Andy Grove on the Right Kind of Fear (Ed Batista)

Fear by Giuseppe Milo giuseppemilo 24226144354 EDIT

While I firmly believe in the value of psychological safety as a factor that contributes to high performance, I've also observed an unhelpful tendency in recent years to prioritize that quality above all else. [1] Anything that leads someone to feel distress is viewed as "unsafe" and thus unacceptable. But former Intel CEO Andy Grove believed that a particular kind of fear can actually play a productive role in organizational life--the fear of losing:

The quality guru W. Edwards Deming advocated stamping out fear in corporations. I have trouble with the simplemindedness of this dictum. The most important role of managers is to create an environment in which people are passionately dedicated to winning in the marketplace. Fear plays a major role in creating and maintaining such passion. Fear of competition, fear of bankruptcy, fear of being wrong and fear of losing can all be powerful motivators.

How do we cultivate fear of losing in our employees? We can only do that if we feel it ourselves. If we fear that someday, any day, some development somewhere in our environment will change the rules of the game, our associates will sense and share that dread. They will be on the lookout...

Simply put, fear can be the opposite of complacency. Complacency often afflicts precisely those who have been most successful. It is often found in companies that have honed the sort of skills that are perfect for their environment. But when their environment changes, these companies may be the slowest to respond properly. A good dose of fear of losing may help sharpen their survival instincts. [2]

However, this doesn't mean that all fear is productive. Grove made a sharp distinction between the healthy fear that dispels complacency and a very different kind of fear that is toxic to an organization's effectiveness--the fear of speaking up:

If you are a middle manager you face an additional fear: the fear that when you bring bad tidings you will be punished, the fear that your management will not want to hear the bad news from the periphery. Fear that might keep you from voicing your real thoughts is poison. Almost nothing could be more detrimental to the well-being of a company.

If you are a senior manager, keep in mind that the key role of Cassandras is to call your attention to strategic inflection points, and under no circumstances should you ever "shoot the messenger," nor should you allow any manager who works for your do to so.

I can't stress this issue strongly enough. It takes many years of consistent conduct to eliminate fear of punishment as an inhibitor of strategic discussion. It takes only one incident to introduce it. News of this incident will spread through the organization like wildfire and shut everyone up.

Once an environment of fear takes over, it will lead to paralysis throughout the organization and cut off the flow of bad news from the periphery. [3]

The figure of Cassandra provides a fitting analogy. A priestess in Greek mythology, she was the younger sister of Hector, the great warrior of Troy. The god Apollo gave Cassandra the ability to see the future, but after she rejected his advances he put a curse on her so that her true prophecies would always be disbelieved. When the Greeks left a massive wooden horse at the gates of Troy as a supposed peace offering, Cassandra warned her compatriots to destroy it, but they ignored her as they conducted a victory feast: "We stationed the monster fraught with doom on the hallowed heights of Troy. Even now Cassandra revealed the future, opening lips the gods had ruled no Trojan would believe." [4]

Cassandra tried to attack the horse with axe and fire, but she was stopped so that the feast wouldn't be disrupted. [5] That evening, of course, Greeks concealed in the horse slipped out and opened the city gates to their countrymen, leading to Troy's destruction. A healthy fear of losing and respect for a truth-teller certainly would have sharpened the Trojans' survival instincts. Their complacency and their resistance to bad news sealed their fate.

Note that Grove's position on fear is entirely consistent with that of Harvard Business School professor Amy Edmondson, whose research makes a compelling case for the competitive advantages to be derived from psychological safety. [6] They both emphasize the role that safety plays in encouraging people to speak up. As Grove noted, "Constructively debating tough issues and getting somewhere is only possible when people can speak their minds without fear of punishment." [7] Edmondson made the very same point nearly two decades later in a 2018 interview:

What makes a workplace psychologically safe or not?

Individuals feel they can speak up, express their concerns, and be heard. This is not to say that people are "nice." A psychologically safe workplace is one where people are not full of fear, and not trying to cover their tracks to avoid being embarrassed or punished.

What I am advocating is candor. Being open. And sometimes that might mean being direct to a fault, knowing that you have a right and a responsibility to ask hard questions about the work: "Is this the right decision? Are we collecting the right data? Do we know the impact this might have on others?" [8]

So if you're a senior leader seeking to help your organization perform at the highest possible level, how can you inspire "the right kind of fear" while avoiding "the wrong kind"? There's no simple solution or quick fix, but there are steps you can take over time:

1. Reward (and Model) Candor

A foundational leadership principle is that when you see behavior you want more of, acknowledge it and express appreciation for it. To minimize the fear of speaking up, whenever anyone shares information that might be viewed as "bad tidings," recognize that it may have felt risky for them to do so, and thank them. [9] The lower their position in the hierarchy, the greater the risk, which your appreciation should take into account.

This doesn't mean that you should have infinite patience for someone who's always negative. Relentless pessimism isn't the same thing as candor. But neither is unremitting optimism, and some leaders tend to reward people who only bring good news--which means they won't hear bad news until it's too late to do anything about it.

A related principle is modeling the behavior you want others to adopt. Here this entails being candid with critical feedback, even--and perhaps especially--when you're concerned about how the other person will respond. This gets easier when you provide feedback on a consistent basis, rather than waiting for review cycles [10] and when you learn how to deliver critical feedback that the other person might experience as motivational rather than demoralizing or threatening. [11]

2. Foster (and Model) Accountability

A healthy fear of losing is only possible when losing comes with consequences. In this context it's vitally important to create incentives to be open about mistakes and setbacks in order to learn from them. [12] Ray Dalio, founder of hedge fund Bridgewater Associates, attributes much of the firm's success to a rigorous commitment to accountability:

Having a process that ensures problems are brought to the surface, and their root causes diagnosed, assures that continual improvements occur. For that reason I insisted that an issue log be adopted throughout Bridgewater. My rule was simple: If something went badly, you had to put it in the log, characterize its severity, and make clear who was responsible for it. If a mistake happened and you logged it, you would be OK. If you didn't log it, you would be in deep trouble. [13]

This doesn't mean that you should have infinite tolerance for ineptitude and underperformance. While accountability starts with candid feedback, in some circumstances it becomes necessary to remove someone from their role. But while it's essential to avoid creating an environment in which people are constantly anxious about losing their job, having coached many leaders though this difficult process I know that when a termination is handled well it can have a galvanizing effect on the organization while also being in the best interests of the person being fired. [14]

Here it's critical that you hold yourself to the same standard. When a leader screws up, the rest of the organization often colludes in the process of quietly ignoring it in order to shield the leader from embarrassment. [15] This not only prevents the leader from learning, but also gives everyone else a convenient excuse to do the same. If, instead, you admit and publicly acknowledge your mistakes, you invite others to follow your example. [16]

3. Promote a Team Identity

Despite the potential benefit of a healthy fear of losing, it's all too easy for efforts to foster accountability to trigger an excess of fear, resulting in finger-pointing and blame, as Stanford professor Jeff Pfeffer has noted:

The downside of the emphasis on individual accountability is illustrated by Jody Hoffer Gittell's research on Southwest and American Airlines during the mid-1990s. American Airlines then-CEO, Robert Crandall, insisted that delays come to his attention and that the delays get assigned to individual and departments, so they would be accountable for their results and, moreover, would compete with one another to avoid creating problems...

The result of this approach was to create a culture of fear and infighting as people and units tried to pin the blame on others. Little learning occurred and on-time performance continued to lag. At Southwest Airlines, the view was that delays were everyone's problem and when they occurred, people needed to work together to learn as much as possible...

Gittell's research showed that the Southwest system produced more learning and more teamwork, resulting in better system performance, than the American Airlines approach with its emphasis on assigning individual or departmental accountability and blame. [17]

The key is ensuring that people identify with the organization as a whole and believe that they succeed or fail together. This is more difficult in certain environments, of course--if people don't truly work interdependently then a sense of team spirit may never be sufficient to overcome the incentive to escape scrutiny and avoid blame. [18] Even when people do work interdependently, they may identify more strongly with their close colleagues than with the organization, a situation described by George Halvorson, the former CEO of Kaiser Permanente:

Humans are social creatures; we fall readily into group loyalties. We instinctively divide the world into "us" and "them" and treat others very differently according to which category they’re in... Many workplaces default to a version of kinship based on function. A group’s shared identity reflects a common characteristic of its members—everyone’s an engineer, or everyone’s a radiologist. Doing similar work under the same conditions is enough to make an "us." [19]

A degree of sub-group identity is by no means a bad thing, and at times cross-functional rivalries spur fruitful competition. But they should always be subsumed within a larger organizational identity--a "greater us" [20]--which you as the leader must personally embody. [21]

4. Regulate Your Emotions

Finally, in all of these efforts it's essential to regulate your emotions, which is one of the most common--and most challenging--themes in my practice. To be clear, note that regulate does not mean suppress. We can suppress emotions for short periods of time, but not for long, and in some circumstances the effort actually heightens the feeling we're seeking to minimize. [22] But the goal isn't to pretend you're not having any feelings at all--it's to express your feelings in such a way they help you achieve your goals, rather than serve as obstacles.

The work of emotion regulation is never easy, but it's particularly difficult when dealing with fear, perhaps the most primal and powerful emotion. [23] A hallmark of ineffective leaders is their inability to grasp the difference between "the right kind of fear" and all other kinds. Such leaders generate fear indiscriminately and imagine that they're cultivating a healthy fear of losing, but fail to recognize the negative impact on those around them: self-censorship, excessive caution, risk-aversion. Ultimately the organization pays a price as talented people leave or choose to remain under duress (and then only as long as financial incentives are sufficient to be motivating.)

The alternative is to be deliberate, thoughtful and intentional in leveraging the power of emotions, both positive and negative, when taking any of the steps noted above: acknowledging bad news, providing feedback, learning from failure, holding others accountable, holding yourself accountable, creating a sense of camaraderie.

In addition, let's recognize that even the fear of losing is counter-productive when taken to extremes, and sometimes that affects a leader internally. I've worked with many leaders who felt overwhelmed by the prospect of failure or even just the sense that they were falling short of expectations (their own or those of others) or falling "behind" in some type of competition (real or imagined). The purpose of emotion regulation isn't merely to assuage other peoples' fears, but also one's own.

Cultivating the capacity for emotion regulation is the work of a lifetime, and you'll probably never feel that you've "mastered" it, if only because it's necessary for our survival that emotions not be subject to willful control. [24] But my work with leaders makes it clear that you can improve your ability to inspire a healthy fear of losing without inadvertently triggering a poisonous fear of speaking up:

Footnotes

[1] Safety Is a Resource, Not a Destination

[2] Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company, pages 117-118 (Andy Grove, 1999)

[3] Ibid, pages 118-119.

[4] The Aeneid, page 83 (Homer, translated by Robert Fagles, 2008)

[5] The Fall of Troy, Book XII (Quintus Smyrnaeus, translated by A.S. Way, 1913)

[6] For more on Amy Edmondson's work on psychological safety, see the following:

How Fearless Organizations Succeed (strategy+business, 2018; excerpted from Edmondson's book below)
The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation and Growth (2018)
Building a psychologically safe workplace [11:26 video] (TEDxHGSE, 2014)

[7] Grove, page 117.

[8] Make Your Employees Feel Psychologically Safe (Martha Lagace interviewing Amy Edmondson, Harvard Business School Working Knowledge, 2018)

[9] Risk Management (The Importance of Speaking Up)

[10] Make Feedback Normal. Not a Performance Review.

[11] How to Deliver Critical Feedback

[12] The Ruling Out of Possibilities (On Failure)

[13] Principles: Life and Work, page 62 (Ray Dalio, 2017)

[14] Merciful Exits (On Under-Performing Executives)

[15] Overcoming Organizational Defense: Facilitating Organizational Learning, page 25 (Chris Argyris, 1990)

[16] I know from personal experience that publicly acknowledging my mistakes in a leadership role is simultaneously mortifying, liberating, and profoundly useful to those around me:

[17] Changing Mental Models: HR's Most Important Task (Jeffrey Pfeffer, Chapter 19 in The Future of Human Resource Management, Mike Losey, Dave Ulrich and Sue Meisinger, editors, 2005)

[18] What Kind of Team Are We?

[19] Getting to "Us" (George Halvorson, Harvard Business Review, 2014)

[20] Startup Leadership: A Greater Us

[21] Leader as Avatar

[22] For more on the impact of suppressing emotions: