How to Think Your Company into a PR Mess

<We've come to expect inhuman treatment by the airlines. As the carriers struggle to stay afloat, we have learned to live with the results of their short-sighted cost cutting. We strap ourselves in seats that have all the comfort of the rack, pay outrageous fees to hazard our checked luggage will arrive when we do, and purchase snacks that must have been deemed unfit for penal institutions. Given the way flight attendants have been treated by management, we know that the skies will be anything but friendly.

But hotels are different. We usually have a choice, so we’re lured with amenities and promised the best service. It is, after all, called the hospitality industry. Advertisements often include pictures of friendly staff members, eager to please.

I don’t really care about fruit baskets or complimentary continental breakfasts, but I do want a clean room and pleasant interactions with the hotel staff. We all know that in a service industry, the attitude of employees has an enormous impact on quality, and the way employees are treated is mirrored in the way they treat customers.

Apparently, the management of Hyatt Hotels knows this too. In the career section of their corporate website, under pictures of smiling and satisfied employees, they entice prospective job candidates with the offer, “Discover your place to shine in our warm, respectful, and inclusive culture.”

I owe a debt of gratitude to Hyatt, because I’m alway looking for good examples of bad thinking in business. If they had set out to illustrate every flaw in conventional management thinking, they couldn’t have done a better job. And as if to illustrate how flawed paradigms can lead to a succession of self-defeating decisions, their attempts to mitigate their public relations disaster has created an even bigger one.

I can see how it happened in my mind’s eye. Well intentioned managers are gathered in a conference room with a spread sheet projected on a screen. It shows that occupancy is down and room rates have been cut, so margins are being squeezed. Finance is driving for expense reduction and somebody comes up with the idea of outsourcing housekeeping. The business model shows that the savings go right to the bottom line. It’s hard to argue with the objective logic of the decision.

But another manager, perhaps from HR, raises the objection that it will be difficult to train the new staff. This objection is addressed logically with the suggestion that the current housekeepers train the new employees. When somebody suffering from a short spasm of empathy raises the further objection that the housekeepers may be unwilling to train those that are taking their jobs, one of the more creative members of the group comes up with the idea of telling them that the new people are just substitutes for those on vacation. The meeting adjourns with everyone comfortable that they have executed their responsibility for prudent financial management.

The thinking may be logical, but it’s a perfect example of how costly an exclusive focus on measurable objectives can be. By viewing the employees as no more than a cost, management lost sight that they are also human beings capable of both thought and independent action. Of course, they weren’t going to go quietly, and inevitably their story would find its way to the press.

The morality of tricking long term employees into training their replacements and then firing them may be an issue for the managers and their consciences. But the idiocy of the decision from a long term business perspective ought to have Hyatt’s shareholders up in arms.

Not only did management forget that employees are people, they somehow missed the populist anger against large corporations welling up in the country. Apparently, they also forgot they were in liberal Boston and even more liberal Cambridge, where the rights of working people are held sacrosanct. The resulting boycott of the hotel by the populist mayor, governor, and even the taxicab drivers may have been an unintended consequence, but it should have been anticipated.

And, of course, the logic also obscured critical interdependent relationships. No attention was paid to how employee relations impact customer relations, or how the “talk” on the website ought to match the managers’ “walk.”

Focusing on numerical objectives and driving for cost reductions may be conventional wisdom, but it creates tunnel vision. So management also missed that the company they outsourced to has a record of labor law violations and of employing illegal aliens, but the  Boston Globe didn’t.

This morning, Hyatt announced they will now give the laid off housekeepers either a job with an outsourcing company or career training, and will continue to pay them their original salary for the near term. If there was some soul searching at the company, the search didn’t go very far. Predictably, the housekeepers aren’t simply interested in a job or in the money. They want their original jobs and their relationships with their coworkers back. They want to “shine” in Hyatt’s “warm, respectful, and inclusive culture.”

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5 Tips for Failing Miserably as a Manager

There are many articles on tips for succeeding as a manager, but there aren’t any for those managers aspiring to failure. The benefits of failure are many: the chance to move away from a material lifestyle to a more parsimonious one, the free time to pursue the increasingly popular hobby of rummaging through dumpsters, and the opportunity to bond with other like-minded souls at the unemployment office, to name just a few. My research in brain science proves that these following tips are guaranteed to make any manager fail to achieve the results they intended:

Check with Your People Frequently to See If They Need Help.
Not only will this suck up huge amounts of your time, it will distract you from the more value-added strategic work you should be doing. Even better, though, it will drive your people nuts. Given their perspective, they’ll misinterpret it as you checking on them because you don’t trust their competence. They’ll become resentful and passive, ensuring that the performance of your business spirals downward.

Give Direct Feedback on Performance.
Even if you think it’s constructive, they won’t. Because it conflicts with their self-image, they’ll either reject the feedback or reject you. If it comes across even the least bit punitive, they’ll growl at you with aggression and be motivated to do exactly what the feedback tells them they shouldn’t. In other words, if you tell them “You could be better at punctuality” this will ensure that they won’t show up to work at all.

Set Stretch Objectives.
If they’re really a stretch, there’s no way people will be able to achieve them, and they’ll become so frustrated that they’ll stop even trying. Because the objectives come from you, rather than from them, you can bet they won’t be a good fit with the job. Plus, if you insist on managing only by the numbers, without reference to an aspirational vision, you’ll guarantee that people don’t use the emotional part of the brain. It will both sap their energy and bar them from accessing the past learning that allows them to make better decisions. So if you tell them to reach for the stars, they’ll instead reach for a sledgehammer with your name on it.

Focus on Behavior, Not Attitude or Intent.
If you tell people specifically what to do and don’t address the thinking behind the behavior, you can ensure they’ll do it badly. Without that overarching understanding, the behavior won’t fit the specific situation they find themselves in, different behaviors will conflict with one another, and they’ll be executed unwillingly. When AT&T insisted that operators say, “Thank you for calling AT&T,” their snarkiness reached new heights.

Install Tight Control Systems to Ensure the Right Behavior.
Control systems may just be the best tool for a manager that wants to fail. They signal that employees aren’t trusted to do the right thing and so demolish their loyalty. They’re costly and tend to squander resources, like the one that insisted on reports filed for even a fifty-dollar expense when it cost seventy-five dollars to process it. If they’re particularly irksome, employees will waste countless hours figuring out how to subvert them. Best of all, control systems eliminate any need for employees to feel they’re personally responsible for doing the right thing.

With proper attention to these tips, most managers should find themselves free to pursue other career options in a matter of months. There is a danger, however. In direct opposition to what we’re learning from brain science and management research, a number of organizations believe that this is the right way to manage. Should that be the case in your company, you may instead find yourself rapidly promoted up through the ranks in direct proportion to the lack of results you’ll achieve.

You’ll make a boat load of money in the short-term and sink the company in the long-term. The Board of Directors will eventually have to fire you, but you’ll leave with a nice severance package. Hey, everybody in finance has been doing it with proven results so why not you?

You’ll have to forego the camaraderie of the food bank and the carefree life of the homeless. But the mind is a wonderful thing. If you close your eyes and imagine hard enough, imported pate can taste just like the dog food the wiped-out shareholders in your company are forced to eat.

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Brain Science Can Lead Us Out of the Doldrums

Even the most cheerful optimists have got to be depressed by the economy. Every time we get data that suggests we’re finally coming out of the Great Recession, it’s followed by more that indicates we’re not, lately even in the same report. Perhaps we need to set aside the wishful thinking and just accept what we’ve got: an economy that isn’t falling off a cliff, but isn’t going to come roaring back any time soon.

It’s tough for the bipolar financial media to recognize that it is what it is, because there’s no news in a so-so status quo. It’s the really good or really bad that drives us to buy newspapers or visit websites. But it’s also tough for managers. Nobody gets rewarded or excited when earnings are flat, and most businesses have already cut all there is to cut to bump up their bottom line.

Part of the problem, we’re told, is that there’s no hot new technology like computers or the internet to help us dig out of the hole of debt we’ve created. But I think there is a hot new technology, not right in front of our noses, but behind them. Neuroscience’s incredible advances in understanding how the mind works have enormous potential to transform the way we run our businesses.

I’m not talking about pills that supposedly make us smarter, nor do I believe that using neuro-feedback to teach managers how to mimic the brain wave patterns of great leaders will make them great leaders. Such approaches are just too far out there for me or, I suspect, my clients. And while brain scans may help us understand what product features stimulate the release of the pleasure inducing dopamine, it’s still a long way from that knowledge to a product that will delight customers and make a profit. The real gains come from just factoring in how the mind works when we make business decisions.

A number of years ago, Ernst and Young came up with the tag line, “There’s not a business we can’t improve.” While a marketing campaign that insults the capability of potential clients is ill-considered, and evidence of not paying enough attention to the mind, the firm was correct in it’s assessment. Because our conventional way of thinking is flawed, according to neuroscience, it inevitably leads to flawed businesses.

I would bet anyone that has worked in the corporate world would agree that organizations are hugely inefficient and that much of what managers do is self-defeating. At the same time, there is a solid body of data on which organizational designs and management practices improve performance. The reason we don’t replace what doesn’t work with what does is exactly what the latest research in neuroscience teaches us.

Because the brain doesn’t record our experience of the world, as conventional wisdom asserts, but creates it, as neuroscience has established, we live in a world of our own making. But most of what we do as managers is based on the assumption that we all see things the same way. The feedback I give employees is objective and for their benefit, the rewards I dispense are generous, and this time I’m serious about change.

But employees don’t see things the same way as managers, so they don’t respond the way we expect. Our feedback comes across as punitive and is rejected, our rewards are so small they’re seen as insulting, and change is just more of the same. Worse yet, I see what I believe, so all I become aware of is evidence that what I do as a manager is effective. Given the self-deception our brains are capable of, we’re just not good judges of what works or doesn’t.

And much of what has been proven to work flies in the face of our common sense. Self-management improves performance and open organizations that give up the illusion of control outperform traditional ones. Engaging narratives are much more effective at changing minds than logical arguments, and inspirational visions trump measurable objectives in driving performance.

Because of the kind of thinking our culture has historically valued, we pay inadequate attention to the minds of those we interact with. In an objective world, there’s no reason to. But neuroscience teaches us that the world we live in isn’t objective, and if we take the lesson to heart, it dramatically changes how we manage.

Calculate the savings if managers no longer waste their time doing what doesn’t work, if we dispense with all of the organizational control systems people cleverly find ways to work around, and if we no longer spend money on change initiatives that don’t change anything. Now add in the increased productivity that comes from highly engaged people eagerly contributing their best thinking to further the success of the business. Factor in, as well, the increase in revenue that would come from designing and marketing products that leverage how and why customers make buying decisions, and the gain in market share that would come from strategies that confound the thinking of the competition.

The total would dwarf any savings coming from cost-cutting or the implementation of new information technology. This isn’t science fiction or some pipe dream of what the future will bring. We have the knowledge and the means to apply it today. In fact, there are companies already reaping the benefits of this new scientific approach, and not just in Silicon Valley but in the heartland as well.

No new technology indeed!

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