Ed Batista

Why Your Bonus Plan Isn't Working

A major theme in my practice is executive compensation. Like all other professionals, my clients are seeking to obtain a fair return in exchange for their services, and they're also leaders who must offer competitive compensation to attract and retain top talent. In some conversations, we'll focus on a client's own financial requirements, and in others we'll address the needs of one or more employees, or the company's overall approach to compensation

I don't provide comparable datasets or detailed guidelines for compensation plans, although I can refer my clients to people who do. [1] Instead, when working with clients on their individual compensation I'm generally helping them think about their overarching goals as well as their immediate negotiation strategy. [2] And when working with clients on employee compensation, my role is to help them consider the organizational implications of any particular choices they might make.

In the latter case, we often wrestle with the issue of bonuses. Economic sociologist Viviana Zelizer describes the various forms bonuses can take:

Advance inducements to make some major commitments (e.g. enlistment in the army), after-the-fact lump-sum rewards (e.g. veteran's bonuses, retirement bonuses), discretionary rewards by employers (e.g. Christmas bonuses), payments tied to extraordinary individual achievements (e.g. overfulfilling sales quotas, landing a big account, inventions that become company property), payments tied to collective performance (e.g. shares of company profits, group productivity rewards), and more. [3]

Typically my clients hope to use a bonus to motivate and reward behavior that will lead to "extraordinary individual achievement" or yield improved "collective performance," although for a bonus to achieve these goals a set of conditions must be met. And a problem I often see in my practice is a bonus that's offered in the absence of one or more of these conditions, which renders it far less effective as a motivator and yields frustration on the part of employees, management, or both. Why does this happen, and if you're a leader in this situation, what can you do about it?

A Lack of Clarity or Control

The desired behavior must be sufficiently distinct from ordinary activity, and employees must have a degree of control over the intended outcome. The desired behavior need not be novel or innovative--it may simply entail "do more of what's already working." It's also not necessarily the case that management must provide explicit guidelines or instructions--that's rarely feasible with highly-skilled knowledge workers. But employees must grasp that something different is being asked of them, even if it's up to them to determine how to proceed.

Should employees accept that challenge, they must also feel a sense of agency in the process. There has to be a connection between their expenditure of effort and the achievement of the goal. This doesn't mean that employees need to have total control over the outcome or that exogenous factors can't ever get in the way. But the more control they enjoy, the more effective the bonus as a source of motivation. And below a certain level of control, any bonus plan will likely be viewed as unfair and demotivating.

The Wrong Risk Profile

Employees must be comfortable with the concept of variable compensation, and optimally they prefer this to a fixed salary. Everyone's comfort level with risk varies, and this risk profile can play a significant role in our career choices. People with a relatively high tolerance for risk gravitate toward fields that offer variable payouts, largely because they're attracted by the potential upside, but in some cases because they find the uncertainty itself stimulating. They're gamblers, in a sense, and they like to bet on themselves.

This risk profile is common among the entrepreneurs and investors who comprise the majority of my clients, but it can be found in most market-facing fields, particularly sales. (And most of my clients must sell in one way or another, from closing deals to raising funds.) But many people are uncomfortable with risk, and their caution may be heightened when it comes to financial matters. They're less interested in upside potential and more intent on downside protection.

A bonus is of interest to this latter group to the extent that it's merely additive on top of already sufficient compensation--so it may not really serve leadership's goals at all. This isn't to say that bonuses never work outside of sales or similar roles. But the overall organizational culture must foster an appetite for risk, even in conventionally risk-averse functions.

Hedonic Adaptation and Loss Aversion

The bonus must be viewed as a quid pro quo for the desired behavior, not an expected function of employment. But a challenge is that we readily adapt to improved conditions and soon come to take them for granted, a process known as "hedonic adaptation." [4] Even if the above conditions are satisfied, when a bonus is paid out repeatedly it may well come to be expected by employees.

It can help to maintain a clear delineation between base and variable compensation, although even then it's likely that at least some employees will come to view the bonus as a given. When that occurs, the absence of a bonus in the future will cause even greater unhappiness, the result of "loss aversion," our propensity to weight perceived losses more heavily than equal gains. [5]

There isn't really a "solution" to these states, which are deeply rooted in human psychology. But it's important to be aware that they generate continuous upward pressure on ambitious employees' financial expectations, and leaders who fail to prepare for this eventuality are engaged in magical thinking. [6]

On Currencies

Even as I work with clients to help them optimize their compensation plans, I believe it's essential to bear in mind the work of the great 20th century psychologist Frederick Herzberg, who provided a sharp critique of conventional approaches to motivating employees, which he referred to as "kicks in the ass" or KITA. These kicks aren't only negative, in the form of criticism or threats--they can also be positive, in the form of desirable rewards:

Let us consider motivation. If I say to you, "Do this for me or the company, and in return I will give you a reward, an incentive, more status, a promotion, all the quid pro quos that exist in the industrial organization," am I motivating you? The overwhelming opinion I receive from management people is, "Yes, this is motivation." I have a year-old schnauzer. When it was a small puppy and I wanted it to move, I kicked it in the rear and it moved. Now that I have finished its obedience training, I hold up a dog biscuit when I want the schnauzer to move. In this instance, who is motivated--I or the dog? The dog wants the biscuit, but it is I who want it to move. Again, I am the one who is motivated, and the dog is the one who moves. In this instance all I did was apply KITA frontally; I exerted a pull instead of a push. When industry wishes to use such positive KITAs, it has available an incredible number and variety of dog biscuits (jelly beans for humans) to wave in front of employees to get them to jump. [7]

As I've written before,

Herzberg is exaggerating for comic effect here--I don't think he ever kicked his dog. But his larger point holds: rewards like dog biscuits and jelly beans may result in movement, but that's not the same thing as motivation. This doesn't mean rewards are irrelevant as incentives, but a key in deploying them effectively is understanding that there are two different types of motivation, intrinsic (deriving from the work itself) and extrinsic (deriving from by-products of the work or aspects of the environment in which work occurs). [8]

Bonuses and other forms of compensation are extrinsic motivators, which Herzberg called "hygiene factors." His research indicates that inadequate compensation causes tremendous job dissatisfaction, but above a certain amount (which varies for everyone), additional compensation doesn't yield greater satisfaction. I'm not suggesting that bonuses never work--that's obviously not the case. But should you find that your bonus plan is failing to deliver the desired results even in the presence of the conditions described above, it may be worth considering what other "currencies" your employees value that you may be failing to provide. [9]

 

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Footnotes

[1] For more detailed guidance, I recommend these experts on executive compensation:

• Jody Thelander, J. Thelander Consulting and LinkedIn
• Lanelle Santimauro, Compensation Consultant
• Rob James, Pearl Meyer and LinkedIn

[2] Culture, Compensation and Negotiation

[3] A Humbler Bonus (Viviana Zelizer, The Huffington Post, 2009)

[4] For more on hedonic adaptation:

• The Myths of Happiness: What Should Make You Happy, but Doesn't, What Shouldn't Make You Happy, but Does (Sonja Lyubomirsky, 2014): "Human beings have the remarkable capacity to grow habituated or inured to most life changes... What is particularly fascinating about this phenomenon, however, is that it is most pronounced with respect to positive experiences. Indeed, it turns out that we are prone to take for granted pretty much everything positive that happens to us." [pages 18-19]

• The Laws of Emotion, pages 353-354 (Nico Frijda, American Psychologist, 1988): "One must, I think, posit a law of hedonic asymmetry, the law of asymmetrical adaptation to pleasure or pain: Pleasure is always contingent upon change and disappears with continuous satisfaction. Pain may persist under persisting adverse conditions."

• We Won't Be Happy WHEN. We Could Be Happy NOW.

• Pain, Suffering and Hedonic Adaptation

• Stop Trying to Be "Good Enough" by "Getting Better"

[5] For more on loss aversion:

• Thinking, Fast and Slow, Chapter 26: "Prospect Theory" (Daniel Kahneman, 2011)
• Loss aversion (Behavioral Economics)
• Questions about the validity of loss aversion have emerged in the course of social psychology's replication crisis. For example, see Kahneman and Tversky’s "debatable" loss aversion assumption (Jason Collins, 2019). While acknowledging this controversy, I still find the concept a reasonable explanation for otherwise curious behavior.

[6] The Traps We Set for Ourselves

[7] One More Time: How Do You Motivate Employees? (Frederick Herzberg, Harvard Business Review, originally published 1968, republished 2003)

[8] Currencies (On Motivating Different People)

[9] Ibid.

 

Photo by pictures-of-money.

The Ambiguous Role of Executive Chair

According to Spencer Stuart, the outgoing CEO becomes the Board's Executive Chair in over 40 percent of S&P 500 CEO transitions, and I've worked with several clients who followed this path. [1] In these cases everyone agreed in principle that the company would benefit from the continuity afforded by having the former CEO take on this special role, but what this meant in practice was often highly ambiguous.

A degree of ambiguity is inevitable. Any standardized "job description" for such a specialized role will fail to meet a given company's unique needs. (This is also often true for Chief Operating Officers, another role that varies widely from one organization to another. [2]) But too much ambiguity makes it difficult for the parties involved to understand what it will take for this new arrangement to work.

This can pose a particular challenge for the Executive Chair and the incoming CEO. The Chair may have played a large role in recruiting and selecting their successor, and if so it's likely that both parties said the right things about their future working relationship and were reluctant to jeopardize the deal by asking too many inconvenient questions. As a result sometimes very little is spelled out with any specificity before the Chair and CEO must begin working together, which can easily lead to misunderstandings.

I don't believe there are best practices that an Executive Chair must follow in order to succeed, but here are a set of questions that a new Chair and an incoming CEO can explore to arrive at a shared definition of success:

The Executive Chair and the CEO

• What expectations do you both have for this relationship?
• How clearly have those expectations been articulated?
• How often will you communicate, and on what issues?
• What decisions does the Chair expect to be consulted on?
• How does the CEO (really) feel about this?
• What decisions does the CEO expect to make autonomously?
• How does the Chair (really) feel about this?
• What will happen when you disagree?
• How will any disagreements be resolved?
• What role will the Chair play in assessing the CEO's performance?
• If necessary, how open are you to working jointly with a coach?

The Executive Chair and the Board

• What role will the Chair play during Board meetings?
• Will they facilitate or have any other special responsibilities?
• How does the CEO (really) feel about this?
• What role will the Chair play in between meetings?
• Will they hold one-on-ones with other Directors?
• If so, is this an option or an obligation?
• And how does the CEO (really) feel about this?

The Executive Chair and the Business

• What ongoing responsibilities (if any) will the Chair have?
• How much autonomy will they have to conduct these duties?
• How accessible will the Chair be to other parties, such as investors, analysts, or the media?
• What role will they play in those settings?
• To what extent will they be empowered to speak for the company?
• And how does the CEO (really) feel about this?

 

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Footnotes

[1] 2023 CEO Transitions (Spencer Stuart, 2024)

[2] The Mythical COO

 

Photo by Kyle Taylor.

My Appearance with Ryan Hawk on the Learning Leader

On May 1st I conducted the 8,000th coaching session of my career, and my post on lessons learned came to the attention of Ryan Hawk, who's been hosting the Learning Leader podcast for over 9 years. Ryan invited me to join him for Episode 592, and we discussed topics ranging from coaching and leadership to the elements of effective feedback.

• YouTube
• Learning Leader (streaming audio and list of key points)
• Apple Podcasts
• Spotify

Recorded June 6, 2024. Published July 21, 2024.

Your Toughest Critic & Biggest Fan (CEO Self-Assessment)

A theme in my work with CEOs is the necessity of seeing yourself clearly and cultivating the capacity to rigorously assess your weaknesses and your strengths. You have to be both your toughest critic and your biggest fan. This is good advice for executives at any level, but it's particularly important for CEOs because the nature of the role makes it difficult to get candid feedback from people in a position to offer relevant and trustworthy guidance. [1]

The people who have your best interests at heart and who you trust to be candid, such as family and friends, may not be in a position to offer a meaningful critique of your performance. The people who are in such a position, such as Board members, investors and senior employees, may not be candid, or they may have obligations that at some point diverge from your personal interests. And the mentors you relied upon to fill this gap earlier in your career may no longer be available to you. So what can you do?

1. Clarify How You Add Value

You're undoubtedly busy with a great deal to do. And yet in my experience CEOs add the most value and have the greatest impact on the business by leading, not simply by doing. Seeking to add value by merely doing more may actually be counterproductive in your efforts to lead at scale. [2] The goal here is to ensure that any self-assessment is focused on your most meaningful activities.

It's no longer the case (if it ever was) that you can assess your impact by the number of hours you put in or how many items you've crossed off your to-do list. As Andy Grove once wrote, "My day always ends when I am tired and ready to go home, not when I'm done... A manager's work is never done. There is always more to be done, more that should be done, always more than can be done." [3]

Instead, if you're like most of my clients, at any given moment you have a relatively small number of responsibilities that are both important and urgent--perhaps three to five. [4] It's tempting to add to that list, but rigor matters here--if too many things are important and urgent, than nothing really is. If you succeed at these key tasks but others slip, you've still succeeded. And if you fail at these key tasks, then success elsewhere won't matter.

2. Make Reflection a Practice

Early in their careers many people imagine they'll finally have a more spacious work life when they obtain a more senior role and have greater control over their calendars. They often fail to realize that the more senior the role, the more people want your time and attention. You likely face some version of this challenge, and it can feel difficult or even irresponsible to dedicate time to yourself. But reflection is like a good night's sleep or regular physical activity--it's not an indulgence, but an investment in your capacity to add value. [5]

It's also not the type of activity that fits neatly into brief segments of free time between other activities. While there's no single best approach, I do recommend making reflection a regularly occurring item on your calendar. Every individual's needs differ, and you will have to experiment to find the routine that's most productive for you. Consider the length of time and the setting that are most conducive to meaningful reflection, as well as the frequency with which you can reliably block off and protect such activities on your calendar. [6]

I know CEOs who do their best thinking on solo retreats over a long weekend, although that may only be feasible several times a year. I've also known a CEO who did his best thinking at the driving range, and he made that a weekly routine. The idea isn't that reflection must occur on a rigid schedule, but like all important-but-not-urgent activities, it won't happen with any consistency if you don't make it a practice.

3. Find the Signal in the Noise

As noted above, it can be challenging to obtain useful feedback as a CEO, but I'm not suggesting that you should ignore others' feedback or fail to solicit it. And yet feedback from others isn't necessarily "the truth" about your performance. As I've written before, "feedback always says as much about the giver as the recipient. It's filtered through their reality-distortion fields, reflecting their personal values and priorities." [7]  Many organizations try to correct for that distortion via a 360 assessment, and if that's available to you I recommend taking advantage of it. At the same time such processes can be time-consuming, occur only at periodic intervals, and are subject to some predictable biases of their own. [8]

There's also feedback available to you in the form of organizational results, which likely matter much more than anything else. But here, too, is plenty of noise in the form of what psychologists call the "fundamental attribution error"--we routinely assign leaders more credit for success (and more blame for failure) than they deserve. [9] Further, the feedback loops for a CEO are extremely long, as Jeff Bezos has noted: "When somebody congratulates Amazon on a good quarter, I say 'Thank you,' but what I'm thinking to myself is, 'Those quarterly results were fully baked about three years ago.'" [10]

Ultimately, all of the feedback you might obtain, including but not limited to direct input from others, 360 reports, and organizational results--are forms of data, which is comprised of signal and noise. It's your job to determine which is which.

4. Tolerate the Dissonance

Self-assessment isn't merely an intellectual task--it's also an emotional one. This is true for all executives, but, again, it's particularly true for CEOs because of the obligation to be your toughest critic and your biggest fan. If you're like my clients, there are any number of parties who are watching to see if you stumble, and when you do they'll be quick to find fault. If you shrink from a candid assessment of your weaknesses and missteps, your critics won't hesitate to do so, and you may find yourself unpleasantly surprised by how they leverage that information.

But senior leadership also entails maintaining a high degree of confidence in your capabilities and an optimistic view of what you and others can achieve. As I've written before, "There's a positive correlation between optimism and effective leadership, in part because the optimistic leader has a contagious effect on others, attracting talent and resources and making success more likely." [11] And as you've no doubt experienced as a CEO, there are moments when you can't look to anyone else for encouragement, because everyone is looking at you.

Putting this into practice and acting as your toughest critic and your biggest fan is likely to evoke what psychologists call "cognitive dissonance," a form of stress deriving from the difficulty of holding in mind seemingly incompatible realities. Most people have a low tolerance for such dissonance, to the extent that they may dramatically alter their beliefs and behavior in order to reduce the stress. But as a CEO you can't afford to do that. I've previously discussed how to better manage the dissonance that inevitably accompanies this job, and my guidance is consistent with what we know about emotion regulation more generally: Expect it. Get comfortable with it. And talk about it with people you trust. [12]

 

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Footnotes

[1] Two Sides of Trust

[2] How to Scale: Do Less, Lead More

[3] High Output Management, page 47 (Andy Grove, 1983)

[4] Importance vs. Urgency

[5] Investments, Not Indulgences

[6] How to Think (More on Open Space and Deep Work)

[7] Feedback Is Not a Gift

[8] Your 360 Report Is Ready

[9] I first learned about the fundamental attribution error as an MBA student from Roberto Fernandez, who described it as "ascribing causality to personal characteristics when causality actually lies with the situation." The original research was done by Stanford psychologist Lee Ross: The Intuitive Psychologist and His Shortcomings: Distortions in the Attribution Process (Advances in Experimental Social Psychology, 1977).

[10] Jeff Bezos interviewed by Michael Beckerman (Internet Association Gala, 2017). The passage above begins at the 7:07 mark in this video.

[11] This line is from The Ruling Out of Possibilities (On Failure). For more on the research on leadership and optimism, see Dispositional Affect and Leadership Effectiveness: A Comparison of Self-Esteem, Optimism, and Efficacy (Martin Chemers, Carl Watson, and Stephen May, Personality and Social Psychology Bulletin, 2000), and Impact of Leadership Style and Emotion on Subordinate Performance (Janet McColl-Kennedy and Ronald Anderson, The Leadership Quarterly, 2002).

[12] The Cognitive Dissonance of the CEO. For more on emotion regulation, see The Tyranny of Feelings.

 

Photo by Slim via Pixahive.

Snark, Not Sarcasm (On Leader Communication)

An occasional theme in my work with leaders on communication is the verbal or written comment that was intended by the leader to be witty but instead falls flat, creates distance, or even leaves people feeling offended or hurt. One reason for this gap between intent and impact [1] is that the leader was perceived as going beyond what we might call snark and crossing a line into sarcasm.

Many definitions use these terms almost interchangeably, but we can distinguish between them to illustrate a subtle yet important point when you're communicating as a leader. Both snark and sarcasm are forms of irony that involve delivering a message employing language that usually means the opposite. This creates a moment of dissonance as people figure out what you really mean.

With snark that dissonance resolves in a moment of shared humor. The seeming incongruity of your message poses a riddle, and you're inviting others to join you and get in on the joke by solving it. But sarcasm is sharper, and it cuts deeper. There is no shared resolution, or if there is it comes at someone else's expense. The incongruity of the message is evident, and others are not invited to get in on the joke--they are the joke.

This is a subjective distinction that's contingent on the context, among other factors. A comment that evokes knowing laughter in one setting will yield stony silence in another. This is a function of the culture and its norms, a topic I've addressed before by comparing organizational life to three common settings:

Many of the situations we encounter in contemporary professional life take one of three cultural forms: A classroom, a church, or a cocktail party... So some meetings are like a classroom, others are like church, and still others are like a cocktail party. And some companies are like a classroom, others are like church, and still others are like a cocktail party... The problem, however, is that schools, places of worship, and celebratory gatherings identify themselves very clearly through obvious signifiers. We know where we are, we readily grasp the norms, and we act accordingly. But meetings and companies are much harder to interpret... So the signs and signals are opaque and confusing, and it's easy to misread them. [2]

Many cocktail parties run on snark, and it's welcome in some classrooms, but it's rarely tolerated in church. So a first step is to assess the setting, although our ability to "read the room" can vary widely. Neuroscientist Richard Davidson calls this "context-sensitivity," and people who score low on this dimension "are oblivious to the implicit rules that govern social interactions" and fail to appreciate that "a behavior that would be perfectly acceptable in one context [is] offensive in another." [3] But this capability is by no means fixed, and if you find yourself repeatedly misjudging the setting, Davidson recommends meditation and other approaches to mindfulness to heighten context-sensitivity. [4]

Another key factor is your relationship with the other parties, which is particularly salient for leaders, given what social psychologist Adam Galinsky calls the "power amplification effect." A leader's comments often have a greater impact than the leader intended, and ambiguous comments by a leader--such as ironic humor--tend to be interpreted negatively by others. [5] Here it's important to assess the extent to which others perceive you as a distant or intimidating authority figure. Note that you may not be the best judge of that perception, so it can be useful to solicit feedback, even--and especially--if you have any concerns about what you might hear. [6]

Also, note that while sarcasm tends to be cutting and cold, snark can be warm, even inviting. It's still ironic, but it can be delivered with a knowing twinkle in the eye that encourages others to join you in the fun, a point made (in a snarky way) by author Robert Dimmick: "If sarcasm is the ability to insult idiots without them realizing it, snark is the ability to insult others who will realize it and will A) appreciate the effort made and/or B) respond in kind." [7]

The timely use of humor is an essential leadership tool, particularly in helping people maintain hope and optimism in the face of adversity. In such circumstances ironic humor can be risky, as people under stress are less effective at processing nuanced information, and alternatives may be safer. [8] But rather than banishing irony from your repertoire, I think it's far preferable to learn to use it skillfully, as you would any sharp implement.

 

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Footnotes

[1] Intent vs. Impact (When Communication Goes Awry)

[2] Classrooms, Churches, Cocktail Parties (On Norms)

[3] The Emotional Life of Your Brain: How Its Unique Patterns Affect the Way You Think, Feel and Live--and How You Can Change Them (Richard Davidson and Sharon Begley). Davidson's "Dimensions of Emotional Style" model includes an assessment that can be completed to approximate the results he sees in the lab.

[4] Ibid, Chapter 11, which includes a number of tips for adjusting your "emotional style" to enable you to better achieve your goals, largely focused on meditation. Also see Don't Just Do Something, Sit There! (Mindfulness for Busy People).

[5] When You're in Charge, Your Whisper May Feel Like a Shout (Adam Galinsky, The New York Times, 2015). Discussed further in The Blue Problem (Power and Communication).

[6] For more on soliciting feedback, see the following:

• Make Getting Feedback Less Stressful
• Why Some Feedback Hurts (and What To Do About It)
• The Problem with Anonymous Feedback

[7] Snark vs. Sarcasm (Robert Dimmick, The Etiquetteer, 2018)

[8] Joe Montana & John Candy (Leadership & Group Mood)

 

Photo by Rich Bowen.

Risky Business (When Commerce and Compliance Clash)

My clients are senior leaders whose businesses invariably face a wide range of risks. Some of them must deal with literal threats to life and limb in medicine, pharmaceuticals, construction, manufacturing, or other industries. All of them have to consider the risk of financial losses, technical failures, legal action, or damage to their reputation should things go wrong.

Risks are mitigated by various forms of compliance. Companies in the industries listed above must comply with various methods and procedures to ensure the safe provision of their goods and services. And businesses in every sector protect themselves against unacceptable risk not only by complying with legal and regulatory obligations but also by following recommended best practices.

We take on risk for the promise of a reward, and even as these businesses seek to maintain compliance they do so in pursuit of commerce. I often work with leaders whose companies are taking a novel approach in their field, which usually means that the commercial potential is large but is by no means guaranteed, while the risks they run are uncertain and hard to predict.

In these businesses there's often a tension between the recommended or required compliance and the prospective commercial opportunity. There isn't necessarily a zero-sum relationship between the two, but in any given situation there may be competing priorities, and so a balance must be found. If a company can't provide its goods and services safely and profitably, it won't be around for long.

Many roles in a company are either compliance-oriented or commerce-oriented. This doesn't imply that the people primarily responsible for compliance don't care about profits, or that the people primarily responsible for commerce don't care about safety or quality. But many professionals are educated and trained in disciplines that emphasize one side or the other, and at scale companies are typically organized along functional lines that foster sub-cultures which do the same.

In good times this state of affairs offers an important advantage. Individual employees and their respective functions have distinct incentives that are aligned but not identical, creating a system of checks and balances. This ensures that the demands of compliance and commerce are met with neither side predominating.

But such harmony can be difficult to maintain, particularly in the face of competition, financial pressures, customer churn, outside scrutiny, or legal threats, among many other factors. In these circumstances executives who've previously operated as allies may find themselves at odds, advocating for more stringent compliance or a more vigorous approach to commerce.

And even in good times some leaders must understand and advocate for both sides rather than championing one over the other. This is particularly true for the CEOs who make up the majority of my practice, but a leader at any level of an organization may be called upon to do the same. So if you're a leader who's caught up in such a dispute or who feels stuck in the middle of one, what can you do?

Question Assumptions and Labels

When the commerce vs. compliance divide turns rancorous, among the first casualties are charitable interpretations of the other side's behavior. People leap to conclusions about what's happening and why, and in the process often label their counterparts in ways that reinforce the schism. David Bradford, one of my mentors at Stanford, has noted that professional conflicts tend to escalate in stages:

1. Annoyance at having to adjust our style to accommodate the other person's.

2. Feeling alienated from the other person as our annoyance builds over time.

3. Making unfounded assumptions about the underlying cause of the difference.

4. Viewing the other person as "the problem" (or worse) that's preventing us from working effectively. [1]

David was making an observation about differences in what he called "work style," but this framework is equally applicable to conflicts that result from goals and incentives. The key is recognizing when we've begun to label our counterparts as "the problem" and working backwards to understand what assumptions we've made about their motives and intentions.

Typically we have only a partial understanding of their perspective. Sometimes this is a function of limited access to information or insufficient time to explore the data that is available. But as the great psychologist and communication theorist Paul Watzlawick has noted, "It is gratuitous to assume not only that the other has the same amount of information as oneself, but that the other must draw the same conclusions from this information." [2]

So while improved information-sharing can help, there's often a more fundamental gap in worldviews with regard to risk. People in commercial and compliance roles are trained, acculturated, and incentivized to view risk differently. It's necessary to recognize that all parties are not only acting in accordance with their respective incentives and goals, but also see the situation through a very different lens.

Bridge the Emotional Gap

Once we've stopped labeling our counterparts as "the problem" and begun questioning the assumptions we've made about their motives and intentions, we may still find ourselves viewing them from across a divide. We know more about what they're thinking and why, but we find their conclusions unreasonable.

Such a gap between people in commerce and compliance roles is often heightened by the emotions that are readily evoked in stressful circumstances: Anxiety and fear that we won't achieve our goals. Frustration and anger directed toward any perceived obstacles. Such feelings, while unpleasant, can be useful: negative emotions serve an essential function by warning us of potential threats or the loss of potential opportunities. But emotions are very noisy signals, in part because we're predisposed to overreact to our concerns. This is a reliable feature of human psychology described by physician and evolutionary psychiatrist Randolph Nesse as "the smoke detector principle":

Most of the responses that cause human suffering are unnecessary in the individual instance but still perfectly normal because they have low costs but protect against huge possible losses. They are like false alarms from smoke detectors. The occasional wail when you burn the toast is worth it to ensure that you are warned early about every real fire. [3]

Yet in a commerce vs. compliance dispute it's likely that both sides believe that their perception of risk is accurate and the negative emotions they feel as a result are justified. And as many of us have learned the hard way, it's unhelpful to tell someone who's upset that they "shouldn't" be upset. The key here is empathy, and as I've noted before empathy isn't agreement:

We act as though empathizing with someone entails endorsing their perspective and their feelings, but this need not be the case. Understanding someone’s perspective and their emotions while suspending our judgments about both does not necessarily imply that we agree with that perspective or believe that the resulting emotions are justified. It simply means that we comprehend their perspective and emotions, and we are able to envision ourselves experiencing that perspective and those emotions under similar circumstances. Just as we can empathize with someone without sympathizing [i.e. feeling sorry for them], we can empathize with someone while disagreeing with them and considering their perspective inaccurate and their emotions unwarranted. [4]

In practice this means withholding our judgments about the other person's thoughts and feelings, and actively expressing our understanding in a way that registers with them. The idea isn't to feign agreement, but to lower the emotional temperature and help everyone be more dispassionate in assessing risk--because ultimately a decision must be made about how to proceed.

Decide How to Decide

A common problem in professional disputes is that people jump immediately into advocating for their point of view on an issue without first agreeing on a decision-making process. Management thinker Jurgen Appelo has identified "7 Levels of Delegation" to help groups determine how a given decision will be made:

1. TELL: Leader decides, no discussion.

2. SELL: Leader decides and convinces.

3. CONSULT: Leader seeks input and decides.

4. AGREE: Leader and group decide together.

5. ADVISE: Leader suggests and others decide.

6. INQUIRE: Others decide and inform leader.

7. DELEGATE: Others decide with no further discussion. [5]

(Here's an illustration.)

There are several factors to consider in a commerce vs. compliance dispute: Who has information about the nature of the risks involved? What role should they play in the decision-making process? How will we ensure that this information is explored thoroughly and efficiently? And perhaps most importantly, what are the sources of power and authority in this situation?

I emphasize that last point because in many settings the person with the ability to unilaterally make a decision is in a commerce role or a compliance role, or their training and experience derives from one side rather than the other. In such cases it's essential that they correct for potential biases and are perceived as even-handed, without allowing the process to become bogged down.

Invest in Cross-Cultural Relationships

Once a given dispute has been resolved, continued work over time will help ensure that subsequent disagreements are less heated and resolved more easily. A key in this effort is ensuring that people in commerce and compliance roles don't merely retreat to their respective sub-cultures, but actively maintain cross-cultural relationships with their counterparts.

This need not entail de-emphasizing these sub-cultures or pretending they don't exist. It's a natural human tendency to form cultural sub-groups within a larger population, and this can have beneficial effects, as former Kaiser Permanente CEO George Halvorson has written:

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... In the 1970s the social psychologist Henri Tajfel gave us the concept of social identity--the understanding that an individual’s identity is powerfully shaped by group allegiances... Researchers since have shown that when people in a work setting have a strong sense of being an us, morale and productivity rise...

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." But it doesn’t provide much impetus for the group to align its energies and take bold action. [6]

Commerce and compliance sub-cultures within an organization typically form an "us," what Halvorson calls "a version of kinship based on function." But there also needs to be what I've called "a greater us," a larger organizational identity that encompasses both of these sub-cultures (and any others as well). [7] This can take on symbolic forms in logos and corporate swag, but it also occurs via interpersonal experiences.

So whether you're in a commerce role or a compliance role--but especially if you're a senior leader tasked with overseeing both functions--look for opportunities to bring members of these tribes together so they will recognize each other as fellow inhabitants of the same village. The goal isn't simply to establish connections, but in so doing to amass a store of social capital that will contribute to greater empathy and trust the next time there's a disagreement over risk.

 

---

Footnotes

[1] Work Style Differences

[2] Pragmatics of Human Communication: A Study of Interactional Patterns, Pathologies and Paradoxes, page 95 (Paul Watzlawick, Janet Beavin Bavelas, and Don Jackson, 1967)

[3] Good Reasons for Bad Feelings: Insights from the Frontier of Evolutionary Psychiatry, pages 40-41 (Randolph Nesse, 2020). For more on this concept, see The Smoke Detector Principle (Why We Overreact).

[4] The Difficulty of Empathizing Up

[5] The 7 Levels of Delegation (Jurgen Appelo, 2015). For more on this concept, see Leadership, Decision-Making and Emotion Management.

[6] Getting to "Us" (George Halvorson, Harvard Business Review, 2014). For more on social identity theory: Experiments in Intergroup Discrimination (Henri Tajfel, Scientific American, 1970) and Social Identity Theory (Gazi Islam, Encyclopedia of Critical Psychology, 2014)

[7] Startup Leadership: A Greater Us

 

Photo by Rhys Asplundh.

Transcendence in Everyday Life

The term "transcendence" can evoke some sort of inaccessible mysticism, but it also has a very straightforward meaning: a state in which we look beyond our present concerns, heighten our awareness of the outside world, and feel a greater sense of connection as a result. This definition of transcendence is highly relevant to my work with coaching clients, and to understand why we first need to discuss how people respond to goals and achievements.

While I strive to help clients accomplish ambitious professional goals, it's important to bear in mind that evolution has solved for the adaptation and survival of the species, not for our fulfillment as individuals. As a consequence, the fulfillment we enjoy upon achieving even our most significant goals is invariably fleeting, a process known as "hedonic adaptation." [1] We acclimate so readily to improvements in our life circumstances that we soon take them for granted, and they lose their potency as sources of fulfillment.

This isn't to say that the aspirations we imagine will be sources of fulfillment once achieved are meaningless illusions. They may matter a great deal, and some of them will have a profound impact on the material condition of our lives. But goal pursuit is not the result of a purely rational calculus. We pursue ambitious goals because we want to feel the flush of success, and we want to overcome our fears and anxieties, and we want these emotional states to last.

So it can be something of a cruel joke to accomplish an ambitious goal and realize that the human mind doesn't work this way. We do feel successful--but it's never as comprehensive or sustained as we thought it would be. We do feel at peace--but our fears and anxieties come creeping back with shocking speed. So what can we do about this state of affairs? There are no permanent solutions, but there are steps we can take to ease our discontent, and one of the most effective is what we might call "everyday transcendence."

A useful description of this concept can be found in the work of Martin Seligman and Christopher Peterson, two of the most prominent figures in the positive psychology movement. In the early 2000s they convened a diverse group of thinkers to document and categorize "the strengths of character that make the good life possible," and the result was the monumental volume Character Strengths and Virtues: A Handbook and Classification. [2]

The book identifies six universal virtues, i.e. "the core characteristics valued by moral philosophers and religious thinkers: wisdom, courage, humanity, justice, temperance, and transcendence," as well as 24 character strengths, "the psychological ingredients--processes or mechanisms--that define the virtues. Said another way, they are distinguishable routes to displaying one or another of the virtues." [3]

The virtue of transcendence encompasses five of these character strengths, all of which, Seligman and Peterson note, involve a form of connection:

The common theme running through these strengths of transcendence is that each allows individuals to forge a connection to the larger universe and thereby provide meaning to our lives... The prototype of this strength category is spirituality, variously defined but always referring to a belief in and commitment to the transcendent (non-material) aspects of life--whether they be called universal, ideal, sacred, or divine... Appreciation of beauty is a strength that connects someone directly to excellence. Gratitude connects someone directly to goodness. Hope connects someone directly to the dreamed-of future. Humor--admittedly the most controversially placed entry--connects someone directly to troubles and contradictions in a way that produces not terror or anger but pleasure. [4]

The sense of connection fostered through these activities will not switch off our drive to succeed or our attachment to ambitious goals--nor would we want it to. But the cultivation of "transcendence in everyday life" can help us maintain perspective. Drawing on the work of philosopher Simone Weil, theologian Eric Springsted has observed that human beings are subject to a distorting illusion: "It appears to us as if we were at the center of the world. We thus appear as terrifically important, and what else is of value can be ranked by its proximity to us." [5]

As I've written before, "We can readily grasp why evolution has selected for the center of the world illusion--viewing ourselves from this perspective, we typically put our subjective needs and desires above those of others, making our own biological success more likely." [6] But this only heightens our discontent not only when our achievements inevitably lose their savor, but also when we fall short of our aspirations, as all ambitious people must.

And this is precisely where transcendence can serve an eminently practical purpose. The connections we experience through spirituality, appreciation of beauty, gratitude, hope, and humor remind us that we are not the center of the world and that every other human being is facing challenges of their own, including many that make ours seem trivial. We may find support in unexpected places, perhaps in the mere knowledge that we're not alone. We may even take a step further and see ourselves as part of a larger whole and find comfort in community, or humanity, or the universe itself.

 

---

Spirituality: "Having coherent beliefs about the higher purpose and meaning of the universe; knowing where one fits within the larger scheme; having beliefs about the meaning of life that shape conduct and provide comfort." [7]

In the day-to-day trenches of adult life, there is actually no such thing as atheism. There is no such thing as not worshiping. Everybody worships. The only choice we get is what to worship. And a compelling reason for maybe choosing some sort of God or spiritual-type thing to worship--be it J.C. or Allah, be it Yahweh or the Wiccan mother-goddess or the Four Noble Truths or some infrangible set of ethical principles--is that pretty much anything else you worship will eat you alive.

~David Foster Wallace [8]

Appreciation of Beauty: "Noticing and appreciating beauty, excellence, and/or skilled performance in various domains of life, from nature to art to mathematics to science to everyday experience." [9]

A bee

staggers out

of the peony.

~Matsuo Bashō [10]

Gratitude: "Being aware of and thankful for the good things that happen; taking time to express thanks. [11]

I'm alive.	☐
I'm not in pain.	☐
I can think clearly.	☐
I can see, hear, and walk.	☐
I'm warm and well-nourished.	☐
I'm protected from the elements.	☐
I was born to parents who loved me.	☐
I've built a loving relationship with a partner.	☐
I feel known and cared for by a number of people.	☐
I derive a sense of meaning and purpose from my work.	☐

~Gratitude Checklist [12]

Hope: "Expecting the best in the future and working to achieve it; believing that a good future is something that can be brought about." [13]

While I certainly wasn’t in denial about the difficulties I might have to face, I knew that I had the capacity to face them. In short, I never lost hope, and not because I told myself a fairy tale that everything would be fine, but because I believed that no matter what happened I could cope with it. We sometimes confuse hope with unfounded optimism, but that's just a form of magical thinking, a sandcastle waiting for the tide to turn. True hope is more robust, rooted not in a wish that things will go our way, but in a confidence that we'll adapt even when they don't.

~On Pain and Hope [14]

Humor: "Liking to laugh and tease; bringing smiles to other people; seeing the light side; making (not necessarily telling) jokes." [15]

~Ilana Glazer and Abbi Jacobsen [16]

---

Footnotes

[1] For more on hedonic adaptation:

• The Myths of Happiness: What Should Make You Happy, but Doesn't, What Shouldn't Make You Happy, but Does (Sonja Lyubomirsky, 2014): "Human beings have the remarkable capacity to grow habituated or inured to most life changes... What is particularly fascinating about this phenomenon, however, is that it is most pronounced with respect to positive experiences. Indeed, it turns out that we are prone to take for granted pretty much everything positive that happens to us." [pages 18-19]

• The Laws of Emotion, pages 353-354 (Nico Frijda, American Psychologist, 1988): "One must, I think, posit a law of hedonic asymmetry, the law of asymmetrical adaptation to pleasure or pain: Pleasure is always contingent upon change and disappears with continuous satisfaction. Pain may persist under persisting adverse conditions... The law of hedonic asymmetry is a stern and bitter law. It seems almost a necessary one, considering its roots, which, theoretically, are so obvious. Emotions exist for the sake of signaling states of the world that have to be responded to or that no longer need response and action. Once the 'no more action needed' signal has sounded, the signaling system can be switched off; there is no further need for it. That the net quality of life, by consequence, tends to be negative is an unfortunate result. It shows the human mind to have been made not for happiness, but for instantiating the blind biological laws of survival."

• We Won't Be Happy WHEN. We Could Be Happy NOW.

• Pain, Suffering and Hedonic Adaptation

• Stop Trying to Be "Good Enough" by "Getting Better"

[2] Character Strengths and Virtues: A Handbook and Classification, page 4 (Christopher Peterson and Martin Seligman, 2004). For more on Peterson and Seligman's work and its application, see the VIA Survey of Character Strengths.

[3] Ibid, page 13.

[4] Ibid, page 519.

[5] "Will and Order: The Moral Self in Augustine's De Libero Arbitrio," page 92 (Eric O. Springsted, Augustinian Studies, Volume 29, Issue 2, 1998). This essay is also available as a chapter in Springsted's The Act of Faith: Christian Faith and the Moral Self (2015).

[6] We're Not the Center of the World (But We Think We Are)

[7] Character Strengths and Virtues, page 30.

[8] This Is Water (David Foster Wallace, 2005)

[9] Character Strengths and Virtues, page 30.

[10] Bashō was a Japanese poet and essayist in the 17th century, recognized during his lifetime as one of the greatest masters of haiku. I highly recommend his Narrow Road to the Interior, a book I discussed in my June 2022 newsletter. Here's a sample of his work.

[11] Character Strengths and Virtues, page 30.

[12] Gratitude Checklist

[13] Character Strengths and Virtues, page 30.

[14] On Pain and Hope

[15] Character Strengths and Virtues, page 30.

[16] Broad City, Episode 1 (written and created by Ilana Glazer and Abbi Jacobsen, 2009)

 

Photo by Chaval Brasil.

The Problem with Hot-Swapping (On Exec Transitions)

A CEO attempting to hot-swap an exec.*

A theme in my practice is the CEO who's concluded that one of their executives is under-performing and must be managed out. Sometimes the CEO holds out hope that the transition will be perfectly seamless, with no disruption to operations, no awkwardness, no mess. A client once called this "hot-swapping," referring to technical components that can be replaced without powering down the system. What would this look like in practice?

• The CEO conclusively determines that the incumbent exec is under-performing and incapable of improvement. There's no question that they need to be replaced.
• In the absence of an obvious successor, the CEO runs a confidential search. News of the search never leaks to the incumbent, and prospective candidates aren't dissuaded by the secrecy.
• After a successor is identified and closed, the news is broken to the incumbent. They take it with grace and accept the severance package, with no threats of legal action or negative publicity.
• The successor is introduced to the team, who welcome their new colleague and eagerly assist in the onboarding process.
• The team wishes the departing exec well, who reciprocates. All loose ends are tied up, and the departing exec has left clear and thorough documentation for their successor.

It's not that things never turn out this way, but it's rare. There are multiple points where this neat and tidy plan can go awry. There's not just one problem with hot-swapping--there are many. So if you're a leader in this position, what challenges are you facing, and what might you do about them?

Making the Decision

You know the incumbent exec is under-performing, but you may not know the extent to which their performance is a function of situational factors that would hamper anyone in the role rather than personal shortcomings. If the incumbent hasn't been provided with sufficient critical feedback, you may not know whether they're capable of improvement. And if you leap to conclusions prematurely, you'll not only squander potential talent, you'll also miss opportunities to advance your own growth and development as a leader.

As CEO it's your obligation to replace under-performing execs when necessary, and yet you don't want to create a climate of fear on your team. You also don't want to cycle through multiple execs because you keep setting them up for failure in an untenable position. So consider...

• Are there structural or contextual factors beyond the incumbent's control that you might address?
• Have you provided them with sufficient critical feedback on the factors that are within their control?
• If so, how have they responded? Are they open to learning? Or are they defensive?

Run a Search? Or Break the News?

If you decide to proceed with a transition, unless you have a successor at the ready you face an important choice. One option is to run a confidential search and break the news to the incumbent later in the process. This poses several risks: If the incumbent learns about the search second-hand, they may feel betrayed, and the relationship will be damaged, making an amicable transition more difficult. To maintain confidentiality you'll need to limit exposure to the team, which will prevent them from providing input and may deter some prospective candidates. And you won't get the benefit of any insights from the incumbent, who may be in a position to tell you why they struggled.

In some circumstances you may feel obligated to identify a successor before breaking the news. You may lack faith in the incumbent's ability to handle the news. You may worry that they'll become a source of disruption once informed. Or you may have concluded that their poor judgment renders their insights less useful. But an alternative to the above is to inform the incumbent that you'll be replacing them and then reach agreement on a transition plan. This isn't always preferable before you have a successor lined up. But in my experience CEOs over-estimate the risks of this option and under-estimate the risks of a hot-swap. The key is recognizing that there's no risk-free path. So consider...

• You don't owe an under-performing exec a permanent role, special treatment, or a debate. But how might you treat them with honesty, fairness, and dignity?
• If you're concerned about a break in continuity, what's behind your fear of the empty chair?

Breaking the News...Again

However you proceed, at some point various stakeholders will need to be informed about the transition. This includes your other employees, such as the departing exec's direct reports, their colleagues on the executive team, and potentially the entire company. It may also include Board members, customers, and other external partners. The key element is the explanatory narrative, the rationale for the transition that helps these parties make sense of what's happening and why. Here hot-swapping poses a dilemma, because an exec who's been summarily terminated is unlikely to be a willing partner in this process. Even if they're induced to play along, the transparency of the charade is usually evident, which breeds cynicism and mistrust.

It isn't always preferable to hear from the departing exec. In cases of malfeasance, toxic behavior, or gross incompetence it may be preferable or even necessary to simply announce their departure. But barring such factors, it's likely that all parties will benefit from some form of joint participation. The departing exec is afforded an opportunity to say their goodbyes, minimize the loss of face, and leave with dignity. Other stakeholders gain clarity and reassurance, which increases their trust in your ability to manage difficult situations.

While the participation of the departing exec can be advantageous, I'm not suggesting that you obtain it by misleading people. Explanatory narratives rarely include "the whole truth," yet they must be truthful to be plausible. In an effort to help the departing exec save face you need not pretend that their tenure was an unqualified success or that anyone else is at fault for their shortcomings. So consider...

• What factors will influence your ability to create a plausible, truthful shared narrative?
• What information should be shared as a part of that narrative, and what should not?
• If you haven't yet chosen a successor, what role, if any, do you want other employees to play in the hiring process?

The Transition

Once you've identified a successor, you now have to implement the actual transition. Some parameters will have been fixed in the process of making the decision and breaking the news, while others remain open. Here, too, attempting a hot-swap can be counter-productive in multiple ways. You can leave the under-performing exec in the role for too long, or they may quit abruptly before you're prepared to make a change. If you've managed the process effectively, you still retain a great deal of flexibility at this point--and if you haven't, you may be locked into a suboptimal course of action.

The transition shouldn't be too lengthy. The departing exec will rapidly lose power and influence, and it will be difficult for them to remain motivated to give best effort. Organizations reliably solve for optionality, which often leads to excessive transition periods. This is one of the primary rationales for hot-swapping in the first place--CEOs often over-estimate the risk of a gap in continuity, and under-estimate the risk of leaving an under-performing exec in place.

In the circumstances noted above--malfeasance, toxic behavior, gross incompetence--the transition will be brief. Even if a severance package is contractually obligated (or advised by counsel), there's no need to retain the outgoing exec's services. But in most cases there are benefits to a longer, more orderly process. The departing exec has time to wrap things up, and the incoming exec is able to do the same as they conclude their previous role. The team can prepare to help onboard the incoming exec and will be better positioned to do so with sufficient notice and clarity on the narrative. So consider...

• How will this transition--the departure and the arrival--affect your executive team?
• What does the incoming exec need to know about the existing culture?
• How might you benefit from their fresh perspective?

This is Hard. What Helps?

If you're tempted to hot-swap an exec and you're anything like my clients, it's not because you're callous, but because you're human. The process I've outlined here necessarily entails having an ongoing series of difficult, awkward, even fraught conversations. In some cases you may be understandably obligated to prioritize other efforts. If your company's in the midst of a crisis, you simply may not have the time to invest in managing an under-performer, and you're justified in taking the most expedient route.

But even when that's not the case, you may still be reluctant to lean in because those conversations will be hard work, and you may feel that you lack the skills to conduct them effectively. While I obviously recommend working with a coach, here are some relevant resources to help you manage, offer feedback, communicate, and hire and fire more effectively:

Management

• Mind the Gap (On Leading Senior Executives)
• Why Executives Derail (and What You Can Do About It)
• How to Have Better One-on-Ones

Feedback

• How to Deliver Critical Feedback
• Building a Feedback-Rich Culture
• Why Some Feedback Hurts (and What to Do About It)

Communication

• Take a Walk (Making Tough Conversations Easier)
• Learning to Yield (Navigating Tough Conversations)
• Setting the Table (Difficult Conversations)

Hiring

• Fear of the Empty Chair, Part 2 (On Hiring)
• Surfacing Defensiveness (Three Questions for Candidates)
• Daniel Kahneman on Conducting Better Interviews

Firing

• Fear of the Empty Chair, Part 1 (On Terminations)
• Merciful Exits (On Under-Performing Executives)
• On Firing a Senior Team Member

 

* If you don't get the reference from the movie still above, see this clip from Steven Spielberg's classic 1981 film, Raiders of the Lost Ark.

We Won't Be Happy WHEN. We Could Be Happy NOW.

The truly awful thing about success is that it's held up all those years as the thing that would make everything all right. And the only thing that makes things even slightly bearable is a friend who knows what you're talking about.

~Eve Babitz [1]

A theme in my work with senior leaders is the expectation that some future event will result in a profound surge in positive emotions and a sustained state of well-being, a process often described as "I'll be happy when..."

• I launch the company / sell the company / go public.
• I get the job / quit the job / don't need a job.
• I'm earning [$] / have saved [$$] / am worth [$$$].
• I buy the house / sell the house / pay off the mortgage.
• I write the book / host the podcast / teach the class.

You probably have your own versions of these scenarios--I certainly have mine--and I'd like you to consider the possibility that your happiness need not be contingent on some external event that may or may not occur. I'm not saying that these events are irrelevant, but I am suggesting, first, that happiness derived from external events is inevitably unsustainable, and, further, that we have a degree of agency and choice in determining our sense of well-being whether or not we achieve our aspirations.

Happiness Isn't Just "Happiness"

Much of what we know about the science of well-being derives from the positive psychology movement, a widespread effort beginning in the 1980s by researchers, clinicians, and educators in a range of fields to understand and promote mental wellness, in contrast to psychology and psychiatry's prior focus on mental illness. [1] Positive psychology has sometimes been dismissed as mere "happiness studies," but in part that's a function of the limitations of language. In English we use "happiness" to describe a broad range of emotional states, including superficial and fleeting pleasures.

But positive psychology is really about the study of what the ancient Greeks called eudaimonia, which is more accurately translated as "flourishing" or "fulfillment" and differs from mere pleasure. A foundational text in positive psychology is Aristotle's Nicomachean Ethics, one of the first Western guides to good living, which makes this distinction clear: "Happiness does not lie in amusement...but in virtuous activities." [2]

But I use the term happiness here rather than eudaimonia or flourishing or fulfillment for several reasons. Happiness lends itself to misinterpretation because it is so familiar and accessible, but those qualities also have their advantages. There's also a useful connection with unhappiness, another often-misunderstood word that serves as shorthand for a range of valuable emotional states. [3] Finally, I'm inspired to defend happiness from those who view it with suspicion.

Happiness is not the exclusive province of the naive, the childish, or the willfully ignorant. Pursuing happiness need not entail minimizing or discounting our pain and suffering, or viewing reality through rose-colored glasses. If anything, sustainable happiness requires us to let go of our illusions, starting with the idea that happiness is a function of external events.

What We Think Will Make Us Happy Won't (For Long)

I'm not suggesting that achieving our goals has no impact at all on happiness. It's clear that greater happiness is associated with a host of positive life outcomes--see below. But a reliable feature of human psychology is that our achievements rarely make us as happy as we think they will, and the happiness they generate never lasts as long as we want it to, a process known as "hedonic adaptation." Psychologist Sonja Lyubomirsky explains this dynamic by noting that emotionally significant events change our expectations by shifting our reference point, and that we habitually adapt to our new circumstances, thus diminishing their impact over time:

Human beings have the remarkable capacity to grow habituated or inured to most life changes... What is particularly fascinating about this phenomenon, however, is that it is most pronounced with respect to positive experiences. Indeed, it turns out that we are prone to take for granted pretty much everything positive that happens to us... We obtain an immediate boost of happiness from the improved situation, but the thrill only lasts a short time. Over the coming days, weeks, and months, we find our expectations ramping upward and we begin taking our new improved circumstances for granted. [4]

Like many confounding aspects of the human mind, hedonic adaptation is a feature for the species that as individuals we often experience as a bug. It's essential to remember that evolution has solved for the ability to pass on our genes by adapting to a changing environment, not for individual happiness. In this context, the late Dutch psychologist Nico Frijda described the unbalanced nature of hedonic adaptation as one of the "laws of emotion":

One must, I think, posit a law of hedonic asymmetry, the law of asymmetrical adaptation to pleasure or pain: Pleasure is always contingent upon change and disappears with continuous satisfaction. Pain may persist under persisting adverse conditions... The law of hedonic asymmetry is a stern and bitter law. It seems almost a necessary one, considering its roots, which, theoretically, are so obvious. Emotions exist for the sake of signaling states of the world that have to be responded to or that no longer need response and action. Once the "no more action needed" signal has sounded, the signaling system can be switched off; there is no further need for it. That the net quality of life, by consequence, tends to be negative is an unfortunate result. It shows the human mind to have been made not for happiness, but for instantiating the blind biological laws of survival. [5]

So our distant ancestors who took their accomplishments in stride and continued to exert themselves were more likely to adapt and survive relative to their contemporaries who felt a greater sense of fulfillment and took it easy in response. Multiply this over 200,000 years and some 10,000 human generations, and we arrive at the present, where I talk with leaders on a daily basis who are surprised when the happiness they expected to feel after a long-awaited accomplishment is neither as strong nor as sustainable as they'd hoped. As one client who toasted just such an achievement with a colleague noted, "The feeling was over before I'd even finished my glass of Champagne."

Yet Happiness Still Matters

Accepting the inevitability of hedonic adaptation doesn't mean that happiness isn't worth pursuing. As noted above, a host of positive life outcomes are associated with greater levels of happiness. For example, happier people earn more, and people who earn more are happier. [6] And happier people live longer, and people who live longer are happier. [7] The list goes on, as discussed by psychologists Shigehiro Oishi, Ed Diener and Richard Lucas:

Researchers have begun to systematically examine the consequences of happiness beyond simply feeling good. Lyubomirsky, King, and Diener (2005) conducted a meta-analysis of 225 papers on diverse life outcomes in the domains of work, love, and health and found that, in all three domains, happy people did better on average than did unhappy people. For instance, happy people receive higher job performance assessments from their supervisors (Cropanzano & Wright, 1999) and have more prestigious jobs (Roberts, Caspi,& Moffitt, 2003). In addition, happy people earn higher incomes than do unhappy people, even many years after the initial assessment (Diener, Nickerson, Lucas, & Sandvik, 2002). Happy people are more likely to get married than are their unhappy counterparts (Lucas, Clark, Georgellis, & Diener, 2003), and they are also more satisfied with their marriages (Ruvolo, 1998). [8]

Of course, the arrow of causality isn't clear. We know that there's an association between happiness and these positive life outcomes, but we don't know if people who attain these outcomes become happier as a result, or if happier people are more likely to attain these outcomes. I'm disinclined to wait until researchers can provide us with a definitive answer, largely because I don't believe they ever will. So even as we acknowledge the impact of hedonic adaptation and the complexity of the relationship between life outcomes and our sense of well-being, I believe the pursuit of happiness remains a laudable goal.

But Can Happiness Be Pursued?

For the late Viktor Frankl, an Austrian psychiatrist who can also be viewed as one of our greatest philosophers, the answer to this question was clearly "No":

Success, like happiness, cannot be pursued; it must ensue, and it only does so as the unintended side-effect of one's personal dedication to a cause greater than oneself or as the by-product of one's surrender to a person other than oneself. Happiness must happen, and the same holds for success: you have to let it happen by not caring about it. [9]

Frankl's work has had a profound influence on my approach to coaching and my own life [10], and while I don't entirely agree with his perspective here, I believe he makes an essential point. I don't think it's necessary to "not care" about happiness, or that it must be an "unintended side-effect" derived from adjacent pursuits. But Frankl's fundamental premise is consistent with positive psychology research, not in conflict with it.

One of the most important findings from positive psychology is also the most widely misunderstood: Our level of happiness appears to derive from a combination of life circumstances, a genetic set point, and intentional activities. This finding is often represented by a "pie chart" that is the cause of most of the misunderstanding, and for that reason I'm choosing not to reproduce it here, although I've discussed it at length elsewhere. [11] What's the nature of this confusion, and how might we better understand the implications of this research?

Life circumstances matter, but perhaps less than we think.

Our conventional narratives around happiness view it as primarily a function of life circumstances, such as income level, professional accomplishments, or relationship status. The research shows that such factors do play a meaningful role, but differences in life circumstances explain less of the variation in happiness across a population than we might expect, given these narratives. This is often misinterpreted as "life circumstances are irrelevant," or that they contribute to some predetermined percentage of an individual's happiness. But the research can't tell us anything about the impact of a particular life circumstance on any given individual.

This is where Frankl's guidance and positive psychology are in agreement: It's not possible to guarantee happiness by pursuing it through the achievement of a particular set of life circumstances. This is both because the extent to which any such circumstances contribute to happiness varies widely across individuals, and because hedonic adaptation ensures that the positive impact of these achievements will diminish over time.

Genes aren't destiny.

Genetic differences appear to explain a relatively large amount of the variation in happiness across a population, but, again, this doesn't mean that genes account for a certain amount of any given individual's happiness. The research does not--and cannot--provide such insights at the individual level. And while our genes are obviously fixed, our individual "set point" for happiness is not, due to the impact of formative experiences and our environment on which genes are expressed and how. [12]

Consider the role of genetics in height and weight. Our genes influence both aspects of our physiology, and across the population at large height is understood to be more heritable than weight, which is more heavily affected by environmental factors and individual behavior. Our set point for happiness also appears to be a heritable trait, albeit even less so than weight. [13] Genes influence but don't determine our weight, and the same appears to be true for our sense of well-being. We have agency.

Intentional activities matter, and perhaps more than we think.

Having agency doesn't mean that we can simply will ourselves into a state of well-being. While that may sound like a wonderful way to live, it would actually be quite disastrous, as the late social psychologist Daniel Wegner has noted:

It is clear that emotion should not be very susceptible to willful control. If we could turn off all our emotions, feel no pain, never laugh, not be gripped by fear or despair, stop being excited, and so on, we could easily end up dead... The priority of emotions over will is important for our survival because it allows our plans to be interrupted by the immediate pressures of reality. [14]

Here, too, Frankl's guidance is aligned with positive psychology research. We can't pursue happiness like a like a prize to be won in a contest. But we can intentionally engage in a set of activities that research shows are associated with increased well-being. And unlike large-scale life circumstances, which can be difficult to engineer and may take years to achieve, these intentional activities can be conducted on a daily basis, in many cases with ease. Again, the research can't tell us the extent to which any of these activities will affect the happiness of a given individual. But they explain more of the variance across individuals in a population than our conventional narratives about happiness would lead us to expect, suggesting that we have more agency and choice than we realize.

Creating the Conditions for Happiness

Frankl counsels us to "let happiness happen" through dedication to a cause or a deep connection with another person, and while I certainly agree that these are potential paths to well-being, there are others. Lyubomirsky's research identifies a set of intentional activities associated with increased happiness. These are by no means surefire strategies that will be equally effective for everyone, but by identifying the ones most likely to work for each of us as an individual, we may well create the conditions in which "happiness happens":

• Counting your blessings
• Cultivating optimism
• Avoiding overthinking and social comparison
• Practicing acts of kindness
• Nurturing relationships
• Doing more activities that truly engage you
• Replaying and savoring life’s joys
• Committing to your goals
• Developing strategies for coping
• Learning to forgive
• Practicing religion and spirituality
• Taking care of your body

Lybomirsky's work indicates that our responses to each of these activities will be contingent on a set of personalized factors. Activities that feel natural to us, are intrinsically enjoyable, and are aligned with our values and identities will have a greater impact on our happiness. Activities that we might pursue out of a sense of guilt or obligation will be less effective. (Lyubomirsky has developed a simple diagnostic tool, which I link to below, to help people choose the activities that will likely be the best fit. [15] She also defines each of these activities in greater detail in her first book. [16])

We Won't Be Happy WHEN. We Could Be Happy NOW.

I close by returning to the wisdom of the late writer Eve Babitz: "The truly awful thing about success is that it's held up all those years as the thing that would make everything all right. And the only thing that makes things even slightly bearable is a friend who knows what you're talking about." I see this in the lives of my clients on a regular basis, and I experience versions of it myself. We absorb the conventional narratives starting at an early age, and we come to believe that happiness will be a function of a set of objective, external accomplishments. I'll be happy when...

If we're sufficiently smart, dedicated, hard-working, and lucky, we begin to accomplish those goals and experience success. And while winning is better than losing in any number of ways, we ultimately learn that success does not, in fact, "make everything all right." As my client once said, "The feeling was over before I'd even finished my glass of Champagne." And even if the happiness we derive from any particular accomplishment lasts longer than that, our sense of well-being will inevitably fade as we come to take its benefits for granted. The hedonic treadmill never stops.

To be clear, I'm not suggesting that we should stop striving toward these goals. Winning beats losing, and there are many benefits to be derived from objective, external accomplishments. But we should not allow our happiness, our sense of well-being, our sense of self-worth, to hinge upon whether or not we attain these goals. I won't be happy WHEN.

And yet even as we continue our striving, we can exert a degree of agency and choice. We can't simply will ourselves to be happy, nor would we want that capability. But we can create the conditions in which we're more likely to experience eudaimonia. We can choose to focus on what we lack, or on what we have. In recent years I've become much more grateful for things I always took for granted--life, a relatively pain-free body, a clear-thinking mind--in large part because I know my time in this existence is finite. [17] I take seriously these tongue-in-cheek lines from outdoor writer Tom Stienstra:

The odds of being born, according to one legend, are the same as if you were to throw a life ring on the open ocean, and at that exact moment, a blind sea tortoise poked its head through the ring. The odds of dying, on the other hand, are 100 percent. [18]

This isn't a recipe for permanent bliss, and I'm as subject as anyone else to fears and anxieties, fits of pique and frustration. But I can also slow down, be present, and feel a sense of gratitude for this existence, and all that I possess as a function of simply being alive. That feeling won't last indefinitely, nor would I want it to--my yearnings and dissatisfactions not only keep me driving forward, they also make me human. But from time to time I remember: I can be happy NOW.

 

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Footnotes

[1] Slow Days, Fast Company (Eve Babitz, 1974)

[2] The most comprehensive volume on positive psychology I can recommend is Character Strengths and Virtues: A Handbook and Classification (Christopher Peterson and Martin Seligman, 2004), which the authors have called a "manual of the sanities," a counterpart to the Diagnostic and Statistical Manual which categorizes the various forms of mental illness. (This book and the research it represents forms the basis for the VIA Survey of Character Strengths.) Here are some other texts that I've found particularly useful in exploring positive psychology and related developments from fields such as neuroscience, in order of the date of publication:

• The Emotional Brain: The Mysterious Underpinnings of Emotional Life (Joseph LeDoux, 1998)
• Why We Feel: The Science of Human Emotions (Victor Johnston, 2000)
• Authentic Happiness: Using the New Positive Psychology to Realize Your Potential for Lasting Fulfillment (Martin Seligman, 2004)
• Descartes' Error: Emotion, Reason and the Human Brain (Antonio Damasio, 2005)
• The How of Happiness: A New Approach to Getting the Life You Want (Sonja Lyubomirsky, 2007)
  
  • Lyubomirsky's work is easily misinterpreted, and here's my attempt to clear up those misunderstandings: Understanding "The Pie Chart" in The How of Happiness
• Flow: The Psychology of Optimal Experience (Mihaly Csikszentmihalyi, 2008)
• Coaching with the Brain in Mind: Foundations for Practice (David Rock and Linda Page, 2009)
• Mindsight: The New Science of Personal Transformation (Daniel Siegel, 2010)
• The Antidote: Happiness for People Who Can't Stand Positive Thinking (Oliver Burkeman, 2012)
• The Emotional Life of Your Brain: How Its Unique Patterns Affect the Way You Think, Feel, and Live--and How You Can Change Them (Richard Davidson and Sharon Begley, 2012)
• Pursuing the Good Life: 100 Reflections on Positive Psychology (Christopher Peterson, 2013)
• Bouncing Back: Rewiring Your Brain for Maximum Resilience and Well-Being (Linda Graham, 2013)
• Social: Why Our Brains Are Wired to Connect (Matthew Lieberman, 2014)
• The Myths of Happiness: What Should Make You Happy, But Doesn't, What Shouldn't Make You Happy, But Does (Sonja Lyubomirsky, 2014)
• The Upside of Stress: Why Stress Is Good for You, and How to Get Good at It (Kelly McGonigal, 2015)
• Good Reasons for Bad Feelings: Insights from the Frontier of Evolutionary Psychiatry (Randolph Nesse, 2019)

[2] Nicomachean Ethics, Book X, Chapter 6 (Aristotle, circa 335-322 BC)

[3] For more on unhappiness, see The Art of Self-Coaching, Class 7: UNHAPPINESS

[4] The Myths of Happiness: What Should Make You Happy, but Doesn't, What Shouldn't Make You Happy, but Does, pages 18-19 (Sonja Lyubomirsky, 2014)

[5] The Laws of Emotion, pages 353-354 (Nico Frijda, American Psychologist, 1988)

[6] For more on the relationship between wealth and happiness, see Experienced well-being rises with income, even above $75,000 per year (Matthew Killingsworth, Proceedings of the National Academy of Sciences [PNAS], 2021) and Myths in the Science of Happiness and Directions for Future Research (Ed Diener, Chapter 24, pages 493-507 in The Science of Subjective Well-Being, Michael Eid and Randy Larson, editors, 2008).

[7] For more on the relationship between lifespan and happiness, see Subjective Well-being and Longevity: A Cotwin Control Study (Michael Sadler, Christopher Miller, Kaare Christensen and Matt McGue, National Institutes of Health, 2011).

[8] The Optimum Level of Well-Being: Can People Be Too Happy?, page 347 (Shigehiro Oishi, Ed Diener and Richard Lucas, Perspectives on Psychological Science, 2007)

[9] Man's Search for Meaning, pages xiv-xv, from the Preface to the 1992 edition (Viktor Frankl)

[10] Viktor Frankl on the Meaning of Suffering

[11] Understanding "The Pie Chart" in The How of Happiness

[12] Revisiting the Sustainable Happiness Model and Pie Chart: Can Happiness Be Successfully Pursued? (Kennon Sheldon and Sonja Lyubomirsky, The Journal of Positive Psychology, 2019)

[13] Genetics scholar and journalist Razib Khan provides a helpful explanation of heritability and genetic effects:

When someone tells you that height is 80% heritable, does that mean:

a) 80% of the reason you are the height you are is due to genes
b) 80% of the variation within the population on the trait of height is due to variation of the genes

The answer is of course b. Unfortunately in the 5 years I’ve been blogging the conception of heritability has been rather difficult to get across, and I regularly have to browbeat readers who conflate the term with a. That is, they assume that if I say that a trait is mostly heritable I mean that its development is mostly a function of genes. In reality not only is that false, it’s incoherent. Heritability is addressing the population level correlation between phenotypic variation and genotypic variation. In other words, how well can genetic variation work as a proxy for phenotypic variation? What proportion of the phenotypic variation can be accounted for by genotypic variation? (Genetic vs. heritable trait, Discover, 2007)

[14] White Bears and Other Unwanted Thoughts: Suppression, Obsession, and the Psychology of Mental Control, page 123 (Daniel Wegner, 2nd edition, 1994)

[15] Lyubomirsky Person-Fit Activity Diagnostic

[16] The How of Happiness: A New Approach to Getting the Life You Want (Sonja Lyubomirsky, 2007). While I value Lyubomirsky's work immensely, note that this book is the primary source of the "pie chart" that has been the cause of so much misunderstanding, which I seek to clear up here: Understanding "The Pie Chart" in The How of Happiness.

[17] Gratitude Checklist

[18] Cliff collapse shows it’s best to heed nature’s warnings (Tom Stienstra, SFGate, 2015)

 

Photo by Andrew E. Larsen.

Primates Wearing People Masks

Primates take...a mass of social information into account, and are so finely attuned to the moods and intentions of others, that it has been speculated that their high intelligence evolved in order to deal with an increasingly complex group life. This idea, know as the Social Intelligence Hypothesis, may also apply to the enormous brain expansion in our own lineage.

In this view, technical inventiveness is a secondary development: the evolution of primate intelligence started with the need to outsmart others, to detect deceptive tactics, to reach mutually advantageous compromises, and to foster social ties that advance one's career. Chimpanzees clearly excel in this domain. Their technical skills are inferior to ours, but I would hesitate to make such a claim with regard to their social skills.

~Frans de Waal, Chimpanzee Politics [1]

If you're a leader navigating the challenges of organizational life, it's useful to bear in mind that human beings are really just a special type of primate, and this has significant implications for how people behave in groups. We sometimes focus on our special qualities as a species--our capacity for logical reasoning, our facility with tools, our extensive use of symbols--and imagine that we have little in common with our evolutionary cousins. But then we encounter some curious behavior in a group setting, or we find ourselves perplexed by our own behavior in a group, and we may question just how evolved we really are.

This is where it's important to remember that humans are "primates wearing people masks." We put on clothing, adorn ourselves, and employ any number of symbolic artifacts, from wedding rings and Swiss watches to job titles and even our very names. But these accoutrements don't extinguish our underlying identity as primates. So what are the implications of all this for organizational life?

We're Social Animals

Most people are aware that our success as a species is in some way related to the size and complexity of the human brain, but we often mistakenly assume that our evolutionary advantage was derived from our enhanced cognitive abilities as individual problem-solvers. Instead, research suggests that the greatest benefit of a larger brain was our social intelligence--the ability to conceive of and operate within a vast network of interpersonal relationships. [2]

As a consequence, group experiences loom large in our mental landscape, and the social dynamics operating within any group have a powerful effect on its members. This is sometimes overlooked in contemporary Western culture, given our emphasis on the individual. [3] We readily acknowledge the impact of groups in extreme circumstances, such as when a crowd becomes an unruly mob [4], but we often miss the pervasive influence of groups in everyday life.

We're not herd animals, and another defining human characteristic is the ability to wrestle with and overcome our primal impulses, but we remain acutely sensitive to group dynamics and highly motivated to abide by prevailing norms. This can be dysfunctional at times, causing us to censor ourselves or ignore our better judgment. [5] But as with so many confounding aspects of human psychology, it's a feature for the species that occasionally acts like a bug.

So a starting point in organizational life is simply recognizing that people are are profoundly social and keenly sensitive to the impact of group experiences, for better and for worse. Groups aren't merely collections of individuals (although they are that), but can also take on a life of their own, exerting tremendous influence on individuals' judgment, perception, choices and behavior. Countless leaders have exploited this aspect of human psychology to others' disadvantage in dictatorships, cults, street gangs--and some companies. But group dynamics aren't necessarily nefarious, and thoughtful leaders can harness them in ethical ways. [6]

We're Emotional Animals

Psychologists disagree on whether the affective responses we observe in animals should truly be called "emotions" [7], but it's certainly the case that non-human primates display a wide range of such responses that are analogous on some level to human feelings and which serve as a form of "social information" that enables them to co-exist in groups, as the eminent biologist Frans de Waal notes above. The human experience of emotion may be substantially more complex than that of other primates, but in this sense there's a parallel: group experiences always have the potential to evoke emotions, and this "social information" plays a valuable role in organizational life.

Given the nature of coaching, I often talk with leaders about group experiences gone awry as the result of negative emotions. As a consequence it can be tempting to conclude that emotions are a "problem," and being called "emotional" generally carries a stigma in professional settings and suggests a lack of clear thinking. But this misjudges the nature of emotions and their function.

The idea that emotions are antagonistic to reasoning is a popular misconception, one that's exacerbated when we believe that emotions are some sort of base instinct. But neuroscientists have known for decades that emotion and logic work together in concert, and our feelings are vital inputs in reasoning. [8] Emotions allow us to process massive amounts of data very efficiently in a short period of time. In comparison, logical reasoning is a slow and resource-intensive process.

This doesn't mean our feelings are always reasonable or justified, of course. [9] They're a "quick and dirty signal," as noted by neuroscientist Joseph LeDoux. [10] But we rely on emotions to make sense of dynamic, data-rich environments--and that's exactly what occurs in any group setting. Other people are our most vital resource and, potentially, our gravest threat. It's of the utmost importance that we understand their thoughts and intentions, but explicit communication is often insufficient, particularly when we have concerns that our counterparts might lack sound judgment or be untrustworthy.

Emotions fill in those communication gaps by enabling us to rapidly perceive and interpret a host of factors--tone of voice, eye contact, facial expressions, body language--while simultaneously assessing what we know or can surmise about the other people involved. So we shouldn't view emotions as unerring guides to right action, and it's essential to observe and correct for any patterns in which emotions--both positive and negative--repeatedly result in mistaken conclusions or counterproductive behavior. But we should expect that groups will reliably trigger a host of feelings, and we should heighten our ability to sense, comprehend, articulate and express them in order to make most effective use of them.

Simultaneously, we must also expand our capacity for empathy, which can be defined as the ability to see the world from another person's perspective, understand their feelings, suspend our judgments about them, and communicate our understanding. [11] All this entails substantial effort, made easier when we remember that people in groups will reliably trigger emotions in each other, those feelings are potentially useful data (and occasionally misleading), and our "people masks" aren't always accurate indicators of who's feeling what and why.

We're Competitive Animals

As noted above by biologist de Waal, humans' social intelligence differs from that of other primates not in kind, but in degree. One of the most significant differences is our capacity to operate in relatively large social units, and it was the development of advanced social capabilities that enabled early humans to form groups much larger than their evolutionary rivals. Work by anthropologist Robin Dunbar sets this number at roughly 150 people, and a group of that size contains more than 10,000 one-on-one relationships. [12]

A group of 150 people is a powerful force, capable of securing resources and food, fighting off predators, and coping with environmental challenges. Our ability to operate within such large groups is what has enabled us to become the dominant species on the planet, but this advantage also carries some costs. As UCLA neuroscientist Matthew Lieberman has written, "The downside of larger groups is that there is increased competition for food and mating partners within the group. If you are on your own and you manage to find food, it's yours. The larger your group, the more likely it is that one of the others in your group will try to poach it." [13]

More fundamentally, survival depends on one's ability to remain a member of the group. Although bands of early humans came to dominate their environments, individuals were defenseless on their own, vulnerable to attack and the elements. Being left behind or expelled was a death sentence. As a result, we evolved to be acutely sensitive to our social standing and our relative status in the group. [14]

But evolution has solved for the survival of the species, not for our individual happiness or peace of mind. So this heightened awareness of our relative status keeps us collectively striving toward greater accomplishments, while simultaneously being the source of much personal misery. The key for a leader in organizational life is recognizing that our predisposition to social comparison will reliably trigger status contests and power struggles [15] on a near-constant basis, fueled by the unhappiness people feel when they perceive themselves to be "behind" in some way. [16]

Managing these competitive dynamics among employees is one of a leader's primary responsibilities. This is obvious when it comes to issues such as compensation [17] and titles. [18] But it also applies to more subtle forms of status, like the communication patterns within a group. [19] A common theme in my practice is the surprise many clients express at the range and persistence of the interpersonal competitions they're compelled to oversee. But in addition to managing these dynamics among others, we must also bear in mind that we are subject to them ourselves.

Leaders, particularly the CEOs who comprise the majority of my practice, are shielded from aspects of social comparison within their companies, in part because of the status and autonomy that they enjoy as a function of their role. But that very same role puts them in competition with other leaders outside their companies. Sometimes these contests are direct and explicit, as when two companies are going head-to-head in the same market. But more often such competition is symbolic, as when a leader compares their accomplishments to those of friends, classmates, role models, and even historic figures.

As a leader you're almost certainly making such comparisons, and they stoke your competitive fires. [20] Learning how to harness and manage this drive within yourself is one of your most important tasks. The challenge is that the good feelings that accompany success and the flush of victory are inevitably fleeting. And while you'll put certain concerns and anxieties behind you with each new level of accomplishment, new perceived needs will emerge. It's unlikely that you'll switch off this drive, nor is that necessarily desirable--it has undoubtedly contributed much to your ability to generate value for yourself and others. But it also has the potential to render you permanently dissatisfied, competing at ever-higher levels for ever-scarcer prizes. The key is coming to terms with your fundamental nature as a primate in competition with other primates, while determining for yourself what constitutes enough. [21]

 

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Footnotes

[1] Chimpanzee Politics: Power and Sex Among Apes, pages 38-39 (Frans de Waal, 1982, 2nd edition 2007)

[2] "Our social nature is not an accident of having a larger brain. Rather, the value of increasing our sociality is a major reason for why we evolved to have a larger brain." From Social: Why Our Brains Are Wired to Connect, page 33 (Matthew Lieberman, 2013).

[3] "No civilization, as far as I know, has given more scope to individual expression and initiative than the West. Non-Western civilizations have generally tended to subordinate the needs of the individual to those of the collective. Despite important exceptions, including Plato, Aristotle, Hobbes, Rousseau, and Hegel, the prominence of the individual is one of Western civilization’s distinguishing marks. This individualism, as Colin Morris puts it in The Discovery of the Individual, is 'an eccentricity among cultures.'" From A Brief Primer on Individualism in Western Intellectual History (Tamer Nashef, Areo, 2018).

[4] "In a group the individual is brought under conditions which allow him to throw off the repressions of his unconscious instinctual impulses. The apparently new characteristics which he then displays are in fact manifestations of this unconscious, in which all that is evil in the human mind is contained as a predisposition." From Group Psychology and the Analysis of the Ego , page 9 (Sigmund Freud, 1921).

[5] "We frequently fail to take action in an organizational setting because we fear that the actions we take may result in our separation from others, or...we are afraid of being tabbed as 'disloyal' or are afraid of being ostracized as 'non-team players.'" From The Abilene Paradox: The Management of Agreement, page 6 (Jerry Harvey, Organizational Dynamics, Summer 1974). Also see The Abilene Paradox and Other Meditations on Management (Jerry Harvey, 1988).

[6] I discuss how leaders can effectively leverage group dynamics in Loyalty Oaths and Kicks in the Ass.

[7] As a devoted dog owner, I believe that animals' affective responses can be characterized as emotions, but for more on the opposing point of view, see Lisa Feldman Barret's How Emotions Are Made: The Secret Life of the Brain, Chapter 12: Is a Growling Dog Angry? (2017).

[8] Antonio Damasio on Emotion and Reason

[9] The Tyranny of Feelings

[10] The Emotional Brain: The Mysterious Underpinnings of Emotional Life, page 163 (Joseph LeDoux, 1998)

[11] A Concept Analysis of Empathy (Theresa Wiseman, Journal of Advanced Nursing, 1996)

[12] Neocortex size as a constraint on group size in primates (Robin Dunbar, Journal of Human Evolution, 1992)

[13] Lieberman, page 34.

[14] In addition to Lieberman's Social, see the following:

• Good Reasons for Bad Feelings: Insights from the Frontier of Evolutionary Psychiatry (Randolph Nesse, 2020)
• The Myths of Happiness: What Should Make You Happy, but Doesn't, What Shouldn't Make You Happy, but Does (Sonja Lyubomirsky, 2014)
• Status Anxiety (Alain de Botton, 2004)

[15] Power Struggles Among Nice People

[16] Learning How to Fall Behind

[17] Culture, Compensation and Negotiation

[18] Very Cheap, Then Very Expensive (On Job Titles)

[19] Group Dynamics: Very Loud (and Very Quiet) People

[20] "Most of the time, it's impossible not to compare ourselves with others... Social comparisons arise naturally, automatically, and effortlessly." (Sonja Lyubomirsky, The Myths of Happiness: What Should Make You Happy, but Doesn't, What Shouldn't Make You Happy, but Does, pages 131-132, 2014)

[21] The Trap of Competition

 

Photo by Brecht Bug.