of increased security are likely to be particularly high for a country like the U.S., where an open society is the foundation of economic success and a high-tech military. McCauley also argues: “Terrorists particularly hope to elicit a violent response that will assist them in mobilizing their own people. The pyramid is essential to the terrorists for cover and for recruits. The terrorists hope that a clumsy and over-generalized strike against them will hit some of their own side who are not yet radicalized and mobilized, will enlarge their base of sympathy, will turn the sympathetic but unmobilized to action and sacrifice, and will strengthen their own status at the apex of this pyramid.” McCauley says the biggest weakness terrorists have is not the “enemy” they attack, but from moderate opposition from within. If there is a violent reaction by the targets of terrorism, he contends, the terrorists will be able to get greater unity and silence the moderates.

What’s the Solution?

Since the first bombing attack on the World Trade Center, the Western, and particularly, the American response to terrorism, has shifted from criminal justice — finding, trying and punishing perpetrators –to waging war. Certainly, concerns about the safety of citizens in democratic societies are legitimate, and policies and actions aimed at guaranteeing citizen safety is desirable.

The solution to the kind of terrorism we are currently experiencing tends to attract polarized positions. Certainly we hear much currently indicating the solution is to take military action against the countries of origin of the terrorists, although many of them, for example, in France, were French citizens. We hear calls too from conservatives to restrict immigration, increase surveillance and impose further restrictions on privacy and individual rights. At the extreme, we hear rhetoric than is clearly racist and xenophobic.

Liberals have a different perspective. In an article in The Atlantic, Simon Cottee describes this perspective: “For example, in some quarters of the ‘radical’ left it is asserted that the roots of jihadist terrorism lie not in Islam but in the myriad historical crimes and injustices of Western, and specifically U.S.-driven, imperialism—most notably, in the post-9/11 era, the 2003 invasion of Iraq. Jihadist violence, from this perspective, is an inevitable reaction fueled by Muslim anger and vengeance; and Westernized jihadists, far from rejecting the civilized norms and ideals proclaimed by the West, are in fact alienated from a West that excludes, demeans, and harasses Muslims.”

Some would argue the Islamophobic backlash running through the West may actually help recruit more jihadists. Certainly we can understand France’s desire for retribution or revenge. Yet U.S.politicians paint an ugly reminder as to where these emotions can lead. In both the United States and coalition allies, pressure is reportedly building for a stronger military response to ISIS including ground troops. Many of the things we’ve seen and heard in the news and social media are part of the manifestation of those inevitable twin emotions of rage and fear that, as Gawker’s Hamilton Nolan wrote after the Charlie Hebdo attacks, are exactly why terrorism works.

Some would argue that a reaction of stereotyping and prejudice toward Arabs and Muslims living in the U.S. will turn them from sources of help against terrorism to sources of further terrorism. Rudeness, suspicion and hostility directed toward Arabs and Muslims in the U.S. is good news for the terrorists. “Profiling” or other infringement of civil rights of Arabs and Muslims by U.S. agencies of state security can help encourage a sense of victimization.

Others would argue something different. The notion that terrorists could be talked out of committing violence using peaceful dialogue and a helping hand is no longer an idealist’s pipe dream, but actually the aim of a growing number of “de-radicalization” programs worldwide, says social psychologist and START co-director Kruglanski.

In his book, The Mind of the Terrorist: The Psychology of Terrorism from the IRA to Al-Qaeda by Jerrold M. Post, he argues that following the September 11, 2001, attacks on the Pentagon and the World Trade Center, the U.S. government declared war on al-Qaeda and terrorism in general. Just like any other conventional war, the Bush administration decided to combat the enemy by attacking and occupying alleged terrorist hotbeds: Afghanistan and Iraq. Post argues that the battle against terrorism cannot be won but can only be reduced requiring concerted efforts over decades to come. He promotes policies such as: Inhibiting potential terrorists from joining terrorist groups in the first place; producing dissension within the group; facilitating exit from the group, reducing support for the group and its leaders; and insulating the target audience. Although the policy recommendations are supposed to apply to all terrorist groups, they are heavily focused on combating Islamic terrorism.

How we characterize an issue affects how we think about it. Replacing the “war on terror” metaphor with other ways of framing counterterrorism might help us curtail the violence more effectively argues Arie W. Kruglanski, Martha Crenshaw, Jerrold M. Post and Jeff Victoroff writing in the Scientific American. They argue the following:

  • Since the attacks on September 11, 2001, the Bush administration has used a war metaphor to define counterterrorism strategy.
  • Such a description may simplify a complex reality, making it more mentally manageable, but it may also oversimplify and distort reality.
  • Metaphors can guide national decision making. The wars that began in Afghanistan in 2001 and Iraq in 2003 clearly demonstrate that the concept of a war to combat a method of violence used by nonstate agents is more than rhetoric.
  • Viewing counterterrorism through the lens of law enforcement may yield more tightly focused tactics that are less costly than war and less likely to provoke resentment and backlash.

Relating counterterrorism to disease containment or prejudice reduction shifts the focus to the psychological underpinnings of terrorism and, in doing so, may suggest successful long-term strategies that chip away at the motivations of terrorists.

They argue: “The psychological rationale of war is to bring the enemy to its knees and to convince it and its support base that terrorism is counterproductive. And yet experience in Chechnya, Afghanistan, Iraq, Ireland, and the West Bank and Gaza Strip suggests that the use of military force does little to ‘prove’ the inefficacy of terrorism. Military strikes against terrorist targets may temporarily interfere with terrorists’ ability to launch their operations, but they do not generally lessen the motivation to engage in violence—and may even boost it as a result of the enmity that foreign occupation typically engenders and of the injustice and excesses of war.” The authors say that framing counterterrorism as war has considerable costs. It threatens to corrupt society’s values, disrupt its orderly functioning and reshuffle its priorities. War calls for the disproportionate investment of a nation’s resources, with correspondingly less left for other concerns, including the economy, health care and education. “Collateral damage,” ethnic profiling, harsh interrogation tactics and unlimited internment of suspects may all be condoned in the name of security and excused by the uniqueness of circumstances the war concept implies. These costs are especially steep in a war that has no definite end.

But ISIS thrives on a pathological instinct to destroy, to avenge, to annihilate–a perspective which is rampant among “war hawks.” ISIS is a master of social media, in trolling, the epitome of modern terrorism, and for every tweet from extreme conservative commentators calling for the complete obliteration of Raqqa, another militant gets his suicide vest. Wahhabism, the foundation for radical Islam, is not representative of the history and ideology of Islam, nor the culture and identity of the Arab world. It thrives on fear and hatred, and it preys on young, disenfranchised youth. With every declaration of war, with every outpouring of violence, with every condemnation the international order declares against those it has ignored, these individuals feel an even greater desperation and need to join the only alternative they are offered a sense of community.

A Reasoned, Calm and Compassionate Response

Monuments, embassies and public squares around the world fly the French flag in a show of solidarity. Social media is abuzz to show Paris and the French their support. And while the media was quick to report on the solidarity from particular parts of the world, most did not show support for the French from Muslims across the Middle East and North Africa.

We need to pause and reflect on what can be the core causes for current terrorism and a long-term strategy. We need to pull back from a reactionary, violent response. We need to restrain ourselves from retributive justice and focus on restorative justice, one not fueled by vengeance. We need to turn away from hatred and prejudice and focus on compassion and addressing the core causes that attract young people–particularly young men–to become terrorists.

How to Bring Mindfulness into Meetings–10 Tips

Posted November 23rd, 2015 in Articles, Blogs by admin

Leaders can enhance their effectiveness and develop better relationships with employees by having mindful conversations.

In my new book, Eye of the Storm: How Mindful Leaders Can Transform Chaotic Workplaces (link is external) I describe how multiple and increasing demands on leaders’ attention can have a negative impact on their performance.

Executives’ calendars are often booked back-to-back all day based on the proposition that it is both necessary and leads to greater productivity, despite the evidence that it doesn’t. The relenting demands on executives’ time can produce what is known as “power stress,” a side effect that leaves the individual physically and emotionally drained. If leaders believe they don’t have the time to work through all aspects of a problem they’re faced with, they are inclined to be narrow in perspective, take cognitive shortcuts, and become more impulsive and reactive. Their actions, in effect, become “mindless,” unconscious and automatic.

Daniel Siegel, a neuroscientist and author of The Mindful Brain: Reflection and Attunement in the Cultivation of Well-Being, (link is external)contends a corporate culture of cognitive shortcuts results in oversimplication, curtailed curiosity, reliance on ingrained beliefs and the perceptional blind spots.

A research study by Paul McDonald at the University of Wellington’s School of Management argues that today’s leaders have scant time for self-awareness through introspection and personal insight. Christopher Edgar, author of Inner Productivity: A Mindful Path to Efficiency and Enjoyment in Your Work (link is external) being aware of your inner state—your thoughts and emotions—and learning how to manage and self-regulate the mental “chatter” that interferes with optimal performance, is the greatest challenge for leaders. Being self-aware means we learn how to intentionally respond to experiences in our life instead of reacting to them.

Regular practices of mindfulness can give leaders a different perspective on their world, opening them up to ways of being which are both more focused on what matters and more observant and appreciative of what is there. Paradoxically, becoming more present through mindfulness enables leaders to see reality more clearly and act more purposefully and with less of their own stuff getting in the way. This is one of the paradoxes in mindful leadership: to open up for change, it is necessary to sometimes stop striving to change things and to stop talking and listen; to stop doing and start being.

Research studies have shown that regular mindfulness practices elicit better attentional capabilities and more positive emotional states. Mindfulness trains people to increase their capacity to pay attention (beyond the 3-7 seconds that is normal) and to expand the qualitative aspects of attention. Daniel Goleman, in his book, Focus: The Hidden Driver of Excellence, (link is external) underscores the importance of leaders maintaining a triple focus, where an inner focus is equally important along with an outer or external focus. Harvard psychologist Ellen Langer advocates leaders developing an “environmental mindfulness”: constant questioning and listening; inquiry, probing, and reflecting; gathering insights and perspectives from other people. This active engagement leads to smarter questions, better learning, and a more sensitive early warning radar to coming changes.

One of the casualties to an overemphasized external focus, filled with multiple meetings and agendas are meaningful and mindful conversations. In my two decades of coaching leaders and their teams, I’ve had the opportunity to observe leaders’ conversational skills in action, and found a wide contrast both in styles and results. The leaders who struggle often appear to be, or actually are, hurried, busy, almost frenetic in “getting things done,” and as a result, their conversations with others reflect these characteristics:

  • They come to conversations without actually being “present” in the conversation because their minds are full of thoughts and emotions from a previous conversation or an anticipated one—in short, their minds are either in the past or in the future;
  • They exhibit poor listening skills, being more focused on what they want to say;
  • They exercise their authority to “control” the conversation to a predetermined outcome;
  • They exhibit a close-mindedness to others’ perspectives in the conversation;
  • They are in a rush to end the conversation as soon as possible, so they can get on with other or “more important” things;
  • They are oblivious or inattentive to the emotional or feeling states of the other people in the conversation;
  • They are oblivious or inattentive to their own internal emotional state while they engage in a conversation.
  • The net result of these behaviors can be a lack of connection and trust with employees and others and a lack of awareness of their own internal emotional state.

So how can leaders have more mindful conversations to both avoid these unproductive and unappreciated tendencies?

9 tips for having more mindful conversations.

  • Slow down. Leaders may be concerned about the conversation dragging on too long, or not being able to cover all the items on an agenda, but projecting the energy and feeling of being in a hurry in conversations gives the impression to other speakers that what they have to say, and therefore they, are not important to you. There’s a need to balance results with connection. The key here is internal, not just external. That means slowing down your thoughts and feelings not just your actions;
  • Breathe. Often when conversations get intense or heated, participants’ breathing may become shallow, which reduces the oxygen supply to the brain, which in turn, can impair cognitive functioning. Remembering to breathe normally, or deeply when things become intense is an mindful practice;
  • Focus your attention. It’s normal for your mind to wander much of the time, including during conversations. That’s why mindfulness meditation can help you learn to focus your attention more fully. If you notice your thoughts wandering while someone else is speaking, just note that, and gently return to the conversation at hand;
  • Listen with your heart, not just your head. Listening training tends to emphasize cognitive skills, including such things as paraphrasing. Equally—and even more important—are listening with empathy and compassion. Be sensitive to others’ emotional state while they speak or respond to you. This may also require you to be keenly aware of your own emotional state;
  • Be Open and Curious. Leaders can enter conversations with a close-mindedness, and unwillingness to see other perspectives. The mindful practice of “beginner’s mind,” in which the you make no assumptions about what has happened or needs to happen, but rather keeping an open mind, and seek out others’ perspectives in an open way will make the conversation more meaningful. This also requires you to make fewer assertions or speeches and ask more questions;
  • Practice acceptance and non-judgment. This doesn’t necessarily agreeing with others’ perspectives or opinions, but it does mean accepting who they are, and what they think and how they feel at face value. It also means accepting the emotions you may be feeling yourself, particularly the negative ones;
  • Be present. All to often people in conversations are not fully present. They may be thinking of the response they want to make, or the next conversation they are going to have, or reviewing in their mind past conversations. In either case, they are not really “here” in the present moment, giving their full attention to what is happening.
  • Mindfulness can enhance your ability to be and keep present in conversations. One of the most important ways to accomplish this is to turn off all electronic devices (such as smartphones) while you’re having the conversation and give full attention to the conversation at hand;
  • Respond to others in a mindful intentional way, rather than reactive way. At times during intense, controversial or difficult conversations the defensive and protective parts of participants’ brains can be unconsciously and automatically be quickly activated resulting in a reactive response which can negatively impact the conversation. Mindfulness can aid the leader through the process of noticing and labeling the emotion that is arising, pausing and creating space for a calm and intentional response;
  • Temporarily set aside your personal agenda. Leaders can go into meetings with a predetermined agenda, including what they will say, how they will respond to opposition, and the outcome(s) they want. While this may be desirable in some situations, making it a habit stifles conversations, and makes others reticent to participate in meaningful ways. Being able to temporarily set aside a personal agenda, being open, and not making assumptions can enrich conversations, often with a more creative outcome;

And finally, start conversations with a brief check-in with the other person(s). Before launching into the depths of a conversation, checking in with how the other person is feeling at that time and on that day will give the leader a wealth of information that will contribute to a fruitful conversation. For how this can be a great practice in meetings, read my article “How to Bring Mindfulness into Meetings—10 Tips,” in Psychology Today.

In summary, meaningful conversations can make a significant contribution to a positive organizational culture. Leaders who practice engaging in mindful conversations can do much to create that culture.

Why It’s Time to Humanize Leadership

Posted November 23rd, 2015 in Articles, Blogs by admin

While the world’s economy continues to expand, mostly driven by technology, trust in our leaders continues to either languish or decline. Part of the reason for this sad state of affairs is both current leaders and leadership development education are predominantly utilitarian and lack a humanistic focus.

In my two decades of work as an executive coach and consultant in organizations, I’ve found a direct correlation between an culture that has no joy, no passion, and little concern for the well being of its employees and a senior management team that makes little or no personal connection with those they work with. And much of that leadership behavior was encouraged in leadership development training, particularly in business schools.

In my article in Psychology Today, “What’s Love Got To Do With Business?” I said: “A predominant dispassionate, logical approach that distances itself from compassionate love, develops reward systems and training and development methods and the cycle reinforces itself. You will rarely see management training programs or employee manuals that address principles of tolerance, selflessness, kindness and compassionate love. When the leader models unloving, dispassionate behavior, this sets the tone for the entire organization, and when replicated across many organizations, sets a norm for business. It’s not that dispassionate, coldly logical ways of running organizations have not met with success, because they and their leaders have. But what has been the cost in terms of relationships, employee morale and happiness?”

We continue to hold up for admiration, if not idolatry, examples of business and political leaders who at various times are ruthless, unprincipled or abusive bullies who act out of self-interest. Add to this the never-ending list of books, articles, seminars or leadership training programs that emphasize a sanitized, technical or strategic focus. Rarely are the words “humanistic,” “compassionate,” caring,” “ethical” or self-sacrificing” heard.

Business school critiques (link is external)and growing skepticism of their value has increased. Management gurus such as Henry Mintzberg have criticized business schools’ excessive focus on abstract analytical models that rarely prepare graduates for the work of managing people. Other experts such as Samantra Ghoshal and Jeffrey Pfeffer have expressed concerns about the lack of focus in business schools on ethics or a general concern for employees or society. One need only look to the recent financial crisis to see how prominent leaders who were bereft of socially responsible values in their actions.

INSEAD business school Professors Gianpiero Petriglieri and Jennifer Petriglieri, authors of “Can Business Schools Humanize Leadership?” (link is external) have coined the term “leadership industrial complex,” which they say promotes a view of leadership that is depersonalized and sanitized: “Over one decade of corporate scandals, financial meltdowns and growing inequality has consolidated a disconnect with business and political leaders, as it is in the protests in the streets and squares around the globe.”

Leaders now are no longer seen as being role models or stewards of the common good, but rather as predatory plutocrats who profit disproportionately at the expense of the majority of the population.

G. Petriglieri and J. Petriglieri argue that we have experienced a “dehumanization of leadership” in which leadership is reduced from a cultural enterprise to a strict intellectual or commercial one, in which leadership “distances aspiring leaders from their followers and institutions, resulting in a disconnect their inner and outer worlds.”

The solution, the authors argue, is to re-humanize leadership, in which the process of becoming a leader is both a psychological and social journey, in which the core is to engage in identity work.

We might well be guided by answering the questions, “What and who does leadership serve?” What is its purpose?” If the answer continues to be self-servicing opportunism, then we will continue to be in deep trouble.

An emphasis on humanistic leadership in educational programs would contain some elements of a classical education, inclusive of the study of literature and philosophy, and emphasize a search for meaning and purpose in human experience, which is grounded in a moral ethos. Leaders need to continually have the answers to these questions: What motivates my actions? How do my actions serve the common good?

Humanistic leaders are compassionate. Humanistic leadership is grounded in a philosophy that recognizes the dignity and worth of every person. They never forget that the people they are working for are real, with feelings and emotions, not just data or expenses. Humanistic leaders are ethical, and live by ethical and moral values. Humanistic leaders encourage people to be the best people they can be, and model that belief. And finally humanistic leaders value above all else, service to others.

Making a living and making the world a better place are not mutually exclusive. Humanistic leaders build a workplace of trust and collaboration and focus on people over profit for the few.

The work world is changing, particularly for young people. People are now seeking out more meaning in their work and in their lives. People, thanks to the internet and social media platforms, have both a voice and a stage to promote that voice. Customers are increasingly becoming the focus of business rather than the producers of products and services.

People are getting sick and tired of the greed, selfishness and lack of integrity of organizations and their leaders. People are expecting a change. A focus and demand for humanistic leaders can do much to make that change happen.

How to Bring Mindfulness Into Meetings–10 Tips

Posted November 23rd, 2015 in Articles, Blogs by admin

Meetings can be far more productive, less stressful and more interesting if they are conducted mindfully.

In my work as an executive coach with CEOs, senior executives and managers, the number one complaint is meetings—specifically how they are a waste of time. As renowned economist John Kenneth Galbraith once said, “meetings are indispensable when you don’t want to do anything.”

Several studies have shown that many, if not most, meetings are not worth the time. For example, in a survey reported in Industry Week, 2000 managers claimed that at least 30 percent of their time spent in meetings was a waste of time. According to a 3M Meeting Network survey of executives, 25 to 50 percent of the time people spend in meetings is wasted. And according to a survey by Office Team, a division of Robert Half International, 45 percent of senior executives surveyed said that their employees would be more productive if their firms banned meetings for a least one day a week.

Mike Figliudo, writing in SmartBrief on Leadership, asked this question in a poll: “How much time do you spend in recurring meetings?” He was shocked by the results. Thirty percent of the respondents are spending between 30 and 75 percent of their time in recurring meetings. He claims much of this time is a waste of money. Figliudo calculates the cost by taking the total annual compensation of each for the people in the meeting, dividing by 250 days per year and dividing that by eight hours a day. Using an example of a typical company of senior managers, a monthly two-hour staff meeting was costing the company $180K per year. Figliudo asks, is the resulting productivity worth the investment?

And brain research may provide us with another reason to not have meetings. Research by University of Minnesota psychologist Kathleen Vohs and her colleagues, as well as other neuroscientists, indicates that we have a limited amount of cognitive or what they call “executive” resources. Once they get depleted, we make bad decisions or choices. Business meetings require people to commit, focus and make decisions, with little or no attention paid to the depletion of the finite cognitive resources of the participants—particularly if the meetings are long. So if that is true, the three or four hour project meetings may be counterproductive.

For meetings to run well, participants should be encouraged to employ some of the techniques of ‘mindfulness’ to help them focus clearly and make more effective contributions. With heads typically buzzing with a thousand things these techniques ensure attention is focused in a purposeful way on the specific issues in hand and on what is happening throughout the meeting.

Mindfulness techniques enable people to be aware of the present moment without reacting too quickly to information. This allows new perspectives and innovative ways of doing things to be explored before making a decision. At its core, mindfulness is engaged awareness.

To get to this happy state, the chair of a meeting needs to lead participants into a “mindful space,” a space that provides both the meeting facilitator and participants opportunities to be aware both of their internal state as well as what is going on externally in the meeting.

Here’s 10 tips to run meetings more mindfully:

  • Do a self check-in before the meeting. This is particularly critical for the team leader or meeting facilitator. This means determining what your mental and emotional state is. Are you anxious? Fearful? Angry or irritated by one or more of the participants? Are you carrying some baggage from a previous meeting or conversation that could contaminate a productive involvement in the meeting to come? Take a few moments meditatively to clear away these things from your mind, so you can enter the meeting calmly and manage your thoughts and emotions.
  • Conduct a quiet one to two minute grounding meditation exercise. This will allow people can clear their minds of previous brain activities and mentally and emotionally prepare themselves better for their new tasks in the meeting;
  • Conduct a group check-in. Go around the table and have people express how they are “feeling” (not thinking) that day. This will help the meeting leader and participants can gain a better appreciation of the inner states of the participants;
  • Encourage open-mindedness. This can be accomplished by insisting on people asking questions for clarification or further elucidation of the speaker before adding their perspectives. Also encouraging participants to practice “beginners’ mind”—approaching every issue as though they had never experienced that issue before, so that unconscious past experience and habits don’t drive perspectives;
  • Encourage the practice of acceptance. This means encouraging participants to accepting the person who is speaking and respect their point of view, even though issue may be taken regarding their specific perspective or ideas. Acceptance does not mean agreement, but it does mean avoiding judgment;
  • Encourage the practice of compassion. This may apply to participants who have made mistakes or may be experiencing personal emotional challenges;
    Ensure the meeting leader/facilitator regulates and prohibits personal attacks on individual participants. This means encouraging participants to withhold personal judgments on others, and rather, to focus on the issues;
  • Encourage participants to monitor their internal mental, physical and emotional states. This means encouraging participants to conduct an ongoing or continuous internal check-in for the purpose of enhancing emotional self-regulation.
  • Demonstrate and practice intentionally responding rather than automatic reactivity. Often in meetings, particularly when contentious issues arise, participants may get irritated or aggressive to defend or advance their perspective. This is usually an indication of the unconscious, emotional and protective aspects of the brain taking over behavior. Encouraging participants to be breathe, pause and consciously and intentionally respond in a calm manner can counteract and replace that reactive behavior.
  • Breathe. Often when emotions run high, or anxiety is elevated, people begin to shallow breathe, and this can have a viral effect in the meeting. The meeting leader can monitor breathing, and if needed, have everyone pause and breathe deeply for a minute or two.
    In conclusion, meetings can be far more productive and less stressful, if they are conducted in a mindful way, utilizing the practices described above.

To learn more about how to integrate mindfulness into the workplace, read my new book, Eye of the Storm: How Mindful Leaders Can Transform Chaotic Workplaces.

Your Boss is Watching You: Employee Monitoring Systems Growing

Posted November 2nd, 2015 in Articles, Blogs by admin

Does your boss know how much time you spend having coffee breaks? In meetings? Doing work at your desk? Doing nothing? Probably not. Or if yes, in a very general way, like looking at your Outlook calendar. Until recently it has been difficult for organizations to specifically monitor the activities of employees. No longer.

We are witnessing an explosion of employee monitoring systems and technological devices to facilitate that monitoring. The culture of surveillance has now invaded the workplace.

From one perspective, the spread of employee monitoring systems parallels the expansion of surveillance programs by government and law enforcement agencies, with a focus on safety or prevention of crime. That said, one the main drivers for employee monitoring has been concerns about employee productivity, as evidenced by numerous reports indicating the decline of worker engagement and productivity levels in the workplace.

The form that employee monitoring takes is varied and sometimes multi-purposed. Here’s a couple of examples:

  • Nurses and patient care technicians in selected units at a Florida Hospital, Celebration Health, wear badges embedded with sensor technology that tracks exactly where the employees go during their work shifts and for how long;
  • JP Morgan has a surveillance program in its trading business which monitors the trading activities of employees and has plans to eventually spread it throughout all banking divisions, a system designed to control possible illegal or unethical practices by traders;
  • A company called Humanyze uses a combination of microphones, infrared sensors, accelerometers and Bluetooth to measure employees’ movements, face-to-face encounters, speech patterns, vocal intonations, physical posture and details of conversations.

Even as far back as 2007, a widely cited survey by the American Management Association and the ePolicy Institute  found about two-thirds of employers polled monitored their workers’ web use, and 45% said they monitored how employees were spending their time on company computers, the content they viewed, or the actual keystrokes they entered. One aspect of employee monitoring systems that is interesting is that most of them target line employees and not senior managers or high level executives in the organization.

Imagine this scenario in a typical office in the not too distant future. You are in employee at a meeting, and everyone participating places their phones on the table before conversation begins. Everyone is wearing sensor tracking badges around their necks. A fellow team member of yours is speaking about an issue and you interrupt him with a side comment. All the phones on the table start beeping. The meeting “mediator” who is not in the room, but observing the meeting via a video camera, reminds you not to interrupt others during a meeting. When the meeting is over, your boss calls you into his office. He shows you a series of technical images that represent the bodies in a conversation. “See this sequence of images of you,” he says, “the thermographs and bio-readouts show your blood pressure spiked several times during the discussion when your colleague spoke. Is there a problem between you?”

An even more extreme scenario would be monitoring systems that predicted aberrant behavior—such as bullying, stealing company information or loafing on the job—before it happened by monitoring brain waves, much in the fashion of the movie Minority Report.

Far fetched? Not from a technological point of view.

Companies such as Volmetrix, Humanyze, Social Intelligence, and Sociometric Solutions have already developed  sophisticated monitoring/surveillance systems that are in use today.

What would be the motivation for employers to develop and use such monitoring systems? Here’s the advantages as argued by proponents )of monitoring:

  • Employers learn conditions under which employee performance is optimized;
  • Employee performance reviews can be more accurately determined as a value proposition. “The underlying principle is value for money,” says Joseph R. Garber, a columnist for Forbes magazine. “If you don’t deliver value for money, in some sense, you’re lying.”
  • Theft of company information is controlled. Beyond worry about lost productivity, employers have legitimate concerns about the use of e- mail for thefts of proprietary information, which, according to the “Handbook on White Collar Crime,”  account for more than $2 billion in losses a year;
  • “Cyberloafing” (wasting time doing personal communications or internet browsing). A study by Nielsen Media Research found that employees at major corporations such as IBM, Apple, and AT&T logged onto the online edition of Penthouse thousands of times a month;
  • Potential cases of bullying or harassment are discouraged or thwarted;
  • Distractions are reduced to improve productivity.
  • Critics counter these advantages, suggesting employee monitoring creates privacy problems, reduces employee trust and motivation and defines work as being more mechanistic and dehumanized. Some research suggests that excessive monitoring can itself curb productivity and innovation, says Karen Levy, a fellow at New York University’s Information Law Institute and the Data & Society Research Institute.

Harvard Business School assistant professor Ethan Bernstein suggests overly aggressive monitoring and measurement leads workers to hide or simply refrain from any deviations from established practice—even those that benefit the company. Trust is often mentioned by opponents of monitoring as a major ethical issue. As Rita C. Manning writes in the Journal of Business Ethics, (link is external) “When we look at the workplaces in which surveillance is common, we see communities in trouble. What is missing in these communities is trust.”

Bahaudin Mujtaba of Noval Southestern Univesity in the Journal of Applied Management and Entrepreneurship  argues “While employers use monitoring devices to keep track of their employees’ actions and productivity, their employees feel that too much monitoring is an invasion of their privacy.” He concluded “”About 80% of employees in industries such as banking, insurance, telecommunications, travel, and other related service industries might be subject to some level of telephone or computer-based monitoring,” in some cases, without their knowledge.

The implications of a sociometrically quantified organization are profound, and indeed may end up redefining the nature of work and the workplace. Are we headed to a Brave New World or dystopia in the workplace?

Why More and More Companies are Dropping Performance Reviews

Posted November 2nd, 2015 in Articles, Blogs by admin

In 2014 I wrote an article for Psychology Today, “Why Performance Reviews Don’t Improve Performance.” My perspective was based upon recent research and two decades of experience as an Executive Coach. I said in the article: “The reality is that the traditional performance appraisal as practiced in the majority of organizations today is fundamentally flawed and incongruent with our values-based, vision-driven and collaborative work environments.”

Performance reviews have been around for ages, apparently as far back as third-century China, but were popularized during the Industrial Revolution. Certainly by the l980’s performance appraisals in the form of GE’s CEO Jack Welsh’s “rank-and-yank” system were widely used in organizations.

Research  by psychologists at Kansas State University, Eastern Kentucky University and Texas A&M University examined how people respond to negative feedback they receive in performance reviews. Conventional wisdom is that people who are really motivated to improve their performance would respond well to getting critical feedback in a performance review. The research demonstrated this wisdom is wrong. Those employees who have a desire to learn and grow—presumably the best employees—were significantly bothered by the negative feedback they received. One of the authors of the study argues that if negative feedback has the potential to discourage even the best performers, then managers need to be aware that what was meant as praise doesn’t get misconstrued as criticism.

Now a new report, by David Rock who is cofounder of the Neuroleadership Institute, a consultant and author of Your Brain at Work  and Beth Jones, a senior consultant with NeuroLeadership Institute and heads up its performance management practice, published in the Harvard Business Review, provides support for my perspective. Rock and Jones describe how companies such as Juniper and Adobe stopped giving people a one-to-five rating or evaluating employees on a “performance curve,” also known as the “forced ranking” approach. The ranking system has been best exemplified—critically—in a New York Times expose of the toxic work environment in Amazon.

By early 2015, around 30 large companies, Rock and Jones report, representing over 1.5 million employees, have dropped traditional performance reviews. No longer defining performance by a single number, these companies were emphasizing ongoing, quality conversations between managers and their teams. “Yet in mid-2015, the trend started to accelerate. Consulting firms Deloitte and Accenture, global health services client Cigna, and even GE—the company who popularized the idea of forcing people into a performance curve—all announced changes to their performance management systems. By September 2015, 51 large firms were moving to a no-ratings systems. According to research firm Bersin by Deloitte, around 70% of companies are now reconsidering their performance management strategy,” Rock and Jones report.

The authors propose there are several cogent reasons why companies are moving away from ranking or traditional performance review systems, among which are:

  • The changing nature of work;
  • The need for better collaboration;
  • The need to attract and keep talent;
  • The need to develop people faster.

Rock and Jones conclude “Companies who have replaced ratings tend to be anxious about it beforehand and enthusiastic about it afterward. Their employees are happier, which encourages more engagement and better performance.”

Clearly, the annual performance review was designed for a work environment where control of individual employee performance was a key function. In today’s collaborative environment, that perspective no longer makes sense. Some key questions that need to be answered are: Why are we perpetuating a system that research (including recent brain research) shows is not only ineffective, but counterproductive; and what are better processes to replace the performance review?Why

Amazon and Toxic Workplaces

Posted November 2nd, 2015 in Articles, Blogs by admin

A recent expose of Amazon’s work culture in a New York Times (link is external) report brings into focus the growing problem of toxic work cultures in North America, one that will take a huge toll on long term productivity and employee well being.

Amazon may now be the biggest retailer in the U.S. with an estimated valuation of $250 billion. As of July, 2015, Amazon surpassed that other retail giant, Walmart.

What is being said both in the New York Times report and by others about Amazon that would prompt one to conclude it has a toxic work culture, something that appears to be a trend in certain sectors of our economy. The Times describes Amazon as a place where employees are held to standards described by the company as “unreasonably high.” The report details 85-hour workweeks, regular culling of staff and back-stabbing. Former Amazon employees describe how working for Amazon where their performance is reviewed weekly through constant data collection. Workers are also encouraged to comment on each other’s performance constantly, using an anonymous online forum.

Here’s what some other publications have said about the Amazon work culture:

  • Gawker has published a series of emails describing life inside Amazon warehouses, written by former Amazon employees where temp employees toil in freezing conditions;
  • Pennsylvania’s Morning Call  published a series of stories about Amazon warehouses that were so hot workers fainted on the job and were placed on stretchers by paramedics. (Amazon has since installed air conditioning);
  • Amazon’s temp agency aggressively opposes unemployment compensation for workers who were let go because they were sick, The Morning Call reported;
  • Mother Jones  did an in-depth piece that described how Amazon workers are fired if they burst into tears on the job;
  • German unions were striking over pay rates in Amazon’s warehouses as reported in the New York Times  in 2013.

This is how working life at Amazon has been described in a New York Times investigation – though Jeff Bezos, the Amazon founder and chief executive, has repudiated its claims.  “The article doesn’t describe the Amazon I know or the caring Amazonians I work with every day,” he said in an email to staff. “But if you know of any stories like those reported, I want you to escalate to HR … our tolerance for any such lack of empathy needs to be zero.”

Amazon’s approach has been called “purposeful Darwinism, (link is external)” an often-abused concept of “survival of the fittest” from Charles Darwin. This means creating competition among employees and see who survives. In the Amazon system this idea is operationalized by measuring employees on a wide range of metrics, ranking them on the basis of their performance, then splitting them into three groups: a small number of high performers who are lavishly rewarded; a large group of average performers who hold on to their jobs; and a third group of under-performers who are fired.

Merge Gupta-Sunderji, writing in The Globe and Mail (link is external), argues :“On one hand, compelling anecdotal evidence suggests that Amazon is running the First World equivalent of a Third World sweatshop… somewhere along the way, as the company grew in size, managers in the organization became so focused on results that they lost sight of how they were obtained and the people who made these results happe… a toxic work environment is created. Empathy is discouraged while hostility and sabotage become accepted.”

Amazon’s approach has also been coined the “rank and yank” system, dramatized in the movie Glengarry Glen Ross, when a senior executive played by Alec Baldwin visits a sales team to “motivate” them by offering them first prize a Cadillac; second prize a set of steak knives; and without apology or second thought, third prize is “you’re fired”.

Rank and yank has been widely used before by companies such as General Electric but most of the available evidence by management experts such as Jeffrey Pfeffer and Robert Sutton point out that the approach can drive destructive internal competition. More recently research has shown when you introduce a forced ranking system into a workplace, people are more likely to start sabotaging each other in the hope of climbing up the ladder by steppping on the heads of others.

Think about the psychology of the “rank and yank” system, which more closely resembles the law of the jungle. When your co-workers can stab you in the back to improve their own performance ratings, it is hard to work cooperatively with them. So people protect themselves and act out of self-interest. Sharing knowledge with them or helping them can be risky. This creates a toxic work environment that undermines cooperation, sharing and innovation.The rank and yank system can become a self-fulfilling prophecy and is counter to all we know about good motivation methods.

Yet, we know from research that when people are labeled poor performers they usually conform to expectations and end up performing poorly. In contrast, the rank and yank system favors the top performers and potentials who are lavished with rewards. What does that leave? A whole group in the middle who are neither poor or top performers, who are virtually ignored. So a system of inequality is perpetuated, in many ways, mirroring the social and economic structure of the U.S.

Questions were raised about the system as far back as the early 2000s, when employees of Goodyear and Ford challenged the rankings as discriminatory. Employees at both companies claimed they were singled out because of their age and, in 2002, Ford paid $10.5 million to settle two class actions suits. Both companies later dropped the evaluation system. Microsoft also settled lawsuits with employees who claimed the forced ratings led to racial discrimination by “predominantly white male” managers, and Conoco settled a lawsuit brought by the Justice Department that accused the Houston-based company of using the appraisals to favor cheaper foreign workers over U.S. citizens. The most notable company was Microsoft, which hung onto it until only recently, finally bowing to long-standing criticism that such rigid employee ratings can stifle collaboration and creativity.

What’s interesting to note is that although companies such as Microsoft and Ford have discontinued the rank and yank system, it’s rumored that Yahoo may be instituting it. Clifford Stevenson, lead management researcher for the Institute for Corporate Productivity, a Seattle research firm, said his organization’s 2011 survey found a decline in the number of companies, especially those that are high-performing, using the rank and yank system.:“The percentage of companies reporting that they used a forced-ranking system declined from 42% to 14%,” he says.

Silicon Valley is known  for some aggressive environments like Amazon where employees getting “dressed down” is a daily event.. Apple, under Steve Jobs, wasn’t an pleasant place to work for many. Intel’s Andy Grove cultivated a workplace where all employees were encouraged to speak their minds, even if co-workers were offended.

Yet the same culture exists at most big companies and can be “used to represent either success or failure,” believes Steven Sinofsky, long-time former executive at Microsoft, Harvard professor and board member of a number of startups. Sinofsky tweeted a link to a story about Microsoft’s culture that ran in the Seattle Times back in 1989. That old article described Microsoft as a “velvet sweatshop” where employees were expected to work themselves to exhaustion.

In my book, Eye of the Storm: How Mindful Leaders Can Transform Chaotic Workplaces, I outline in detail the characteristics of toxic workplaces which include the following:

  • All sticks and no carrots. Management focuses solely on what employees are doing wrong or correcting problems, and rarely give positive feedback for what is going right. Or mostly carrots for the best performers, sticks for the the rest;
  • The creeping bureaucracy. There are too many levels of approval and management to get things done and a singular focus on micromanaging employees;
  • The gigantic bottom line. A singular focus on profits, beating the competition and cost cutting without consideration of other bottom lines;
  • When bullies rule the roost. Bullying of employees by management, or tolerated by management when it occurs among employees;
  • Losing the human touch. People are considered to be objects or expenses rather than assets, and there is little concern for their happiness and/or well-being;
  • High levels of stress, turnover, absenteeism and burnout;
    Instituting internal competition among employees enforced by a performance assessment system that focuses on individual performance rather than team performance;
  • Little or no concern for work-life balance, where a personal or family life must be sacrificed for the job;
  • Overwork or workaholism, commonly evidenced by 50 hr+ workweeks, little or no vacation time and 24/7 availability for work communication;
  • Little evidence of leaders’ compassion and empathy for employees;
  • Little or no commitment to making contributions to the community, worthy causes or making the world a better place;

Jeffrey Pfeffer, Thomas D. Dee Professor of Organizational Behavior at the Stanford Graduate School of Business and the author of The Human Equation: Building Profits by Putting People First, outlines in his book how companies that treat their people right get enormous dividends–high rates of productivity, low rates of turnover. Pfeffer disputes much of the conventional wisdom in the current conversation about work and business. Loyalty isn’t dead, he insists — but toxic companies are driving people away. There isn’t a scarcity of talent — but there is a growing unwillingness to work for toxic organizations.

The great irony, says Pfeffer, is that most workplace policies that are bad for employees are also bad for companies themselves. Organizations that are more “humane” — offering generous benefits, sick leave, vacation pay, health insurance, and so forth — are shown to be more profitable. Examples are Southwest Airlines, Kimberley-Clark, Whole Foods, CostCo and of course, Google. Google is a profitable business with high standards and where sharing differences of opinion (link is external)is encouraged, according to some. Yet the company has realized the public value of building a caring employee culture. Others do, as well. SAS, the software company, is famous for respecting the fact that its employees have a life outside the office. Workers there are on a 35-hour work week. SAS has been acknowledged as “The World’s Best Place to Work.” (link is external)

Some would argue that it doesn’t matter if the workplace culture enhances employee well-being as long as the company makes a profit for shareholders. Despite the fact that that utilitarian “ends justifies the means” philosophy is a throwback to 19th and early 20th century industrialism, it’s actually not born out by research evidence.  First, in Amazon’s case, some have argued the company is actually not profitable. Almost 20 years after it was launched, it has yet to report a meaningful profit. According to Yahoo Finance , the company earned only a slim 1% operating margin during the last 2 years. For all Amazon’s remarkable revenue growth, the company has still not demonstrated that it can generate profits consistently. Now, investors in the company may finally be running out of patience, Graham Ruddick writes in The Telegraph.

One could also argue that Amazon work practices—even the issue of productivity—is not supported by research. For example, the relentless pushing for more and more productivity through extended working hours, and even workaholism may actually harm productivity. Research shows that exhausted, overworked people make bad decisions and big mistakes. Second, (link is external) exhausted, overworked people are seldom innovative, at least not for very long.

The expression “killing yourself at work” takes on new meaning with the publication of a massive research study on the topic. The scientists looked at data from 25 studies involving over 600,000 individuals and assessed if there was a relationship between heart events like heart attacks and strokes with standard work weeks (35-40 hours a week) compared with long work weeks (>55 hours). After adjustments for age and other known risk factors, the long work week was associated with a increased risk of heart events and particularly with stroke events. In fact, the more hours one works, the greater the risk of stroke.

What about productivity?

“People-centered organizations often outperform their profit-centered counterparts seven ways to unleash the full potential of your people,” says Daniel Goleman, author of the best selling book, Focus: The Hidden Driver of Excellence, and winner of the McKinsey award for the best HBR article of the year, “The Focused Leader.”

He goes on to say “Studies conducted by companies evaluating their own executives have proven taht the the top 10 percent of performers displayed superior comeptencies in emotional intelligence, which includes empathy and a focus on teamwork.”

In his book, Drive , Daniel Pink, describes what he says is “the surprising truth” about what motivates us. Pink concludes that extrinsic motivators work only in a surprisingly narrow band of circumstances; rewards often destroy creativity and employee performance; and the secret to high performance isn’t reward and punishment but that unseen intrinsic drive—the drive to do something because it is meaningful. Pink says that true motivation boils down to three elements: Autonomy, the desire to direct our own lives; mastery, the desire to continually improve at something that matters to us, and purpose, the desire to do things in service of something larger than ourselves. Pink, joining a chorus of many others, warns that the traditional “command-and-control” management methods in which organizations use money as a contingent reward for a task, are not only ineffective as motivators, but are actually harmful.

In an article by Richard Williams, Wallace Higgins and Harvey Greenberg, published in the Boston Globe, ) they cited numerous research studies regarding leadership style and the health of employees. They concluded “your boss can cause you stress, induce depression and anxiety or even trigger the onset of serious illnesses. It is not just bad managers who can negatively affect employee health, but it is also the lackadaisical and mediocre who put employees on the sick list.” And the cost is huge in terms of lost productivity, healthcare costs and employee turnover. The authors argue that a whole new field of litigation in the U.S. is developing-“lawsuits against ‘bad bosses’ and the organizations that negligently allow them to supervise.”

Christina Boedker of the Australian School of Business conducted a research study on the link between leadership and organizational performance and collected data from more than 5600 people in 77 organizations. She concluded that the ability of leaders to spend more time and effort developing and recognizing people, welcoming feedback, and fostering co-operation among staff were critical to success. Moreover, out of all the various elements in a business, the ability of a leader to be compassionate, “to understand people’s motivators, hopes and difficulties and to create the right support mechanism to allow people to be as good as they can be,” had the greatest correlation with profitability and productivity, Boedker concluded.

William Baker and Michael O’Malley, authors of Leading With Kindness argue that the practice of kindness in corporations has a positive impact on bottom line business results. They argue that a management style, which could be called transformational, that has these traits—compassion, integrity, gratitude, authenticity, humility and humor—improves employee performance and employee retention.

Jonathan Haidt, author of Righteous Mind, (link is external) reflects the view of Edward O. Wilson, David Sloan Wilson and others who argue that when groups of animals compete, it’s the cohesive, cooperative, internally altruistic groups that win and pass on their genes.

Frans de Waal is author of The Age of Empathy: Nature’s Lessons For A Kinder Society. (De Waal is a biologist, professor of psychology and director of the Living Link Center at Emory University. In 2007, Time magazine selected him as one of the world’s most influential people. The distinguished scientist says it is long overdue that we jettisoned our beliefs about human nature—proposed by economists and politicians—that human society is modeled on the perpetual struggle for survival that exists in nature. De Waal says this is mere projection on our part. Nature is replete with examples of cooperation and empathy.

Given all we know about empathy in other animal species, why do we persist in seeing human existence, particularly in business, as a fight for survival, with winners and losers? De Waal calls this the “macho origin myth” which insists that the human species has been waging war on itself as millennia as a reflection of our true nature. What has been ignored is the fact that empathy has been evident during that entire time. De Waal points to a mass of examples of sacrifice, empathy, co-operation and fairness in humans and other animals’ species.

But there is a greater tragedy brewing if current and future business leaders think Amazon does represents the future of management. The techniques that Amazon uses to manage its own people can destroy the lives of individuals and undermine organizational performance. The decision to rank and yank is based more on a commitment to an outdated ideology than any real business benefits it might bring.

A commitment to short term profits at human and social costs can’t be the future of business in America can it? Is the proliferation of toxic work cultures really what we want for the sake of financial gain?