The Effects of Positive Psychology on Organizational Success

Intent is a powerful mediator of outcomes.  An organization’s mission, vision, and values set the direction of future success simply by codifying the organization’s intent.  This intent flows through every aspect of the organization, affecting the choices people make, and the outcomes of those actions.  (Read Simon Sinek’s “Start with Why“).

For instance, suppose you start a company to develop a better mousetrap.  You might start this company simply because we all know that if you build a better mousetrap, the world will beat a path to your door and generate huge profits.  On the other hand, you might start your company because you have a passion for eradicating the scourge of mice and their negative effects on human society.   These are both valid rationales for starting a new company and developing a better mousetrap.  If you succeed in building a better mousetrap, both intents are likely to be successful, at least initially.  Intent, however, will begin to show over time.  The company whose intent is purely profit driven will make choices supporting that mission, while the company whose intent is based on a passion for improving the world through mouse eradication will make different choices supporting that mission.  These choices affect the long-term viability of the business.

Not only will these differences in intent affect things like pricing, marketing, customer experience, and other traditional business decisions, they will also affect the people in the organization.  A positive intent keeps employees engaged and helps them grow as people and employees.  These are the effects of positive psychology and should not be discounted when an organiation considers why they do what they do.

Understanding Positive Psychology

Positive psychology, in short, is simply a focus to understand and investigate the positive capabilities and achievements of the individual, community/organization and society as a whole (Fredrickson, 2001; Quinn, Dutton, & Cameron, 2003; Seligman & Csikszentmihalyi, 2000; Sheldon & King, 2001).  Seligman and Csikszentmihalyi (2000), suggest that, prior to WW II, psychology was normally associated with three purposes: treating mental illness, encouraging the development and growth of all people, and the identification and development of exceptional capabilities. Since WW II, however, the focus of psychology has been solely on mental illness, deficit and pathology.  The other, more positive implications of psychology withered. While positive psychology is not intended to supplant existing research and theories on mental illness (Sheldon & King, 2001), it suggests that the typical deficit models practiced for over half a decade fail to adequately describe the realities of the population as a whole, as well as be a reminder of the original tenets of psychology foundation to include the good, the exceptional and the positive.

This positive approach has spawned any number of new approaches to the understanding of human development and organizational development focused on examining the positive instead of the negative.  For instance, towards the understanding of human development, theories have evolved to demonstrate that positive emotions or moments not only broaden an individuals perceptions of the world, but also build capabilities and personal resources which help them mitigate the effects of negative experiences (Fredrickson & Losada, 2005).  Additional research suggests this broadening capability is not solely constrained to mental perceptions, but to physiological perceptions as well like visual attention and field of view (Fredrickson, 2013). The resources accumulated from positive moments may not be abstract resources related to resilience and adaptability, but more discrete resources like attention to detail and capacity to learn.

Towards understanding organizational development, positive psychological approaches have generated new ways at looking at the process of creating exceptional organizations, not by fixing what is wrong, but by amplifying what is right.  Appreciative Inquiry is a model for change practices making the assumption that all organizations have an essentially positive capability to succeed.  By examining the past moments of peak performance, achievement and success, the organization can create a vision of the future based on those positive aspects (Quinn et al., 2003).

The common element in all of these ideas is that there is benefit in focusing on what is good instead of what is bad.  Focusing on the positive aspects creates a upward spiral of reinforcement (Quinn et al., 2003) and is a self-perpetuating process under normal circumstances (Fredrickson, 2013).  The corollary is that a focus on the bad would promote a downward, self-perpetuating cycle.  Thus, attempting to make change by focusing on the negative aspects of  what not to do, while one appropriate response to challenges, creates a self-defeating process promoting blame, low self-worth and incompetence.  Positive psychology suggests that focusing on what to do, on what was successful, is a better alternative as it creates a self-fulfilling cycle promoting excellence, success and achievement.

Brining it back to Intent

One could argue that a profit intent is not inherently bad; without making money, companies cannot sustain themselves.  Yet, without a positive focus beyond profit, without an intent that can inspire and create positive feelings, the organization is likely to diminish in productivity, innovation, and, ultimately, profit.  The concepts of positive psychology push us to appreciate a focus on the existence of the extraordinary and exceptional instead of simply on what is broken and dysfunctional (Seligman & Csikszentmihalyi, 2000).  It is an attempt to look at the positive potential of the future instead of simply examining the future as an attempt to overcome deficit.  It tells us that our intent has significant influence on our long-term outcomes.

References

Fredrickson, B. L. (2001). The role of positive emotions in positive psychology. The broaden-and-build theory of positive emotions. The American psychologist, 56(3), 218–226.

Fredrickson, B. L. (2013). Updated thinking on positivity ratios. The American psychologist, 68(9), 814–22. doi:10.1037/a0033584

Fredrickson, B. L., & Losada, M. F. (2005). Positive affect and the complex dynamics of human flourishing. The American psychologist, 60(7), 678–86. doi:10.1037/0003-066X.60.7.678

Quinn, R. E., Dutton, J. E., & Cameron, K. S. (2003). Positive Organizational Scholarship : Foundations of a New Discipline. San Francisco, CA: Berrett-Koehler. Retrieved from http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=nlebk&AN=260674&site=ehost-live&scope=site

Seligman, M. E. P., & Csikszentmihalyi, M. (2000). Positive psychology: An introduction. American Psychologist, 55(1), 5–14. doi:10.1037//0003-066X.55.1.5

Sheldon, K. M., & King, L. (2001). Why positive psychology is necessary. The American psychologist, 56(3), 216–7. doi:10.1037/0003-066X.56.3.216

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The Three “People” Needed for Successful Innovation

Despite decades of research into the constructs of innovation, few practical sources of sustained innovation have proven causal to organizational success.  A cursory examination of innovation theory fails to provide concrete evidence that innovation, in itself, is key to long-term success; most innovation theories rely on post-hoc analysis of firm performance focused on successes, rather than failures (Buisson & Silberzahn, 2010; Burke, van Stel, & Thurik, 2010).  The term innovation is just as difficult to articulate being equally evaluated through ex post selection of successful innovation rather than innovative efforts in general.  While innovation may not guarantee firm success, it is clear that organizations failing to adopt to the pace of the modern, global marketplace will flounder (Reeves & Deimler, 2011); the chances of success increase dramatically if organizations are positioned to innovate and change in response.  As such, understanding the models, systems, and approaches improving an organization’s ability to innovate are increasingly important even if they are not proven to promote long-term success, or even successful innovation. This is the basis of the Innovation Strategy Framework, which attempts to combine multiple theories of innovation into a single construct.

InnovationModel

Figure 1. The Innovation Strategy Framework

Today, we are going to look at the importance of people to innovation strategy, what those people do, where they come from, and why they are important to innovation.

Human capital, or the knowledge, skills, abilities and other characteristics (KSAO’s) of the people associated with the organization are the source of innovation.  Human capital is a critical starting point and requirement for the development of organizational knowledge and innovation capabilities (Choong, 2008; Ployhart, Nyberg, Reilly, & Maltarich, 2014).  This is not just the employees of the organization, but also the knowledge resources of partners and other collaborators.  The greater the diversity and density of these knowledge resources, the greater the potential for organizations to achieve innovative outcomes (Dell’Era & Verganti, 2010; Phelps, 2010).   Clearly, the depth, breadth, and quality of the people in the organization are critical dimensions of innovation capability.

The three main groups of people necessary for successful, serial innovation capability are: the people with innovation ideas, the people nurturing and developing ideas into successful innovation, and the organizational leadership fostering innovation.

People as the Source of Ideation

The largest group of people involved with innovation is the infinite sources of innovation ideas (left side of Figure 1).  This group of people, including customers, partners, employees, and others, are the heterogeneous sources of knowledge providing innovative ideas and solutions.  These resources are both internal and external, creating the depth, breadth, and diversity of knowledge to supply the organization with innovative fuel (Dell’Era & Verganti, 2010; Phelps, 2010; Rothaermel & Hess, 2010).  The composition of an organization’s knowledge ecosystem (employees, partners, customers, and others) significantly contributes to the ability of an organization to successfully innovate (Dell’Era & Verganti, 2010; Engel & Del-Palacio, 2011; Kim & Ployhart, 2014; Phelps, 2010; Rothaermel & Hess, 2010; Sandmeier, Morrison, & Gassmann, 2010; Wilson & Doz, 2011).

Interestingly, while this is the largest group of people directly involved with innovation efforts, they are not necessarily the most important.  Yet, many organizations embark on innovation efforts by encouraging their employees to “be more creative”, or “be innovative”.   To the contrary, research suggests most organizations have far more innovation ideas than they can possible deal with; the problem is selecting and developing ideas into real-world solutions.  While organizations need to encourage innovation and creativity, making it the primary focus of innovation efforts will fail more often than succeed. The belief that innovation stems from the rare, perfect idea is a pervasive myth.

Ideation is essential, but completely useless without the other people necessary for innovation success.

People Strategically Selecting and Developing Innovation

On the right side of Figure 1, people in the strategic domains represent the knowledge resources responsible for taking innovative ideas and developing them in alignment with organizational goals and strategy (Ramírez, Roodhart, & Manders, 2011). This group of people is arguably the most important innovation resource in the organization as they are often able to achieve innovation in the absence of well-defined innovation strategies or formally defined roles to direct innovation.  Unfortunately, in the absence of a strategic innovation practices, innovation success is less than assured, becoming the victim of conflicting responsibilities.

Instead of relying on happenstance, organizations should create specific job roles whose entire function is to surface, develop, and promote innovation ideas specific to one strategic organizational goal.  While the strategic goals themselves may change from year-to-year, or be longer term, these strategic innovation specialists are charged with all aspects of taking ideas aligned with their strategic focus from ideation all the way through market release.  These individuals are like innovation product managers, with a portfolio of potential innovation ideas.

The caveat here is that each individual (or team) should be focused solely on one strategic organizational goal, and must have the appropriate resources (outside of existing product management) to develop and mature their innovation portfolio, which leads us to the last group of people necessary for succesful innovation.

Innovation Leadership

Developing an innovation capability within an organization takes substantial effort (Barreto, 2010; Wilson & Doz, 2011).  Accumulating the vast knowledge resources to drive innovation and implementing the systems and processes to integrate knowledge into innovative execution takes significant resources, will, and commitment.   At the top of Figure 1, innovation leadership develops knowledge networks, provides resources to create innovation processes, and the creation, funding, and direction of strategic domain groups (Brown & Anthony, 2011; Engel & Del-Palacio, 2011; Ramírez et al., 2011; Rufat-Latre, Muller, & Jones, 2010).  Without dramatic changes in the way organizations are led, innovation cannot consistently take root (Hamel, 2009).

Innovative management strategies incorporate novel ways of interacting with customers, driving cultures of trust, and opening the organization to honest debate (Abele, 2011; Capozzi, Dye, & Howe, 2008; McGrath, 2011).  McGrath argues fear of failure inhibits organizations from achieving great innovation and an acceptance of potential failure can help organizations use failure to achieve success. Capozzi, Dye and Howe report the benefits of challenging the status quo of the organization often presents a springboard to innovation.  In much the same way reducing the fear of failure helps to spark responsible risk taking, reducing the fear of challenging organizational orthodoxies helps ensure that new ideas are not discarded simply because they are counter to the way things are currently done.  These cultural changes are more difficult than getting the right people or developing systems and processes; they require commitment at the highest levels of the organization.  Without leadership demonstrating this commitment to innovative practices, organizations are unlikely to truly capture their innovative capabilities.

Bridging the Divide

Having all the right people is critical to achieving long-term innovation capability.  Organizations already have an embarrassment of riches in terms of innovative, creative ideas, but without the appropriate people committed and dedicated to their development, innovation success is only a matter of chance.  It happens all the time, but rarely more than once or twice within the same organization.  Only the organizations designed and aligned to foster innovation and committed to the process achieve long-term, repeatable innovation success (think Shell, P&G, or 3M).  Simply telling your employees to be more innovative or offering a suggestion box is not sufficient.

Even having the right people is not enough.  Without the processes governing how these people work together to create successful innovation, success is possible but not guaranteed.  In the next Innovation Playbook, we will look at how to manage the innovation process for success. 

 

References

Abele, J. (2011). Bringing minds together. Harvard Business Review, 89(7–8). Retrieved from https://hbr.org/

Barreto, I. (2010). Dynamic capabilities: A review of past research and an agenda for the future. Journal of Management, 36(1), 256–280. http://doi.org/10.1177/0149206309350776

Brown, B., & Anthony, S. D. (2011). How P&G tripled its innovation success rate. Harvard Business Review, 89(6), 64–72. Retrieved from http://hbr.org/

Buisson, B., & Silberzahn, P. (2010). Blue ocean or fast-second innovation? A four-breakthrough model to explain successful market domination. International Journal of Innovation Management, 14(3), 359–378. http://doi.org/10.1142/S1363919610002684

Burke, A., van Stel, A., & Thurik, R. (2010). Blue ocean vs. five forces. Harvard Business Review, 88(5), 28. Retrieved from http://hbr.org/

Capozzi, M. M., Dye, R., & Howe, A. (2008). Sparking creativity in teams: An executive’s guide. McKinsey & Company, (April 2011), 1–8. Retrieved from http://www.mckinsey.com

Choong, K. K. (2008). Intellectual capital: definitions, categorization and reporting models. Journal of Intellectual Capital, 9(4), 609–638. http://doi.org/10.1108/14691930810913186

Dell’Era, C., & Verganti, R. (2010). Collaborative strategies in design-intensive industries: Knowledge diversity and innovation. Long Range Planning, 43(1), 123–141. http://doi.org/10.1016/j.lrp.2009.10.006

Engel, J. S., & Del-Palacio, I. (2011). Global clusters of innovation: The case of Israel and Silicon Valley. California Management Review, 53(2), 27–49. http://doi.org/10.1525/cmr.2011.53.2.27

Kim, Y., & Ployhart, R. E. (2014). The effects of staffing and training on firm productivity and profit growth before, during, and after the Great Recession. The Journal of Applied Psychology, 99(3), 361–89. http://doi.org/10.1037/a0035408

McGrath, R. G. (2011). Failing by design. Harvard Business Review, 89(4), 76–83. Retrieved from http://hbr.org/

 

Phelps, C. C. (2010). A longitudinal study of the influence of alliance network structure and composition on firm exploratory innovation. Academy of Management Journal, 53(4), 890–913. http://doi.org/10.5465/amj.2010.52814627

Ployhart, R. E., Nyberg, A. J., Reilly, G., & Maltarich, M. a. (2014). Human capital Is dead; Long live human capital resources! Journal of Management, 40(2), 371–398. http://doi.org/10.1177/0149206313512152

Ramírez, R., Roodhart, L., & Manders, W. (2011). How Shell’s domains link innovation and strategy. Long Range Planning, 44(4), 250–270. http://doi.org/10.1016/j.lrp.2011.04.003

Reeves, M., & Deimler, M. (2011). Adaptability: The new competitive advantage. Harvard Business Review, 89(7/8), 134–141. Retrieved from http://hbr.org/

Rufat-Latre, J., Muller, A., & Jones, D. (2010). Delivering on the promise of open innovation. Strategy & Leadership, 38(6), 23–28. http://doi.org/10.1108/10878571011088032

Rothaermel, F. T., & Hess, A. M. (2010). Innovation strategies combined. MIT Sloan Management Review, 51(3), 13–15. Retrieved from http://sloanreview.mit.edu/

Sandmeier, P., Morrison, P. D., & Gassmann, O. (2010). Integrating customers in product innovation: Lessons from industrial development contractors and in-house contractors in rapidly changing customer markets. Creativity and Innovation Management, 19(2), 89–106. http://doi.org/10.1111/j.1467-8691.2010.00555.x

 

Wilson, K., & Doz, Y. L. (2011). Agile innovation: A footprint balancing distance and immersion. California Management Review, 53(2), 6–26. http://doi.org/10.1525/cmr.2011.53.2.6

The Versatilist Vs. the Peter Principle

It is surprising how few are familiar with the Peter Principle.  This is most disturbing in the areas of business and organizational psychology as it speaks directly to the source of innumerable challenges for organizational success.  It should be a risk factor in talent management, succession planning, and organizational compensation systems.  Most of all, organizations should look at ways to circumvent this process; most notably, organizations should consider how Verstalists can thwart the Peter Principle.

The Peter Principle

“In a Hierarchy Every Employee Tends to Rise to His [Her] Level of Incompetence” (Peter & Hull, 1969, p. 25).

In action, the Peter Principle states a simple inevitability.  If you are good at your job, you get promoted.  If you are good at the new job, you get promoted again.  This continues until you take on a job for which you are not well suited; i.e. incompetent.  Having reached your level of incompetence, you no longer get promoted, but stay within the job you are least capable of performing well.   Taken to its ultimate conclusion, organizations eventually become dominated by leaders with the least capability to do their job.

Although published originally in 1969 as a tongue-in-cheek exposition on incompetence within human organizations, and supported by fictitious research, the Peter Principle continues to be debated amongst practitioners and academics.  It has been lambasted as unscientific (something it never purported to be) and crass overgeneralization, as well as an insightful source of legitimate inquiry.  The staying power of the Peter Principle maybe that its simplicity and succinctness, aligns with human experience and explains why so many organizations manage to do such stupid things.

The Value of the Peter Principle Perspective

Despite the limited academic basis for the Peter Principle, it manages to highlight a particular problem – why do we use promotion as a means of reward for competent performance (Fairburn & Malcomson, 2001)?  Doing so fails to consider two very fundamental truths: competence is domain specific, and management is a very specific skill. These fundamental truths conflict with the way most organizations reward and promote people.  Failure to acknowledge these promotes inefficiency, turmoil, and perpetuates the validity of the Peter Principle.

First, few organizations design their job families to reward and promote people for simply getting better and more efficient at the job they do.  Moving from job-specialist level 1, to job-specialist level 2, often requires doing different things, instead of doing the same things better.  We reward people, not for being good at their job, but for taking on new roles they have never done before, not proven they are capable of, and promoting constant change rather than long-term competence.   As soon as people demonstrate competence, we move them.

Second, organizations fail to realize management and leadership skills as a unique job all to themselves.  Being a good engineer says nothing about your ability to be a good engineering manager; however, good leadership skills can be a boon regardless of the function or industry. While understanding the jobs people need to perform is beneficial, leaders do not have to be competent in all the job functions they lead.  Promoting people who are competent in their job but shown no competence for leadership to positions of leadership, once again, promotes inefficiency and disruption.  Not only do you lose a competent performer in their prior role, but you may very well promote incompetent leadership.

Versatilists to the Rescue

Versatilists rarely run afoul of the Peter Principle.  First, versatilists are rarely promoted very high within most organizations, because they do not stay within any specific domain very long (something HR departments seem to think predicts success).  Second, because versatilists are deeply knowledgeable about many domains, they are keenly aware of what they are, and more importantly are not, capable of doing.  As such, versatilists without the desire or capability to lead will not pursue those opportunities.  Versatilists could be the savior for organizations looking to thwart the Peter Principle, but it will require HR to change their perspective on talent acquisition and development.

In terms of talent acquisition, HR and recruiting need to look beyond the experience requirements they believe are required for a job, and begin looking at the actual skills.  Far too often, organizations are looking for years of single domain experience (like engineering and software development) for roles that don’t necessarily require that experience (like leading engineering and software development teams).   The skills themselves are more important than the domain in which they were developed.   This is important for strategic innovation in particular, where having new perspectives brought to the job can be highly valuable.  A versatilists with leadership capability can quickly adapt to new industries and environments, while also bringing a host of new skills.

HR/Recruiting should also consider the quantity and quality of performance, rather than simply the length of performance, when looking at promotions or new hires.  Comparing two candidates for a position, a candidate who has shown success in multiple assignments and multiple environments over numerous years, should be preferred to one that has shown success in a single domain over the same time.  The candidate with multiple, differentiated success is much more likely to be successful in the new job as well; the one in a single domain is ripe to be reaching their level of incompetence.  Success in adapting to new environments is a skill companies should value, but don’t.

In terms of talent development, HR needs to create ways of rewarding specialists who do their job increasingly well over years of dedication without using promotions, while appreciating the versatilists who thrive in taking on new roles.  Promotions should not be the only means of rewarding top performers; bonuses and incentives should be used to drive continued competence building.  Promotions should only be used to expand and diversify the experiences of those already proving their ability to adapt and succeed in new roles.   HR needs to look beyond narrow definitions to find the people most likely to succeed, not those that have just been doing it longer.

As companies continue to struggle with market volatility, disruptive innovation, and dramatic shifts in business models, versatilism should be the new standard of performance.  What good is someone who has ten years’ experience in business models and practices that no longer hold true? Perhaps a new principle, the Versatilist Veracity should succeed the Peter Principle:

“Without Versatilists, a Hierarchy Tends to Become Incompetent”

 

References

Fairburn, J. a, & Malcomson, J. M. (2001). Performance, promotion, and the Peter Principle. Review of Economic Studies, 68(1), 45–66. http://doi.org/10.1111/1467-937X.00159

Peter, L. J., & Hull, R. (1969). The Peter Principle. Cutchogue, N.Y.: Willima Morrow & Co., Inc.

Follow the Leader – Followership vs. Leadership

There has been significant effort and press defining the properties and characteristics of leadership. There are probably hundreds of discrete classifications of leadership styles, each with its own unique perspective on what makes a great leader.  However, few of these approaches mention the most significant common factor: followers. A focus on followers, or why and how people follow a leader, is perhaps more instructive to the development of future leaders.

The Umwelt of Followership

Umwelt is a term used to describe the different perspectives individuals can have when viewing the same situation (Suderman, 2012).  Suderman documents the umwelton of followership as a means of understanding how perspectives of followership shape the success of those that would lead.  The umwelton documented include: position, power, situational, and partner.

Positional and power umwelton are somewhat traditional views of followership.  In each of these, the follower/leader dynamic is based on the perceptions of hierarchy and power typical of many organizations.  Leaders are defined by their roles within the organization and/or the authority they hold to induce followers to comply.  Conversely, followers perform simply because they do not have position or authority to do otherwise.  In this sense, leadership and followership have no relation to individual capabilities, only to circumstances.  Followers follow, but only through fear.

Situational umvelt defines leadership/followership based on the needs of the situation.  Much like the views of interdependent leadership (McCauley et al., 2008), this umwelt is characterized by leadership coming from the elevation of individuals based on expertise or idiosyncratic capabilities not found elsewhere. Interdependent leadership cultures are characterized as those treating leadership as a collective, collaborative process transcending any specific individual, while encompassing all individuals within the organization (McCauley et al., 2008). This idea of interdependent leadership, where leadership materializes through an adaptive, collaborative process is consistent with the descriptions of an actor-oriented scheme of organizational structure documented by Fjeldstad, Snow, Miles, & Lettl (2012). The concept of hierarchy, at least in terms of providing specific direction or work effort, is minimized. Both constructs suggest the complexity and challenges of modern markets/environments gives rise to the need for new methods of organization/leadership commensurate with these complexities.  This perspective has been famously followed by Netflix, as well as Zappos.  It’s long-term effectiveness for organizations has not been proven.

Finally, the partner umwelt is characterized, not by position, power, or situation, but by motives and intent (Suderman, 2012).  Followers choose to follow a leader because they believe in the purpose and goals the leader puts forth.  This umwelt encapsulates the idea that followers and leaders are co-dependent, but “. . . leaders can only lead when enabled by followers” (Suderman, 2012, p. 16).  Those in leadership roles may still have the position, power, or specific knowledge backing them in directing the actions of others, and still not be leaders in the minds of those they direct.  Followership is a state of mind, a true commitment to those that lead and the belief in where they are leading.  The umwelt of partner followership has a profound implication to what leadership truly is.

The Importance of Followership Perspective

The importance of understanding the umwelton of followership is critical towards becoming an effective leader.  Just being in a leadership role does not make you a leader.  Having position or power might result in people doing what you tell them, but does not necessarily make you a leader of people.  It also doesn’t mean that people will be engaged, perform their best, or go the extra mile to achieve superior outcomes.  They will simply do the least amount necessary.

True leaders focus more on the goals, the purpose, and the intent of where they are leading and convince others the destination is worth the effort.  True leaders understand that leadership is about harnessing the beliefs and desires of the entire organization towards a single goal, rather than building their own legacy. While putting the group first is not a natural tendency, it is a core requirement for building the trust necessary for true leadership (Collins, 2001; Collins & Porras, 2002; Sinek, 2014).   And, once a leader convinces others to follow, it doesn’t matter if they are in a leadership role or not.

Only followers can choose whom they follow; and, without true followers there are no true leaders.  Leaders never accomplish anything on their own.

References

Collins, J. C. (2001). Good to great: why some companies make the leap … and others don’t. New York, NY: HarperCollins.

Collins, J. C., & Porras, J. I. (2002). Built to last: Successful habits of visionary companies. New York, NY: HarperCollins.

Fjeldstad, Ø. D., Snow, C. C., Miles, R. E., & Lettl, C. (2012). The architecture of collaboration. Strategic Management Journal, 33(6), 734–750. Retrieved from 10.1002/smj.1968

McCauley, C. D., Palus, C. J., Drath, W. H., Hughes, R. L., McGuire, J. B., O’Connor, P. M. G., & Van Velsor, E. (2008). Interdependent leadership in organizations: Evidence from six case studies. A Center for Creative Leadership Report. Retrieved from http://scholar.google.com/scholar?hl=en&btnG=Search&q=intitle:Interdependent+Leadership+in+Organizations:+Evidence+from+six+case+studies#0

Sinek, S. (2014). Leaders eat last: Why some teams pull together and others don’t (Kindle). New York, NY: Penquin Group.

Suderman, J. (2012). The umwelt of followership. Strategic Leadership Review, 1(1). Retrieved from http://scholar.google.com/

You’re a little bit racist, and so am I.

One of the more well-known, and potentially contentious, songs from the musical Avenue Q declares everyone is a little bit racist.  What it doesn’t state is that we are all also a little bit sexist, regionalist, and nationalist as well.  We naturally identify with people who are like us and are suspicious of those who are different.  If you are travelling in a foreign country and meet up with someone from your own country, there is an immediate affinity.  If they happen to also be from the same region (state, province, whatever) that bond is intensified.  If they are from the same city, you are like long-lost friends who have found each other in a sea of unfamiliar sights and sound, regardless of any other differences (race, religion, sex, etc.). This is how human beings are wired and how we have survived as a species.

The Biology of Prejudice

Prejudice and stereotypes are part of our genetic makeup, the biology allowing our species to survive.  When our ancestors heard growling and rustling in the shadows, the immediate sense of fear and suspicion is what saved them; those that didn’t, or couldn’t, make the association between these inputs and the savage beast about to attack, didn’t survive.  The fact our ancestors survived to give rise to the current population is a testament to their natural ability to take in their surroundings, match complex patterns of association, and make sound, rationale assessments.   While those assessments may not have always been correct, it only took one instance of being correct (or seeing someone else be incorrect) to cement the association and the behavior. Continued exposure to patterns matching our expectations, solidify and codify these reactions until they become unconscious and automatic.  We have little control over it.

This is not to say that we are born specifically racist or bigoted.  It is more that we are wired to trust the familiar, and distrust the dissimilar.  We naturally find safety in similarity, and discomfort in differences.  The more dissimilar, the more discomfort.   Given a choice between aligning ourselves with those that are like us, and those that are different, we will choose similarity every time.   This is the biology of prejudice.   It is not about sex, religion, race, nationality, or anything specific, it is simply a cognitive process that seeks affinity with those most like ourselves.  We are social animals and seek similarity.  It is who we are, the way we are wired, and all of us are subject to it.

What to do About It?

If this prejudice is hard-wired into our brains, what, if anything, can we do about it?  Interestingly, telling people to quit being prejudice may have the wrong effect by focusing on the differences instead of the similarities.  However, there are a number of things that individuals, organizations, and society at large can, and should, do to combat the negative aspects of prejudice.

As Individuals

As individuals, there are two things we can do.  The first is to accept and understand our own biases, and not discard them as characteristic of low moral fiber; they are a part of us and still have value in today’s world.  If you are walking alone in a foreign city at night and see a group of locals hanging out on the street corner, maybe it is okay to have a heightened sense of awareness.  It is not inherently bad to follow our instincts and to have caution; it has kept us alive for centuries.  Maybe, just maybe, it is appropriate to take steps, like crossing the street, in order to minimize your unease.  It does not make you a bad human being.  There is a distinct difference between being cautious and going out of your way to harm those who are unlike you.  Being cautious is okay; being mean is not.

Which brings us to the second thing we can do.  If you happen to be one of those locals hanging out on the street corner and notice someone crossing the street to distance themselves, don’t be so quick to take offense.  This act, which might be labeled a “mirco-aggression”, is not aggressive; no one has done you direct harm.  You don’t know that individual, just like they don’t know you.  Prejudice works both ways and is a general stereotype, a pattern that says nothing about you as an individual or the other person.  Reacting negatively to the situation does more harm as good, because it reinforces the original, negative prejudice.  Acknowledge your own biases and show empathy for another; focus on your similarities.

As individuals, we must accept that we are all prejudiced against the unfamiliar.  It biases our view of the world, including how we interpret other people’s behavior, and words.  What we see and hear, may not be what the person actually did or said; our interpretations of reality are just as biased.

As Organizations

Diversity is an essential ingredient to organizations, as diversity is a key ingredient to the innovation that drives success.  Left to their own devices, however, diverse groups of individuals will naturally segregate themselves based on their similarity or dissimilarity with other members of the group.  This works against getting the benefits of diversity because innovation comes from not just having diverse employees, but getting them to collaborate.  There are also things organizations can do to improve this.

Organizations should find ways of fostering shared experiences and socialization for their diverse teams.  Sponsoring a bowling team, a reading club, toastmasters, or anything that can developed shared experiences will help employees do two things: 1) it allows diverse teams to get beyond inherent prejudices by engaging with individuals and discovering hidden similarities; and, 2) it creates similarities that can override other differences. As we come to see our coworkers as more similar to ourselves than others, we change the dynamics of our prejudices. Coworkers take on new shared labels, like coworker, bowling buddy, or literature lover.  Just like the travellers from the same city who meet in a foreign country, even the smallest similarities can foster connections.

Another way organizations can foster cohesiveness is by employing great leadership.  Organizations are formed for a purpose, and great organizations are effective at connecting that mission to the contributions of each and every employee. Organizations creating passion for their purpose, create an environment of inclusion and solidarity.  This simple fact, once again, creates a new kind of similarity between diverse employees: they are all champions of the organizational mission.  By encouraging an “us against the world”, the “us” becomes a new, powerful form of similarity.

If organizations want to harness the full potential of diversity, they need to focus on creating similarity.  While this is counterintuitive and often runs contrary to most organization’s diversity programs, focusing on differences will not suffice.  Organizations must seek to redefine employee perceptions through inclusion and redefining who “we” are.

As a Society

As a society, we also need to quit focussing on our differences and foster our similarities.  It is not without coincidence many Sci-Fi storylines show all of humanity coming together when aliens invade earth. This scenario clearly creates a strong definition of “us” as humans, overcoming all of our other differences. It changes our calculus of difference as  race, religion, and national origin seem pretty insignificant compared to differences in species.  And, we can learn from that.  There are two great examples from the past year or so that illustrate how we could focus more on our similarities than our differences: the “Black Lives Matter” movement, and the term “Radical Islamic Extremists”.

While any rational person should not be able to argue the statement that black lives matter (they obviously do), the movement has often generated contention because of the implication that only black lives matter.  Of course, this was not the intention of the organizers, but the resultant backlash is instructive.  By calling out labels, which focus on our differences, rather than our similarities, our biology gets in the way.  There are important issues that this movement seeks to address, and while many of them may affect one racial group more than others, solving them will not be effective when we focus on differences, rather than similarities.  More inclusive language, focused on similarities, may have been a better choice and promoted greater engagement.

A similar thing can be said for the term “radical Islamic extremist”.  Applying the label of “Islamic” immediately divides our social understanding of the issue.  Suddenly, we not only see how we are different from others because we are not radical extremists, but also because we may or may not be Islamic.  Highlighting this difference, instead of the ones that matter, does not help us work together to solve the problem.  Instead, it further divides us.  There should be no difference between how we react to Islamic extremists or Christian fundamentalist extremists.  The part that matters is “extremist” or “terrorist”, not what faith or doctrine they happen to hold. Further segmenting the issue only serves to blur who “us” and “them” are.

As a society, we need to work harder to focus on our similarities, rather than our differences.  This does not mean that we should attempt to create complete homogeneity and make all people exactly the same.  We just need to foster greater affinity between ourselves.  Only then can we truly celebrate our differences – from a place of safety and familiarity.

Coming Together

If we are going to survive as a species, we need to focus on that fact: we are all the same species.  We need to accept that we are inherently wired to be prejudiced towards people who are not like us, and foster our understanding of our similarities.  The more similarities we can find, the less the differences will matter.  Furthermore, in today’s globally interconnected world, it has never been easier to uncover our similarities.  It has never been easier for us to get beyond our prejudices and create new patterns of behavior.  If we find a way to come together and focus on our similarities, we not only make it easier to celebrate and harness our differences, but we may also find ways of eliminating negative bias for our future generations.

 

NetFlix: Practical Examples of People, Process, and Culture in Creating Innovation

In keeping with the traditional analysis of innovative success, a post hoc examination of an organization known for innovation provides anecdotal evidence of the impact of people, process, and culture on organizational success.  By most accounts, Netflix, Inc. (Netflix) is considered a prime example of successful innovation.  Netflix is the leading Internet-based television network and counts some 44 million customers in 40 countries streaming more than one billion hours of content (Netflix, 2014).  Since its initial public offering in 2002, Netflix has moved from an innovative provider of DVD rentals-by-mail to become the dominant player in the pure-play Internet streaming market, a market they almost single-handedly pioneered (Netflix, 2014).  Netflix has enjoyed significant growth in market share, customers, and stock valuation over the years, and the stage has been set for further growth through international expansion, strategic partnerships, and the creation of their own content (Ramachandran, 2014a, 2014b, 2015; Ramachandran & Stynes, 2015; Schwartz, 2015). An examination of key elements of Netflix’s success suggest that business models is not the only thing that Netflix has innovated on the road to becoming a household name.

One of the better-known innovations of Netflix is the organizational culture playbook they developed.  Incorporating aspects of both people and culture, the Netflix employee handbook was presented in 127 presentation slides (McCord, 2014).  From a people perspective, Netflix purports to “hire, reward, and tolerate only fully formed adults” (2014, p. 4).  Among the corporate values are the courage to speak your mind, the ability to make sound independent judgments, being curious, and being innovative (Hastings, 2009).  Hastings also suggests “adequate performance gets a generous severance package” (slide 22).  Netflix not only states a goal to hire and retain only the best people, but also sets an upfront expectation of a culture that supports innovation.  A key element in the Netflix employee methodology is a management philosophy to create a culture of freedom and innovation with employee self-discipline and freedom eliminating many of typical corporate controls like performance reviews, bonuses, and managed vacation time (McCord, 2014).  According to the founder of Netflix, “we’ve had hundreds of years to work on managing industrial firms … we’re just beginning to learn how to run creative firms” (McCord, 2014, p. 6).  McCord reports the development of a culture conducive to innovation is seen as a primary responsibility of Netflix leadership.  Netflix, as an organization, demonstrates a commitment to attracting the right people (knowledge) and fostering a culture that fosters innovation.

Interestingly, the Netflix philosophy that supports the people and culture, eschews formalized process.  According to the Netflix culture definition, process is only required when the complexity of the business exceeds the capability of the people (Hastings, 2009, slide 47).  Hastings declares process, while useful for avoiding the chaos of increasingly large organizations, a limit to the flexibility of the organization to adapt as the business environment changes.  The Netflix response is to drive the percentage of high-performance employees faster than the rise of business complexity to maintain an informal and adaptable organization.   The apparent success of this approach calls into question whether process is independent of people and culture.  It is possible an innovative culture, or superior human capital, mediates the necessity of formalized processes for the diffusion of innovation throughout the organization. It is also possible that Netflix either lacks the need for existential knowledge that would benefit from more formalized approaches to knowledge development (Wilson & Doz, 2011), or that Netflix is simply ignoring the benefits of more formalized knowledge development approaches.  Whether superior knowledge resources and culture mediates the need for more formalized processes is a provocative notion that simply underscores how little is known about how to achieve successful innovation.

References

Hastings, R. (2009). Netflix culture: Freedom & responsibility. Retrieved August 8, 2015, from http://www.slideshare.net/reed2001/culture-1798664

McCord, P. (2014). How Netflix reinvented HR. Harvard Business Review, (JAN-FEB). Retrieved from http://hbr.org/

Netflix. (2014). 2013 annual report. Retrieved from http://ir.netflix.com/

Ramachandran, S. (2014a, November 18). Netflix sets its sights down under. Wall Street Journal (Online). Retrieved from http://www.wsj.com/

Ramachandran, S. (2014b, December 17). Dish Network to integrate Netflix app into its set-top boxes. Wall Street Journal (Online). Retrieved from http://www.wsj.com/

Ramachandran, S. (2015, February 4). Netflix to launch in Japan. Wall Street Journal (Online). Retrieved from http://www.wsj.com/

Ramachandran, S., & Stynes, T. (2015, January 20). Netflix steps up foreign expansion. Wall Street Journal (Online). Retrieved from http://www.wsj.com/

Schwartz, F. (2015, February 9). Netflix offers streaming video in Cuba. Wall Street Journal (Online). Retrieved from http://www.wsj.com/

Wilson, K., & Doz, Y. L. (2011). Agile innovation: A footprint balancing distance and immersion. California Management Review, 53(2), 6–26. http://doi.org/10.1525/cmr.2011.53.2.6

Is HR Sabotaging Your Innovation Efforts?

Re-post from LinkedIn from May 10, 2016

In today’s fast-paced, global economy, the traditional means of differentiation (land, capital and equipment) are becoming less differentiated and available equally to businesses large and small, old and new (Drucker, 1992; Friedman, 2006; Teece, 1998). This leaves the organization’s only means of differentiation the ability to combine undifferentiated resources together in unique ways … i.e. innovation (Lawson & Samson, 2001; Teece, 2011, 2012). Regardless of the approach to innovation you subscribe to (there are dozens, see Bowonder, Dambal, Kumar, & Shirodkar, 2010), the depth, breadth, and diversity of an organization’s people are significant antecedents to innovation success (Crook, Todd, Combs, Woehr, & Ketchen, 2011; Kim & Ployhart, 2014).  As a result, HR is a critical part of your innovation efforts.

Pre-employment assessments have been the principal tool used by HR to ensure the organization only hires the best and brightest. The use of pre-employment assessments by large U.S. organizations has increased from 26% in 2001, to 57% by 2013; eight of the top ten private employers use pre-employment testing for at least some of their positions (Weber, 2015). Unfortunately, as previously mentioned many of the traditional assessment tools have proven to be less reliable than flipping a coin when it comes to predicting future real-world performance. This realization has led to the increased use of psychological value assessments.  Value assessments attempt to match the values of prospective candidates with the value profiles of existing, high performing employees, essentially creating a way to find people who share the same values and perspectives of existing employees.  The idea is to find people who think and perform like existing top-performers. While these assessments may not be any better at predicting future performance, Weber reported on organizations reducing 90-day attrition rages from 41% to 12% in the span of only 3 years of use. Given the significant costs of hiring and training, this reduction in short-term attrition can be a significant savings for the organization. As the ease of utilizing these assessments continues to increase, the costs to utilize them decreases, they become increasingly difficult for HR organizations to ignore.

Surely, value assessments have benefit to the organization, but that value is no longer in the attracting and hiring “the best and the brightest”, and become the value of “culture” or “fit”. Even the validation of one of the most popular value assessments, the Hartman Value Profile (HVP), shows almost no correlation to real-world performance even when performance is subjectively evaluated by other members of the organization (Weathington & Roberts, 2005). Furthermore, making hiring decisions based on how well individuals “fit” within the existing organization seems at odds with the need for diverse knowledge and perspectives for effective innovation. While no one is arguing cultural “fit” is not an important aspect to collaboration and productivity, it is potentially dangerous to be seduced by the perceived benefits of values-based pre-employment assessments.

Innovation starts, and ends, with people. Decades of research demonstrate that successful innovation requires, not just the best and brightest, but also diversity in the perspectives and knowledge of those people. If everyone has the same perspective, values, and beliefs, it will be increasingly difficult to create anything “new”. If we compound this by not hiring the best and brightest (because we are more concerned with fit), the effects could be devastating.

Be wary about letting your HR practices sabotage your innovation efforts before they even get started.

References

Bowonder, B., Dambal, A., Kumar, S., & Shirodkar, A. (2010). Innovation strategies for creating competitive advantage. Research Technology Management, 53(3), 19–32. Retrieved from http://www.iriweb.org/

Crook, T. R., Todd, S. Y., Combs, J. G., Woehr, D. J., & Ketchen, D. J. J. (2011). Does human capital matter? A meta-analysis of the relationship between human capital and firm performance. Journal of Applied Psychology, 96(3), 443–456. doi:10.1037/a0022147

Drucker, P. F. (1992). The post-capitalist world. Public Interest, 109(Fall 1992), 89–101. Retrieved from http://www.nationalaffairs.com/

Friedman, T. L. (2006). The world is flat: A brief history of the twenty-first century. New York, NY: Farrar, Straus and Giroux.

Kim, Y., & Ployhart, R. E. (2014). The effects of staffing and training on firm productivity and profit growth before, during, and after the Great Recession. The Journal of Applied Psychology, 99(3), 361–89. doi:10.1037/a0035408

Lawson, B., & Samson, D. (2001). Developing innovation capability in organisations: A dynamic capabilities approach. International Journal of Innovation Management, 5(3), 377. doi:10.1142/s1363919601000427

Teece, D. J. (1998). Capturing value from knowledge assets: The new economy, markets for know-how, and intangible assets. California Management Review, 40(3), 55–79. doi:10.2307/41165943

Teece, D. J. (2011). Dynamic capabilities: A guide for managers. Ivey Business Journal Online, 1. Retrieved from http://search.proquest.com/

Teece, D. J. (2012). Dynamic Capabilities: Routines versus entrepreneurial action. Journal of Management Studies, 49(8), 1395–1401. Retrieved from 10.1111/j.1467-6486.2012.01080.x

Weathington, B. L., & Roberts, D. P. (2005). Validation analysis of the Hartman Value Profile. Retrieved from http://www.hartmaninstitute.org/

Weber, L. (2015). Today’s personality tests raise the bar for job seekers. The Wall Street Journal. Retrieved from http://www.wsj.com

Diversity is not just a social issue, it is an economic one.

The problem with treating diversity as only a social-justice issue is that social issues rarely get solved without demonstrating how they indirectly affect all people, not just the disenfranchised.  All you must do is look at the history of social corporate responsibility (CSR) to see this effect (O’Toole & Vogel, 2011).  CSR was treated with mostly lip-service until two things were demonstrably clear in the marketplace: 1) consumer trends were changing to favor organizations demonstrating CSR principles; and, 2) CSR (or sustainable) practices made economic sense by reducing waste, improving operations, and elevating brand.  While the messaging is about being socially conscious, CSR business models can lead to competitive differentiation, which leading to profits. The only real academic argument against CSR is the implied altruistic nature of most CSR proponents; every corporation engaging in CSR generates either direct or indirect economic profit from those actions, meaning CSR is nothing more than “enlightened self-interest” (Smith, 2003).  As much as we should care about social issues, until they affect us directly, critical mass is not achieved towards solving them.

Diversity is no different.  We, as a collective species, should promote diversity (religious, nationality, sex, age, values, etc.) simply because it is ethical and just. However, because of the numerous permutations of bias, no single group of disenfranchised gains sufficient support to make true change solely on the basis of justice.   Unless we can demonstrate how biases affect everyone, progress will remain slow, or non-existent.  The best way to combat isses of diversity is through developing the enlightened self-interest of the greater society.

Fortunately, there is tremendous support that diversity is the key to economic profit and productivity benefiting everyone, including those who are not victims of bias.  It is no accident that our national headlines, business articles, and social commentary are inundated with stories about both diversity as well as innovation.  These two concepts are intimately conjoined. Without diversity of experience, thought, and perspective, innovation does not happen; without innovation, society will no longer grow and prosper, but decline.  This affects everyone.

Innovation is the only true competitive differentiator in today’s world economy (Drucker, 1992; Friedman, 2006; Salchow Jr., 2016; Teece, 1998, 2004). Whether the innovation is a means to increase organizational efficiency, develop new business models, or an innovative product, the days of competing solely on accumulated land, capital, equipment, or market dominance are long over.  Those who don’t innovate, fail in the long-run. This affects people, companies, communities, and countries not just certain individuals. The inability to adapt to the global economy has decimated entire regions in the U.S. from miners, to steal producers, to manufacturers.   The number of companies and individuals directly affected is miniscule to the number of companies, individuals, and communities that have collapsed indirectly from these failures.  Lack of innovation capability affects us all.

Yet, we know that diversity in perspective, knowledge, experience, and capabilities is a foundation of innovation (Gladis, 2017). We know that diversity drives innovation (Niebuhr, 2010; Parrotta, Pozzoli, & Pytlikova, 2014), and creates economic rents, productivity, and success (Beck & Walmsley, 2012; Crook, Todd, Combs, Woehr, & Ketchen, 2011; Kim & Ployhart, 2014). Without diversity, we cannot hope to innovate because innovation is all about seeing things from a different perspective, a different value structure, a different life experience, a different cognitive lens.  It is through exploring and evaluating these differences that we see new possibilities, new solutions, and new ways of moving forward as companies, communities, and societies.  Diversity forces us to challenge what we think we know, and that leads to innovation.

It is sad that at a time when collaboration and access to diverse perspectives is so easy, we have instead taken to divisiveness, to segregation. We seek the illusionary safety of the known and miss the forest for the trees that don’t look, act, talk, or believe like us.  However, if we fail to see how diversity is an asset, not a liability, we fail our society. We fail, not because we violate the social contract, but because we will bankrupt society.  We fail by succumbing to what we believe is, rather than seeing what could be.  Without innovation, driven by diversity, we become static and eventually decline (Second Law of Thermodynamics anyone?).

Diversity is an economic imperative, not just a social one. The best way to secure your own future, is to seek out and embrace diversity. It is in our own self-interest.

References

Beck, J. W., & Walmsley, P. T. (2012). Selection ratio and employee retention as antecedents of competitive advantage. Industrial and Organizational Psychology, 5(1), 92–95. http://doi.org/10.1111/j.1754-9434.2011.01410.x

Crook, T. R., Todd, S. Y., Combs, J. G., Woehr, D. J., & Ketchen, D. J. J. (2011). Does human capital matter? A meta-analysis of the relationship between human capital and firm performance. Journal of Applied Psychology, 96(3), 443–456. http://doi.org/10.1037/a0022147

Drucker, P. F. (1992). The post-capitalist world. Public Interest, 109(Fall 1992), 89–101. Retrieved from http://www.nationalaffairs.com/

Friedman, T. L. (2006). The world is flat: A brief history of the twenty-first century. New York, NY: Farrar, Straus and Giroux.

Gladis, S. (2017). The Formula for Achieving Innovation. TD: Talent Development, (February).

Kim, Y., & Ployhart, R. E. (2014). The effects of staffing and training on firm productivity and profit growth before, during, and after the Great Recession. The Journal of Applied Psychology, 99(3), 361–89. http://doi.org/10.1037/a0035408

Niebuhr, A. (2010). Migration and innovation: Does cultural diversity matter for regional R&D activity? Papers in Regional Science, 89(3), 563–585. http://doi.org/10.1111/j.1435-5957.2009.00271.x

O’Toole, J., & Vogel, D. (2011). Two and a half cheers for conscious capitalism. California Management Review, 53(3), 60–76. http://doi.org/10.1525/cmr.2011.53.3.60

Parrotta, P., Pozzoli, D., & Pytlikova, M. (2014). The nexus between labor diversity and firm’s innovation. Journal of Population Economics, 27(2), 303–364. http://doi.org/10.1007/s00148-013-0491-7

Smith, H. J. (2003). The shareholders vs. stakeholders debate. MIT Sloan Management Review, 44(4), 85–90. Retrieved from http://sloanreview.mit.edu/

Teece, D. J. (1998). Capturing value from knowledge assets: The new economy, markets for know-how, and intangible assets. California Management Review, 40(3), 55–79. http://doi.org/10.2307/41165943

Teece, D. J. (2004). Knowledge and competence as strategic assets. Handbook on Knowledge Management 1: Knowledge Matters, 40(3), 129–152. http://doi.org/http://dx.doi.org/10.1007/978-3-540-24746-3_7

Using Mental Models to Identify Expertise

Research in the field of expertise and expert performance suggest experts not only have the capacity to know more, they also know it differently than non-experts; experts employ different mental models than novices (Feltovich, Prietula, & Ericsson, 2006). While it remains unclear how antecedents directly affect the generation of mental models, the relationship between mental models and performance is demonstrated across multiple domains of research (Chi, Glaser, & Rees, 1982; Feltovich et al., 2006). Unlike attempts to directly elicit the antecedents of performance that may, or may not, contribute to future performance, the mental models of experts show stable and reliable differences in expert performance without requiring the artificial constructs of tacit knowledge measurements (Frank, Land, & Schack, 2013; Land, Frank, & Schack, 2014; Lex, Essig, Knoblauch, & Schack, 2015; Schack, 2004, 2012; Schack & Mechsner, 2006). The potential to accurately, easily, and quantifiably define job-related expertise is an organizational opportunity for both the accumulation as well as the management of talent.

What are Mental Models

Based on information processing and cognitive science theories, mental models are the cognitive organization of knowledge in long-term memory (LTM) developed through learning and experience (Chase & Simon, 1973; Chi et al., 1982; Gogus, 2013; Insch, McIntyre, & Dawley, 2008; Schack, 2004).  Mental models represent how individuals organize and implement knowledge, instead of explicitly determining what that knowledge encompasses.  Novice practitioners start with mental models consisting of the most basic elements of knowledge required, and their mental models gradually gain complexity and refinement as the novice gains practical experience applying those models in the real world (Chase & Simon, 1973; Chi et al., 1982; Gogus, 2013; Insch et al., 2008; Schack, 2004).  Consequently, achieving expertise is not simply a matter of accumulating knowledge and skills, but a complex transformation of the way knowledge and skill is implemented (Feltovich et al., 2006).  This distinction, between what the individual knows and how the individual applies that knowledge has theoretical as well as practical importance for use in human assessment.

Mental models capture important aspects that plagued prior attempts to assess human capital performance.  In contrast to prior assessment methods, differences in mental models propose to demonstrate differences in the way individuals apply knowledge cognitively, rather than differences in the knowledge itself  (Chi et al., 1982; Gogus, 2013; Insch et al., 2008).   The significance of these findings is the implication of a measurable basis for the difference in performance between expert and novice, substantiating mental models as the quintessential construct defining the difference between the knowledge an individual has versus how the individual applies that knowledge.

Evaluating mental models from a practical perspective, mental models clearly differentiate between expert and non-experts. Chase and Simon (1973) first theorized that the way experts chunk and sequence information mediated their superior performance. Simon and Chase found grand master chess players’ superior performance resulted from recalling more complex information chunks.  These authors demonstrated that both experts and novices could recall the same number of chunks, but the chunks of novices contained single chess pieces whereas the chunks of experts contained meaningful chess positions composed of numerous pieces.  Simon and Chase further showed this superior performance to be context sensitive and domain specific as grand masters were no better than novices at recalling random, non-game specific piece constellations and showed no better performance in non-chess related memory.  The domain dependency indicates mental models of performance are not universal predictors but have job-related specificity making them ideal for assessment.

The observation that expert and novices store and access domain-specific knowledge differently spawned research theorizing quantitative, measurable differences in knowledge representation and organization might differentiate expert performance from non-expert performance (Ericsson, 2006). This research continues to substantiate increased experience and practice as the driver in the development of larger, more complex cognitive chunks (Feltovich et al., 2006). Feltovich et al. (2006) noted this effect as one of the best-established characteristics of expertise and demonstrated in numerous knowledge domains including chess, bridge, electronics, physics problem solving, and medical applications.  Feltovich et al. suggested these changes facilitated experts processing more information faster, with less cognitive effort thus contributing to greater performance.

Evolution of Mental Model Evaluation

The conceptualization of evaluating expert performance in academic and business domains already indicates the importance of mental model differences (Chi et al., 1982; Insch et al., 2008; Jafari, Akhavan, & Nourizadeh, 2013).  The general acceptance of mental models as a critical discriminator of performance has driven a deeper focus on the nature and structure of these differences instead of the specific knowledge they represent (Gogus, 2013).  This evolution of mental model evaluation, from a theoretical construct to a quantitative measure, mirrors the evolution away from what individuals know, towards how individuals utilize that knowledge.

Studies of expertise and expert performance demonstrate the dramatic differences in the way experts and novices organize knowledge in complex physics problem solving a (Chi et al., 1982). Chi et al. (1982) utilized cluster analysis to show differences in the way experts and novices structure their knowledge; however, mental models were only one of several ways in which the authors analyzed expert and novice differences.

Acknowledgment of these differences in mental representations rationalized the use of mental models in constructing more traditional tacit knowledge measures (Insch et al., 2008). Insch et al. (2008) approached tacit knowledge measures through evaluation of the actions individuals performed, acknowledging tacit knowledge was inherently how individuals use knowledge, not necessarily what knowledge they had.  In taking this approach, the authors focused on the mental schemas that directed behavior instead of the antecedent values, beliefs and skills that contribute to performance.  The focus on schemas as the driving factor in performance is notable as divergent from prior tacit knowledge measures; however, Insch et al. did not attempt measuring and comparing resultant mental models explicitly.

More recently, Jafari et al. (2013) looked to elicit and visualize the tacit knowledge of Iranian autoworkers concerning their knowledge of organizational strengths.  The uniqueness of this study was the use of quantifiable measures of individual tacit knowledge for comparison between groups of individuals and purported experts, as well as the use of graphs to visualize the results for each group.  Jafari et al. stipulated differences in mental models as an indication of differences between novice and expert workers but focused on the content rather than the structure of the mental model.  The authors further operationalized the quantitative measures as differences in what the individuals knew, and not how they utilized or implemented the knowledge. This approach advanced the use of mental models in the identification of expert knowledge, yet failed to identify how these models differ regarding application or structure.

Other researchers focused more on the differences in comparative mental models than the specific knowledge represented within the models (Gogus, 2013).  In evaluating the applicability and reliability of different methods of eliciting and comparing mental models, Gogus (2013) suggested the theoretical and methodological approach to the analysis of mental models is independent of the domain of knowledge.  Gogus replicated and contrasted the use of two different methodologies for externalization and measurement of mental model differences.  Of particular note, the author focused on contrasting the features of mental models instead of on the specific knowledge, experience, attitude, beliefs, or values of participants.  These efforts further support differences in mental models as being more dependent on the tacit rather than explicit knowledge of the individual. Since mental models are inherently domain specific and often contain the same base explicit knowledge, structural differences in the mental models between experts and novices are more indicative of the differences in performance.

Research in the area of sports psychology has similarly focused on developing reliable means of differentiating mental models of individuals to differentiate performance and diagnose performance problems.  Distinct differences in the mental models between experts and novices have been documented across multiple action-oriented skills including tennis (Schack & Mechsner, 2006), soccer (Lex et al., 2015), volleyball (Schack, 2012), and golf (Frank et al., 2013; Land et al., 2014). Schack and Mechsner (2006) demonstrated how differences in the mental models of the tennis serve related to the level of expertise.  Lex et al. (2015) evaluated the differences in the mental models of team-specific tactics between players of varying levels of experience.  Less experienced players averaging 3.2 years of experience (n = 20, SD = 4.2) generated mental models viewing team-tactics broadly as either offensive or defensive.  More experienced players averaging 17.3 years of experience (n = 18, SD = 3.3), further differentiated offensive and defensive tactics into smaller groups of related actions.  For instance, more experienced players further segmented defensive tactics into actions for pressing the offense, and returning to standard defense.

Focus on the specific differences in the structure of mental models has not only proven effective in differentiating expert and novice performance but also provided insight into effective training regimens (Frank et al., 2013; Land et al., 2014; Weigelt, Ahlmeyer, Lex, & Schack, 2011).  Frank et al. (2013) compared the models of novice performers to those of experts prior to and following a training intervention.  The authors experimentally evaluated two randomly assigned groups of participants with no former experience in performing a golf putt.  With the exception of an initial training video provided to all participants, none received any training or feedback.  The experimental group participated in self-directed practice over a three-day period, while the control group did not practice at all.  Frank et al. found the mental models of participants subjected to practice evolved, becoming more similar to expert mental models than participants in the control group.  Since the formal knowledge of all participants remained the same, the outcome of this study further suggests the structure of individual mental models is dependent on the experience and tacit knowledge of the individual.

The Opportunity

The use of mental models to identify expertise shows great promise. Variations in mental model construction differentiate clearly between expert and novice performers across numerous domains of knowledge.  Furthermore, methodologies highlighting the structural differences between the mental models of experts and novices show promise in the development and evaluation of training regimens.  As a result, the development of human capital assessments based on the measurement of the structural differences between mental models represents a strategic opportunity for organizations to improve the quality of human capital selection as well as the development and assessment of existing human capital.

References

Chase, W. G., & Simon, H. A. (1973). The mind’s eye in chess. In Visual Information Processing (pp. 215–281). New York, NY: Academic Press, Inc. http://doi.org/10.1016/B978-0-12-170150-5.50011-1

Chi, M. T. H., Glaser, R., & Rees, E. (1982). Expertise in problem solving. In R. J. Sternberg (Ed.), Advances in the psychology of human intelligence (Vol. 1, pp. 7–75). Hillsdale: Lawrence Erlbaum Associates.

Ericsson, K. A. (2006). An introduction to Cambridge handbook of expertise and expert performance: Its development, organization, and content. In The Cambridge handbook of expertise and expert …. New York, NY: Cambridge University Press.

Feltovich, P. J., Prietula, M. J., & Ericsson, K. A. (2006). Studies of expertise from psychological perspectives. In The Cambridge handbook of expertise and expert …. New York, NY: Cambridge University Press.

Frank, C., Land, W., & Schack, T. (2013). Mental representation and learning: The influence of practice on the development of mental representation structure in complex action. Psychology of Sport and Exercise, 14(3), 353–361. http://doi.org/10.1016/j.psychsport.2012.12.001

Gogus, A. (2013). Evaluating mental models in mathematics: A comparison of methods. Educational Technology Research and Development, 61(2), 171–195. http://doi.org/10.1007/s11423-012-9281-2

Insch, G. S., McIntyre, N., & Dawley, D. (2008). Tacit Knowledge: A Refinement and Empirical Test of the Academic Tacit Knowledge Scale. The Journal of Psychology, 142(6), 561–579. http://doi.org/10.3200/jrlp.142.6.561-580

Jafari, M., Akhavan, P., & Nourizadeh, M. (2013). Classification of human resources based on measurement of tacit knowledge. The Journal of Management Development, 32(4), 376–403. http://doi.org/http://dx.doi.org/10.1108/02621711311326374

Land, W. M., Frank, C., & Schack, T. (2014). The influence of attentional focus on the development of skill representation in a complex action. Psychology of Sport and Exercise, 15(1), 30–38. http://doi.org/10.1016/j.psychsport.2013.09.006

Lex, H., Essig, K., Knoblauch, A., & Schack, T. (2015). Cognitive Representations and Cognitive Processing of Team-Specific Tactics in Soccer. PLoS ONE, 10(2), 1–19. http://doi.org/10.1371/journal.pone.0118219

Schack, T. (2004). Knowledge and performance in action. Journal of Knowledge Management, 8(4), 38–53. http://doi.org/10.1108/13673270410548478

Schack, T. (2012). Measuring mental representations. In G. Tenenbaum, R. Eklund, & A. Kamata (Eds.), Measurement in Sport and Exercise Psychology (pp. 203–214). Champaign, IL: Human Kinetics. Retrieved from http://www.uni-bielefeld.de/sport/arbeitsbereiche/ab_ii/publications/pub_pdf_archive/Schack (2012) Mental representation Handb

Schack, T., Essig, K., Frank, C., & Koester, D. (2014). Mental representation and motor imagery training. Frontiers in Human Neuroscience, 8(May), 328. http://doi.org/10.3389/fnhum.2014.00328

Schack, T., & Mechsner, F. (2006). Representation of motor skills in human long-term memory. Neuroscience Letters, 391(3), 77–81. http://doi.org/10.1016/j.neulet.2005.10.009

Weigelt, M., Ahlmeyer, T., Lex, H., & Schack, T. (2011). The cognitive representation of a throwing technique in judo experts – Technological ways for individual skill diagnostics in high-performance sports. Psychology of Sport and Exercise, 12(3), 231–235. http://doi.org/http://dx.doi.org/10.1016/j.psychsport.2010.11.001

Misconceptions about Certification

There seems to be wide misconceptions about what “Certification” and “Licensure” are all about.  Some see it as just the final part of an educational regimen.  Other’s see it as some kind of hurdle imposed by greedy organizations restricting access to some benefit.  These misconceptions and skewed perspectives, lead them to make demands affecting the very heart of what certification is all about and minimizing the value of the very certification they are working to achieve. First:

What Certification IS …

Certification is a legally defined classification stating a certifying body stands behind the capability of a certified individual to perform at some specific level of capability.  Certification is a very simple construct: it is the definition of a standard of performance, and a program assessing individuals to that standard.  That’s it, nothing more and nothing less.

Setting a standard is the first part of any certification.  Ideally, this standard is defined with help of people who perform the job.  In addition, a standard implies that everyone, no matter whether they have done the actual job for decades or participated in the development of the standard itself, must objectively demonstrate their capability in exactly the same manner.  Unless this standard is objectively applied equally to all individuals, it is not a standard.  Maintaining that standard is the foundation of certification value; it is what the certification stands for and how it should be used.

Creating an assessment of that standard is the second part of any certification.  This not only includes a mechanism assessing current capability, but also a program or process to ensure future capability.   Despite what many believe, creating an assessment is not a simple, ad hoc process where someone creates an assessment (test) and makes people take it to prove their ability.  It is, in fact, a highly rigours process backed by decades of scientific research on measuring cognitive ability (psychometrics), the sole purpose of which is ensuring the validity of the decisions made based on assessment performance.  It involves designing the assessment, job-task analysis of the job being assessed, formalized standards of item (question) writing, public beta-testing of items, psychometric evaluation of the item performance, assessment construction, and evaluation of appropriate scoring.  Done properly, it is time-consuming and costly (which is why some organizations don’t do it properly).

Finally, because knowledge and competence are perishable commodities, mechanisms must be put in place ensuring certified individuals remain capable in the future.  This is frequently done by limiting the length of time a certification is valid and requiring periodic re-certification (re-validation) of the individuals capability.  Other methods may include proving continued education and practice of the knowledge.  Regardless, the ongoing evaluation of certified individuals must adhere to the original standard with the same validity, or the standard no longer has value.

There is no hidden agenda to certification.  There is no conspiracy.  It is simply to establish a standard and assess individuals compared to that standard.

Misconceptions about Certification

Really, any belief beyond the design of a standard and the assessment to that standard, is a misconception about certification.  However, there are a number of misconceptions that often drive changes detrimental to the rationale of certification.  The most common ones relate to understanding what an assessment is for, training, and re-certification requirements.

Most people mistakenly assume the items within an assessment must represent the end-all-be-all of what someone should know.  They don’t understand that a psychometric assessment is not about the answers themselves, but the inferences we can make about performance based on those answers.  There is no way to develop an exhaustive exam of all the knowledge necessary to be competent and to deliver that exam efficiently.  However, we can survey a person’s knowledge and through statistical analysis infer whether they have all the knowledge necessary or not.  The answer to any specific question is less important than how answering that question correlates with competence.  Even a poorly written, incomplete, and inaccurate item can give us information about real world performance; in fact, evaluating how a candidate responds to such an item can be highly informative (although this is not a standard, intentional practice).  This focus on the items themselves, rather than the knowledge and competence the answers suggest, is what makes people incorrectly question the validity of the certification.

Similarly, many people think a certification should be able to be specifically taught.  As such, they believe a training course should be all that is necessary to achieve a certification.  However, this does not align with what we know about the development of human competence.  There is a big difference between knowing something, and knowing how to apply that knowledge competently.  Certification is an assessment of performance, not knowledge; and, as such, cannot be taught directly.  If someone can take a class and immediately achieve certification, either: A) the assessment does not evaluate actual performance; or, B) the course simply teaches the answers to the questions on the exam, rather than the full domain of knowledge.  In either case, you have biased the inferences made by the assessment.  Competence begins with knowledge, but must also have experience and practice.  This cannot be gained through a class, but only through concerted effort; you cannot buy competence.

Finally, many people also believe that once a certification has been achieved, it shouldn’t need to ever be evaluated again; or, that taking a course instead of an assessment should suffice.  The former belief simply ignores the fact performance capability is a perishable commodity: if you don’t use it, you lose it.  The latter once again confuses knowledge with performance.  How frequently this needs to happen, or whether continued education is sufficient to demonstrate continued performance is entirely dependent on the knowledge domain the certification attempts to assess.  In highly dynamic environments, this may need to be done much more frequently and rely more on assessments than in other domains; however, ongoing evidence of continued capability is a must if standards are to be maintained.

Leave Certification to the Professionals

The heart of the problem is that everyone seems to believe they are experts in the design of certification programs and assessments simply because they have participated in them.  The reality is that certification is a rigorous, research-based, and scientific endeavor.  The minimum requirement to be considered a psychometrician is a PhD; that’s a great deal of specialized knowledge most people do not have.  The decisions made are not arbitrary, nor are they made with the intention of anything other than maintaining the standard and making valid assessments of individuals according to that standard.

At the end of the day, the value of a certification is whether the people who achieve it can perform according to the standard the certification set forth.  If the certification cannot guarantee that, then it is not valid and has no value.  However, this requires people to actually understand what that standard is, what it means, and why it was created.   It requires people to accept there is a rigorous process accounting for all of the decisions and those decisions all support validity.  Finally, it requires people to understand that just because they may be experts in their field, they are not experts in certification.