FalseChoice

Organizational MO for behavioral change generally goes like this:

 1.    Assemble team.

2.    Establish behavioral objectives.

3.    Determine attendant sanctions or rewards.

4.    Write policy.

5.    Inform the troops.

Often, these efforts are met with short-lived changes in behavior. In some cases, they can even produce the opposite of what is desired. Why?

If an organization’s informal culture and formal policies and systems aren’t aligned, the informal is going to win every time.

Findings in a study by HBS assistant professor, Susanna Gallani, which were published in a working paper and the subject of a recent Harvard Business Review article, support this. In this study conducted in a California hospital, professor Gallani wanted to determine which would produce more lasting increases in hand hygiene performance: rewards or peer pressure?

What were the findings? Monetary incentives generated a more pronounced improvement in the short term, but many participants dropped back to previous levels or even worse when the program ended. Peer pressure techniques, however, generated a change in behavior that persisted well beyond the termination of the initiative.

These findings echo decades of behavioral research demonstrating that culture trumps formal systems. “How things are really done around here" wins every time.  So why don’t more organizations pay attention to this? Rewards and punishments are easy. Culture is hard work.

So start the hard work of understanding your culture today. Ask tough questions of your organization. What behavior does your culture incentivize? What gets rewarded? What gets people promoted? What pressures do people feel? What group or department actually runs this place?

This process may reveal some uncomfortable facts about your organization, but this is the price you must pay—the feedstock of lasting, positive change.

It’s no secret that goal setting is important to achievement, both individually and organizationally. It turns out, though, that all goals are not created equally.

Research from the field of positive psychology shows that goal orientation—whether an individual focuses on pursuing desirable, positive outcomes or on avoiding undesirable, negative outcomes—has a profound effect on the quality someone’s life.

Put simply, are you focusing on wants or don’t wants? A practical example would be “spending more quality time with others” versus “avoiding being lonely.” Semantics, you say? Here are just a few of the outcomes this small difference in thinking and wording can have on your life.

Individuals who focus on avoidance goals:

Are less likely to attain their goals.

Feel a greater sense of pressure to achieve their goals.

Experience more psychological distress, particularly anxiety and depression.

Are less likely to be satisfied with their marriage.

Report lower levels of subjective well-being.

Suffer from increased symptoms of poor personal health.

Importantly, these outcomes can manifest themselves organizationally as well, for what is an organization but a collective of individuals striving toward common goals. You can look for signs of an organization’s orientation in its policies, systems, and culture. Are they focused on enabling positive outcomes, or are they oriented around defining what is not acceptable and deterring negative outcomes? If you are like most, you have experienced more of the latter.

Organizations should aspire to move beyond compliance to enabling and fostering the very best in their people. Start today. Look at your policies and rules. Do they reflect the true aspirations and deeply held beliefs of your organization, or do they represent the moral minimum of compliance?

Start the challenging work today of achieving the higher level of organizational self-awareness required to know the difference.

In a recent article in Harvard Business Review, Richard Stammer, senior executive vice president at Cabot Creamery Cooperative, describes how pursuing self-interest and supporting social issues has not only proven to not be a costly distraction but has given Cabot a sustainable competitive advantage in the marketplace.

According to Stammer, "B Corp certification encouraged more "whole-systems thinking" around our social and environmental practices, which led Cabot to develop even more robust customer and consumer programs, cut operating costs, and strengthen our brand reputation as a sustainability-minded company."

Research continues to accumulate showing that companies that sincerely integrate social issues into the core of their businesses are rewarded by increasingly conscious consumers and the financial markets. Here are just a few data points that support Stemmer's experience at Cabot:

Consumer goods without a commitment to sustainability grew less than 1%, while those that demonstrated a genuine commitment to social and environmental responsibility grew more than 4%.

Companies with strong environmental performance benefit from lower cost of debt by 40-45 basis points versus their peers.

Sustainable practices produce "above average" stock performance in the financial markets: 650 million in incremental market capitalization per company, on average.

Better management of resources can lead to significant cost reductions. Between 2004 and 2013, GE reduced its greenhouse gas emissions by 32 percent compared to its 2004 baseline and water use by 45 percent versus its 2006 baseline, resulting in $300 million in savings.

Importantly, the financial performance gap between sustainable companies and their non-sustainable peers is increasing.

Many people still erroneously believe that companies that are socially responsible are at a competitive disadvantage to those that ethically cut corners. Fortunately for society, these beliefs are largely incorrect.

Here are three examples of a large and growing body of research on this issue:

Kim Cameron, a researcher on organizational virtuousness, and others have found that organizations that promote virtuousness—defined as the attributes of individuals when they are at their best—not only increase profitability, but other performance indicators, as well, such as quality, customer retention, reduced employee turnover, and innovation.[1]

The companies of CEOs who rated high on four moral principles-- integrity, responsibility, forgiveness, and compassion—had an average return on assets of 9.35 versus 1.93 for those with low ratings.[2]

In their book, Firms of endearment: How world-class companies profit from passion and purpose, researchers Rajendra S. Sisodia, David B. Wolfe and Jagdish N. Sheth, define FOEs as companies that act as agents for the greater good. Over the 15-year period studied, FOE companies outperformed the S&P 500 by 14 to 1 and Good to Great companies by 6 to 1.[3]

Doing good is no longer a "should;" it's a "must."

Brad Weaver Chicago, IL LinkedIn: www.linkedin.com/in/brad-weaver

[1] Cameron, K., Bright, D., & Caza, A. (2004), “Exploring Relationships Between Organizational Virtuousness and Performance”, American Behavioral Scientist: pp. 1-24.

[2] “Leadership: Measuring the Return on Character” (2015), Harvard Business Review, (April) pp. 20-21.

We are reminded to give thanks and be grateful for what we have on Thanksgiving. Most of us, however, take a few minutes to think about the things we are grateful for, eat our turkey, then go on with our busy lives. Turns out, though, that two decades of research on practicing gratitude shows that it is a good idea the other 364 days, both individually and organizationally. In their book, The Power of Thanks: How Social Recognition Empowers Employees and Creates a Best Place to Work, Eric Mosley and Derek Irvine provide us with 14 proven benefits of gratitude. The bottom line: try to find a way every day to express gratitude for something—anything. You and your organization will benefit greatly.

1. Grateful people achieve more

People who practice gratitude show significant increases in attention, determination, energy, academic achievement, and even athletic achievement.

2. Grateful people are better corporate citizens

Studies show a positive relationship between gratitude and corporate social responsibility in corporate employees.

3. Grateful people are less likely to burn out

Gratitude provides employees a significant buffer against the stress and burnout.

4. Grateful people pay it forward

Expressing thanks doubles the likelihood that the benefactor will repeat the behavior and people who have been helped are more likely to help someone else.

5. Grateful people are more morally alert

Gratitude encourages prosocial behavior and discourages disruptive behavior.

6. Giving creates a positive feedback loop

A 2009 study at Harvard Business School found: “Happier people give more and giving makes people happier, such that happiness and giving may operate in a positive feedback loop (with happier people giving more, getting happier, and giving even more).”

7. Opportunity to give increases commitment to a company

A Wharton study found that when employees contributed to an employee beneficiary fund, it was the donors, not the beneficiaries, that had the greater increase in their commitment to the company.

8. Givers are more engaged

Employees who are empowered to give recognition to peers were more than twice as engaged as those who were not.

9. Gratefulness increases emotional well-being

Gratitude leads to higher levels of social support and lower levels of stress and depression.

10. Grateful people get along better with others

People who express gratitude are more agreeable, extroverted, and conscientious—and less neurotic.

11. Grateful people are more resilient to trauma

Gratitude helps people maintain emotional well-being after traumatic life experiences.

12. Grateful people sleep better

Studies show that higher levels of gratitude were associated with better sleep with all of its attendant benefits.

13. Grateful people are physically healthier

Gratitude promotes better health, is positively correlated with increased exercise, strengthens the immune system, increases resistance to pain, lowers blood pressure, and reduces symptoms of illness.

14. Grateful people are less depressed

Studies at three major universities found that people who wrote and delivered a letter of gratitude to someone who had been kind to them, but never properly thanked, showed a boost in happiness and a decrease in depression.

Entrepreneur and motivational speaker Jim Rohn said that we are the average of the five people we spend the most time with.

All successful people understand this to be true. We have to surround ourselves with talented, intelligent, and driven people to accomplish significant things. Whether we like it or not, our behavior is significantly influenced by the people we surround ourselves with, both in our personal lives and professional.

Decades of behavioral research supports Mr. Rohn’s observations and intuition. For example, the people we surround ourselves with will largely determine if we are overweight, who we vote for, how much money we make, and our choice of a partner.[1]

Most, however, fail to make this connection to our ethical lives. Somewhat disturbingly, the people you spend the most time with are also going to significantly influence our willingness to cheat on a test, commit a crime, and even inflict physical harm on another person, such as torture.[2][3][4] Choose your friends and coworkers wisely.

The implications of this mutually-reinforcing network effect for ethical behavior in your organization are profound. Compliance and controls alone are ineffective at fostering ethical behavior unless the effects of these cognitive biases are integrated into your ethics programs. Managers and employees must be made aware of these influences through formal training programs and open discussions on a daily basis, synthesized into your company’s culture, and accounted for in your organization’s policies and practices, such as hiring procedures.

Brad Weaver Chicago, IL LinkedIn: www.linkedin.com/in/brad-weaver

[1] Christakis, N. & Fowler, J. (2009), Connected: The Surprising Power of Our Social Networks and How They Shape Our Lives, Little Brown and Company, New York, NY.

[2]Ibid.

[3] Gino, F., Ayal, S., & Ariely, D. (2009), “Contagion and Differentiation in Unethical Behavior”, Psychological Science, 20: pp. 393-398.

Can an organization or individual be fiercely competitive and act ethically? Is it possible to create superior profitability and social benefit? Not only is it possible, it is a strategic and competitive imperative.

We started False Choice because the conventionally understood trade-off between profitability and social responsibility is just that—a false choice.

Fortunately, there is an ever-growing body of research and practical “field” experience to support this notion, which we will introduce to you here. Drawing from the latest research and thinking from a wide range of fields such Positive Organizational Behavior, Positive Organizational Ethics, Conscious Capitalism, and Shared Value, our goal is to provide you with inspiration and practical ideas you can implement in your organizations and personal lives today. Even small changes can pay big dividends. We will also take a look at current news and developments in the world through this "false choice" lens.

To get you started, I’ve included a link to an article that appeared in Harvard Business Review about the connection between CEO character traits and financial performance:  https://hbr.org/2015/04/measuring-the-return-on-character.

The study by KRW International, a consultancy, detailed in this article demonstrates a direct link between virtuous CEO character traits and measurable financial outperformance. The researchers found that CEOs whose employees gave them high rankings for character had an average return on assets of 9.35% versus 1.93% for those with low character traits—almost 5x outperformance. You can do well by doing good.

Don’t just read this and say, “that’s interesting.” Start a discussion in your organization. Circulate the article in an email or at the next all-hands meeting. Ask how your organization is recruiting for and fostering these traits in its people.