The Small BIG: Small Changes That Spark Big Influence (7 page)

E
ncouraging employees to be productive workers can be a challenge for even the best managers. Fortunately many managers will have a range of tools at their disposal in their motivational toolbox. For example, one of the more common ways to increase worker motivation is to simply offer to pay more to workers who are especially productive. Alternatively managers can try to enhance overall employee morale by including them in a profit-sharing program. Or perhaps managers can provide recognition to the best workers by offering desirable rewards such as iPhones, weekend breaks, or even lunch with the CEO.

Although all of these tactics have the potential to be effective, they also share some downsides. For example financial incentives have a tendency to set new reference points for the future. An employee who has been paid an incentive for performing a task once is then likely to expect that similar incentive payments will be forthcoming in the future, and with a subsequent lowering of motivation levels when they are not. Financial incentives can also sometimes serve to erode any intrinsic motivation employees have to perform in that manner anyway. But probably most important of all is the simple fact that incentives can be expensive to implement.

However, research from behavioral science suggests that adding a single ingredient to the productivity recipe can improve the result and will do so at no cost. What’s more, all that’s required is one small change that will take just five easy minutes.

Remember Adam Grant, the Wharton School of Business professor whom we mentioned in chapter 6? He believed that workers often fail to live up to their potential due to one fundamental ingredient that is missing: They’ve lost track of the significance and meaningfulness of their jobs. Grant figured that if employees could be reminded of why their jobs are important, they might become more highly motivated and, as a result, become more productive individuals.

To test this idea, he set up a study in the call center of a university whose employees were tasked with contacting alumni and persuading them to make donations to the college’s scholarship funds. Grant first randomly divided the call center employees into three groups. Employees assigned to the first group read stories written by other employees that described what those employees perceived were the personal benefits of the job. Typically they would write about the financial package they received and the opportunities the job gave them for the development of their own personal skills and knowledge. Grant refers to this group as the “personal benefit” condition.

However, another set of employees read stories written by students who had benefited from the organization’s fundraising activities. These were individuals who described how the scholarships they obtained had an enormously positive impact on their lives, giving them a way to achieve treasured goals and dreams that would have been otherwise unattainable. Grant refers to this group as the “task significance” condition.

Finally, as a control condition, the last group of employees did not read any stories at all. Grant subsequently measured the number of pledges earned as well as the amount of donation money obtained by all the callers both one week prior to the study and one month afterward.

What he found was simply amazing.

Employees in the “personal benefit” and control conditions performed almost exactly the same after the intervention as they did before it both in terms of the amount of donation money they raised and the number of pledges they earned. Yet, those in the “task significance” condition earned
more than twice
the number of weekly pledges, going from an average of 9 to an average of 23. They also raised more than twice the amount of money, with average weekly donations growing from $1,288 a week to $3,130.

So what was it about this particular approach that was driving such an incredible increase? Further analyses suggested that the increase was due primarily to the fact that previously unmotivated employees were being spurred on by recognizing their connection to the touching personal stories they read. Energized by these results, they were making more calls per hour, speaking to more people, and consequently collecting more donations.

This insight provides a timely lesson for anyone tasked with motivating others. Regardless of whether the work concerns one’s role in a private corporation, the public sector, or a social enterprise, there is likely to be some significance and meaningfulness in nearly every job. The small change that managers would be advised to make is to take steps to ensure that their employees don’t lose sight of what that is.

What are those steps? For businesses that don’t already routinely collect customer stories, testimonials, and reports about how an employee, product, or service has benefited them in a positive way, the advice is to start doing so now. For those that already do collect customer stories, perhaps displaying them publicly on bulletin and notice boards is another small change that could have a potentially large impact. Or, rather than leave it to chance that employees will proactively read them, you could take the stories to your staff. In the same way Adam Grant arranged for staff to read stories about the impact their efforts could make, the team leader and supervisors might begin each staff meeting by reviewing a customer account of a job well done. Given some of the insights we have previously discussed on commitment strategies it might even be more powerful to ask team members to pick out their favorite stories and read them out loud to their colleagues rather than a manager reading them.

Another change a savvy manager could make would be to actually ask customers to come and tell their stories so staffs could hear their accounts firsthand. These days, thanks to technology like Skype and FaceTime, this doesn’t even require a physical visit to the company’s office, so it’s fairly easy for workers located in a place like Ames, Iowa, to see the impact they and their products have had on customers in Nairobi, Kenya, for example. Evidence of the potential upsides of this approach comes from a further insight gleaned from Adam Grant’s studies—that is, when callers had an opportunity to meet scholarship students face-to-face and hear their stories, it further fueled callers’ motivation and success.

The applications of this
SMALL
BIG are potentially limitless. Pharmaceutical companies, for example, could reconnect their sales representatives to the significance of what they do by arranging for patients to describe how their life has improved as a result of their medication. Social workers and home helpers are likely to feel more appreciated if they learn, firsthand, of the difference they make to people’s lives.

Finally, in recounting a story from his experiences in the call center, Grant describe a sad sign he saw above someone’s desk. It read “Doing a good job in this place is like wetting your pants in a dark suit. You get a warm feeling no one recognizes.” Maybe that’s the smallest change of all for a manager to make—to simply say “well done” to an employee who has made a difference.

I
n 1973, Barry Diller, the then VP of prime-time programming at the American Broadcasting Company (ABC), shattered the record for the amount paid for the rights to broadcast a single movie, shelling out $3.3 million to air
The Poseidon Adventure
on TVs around the nation.

This huge sum alone would have been enough to raise many eyebrows ($15.3 million in today’s dollars), but even more astonishing was the fact that the moment he put pen to paper, Diller already knew he would be losing at least $1 million on the deal.

So, what would influence a seasoned executive with years of industry experience to pay more than he should have, wanted to, or even needed to? And when it comes to your own negotiations, what small changes can you make that could help you avoid making a similar error?

Let’s leave 1970s TV for a few moments and transport ourselves to an entirely different environment—the modern-day business school. On the first day of his negotiating class Max Bazerman, a professor at Harvard Business School, conducts an interesting experiment. He takes a $20 bill from his wallet and offers it up for auction. Anyone is welcome to take part in the auction provided that they abide by the auction’s two rules. Bids must be made in $1 increments and the runner-up must, as a penalty, pay an amount equivalent to their last bid while receiving nothing in return. The auction begins and hands quickly go up as people try to seize the opportunity to acquire cash on the cheap. “The pattern is always the same,” Bazerman says. “The bidding starts out fast and furious.” But then something interesting happens.

As the bids approach the $14–$16 range it suddenly becomes clear to each bidder that he or she isn’t the only one hoping to snag a bargain. All of a sudden arms become welded to people’s sides and hands are thrust deep into pockets as bidders rapidly retreat, leaving only the two highest offers in the game. At that point something
really
interesting happens. Without realizing it, the two remaining bidders have become locked in a new game. Instead of playing to win, they are now playing
not to lose.

It is clear to any outsider that the bidders should cut their losses before the auction spins out of control. But they rarely do. Bazerman claims to have conducted over 200 separate auctions and only on one occasion did it end before the bid reached $20. Sometimes his $20 bill sells for over $100. Once, for a record $204!

So what’s going on? It appears that during Bazerman’s auctions two persuasive elements join forces to influence bidder behavior. The first is commitment and consistency, the idea that once someone makes even a small initial commitment they then encounter personal and interpersonal pressure to behave consistently with that commitment. It is easy to see how, at just $1, the cost of entry to Bazerman’s auction is a small enough commitment that most people are willing to make it. No surprise, then, that so many people do put their hands up. That subsequent bids are made only in small increments of a dollar further fuels a bidder’s desire for consistency. It is as if they are saying to themselves, “Well I have already bid $1, which is only a small amount, so to raise my offer by another $1 doesn’t seem that big a deal.” Of course it quickly becomes apparent that many others are in the auction, and recognizing the competition for a scarce resource (remember, only one person can successfully bid for the $20 bill), a second persuasive force comes into play: not so much the desire to win but the more potent need to avoid losing.

And that’s essentially what happened to ABC’s Diller. On learning that competitor broadcasters also had an interest in purchasing rights for the movie, and having already invested time and resources into winning the bid, not to mention his reputation, Diller could only move in one direction. His subsequent bids continued to escalate, quickly passing the point where he knew he was throwing away his money.

Diller’s story exemplifies a trap that many competitive negotiators fall into known as the “escalation of commitment,” a condition that is not just limited to individuals. At around the same time that Diller was conducting his negotiations, the Long Island Lighting Company was scheduled to unveil its $70 million nuclear power plant. However, due to a series of costly overruns, and even despite evidence of the plant’s economic infeasibility, it would be another decade before they pulled the plug on the project—by which time their costs had spiraled to over $6 billion!

Recognizing that escalations in commitment can often lead to poor outcomes and a potential loss of money and resources, many will adopt strategies designed to mitigate its influence. One of the most common is to arrange for one individual to make the initial decision about whether to enter a negotiation and then assign a different individual to carry out that negotiation. For example, a company looking to procure a new computer software system might delegate the responsibility of choosing that new system to one decision maker, but once a decision has been made, delegate the next job of negotiating that purchase to a different person. The thinking here is that by separating out the decision maker and negotiator roles, any escalations in commitment and the financial pitfalls that accompany them can be dodged.

In theory this sounds like a good strategy but it’s one that can sometimes still fail for a very simple but often overlooked reason. While a separate decision maker/negotiator strategy removes a
physical
connection between the two parties involved, it may not serve to remove any
psychological
connections that may exist. This leads to an intriguing question. Might the negotiator ensnare themselves in the decision maker’s  commitments simply because they share a connection with them? And if this does happen, is the resulting outcome likely to mirror those experienced by Barry Diller and Max Bazerman’s students?

In an attempt to test these ideas, social scientists Brian Gunia, Niro Sivanathan, and Adam Galinsky set up a series of studies. In one experiment, participants first read an account of a vice president of finance who had decided to invest $5 million in the consumer division of his company. They also learned that over the past five years that division had performed significantly worse than another division that he chose not to invest in. The participants were then told to imagine that they had just been appointed as the new vice president and consider how they would invest $10 million of new funds. However, before making their decisions, half of them were to spend a few minutes engaged in some “perspective-taking” by considering how the previous VP might have felt and thought as he made his investment decisions. The other half were simply told to be objective and not take into account the previous incumbent’s perspective at all.

The results demonstrated that those asked to take the perspective of the previous VP were not only influenced by the previous poor decision, they were also more likely to escalate the previous commitment that had been made, typically investing 40 percent more in that division than the control group. Perhaps most interestingly of all, this occurred despite the participants being offered a $50 cash bonus if the decisions that they made led to the best financial outcome.

But hang on a second. Today’s fast-paced and competitive business world is hardly conducive to undertaking our own perspective-taking, let alone someone else’s. So perhaps the procurement managers and buyers who are tasked with making decisions and negotiating on behalf of their organization can breathe a sigh of relief, confident in the knowledge that, in the absence of any deep connection, their performance is unlikely to be unduly affected.

Further studies by the researchers showed that such confidence might be misplaced. In fact, they found evidence that even seemingly meaningless connections—such as sharing a birth month and graduation year—can be enough to lock individuals into another’s commitments.

So what small changes might insights such as these prompt you to make to avoid falling into the trap of being influenced by others’ commitments? Imagine that you manage the procurement department in your organization and are responsible for a team of negotiators and purchasers. The results of these studies suggest that you take steps to select the member of your team who, all else being equal, has the fewest connections with the personnel of the department for which you are negotiating.

Managers also might consider the implications of these studies. As tempting as it would be to promote, for example, one of the team’s long-standing high performers in your sales department, the connection that individual likely has with the previous sales manager might serve to extend the life of decisions and strategies that you would actually prefer to eliminate. On the other hand, if you want the approaches and strategies employed by a previous manager to continue, then appointing that individual might be exactly the right thing to do.

And of course when it comes to your own negotiations and decisions, an awareness of the small but powerful influences that can sway your actions and decisions is crucial. Acting in accord with this insight might be enough for you to avoid a
Poseidon
-like adventure yourself that leads to the sinking of your business. For instance, research led by Jeffrey Pfeffer of the Graduate School of Business at Stanford University demonstrated that, if you have overseen a particular project within your organization, you would be well advised to assign the job of judging its success to someone else within the organization. That’s because you will be inclined to overestimate the project’s value—sometimes dramatically. Further, the less connected that selected judge feels to you, the more objective his or her assessment of the project will be.