Turnover Costs: 8 Hidden Costs of Employee Turnover You May Have Missed

Turnover Costs: 8 Hidden Costs of Employee Turnover You May Have Missed

Turnover costs a lot.

Turnover is a huge headache. It’s also expensive. You know turnover costs a lot, but do ever wonder what it costs you? Experts project voluntary turnover will hit 20% this year with direct costs over $11 billion. Yes, $11 billion.

But these direct costs are just the beginning. In addition to the hard costs of recruiting, hiring and training new hires there are many hidden costs.

8 Hidden Costs of Employee Turnover

One: Knowledge Gap

When you lose a member of the team, you also lose that person’s “tribal knowledge.” Tribal knowledge is the know-how a person accumulates in the trenches. Every person develops tribal knowledge as they learn their job and react to things that pop up. This unwritten playbook helps them be better, faster, and more efficient. Much better than standard procedure. And when they walk out the door, so does all that knowledge.

Quick Tip: Honor all this knowledge and try to document it. You’ll recognize your teammate, capture knowledge, and increase the value of your business. You will reduce the time it takes to train a replacement. And you make it a lot less likely they’ll jump ship in the first place!

Of course, there’s the darker side of tribal knowledge. Someone who’s been around knows the good, the bad, and the ugly of your company. They know where all the bodies are buried. You may prefer to keep that knowledge inside the tribe 😉

Two: Lost Connections

We talk about this all the time. Relationships and connections. When you lose a team member, you not only lose their connections with teammates. You also lose the connections they’ve built with your customers and vendors. The UPS guy and the people who cut the checks.

Each of these lost connections can damage your company. It can hurt morale and customer relationships. Things slow down because connections are often the lubricant that smooths out frictions we may never see. Some of the effects will be obvious right away. Others won’t emerge until the iron strikes the coal. These are the “thousand cuts” we don’t notice till it’s too late.

Three: Lost Intellectual Property

Taking trade secrets is unlawful. Yet it happens every single day. Customer lists, processes and procedures, formulas, sales strategies, and much more floats around the heads (and cell phones and home computers) of your team.

Often this happens unknowingly. Even when on purpose, it is very hard (and expensive) to prove. Every time an employee leaves your company you must ask: Is your “secret sauce” walking out the door?

The costs of lost intellectual property may not be obvious until months or years later. They play out in the business headlines every day. And trying to put this genie back in the bottle is difficult and expensive. These cases costs companies millions of dollars every year.

You can try to keep this valuable information from your competitors. But the best solution is the simplest. Don’t lose the talent in the first place.

Four: Added Pressure on Top Performers

When you lose an employee (even a bad apple), the best members of your team suffer. Your top people step in to carry the weight of the person who left. After all, that’s one of the reasons they are your top people. But this is a dangerous bargain. It can leave your top folks feeling unappreciated or taken advantage of. They get frustrated with other team members who don’t step up.

If these feelings get too strong you have a bigger problem. Your top performers start looking for greener pastures themselves. After all, if that slacker Karla found a better-paying gig with less stress and a more flexible schedule, why can’t I?

Maybe you feel like this isn’t too big a concern because you will reload. You can get a replacement for Karla into the game quick, right? Well… maybe yes. Maybe no. That’s the next two hidden costs.

Five: Cost of a Bad Hire

How effective is your hiring process? Do you bat a thousand at getting only “A” players? Or do you sometimes bring in a “B” player? Or the occasional “C” player?

Most companies focus too much on getting a new person in place and too little on getting the perfect person in place. After all, the business wants the position filled. Finding good people is hard. Finding the perfect person? Well, that’s nearly impossible. And that’s a very costly problem.

The hard costs of turnover can be tough to pin down. What’s your share of that $11 billion?  It varies by type of business and the position. But the financial cost of a bad hire is normally one to five times that person’s salary. (Here’s a great infographic detailing the staggering cost of a bad hire.)

But I’ve got bad news. That $11 billion figure is conservative. That’s because it focuses on the hard costs of recruiting and getting a new person in the door. But if you replace an “A” player with a “B” player (or heaven forbid your new recruit is a “C” player) you haven’t begun to figure the costs correctly.

Topgrading and the Cost of a Mis-hire

One of the best books on hiring “A” players is Brad Smart’s book Topgrading. In it he makes the case (and offers a great process) for hiring “A” players. In a study of over 100 client companies Smart and his team found that an average managerial mis-hire cost companies nearly $1.5 million per manager (14.6 times base compensation). Hiring costs were only $31,643. The cost of failure, mistakes, wasted and missed business opportunity? Over $1.2 million.

Turnover costs are much more than the cost of replacing lost talent. Do you end up with worse talent when you finally get the replacement up to speed? Do that consistently and you end up in what Smart calls the corporate death spiral:

“… we are sometimes asked to help correct an insidious corporate “death spiral” in which poor executive hires result in lower-level A Players quitting, leaving B/C Players who hire and promote more B/C Players. The shareholders are left bleeding and wounded, and the company may become moribund. Mis-hires can kill companies, individual careers, and real people whose stress causes heart failure.”

A team is only as good as its weakest link. So guess what happens to team productivity when you start adding a bunch of B/C links to your chain? That’s hidden cost number six.

Six: Productivity Plummets

Companies in the “death spiral” don’t just get poor performance from the new players. Everyone’s performance drops. Your team picks up the slack for the new players, which slows down their normal pace. They get frustrated training and re-training recruits that don’t get it. They stop helping new people, figuring they won’t last long anyway.

This reduced productivity is inevitable once turnover picks up. The entire team is stressed. They fail to meet team goals. Individual goals falter too. Rinse and repeat.

Seven: Lost Opportunity

Turnover costs business opportunity too. Time spent picking up the slack for lost teammates or training new ones is time not innovating or looking for new business opportunity. This cost is not just hidden from view, it’s enormous. Brad Smart calls it the single biggest cost of turnover:

 “The single biggest estimated cost in mis-hiring is the wasted or missed business opportunity. For decades I have witnessed multi-million-dollar fiascoes that clearly could have been avoided had an A Player been hired instead of a B/C Player. Gross neglect by a B/C Player salesperson resulted in the loss of the #1 customer in one client company. In another, incompetent information technology consultants were hired. Why? Because they were friends of a B/C Player CIO. The losses in information technology bankrupted the company. In companies that Topgrade sales departments, the sales of new A Players are sometimes twice that of the replaced Non-As; the “wasted or missed business opportunities” are easily estimated in sales organizations.”

How many multi-million dollar fiascoes and lost sales opportunities can your company withstand before it breaks? That’s what I thought. But we’re not done.

Eight: Hurts Overall Work Environment

All these challenges make for a pretty crappy work environment. Poor performance, lousy habits, and lack of engagement spread like wildfire. And they negatively impact a team even if you replace the bad hire. As Falon Fatemi mentions in Fortune, bad hires erode work environments:

“A bad apple spoils the bunch, so to speak. Disengagement is contagious, which may be why employers can’t seem to defeat it. …In many ways, a bad hire’s effect on company culture echoes beyond the employee’s tenure. Poor performers lower the bar for other employees, and bad habits spread like a virus. I once hired a manager who built a chaotic, everything’s-a-fire-drill environment. Even after removing the employee from the equation, we still had to invest time and resources to reset the behaviors of team members who emulated the manager’s approach.”

Action Steps to Turn Around Turnover

Is your company facing any of these hidden turnover costs? Next week we will offer some practical tips on how you can stop the “corporate death spiral” and get turnover under control.

5 Research-Backed Ways to Improve Employee Engagement

5 Research-Backed Ways to Improve Employee Engagement

How Do You Increase Organizational Citizenship (and Employee Engagement)?

Quick recap from last week:

  1. Chasing employee engagement (especially employee happiness) doesn’t work. Engagement is too squishy to define and often your unhappy or frustrated employees are your most engaged.
  2. What does work is increasing Organizational Citizenship Behavior (OCB). That is the only observable way to know whether your employees (or you) are engaged or not.

Which brings us back to the key question: How do you increase Organizational Citizenship?

Here’s 5 Research-Backed Steps to Increase OCBs for Your Team

One: Focus On Progress, Not Engagement.

Have you ever struggled with meditation? You sit and tell your brain to be calm, but instead your “monkey-mind” goes into overdrive thinking about… well, everything but being calm. The masters know the answer is to stop forcing the issue and to just notice what’s happening. Each time you catch your mind wandering now is a sign of progress. Which ironically makes the distractions less concerning and, in a way, welcome.

Engagement works the same way. You can’t force people to be engaged organizational citizens. Engagement is voluntary. No matter what you pay or offer in benefits. How cool your product or service. Whatever perks you offer. Everyone still chooses how much of themselves they are going to give from day to day. And in that sense, “everyone is a volunteer.”

But there still has to be something you can do to encourage people to bring their volunteer spirit with them to work each day. The good news is that there is. Help them see they are making progress in their life. Here is a model to guide you in doing just that.

Two: Ask “What’s Next?” To Blaze the Trail

Step one to helping a team member make progress in his or her life is to ask one simple question: “What’s next?”

If you’ve ever gone on a hiking trip, you’ve noticed the trail is usually marked with blazes. These blazes are painted or hung on trees. They are a sign you are on the right path. Often, they are spaced pretty far apart so it’s not abnormal to walk for a while without seeing one. But you know that if it’s been too long, you are lost. And that you need to retrace your steps in order to find where you got off the path.

“What’s next?” is a way for you to blaze the trail for your teammate. This question helps you figure out what path they are on, and what series of steps they’ll need to take. Notice how this question avoids looking too far ahead. That’s on purpose. Focusing on a big goal is often counterproductive. It makes it easy to give up (as in “I’ll never lose 100 pounds, so why not eat that third helping”). And even more interesting, sometimes reaching a big goal can be depressing. And have the ironic effect of making it easy to quit after all the progress is made.

Asking “what’s next” gets your teammate thinking about progress, and that’s a HUGE motivator.

Progress becomes a self-reinforcing, virtuous circle.

People who are making progress in their lives are more motivated personally. They are also more motivated to help their team.

Teresa Amabile and Steven Kramer studied the power of progress at work in their recent book The Progress Principle. The main conclusion of their study is that when we make progress, we improve our “inner work life” – the way we internally experience our work. And inner work life is directly connected to engagement.

So step one is to stop focusing on engagement and start focusing on progress is by asking “What’s next?”

Then, the question is, how can a leader help refine a goal into a proven way to manage progress? We’ve developed the Win, Know, Show model to help you do just that.

  1. What is their next small win?
  2. How will they know from the work itself whether they are making progress?
  3. When and how will they show their progress?

win-know-show-model

Ready to learn more? Let’s start with small wins.

Three: Identify a Small Win

So you’ve asked “What’s next?” And just like a Zen master you’re no longer focused on the end result of engagement. Instead, you’re focused on small steps your teammate takes each day. The next step is to help your teammate identify a small win.

A small win isn’t a big ambition. It’s the next logical improvement they need to meet their “what’s next” goal. It should require a little bit of a stretch, but nothing too far out of reach.

Setting a small win helps make sure your teammate can see progress.  What kind of small wins work best? Progress that relates to improving on a task. Or deeper involvement in a project. Maybe even process-related goals like working harder or longer.

Here’s what the professors have to say:

“We discovered that the inner work life effect operates in three primary ways: attention to tasks, engagement in the project, and intention to work hard. When inner work life is good, people are more likely to pay attention to the work itself, become deeply engaged in their team’s project, and hold fast to the goal of doing a great job. When inner work life is bad, people are more likely to get distracted from their work, disengage from their team’s projects, and give up on trying to achieve the goals set before them.”

One other critical point. Your teammate’s next small win (or their “What’s Next?”) might not be work related. That’s cool. If it’s something you can help them with, do it. Progress won’t always be work related. And occasionally, progress on personal goals might even mean your employee leaves to pursue some other life ambition. You may not like that, but here’s the good news.

That person will run through brick walls for you while they do work for you. They will be your biggest fan (and recruiter) when they leave. And leaders with a reputation for developing talent will attract more of it.

Four: Know When You’re Headed the Right Way (or the Wrong Way)

Making progress is motivating, but daily frustrations can easily overwhelm any progress you make. Professors Amabile and Kramer note:

“The connection between mood and negative work events is about five times stronger than the connection between mood and positive events. Employees recall more negative leader actions than positive actions, and they recall the negative actions more intensely and in more detail than the positive ones.”

That’s why it’s important to establish your “right way/wrong way” yardstick. How will you and your teammate know whether they are making progress? Ideally this feedback will come from the work or task itself. You also want to ask up front about what sorts of obstacles or frustrations could get in the way of progress.

Make sure to talk about how to measure progress.

A good place for inspiration? Video games. The reason video games are so addictive is that they give you immediate “right way/wrong way” feedback. It’s easy to see whether you are improving or getting worse. You can watch your score, the damage you’ve sustained, and the damage you’ve invoked upon your opponent.

What measures are available that can help your teammate see progress in real time? If there aren’t any visible “production” measures, how about process measures? What other ways are there to get feedback?

If you’re having a hard time identifying ways to get feedback, that might be a signal that you should re-think the small win. If you can’t measure progress it’s going to be easy to get stuck.

Don’t forget to look for obstacles and possible frustrations up front. Then, come up with a plan to overcome them. There are two important reasons for this. First, as the good professors suggest, you need to make sure the “steps forward” to “steps back” ratio is around 5:1 in favor of progress. Second, the best research shows that if we plan for obstacles we are way more likely to “grit” our way through them (even if we plan for a different obstacle than the one we eventually face).

This is why it’s so important for leaders to work every day to reduce daily frustrations. It doesn’t matter how much progress you make doing good things for your team. The daily frustrations will outweigh them all day, every day. Avoid taking one step forward, just to take four steps back. Really focus on discovering and reducing daily frustrations for your team.

Five: Show Your Work

You and your teammate have blazed the trail and identified the next small win. You know how you’re going to measure progress. But that’s not enough. Perhaps the most important step is for your teammate to show their progress.

Austin Kleon wrote a brilliant book called Show Your Work. While he focuses a lot on people who work in the visual arts, the lessons he teaches apply to all of us. His basic idea is that the “finished” project is perhaps the least interesting part of the work. What is most interesting are the steps taken to create the project. So his advice: Show Your Work.

This advice can really apply to any field. There are reality TV shows on almost every network today that take us behind the scenes of virtually every kind of work (car shops, kitchens, remodeling, dirty jobs, and so on). People love the chance to show off what they’re working on. It gives us a sense of pride. Honors the craft we dedicate our lives to. Not only that, the feedback you get by sharing your process creates the opportunity to teach and motivate others. It also gives you the chance to learn from others who may have a trick or shortcut you never thought of.

Some people feel like showing their work is showing off.

There is a little element of that, too. But it’s showing off in the best sense of that word. It’s not bragging or taking a victory lap. It is saying, “here’s what I did – the value I created.” It gives others permission to shine a light on the value they create too. Kleon created a great way to do this. Simply take a picture of your work (or of you working) and post it somewhere with the hashtag #ShowYourWork.

Whether your teammate posts their work for the world to see, or just shares it with you or the department, the important thing is that they get a chance to share. Building that into the progress management process helps to set a time-frame for progress. It gives them a reason to get something done (and let’s face it – sometimes that’s the motivation we need to get our noses on that grindstone). If your teammate isn’t ready to show at the designated time, that’s a great signal to check in and see if something is in the way or if they are off the trail.

The Takeaway

Everyone’s a volunteer – so look for OCB instead of engagement. You can’t force people to be engaged. In fact, engagement is such a squishy concept, it is nearly impossible to measure. Which is why leaders should focus on Organizational Citizenship instead.

There are 5 ways leaders can help create more organizational citizenship at work:

  1. Focus on Progress: Nothing motivates more than progress. Managing progress manages inner work life, and generates both internal motivation and motivation to help your team (aka organizational citizenship behavior).
  2. Ask “What’s Next?” This blazes the trail for progress. Make sure your teammate is focusing on the next blaze, not the end of the trail (big goals often kill motivation and progress).
  3. Identify the Next Small Win: Once you know where your teammate is headed, identify the next small step they can take to get there. Focus on task, process or effort-related goals. And it’s OK if the goal isn’t work related.
  4. What’s Your Yardstick? Make sure your teammate can measure progress, ideally from the work itself. Having trouble figuring out a good yardstick? That’s a sign you might want to revise your small win.
  5. Show Your Work: Take a victory lap. Figure out how your teammate can show their progress to you and others. Remember this isn’t bragging. It’s a way to honor the work and to get feedback and advice from others.
Bonus tip:

Don’t forget to lead by example. We’ve already established you can’t force people to engage in OCB activity. But you can help get the ball rolling by volunteering yourself. Organizational citizenship is contagious. Volunteering encourages others to volunteer. Also, make it a priority to zealously remove small daily frustrations. This shows OCB on your part (you don’t have to care about “the little stuff,” but you can choose to). It also shows your team that you value their daily experience. And you recognize that their struggles are real and valid.

Leading by example is the simplest and most effective way to develop and nurture the culture in your workplace. You are watched more than you realize. And, like us all, your actions speak much louder than your words.

Which of the 5 tips for encouraging OCB at your workplace do you see the most room for improvement? What’s your next step? How will you know if you’re making progress? Who can you show that work to? See what I did there 😉

The Only True Measure of Employee Engagement

The Only True Measure of Employee Engagement

Sometimes Your Unhappy Employees Are The Most Engaged.

Think employee engagement just means making employees happy? Nope. Often your unhappy employees are your most engaged ones. Don’t believe me? I’ve got a quick story that might change your mind.

This may come as a surprise to those of you who don’t know me personally, but I haven’t always been the picture of health and wellness that I am today (#irony). I somehow convinced an Ironwoman triathlete to take me on as her lifetime project (#oppositesattract).

Years ago Janet somehow convinced me we should do an “adventure race” together. On the fateful morning of the race Janet went to check us in while all 250 pounds of me sat in the truck wondering what I had done. She quickly returned with the race packet. Inside was the jerseys we had to wear. I watched as she sheepishly pulled my jersey out of the bag and immediately noticed two things:

  1. My jersey was about 3 sizes too small; and
  2. It was a HALF-SHIRT (think Chris Farley’s “fat guy in a little coat” and you’ll get the picture).

Needless to say, I was not happy. But we went on to compete in a two hour race. Well, a two hour race for us (Janet would have finished in under an hour).

The Low-Light (and the Triumph)

The low-light of this day full of low-lights was the blow-up kayak event. Blow-up kayaks are unstable and quite cramped. Especially when the person in the back of the kayak outweighs the person in the front by more than 100 pounds. My legs quickly started falling asleep. Every time I tried to adjust, the kayak took on water, which I would then try to bail out using a small water bottle. This was hilarious to everyone but me.

I decided about halfway through the kayak event that the best way to preserve my marriage was to quit speaking to Janet. When we finally made it back to shore we struggled to dump what felt like 75 gallons of water from the kayak. Janet turned to me and whispered, “We can quit if you want to.” In one of my less approachable moments as a husband I said (OK, I yelled), “We are finishing this fudging race!” Except, like Ralphie, I didn’t say fudge.

But here’s the thing. While I was the slowest, fattest and angriest person on the race course that day I was, without a doubt, the most engaged. If a pack of wild coyotes came between me and that finish line I would have tore right through them. And we did finish, to the cheers (and some jeers) of… well, everyone else who showed up to the race that day.

The Problem with Measuring Employee Engagement

I’m not suggesting you should motivate your team by piling them into your version of a tiny blow-up kayak. But the old adage isn’t necessarily true. Happy employees are not the key to employee engagement. We often get this completely backwards, thinking our job is to be the Chief Happiness Officer of our company. Happiness and satisfaction are often the opposite of employee engagement.

Think about yourself for a second. Do you consider yourself an engaged employee? Okay, then are you always happy? Or do you get frustrated that things aren’t going as well as you know they could? Upset when you see the company or your team settling or not living up to its potential?

So happiness is a poor measure of engagement. Here’s some more bad news. Your “engagement survey” isn’t really measuring employee engagement either. Sure, every survey company out there (including mine) offers an engagement index. But these all measure work conditions that should lead to employee engagement (or disengagement).

The Only True Measure of Employee Engagement

Frustrated or unhappy employees are sometimes disengaged. But often the opposite is true. It depends on why the person is frustrated or unhappy.

One recent article suggests using the “net promoter” score, or whether an employee is likely to refer someone to work or do business with the company. We’ve been measuring net promoter in our surveys for many years now. I like this measure over others because it is a solid predictor of actual behavior. But even this isn’t actually measuring employee engagement. Likelihood to promote is just another precursor to engagement.

Are You Making Diamonds or Coal?

Sometimes friction and high pressure leads to diamonds. Other times you end up with coal (or just ground up dirt). How do you know if you’re creating diamonds or coal? How can you tell if you’re employees are actually engaged?

There is only one way to get a true sense of how engaged your team members are. You must focus on observable behavior. What do they choose to do to help out their teammates? Do they volunteer to help others when they don’t have to? Are they always looking for ways to make things smoother, even outside of their normal job?

That’s the true measure of employee engagement. It’s called Organizational Citizenship Behavior (OCB). And I think it is the best observable way to spot engagement.

Professor Dennis Organ originally defined OCB as, “individual behavior that is discretionary, not directly or explicitly recognized by the formal reward system, and that in the aggregate promotes the effective functioning of the organization.” OCB has 3 critical components:

  1. They are discretionary (not part of the job description) and voluntary or chosen by the employee;
  2. They go above and beyond the requirements of the job (they aren’t just performing your job above expectations); and
  3. They contribute to the overall effectiveness of the organization.

How do you get people to engage in OCB? I thought you’d never ask 🙂

Next week we’ll cover 5 steps (including our “Win, Know, Show” Model) you can use to increase Organizational Citizenship among your teammates.

Have you ever been frustrated or angry and engaged? Do you ever mistake frustration of a teammate as a sign of poor engagement? How much organizational citizenship behavior do you notice among your teammates?

How to Upgrade Your Self-Control as a Leader: 3 Research-Backed Steps

How to Upgrade Your Self-Control as a Leader: 3 Research-Backed Steps

Leadership Takes Self-Control

You ever had one of those days where NOTHING goes right? Alarm doesn’t go off. GPS sends you to the wrong address. You walk in the door only to realize your well-planned day just got blown to smithereens. Or in my case last week, get caught in a monsoon during a measly 6-block walk to a presentation. Nothing like showing up to a speech looking like you just ran a marathon in your suit. Nice.

If you’ve been a leader for any length of time, you know how it is. But leaders pride ourselves on rising to the occasion when the chips are down. Keeping calm under pressure. In my case I found a bathroom, changed my shirt (twice… my clean shirt for the next day also got soaked through my suitcase). I didn’t look my best, but I didn’t look homeless, which was a solid upgrade from a few minutes before. And I didn’t snap or vent my frustration to anyone.

Those are the good days. But there are bad days too. The days you do snap. Say something you regret. Use your “outside” voice while yelling the wrong F-word. Respond when the right move is keeping your mouth shut.

How well do you exercise self-control? It’s a challenge for most leaders. It requires self-awareness and observing yourself through another person’s eyes. You may feel good about your self-control. Does your team feel the same way?

Poor Self-Control? I’ve Got Some Bad News

One of the world’s most important and influential psychologists, Roy F. Baumeister, teamed up with New York Times science writer John Tierney to write Willpower: Rediscovering the Greatest Human Strength. It is the go-to book on how to master (well, at least improve) your self-control. Here are a few of their findings:

  • Managers who scored high in self-control were rated more favorably by subordinates and peers;
  • People with good self-control were exceptional at forming and maintaining secure, satisfying attachments to other people; and
  • They were more stable emotionally and less prone to anxiety, depression, paranoia, psychoticism, obsessive-compulsive behavior, eating disorders, drinking problems, and other maladies.

Master self-control and you’ll be better rated at work and enjoy better relationships. Plus you won’t end up depressed because you’re a fat, drunk psychopath. And if that’s not enough, a recent HBR article cites peer-reviewed research that suggests:

“At work, leaders with higher levels of self-control display more effective leadership styles – they are more likely to inspire and intellectually challenge their followers, instead of being abusive or micromanaging.”

That same study – which is supported by Baumeister and Tierney’s research – explains the 3 ground rules for self-control:

  1. Self control is a finite cognitive resource;
  2. Different types of self-control tap the same pool of self-control resources; and
  3. Exerting self-control can negatively affect future self-control if it is not replenished.

OK, you’re convinced. This self-control thing is worth working on. You know the ground rules. But how realistic is it to maintain self-control all day long? What’s your strategy for managing this precious resource?

3 Research-Backed Steps to Upgrade Your Self-Control as a Leader:

Step One: Don’t Fail the Marshmallow Test. Watch for Signs of Willpower Depletion.

The classic study on self-control is basically torturing children. You put kids in a room with a bunch of marshmallows and tell them not to eat them. Then you leave and watch them struggle to avoid eating them (or not struggle at all and watch the little heathens pound fistfuls of marshmallows).

The marshmallow test turns out to be an incredible predictor of performance later in life. It’s basically the only test you can give a child that predicts how they will perform as an adult (not even IQ does that). Another illustration of the power of self-control.

One of the most important points Baumeister and Tierney make through their research is that willpower becomes depleted as you use it. Think about it like exercise. When you work out, you use up energy. Before you can exercise again, you must rest and refuel. If you hit the wall, your performance drops and you “bonk.”

You don’t want to bonk as a leader. Here are 4 questions to ask yourself to determine how much willpower gas you have left in your tank.

  1. Are you getting frustrated more easily?
  2. Is the “volume” on your life turned up? (Do you feel extra busy? Spread too thin?)
  3. Are you struggling to make decisions?
  4. Is your overall energy down?

Once you recognize your willpower reserves are running low, move on to step two.

Step Two: Slow Down And Eat Some Humble Pie.

If your self-control is running low, it’s likely your relationship with your team is struggling because of it. You don’t want that. Remember, employees perform better for leaders with higher levels of self-control.

How can you refuel your relationships? Recognize that you are not at your best. A lot of leaders will fall back on their power or positional authority in times like these. That’s not a good place. Instead, focus on being humble. For tips on this you should check out Edgar Schein’s book Humble Inquiry. Here are three actions you can take:

  • Do less telling and more asking. Schein observes, “Telling puts the other person down. It implies the other person does not know what I am telling and that the other person ought to know it.”
  • Practice “Here and Now Humility.” This is the idea that when someone in a higher power position asks someone in a lower power position to do something for them, their roles switch. The person in the higher power position becomes dependent on the other and thus, inferior. Schein suggests that you embrace this dynamic as often as possible. Or check out the Recognizing Gaps Tool in our Leadership Survival Toolkit for practical ways to “flip the script” and show humility toward your team.
  • Stop being so task-oriented. Task-oriented relationships encourage individualism and competitiveness. On the flip side, person-oriented relationships encourage cooperation, teamwork, and putting group (or business) before self.

Step Three: Make Your Bed. Work On Building Your Willpower “Muscles.”

How do you maintain self-control? Here are 3 practical tips to get you started.

  1. Start your day off right. Get some early positive momentum by building habits that start your day on the right track. Tim Ferris’ terrific new book Tools of Titans mentions this simple tip from Hindu Priest Dandapani: finish your sleep each day by making your bed. Ferris also recommends journaling about things you’re thankful for each morning. This is part of my daily practice too. I’m such a fan that it’s included in all of our Learn and Lead Journals. Accomplishing small steps gives you the feeling of control.
  2. Take care of yourself. Baumeister and Tierney found that sleep restores willpower. So get plenty of rest. Ferris offers many practical tips on this too. Also organize your workspace. Being in a clean room increases self-control, which is why you should keep your physical and virtual desks under control. Finally, eat right. Will-power is directly affected by your glucose levels.
  3. Pre-commit. Baumeister and Tierney also suggest pre-committing to the steps you’ll take to overcome anticipated obstacles. Let’s say hypothetically that you drive by a Sonic on your way home from work. What’s your plan to keep that voice on your left shoulder from talking you into grabbing a cookie-dough Master Blast after a hard day? Decision-making depletes self-control. Having a plan in place makes it much more likely that you’ll follow through and avoid the temptation (not that I have any personal experience with this :)).

The Takeaway

Leadership takes self-control. And self-control is like any limited resource – it must be conserved and replenished. Here are 3 tips for upgrading your self-control as a leader.

  1. Don’t fail the marshmallow test. Watch for signs of willpower depletion. Learn to recognize the signs that your self-control is running low.
  2. Slow down and eat some humble pie. Take some time to reflect on how your low-willpower moments impact your team. Practice humility and use our tools to flip the power relationship.
  3. Make Your Bed. Work on building your willpower “muscles.” All good things take effort. Practice behaviors that increase your chances of acting from a place of self-control.

How far into your day do you usually make it before your self-control reserves burn out? Can you think of examples where your lack of control has had a negative effect on a team member? What are 2 or 3 things you can do to build up your self-control muscles?

Here is How Leaders Can Overcome Bias: 3 Proven Tactics from Research

Here is How Leaders Can Overcome Bias: 3 Proven Tactics from Research

Are You Biased? Don’t Say No Until You Imagine This.

You’re driving to work. Sipping your coffee. Listening to your favorite morning show. At the most traffic-jammed intersection of your drive, someone squeezes in between you and the car just ahead. How do you feel? Right. What a jerk!

Now imagine you stop for gas. You try pulling out of the convenience store into the same intersection. And what happens? Nobody will let you merge. After fuming for 3 minutes you jam your way in, causing the person behind you to hit their brakes (and salute you). Now how do you feel? Right again. What a bunch of jerks!

You see yourself as the hero of both of these driving stories, overcoming all those villains on the roadways. But are you always an angel on the road? Yeah, me either.

We see our own behavior in the best light possible. When we react to something (like traffic) we explain our behavior based on the situation. But the behavior of others? Well that’s a different story. We explain other people’s behavior based on traits. This is called Actor-Observer Bias (or Fundamental Attribution Error if you want to get real fancy-schmancy). And it is just one cognitive bias that impacts your leadership.

Let’s Start with the Obvious. Very Few People Think They Are Biased.

Bias is how other people behave (there goes that Actor-Observer bias again). Bias is a leadership “blindspot” lurking in the background. It’s rarely overt or even conscious. It’s implicit and hidden from plain sight.

The best book I’ve read on implicit bias is Blindspot: Hidden Biases of Good People by Mahzarin R. Banaji and Anthony G. Greenwald. Their main message is that we all experience bias:

A quarter century ago, most psychologists believed that human behavior was primarily guided by conscious thoughts and feelings. Nowadays the majority will readily agree that much of human judgment and behavior is produced with little conscious thought.

We prefer people who look like us or share similar backgrounds. Or in the case of Actor-Observer bias, we prefer people who are us. And since most of us don’t think we’re biased, we don’t question our decision-making.

Banaji and Greenwald find we often react to things without even thinking about it. It is part of our System 1 (automatic) thinking. Every day we unconsciously react to people and situations based on bias we don’t realize we have. Or worse, bias that we tell ourselves we don’t have. Even professor Banaji, who dedicates his career to overcoming bias in society, tests out as showing an automatic preference in favor of Whites.

Three Ways to Overcome Your Own Bias as a Leader

We rarely think about our biases. We don’t want to think about them. Or we think we aren’t biased when our actions tell a different story. Dostoyevski calls them “colorless lies” because they are lies we don’t even reveal to ourselves.

The fact is, our biases run the show more often than we realize. And that’s a problem. Because if we operate on autopilot our behavior won’t change. But once you shine a light on bias you give yourself a shot to question your assumptions. Here are three research-backed ways you can manage your bias:

1. Check Yourself (Before You Wreck Yourself).

Step one is switch off the autopilot every once in a while. Professor Banaji and another colleague created numerous tests that reveal implicit bias. If you feel like doing some self-awareness work I encourage you to check out the Implicit Association Tests. They were very eye-opening for me (and my family).

The Implicit Association Tests focus mainly on traits like race, culture, age, and gender. Knowing your implicit bias in these areas is obviously very important. But you also need to check for cognitive bias like the Actor-Observer bias. Things like Confirmation bias and the Semmelweis Reflex, are bugs in your cognitive operating system. Here’s a great visual of the most common cognitive bias:

The Cognitive Bias Codex by John Mannogian

The bad news is we all have bias. We rarely question whether it’s impacting our decisions or behavior (spoiler alert: it is). What’s worse, even if you know you have bias you won’t “cure” your implicit or cognitive bias. Professors Banaji and Greenwald lament:

As disappointing as it was to discover that the tests revealed associations that we preferred not to have, it was even more disappointing to observe that our results for these tests changed little over time, as we took them repeatedly. Awareness of the hidden biases did not seem to help us to eradicate them.

Once you understand your potential bias, instead of trying to eliminate it you should manage it. To do that you move to step 2.

2. Teach Yourself to Turn Off (and Sometimes Turn On) Your Autopilot

Our implicit or cognitive bias doesn’t happen in a vacuum. It’s situational. It occurs when we make a decision or respond to a situation. These are “triggers” and each one is an opportunity to question (or act based on) bias. For example, consider these situations:

  • Someone with an accent applies for a customer service job. You don’t think they’ll be a good fit. Why? You don’t think you customers will accept talking to someone with an accent.
  • A small person asks to be a helper in your fabrication shop. You immediately push them to the “no” pile. Why? there’s a lot of heavy lifting involved that this person probably can’t handle.
  • One of your teammates seems to be on Facebook a little too often. They come to you with an idea to reduce the amount of time it takes to do their operation. You internally roll your eyes, figuring they are just trying to get out of more work.

Each one of these might seem like a reasonable reaction. Sometimes language and weight restrictions rise to the level of actual job requirements. But we often don’t question the assumptions behind these reactions. Any of them could be due to implicit or cognitive bias.

Maybe your customers might enjoy someone with an unusual accent. Or this could be an opportunity to reduce or eliminate lifting in fabrication (not to mention you never know who lifts cars after work at the cross-fit gym!) And the “lazy” employee might have just given you a huge money-saving idea. These days some economists even argue that time on Facebook may mask huge productivity gains at work (although for any of my employees reading this let me say I’m not convinced 🙂

How To Turn Off the Autopilot

In situations like these use the trigger as chance to question assumptions. Your goal is to create cognitive dissonance and get your System 2 (analytical) brain working. Our Hero Assumption Learn and Lead Huddle includes a Trigger Tool. It encourages leaders to reflect on these triggers. But here are three questions to get you started:

  1. What is your evidence for the assumption? Is there any evidence that the opposite is true?
  2. Are there any resources or alternatives that could overcome the potential obstacle? Have we ever overcome a situation like this before?
  3. Is this an opportunity to re-think the way “we’ve always done” things? What new could we create from this situation?

These questions will help get your brain off autopilot, and nudge you to face any implicit or cognitive bias. However, there are times when autopilot can be the answer to bias. Like tryouts for a seat in an orchestra. For decades these tryouts occurred out in the open and women rarely won a spot. All that changed over the last 20 years when orchestras started doing “blind” auditions with players behind cloth screens. As Professors Banaji and Greenwald explain:

After the adoption of blind auditions, the proportion of women hired by major symphony orchestras doubled—from 20 percent to 40 percent. In retrospect it is easy to see that a virtuoso = male stereotype was an invalid but potent mindbug, undermining the orchestra’s ability to select the most talented musicians. Two things stand out about the introduction of blind auditions for orchestra hiring. First is that they did the experiment at all; few experts are able to have sufficient distrust of their own abilities to actually put themselves to a test. Second, the fix was simple and cheap—a piece of cloth. Outsmarting this particular mindbug required awareness, a desire to improve, and a method for improving. It did not need to be complicated or costly.

Whenever possible, look for ways to eliminate bias by removing chances for it to happen in the first place. This removes bias from the system instead of relying on us to catch ourselves in the act. But if you still want to stop bias at the source you’ll need a new “autopilot setting” using step 3.

3. Reset Your Autopilot Using The Hero Assumption

Start thinking about implicit and cognitive bias and it’s easy to get discouraged. Leaders get the chance to act on bias dozens of times a day. And be honest. How often do you look at your employees like drivers on the road I mentioned earlier?

We call this the Villain Assumption. The Villain Assumption is the opposite of the Hero Assumption (“nobody wakes up thinking they are the villain of their story”). I’d bet you’ve made the Villain Assumption toward someone on your team at least once today without realizing it. Late for a meeting? Probably wasting time on social media. Quality issue? Probably doesn’t care as much about the work as you do.

Worse, you may make the Villain Assumption toward yourself. Do you ever wonder whether you have what it takes to be a great leader? Are you organized enough? Driven enough? That’s the Villain Assumption. You may have even had some thoughts like that while reading this article.

The Hero Assumption isn’t just being nice. It is a key difference maker in how they perform. Research on the Pygmalion effect proves that your assumptions about your team influences how they perform – for better or worse. And it’s not just a good idea for your teammates. The stereotypes and implicit assumptions we make can negatively effect the way we act and behave toward ourselves and even harm our health. One study Banaji and Greenwald cite shows that elderly people who have negative implicit assumptions about age are more likely to suffer from heart disease when they’re older. They conclude:

In understanding mindbugs, a persuasive reason to take them seriously is self-interest: Stereotypes can negatively affect our actions toward ourselves.

Therefore Step 3 is to make the Hero Assumption about your teammates. This must be your “default” position. Anytime you experience a trigger look for how the glass is half-full. Assume positive intent. When your coworker reacts think of them like the Actor instead of the Observer (the same way you would for yourself).

The Takeaway

Each one of us faces a complicated set of implicit and cognitive biases. We almost never think about them (after all, they’re implicit). Even worse, they are very hard to overcome. This means we have to always look out for them and be ready to manage them when they pop up. You can do that by:

  1. Checking Yourself (working on self-awareness and always being on the lookout for implicit and cognitive bias);
  2. Checking Your Autopilot (look for triggering situations and create alarms to make sure you consider bias; or look for situations where you can set your autopilot to overcome potential bias);
  3. Make the Hero Assumption Your “Default” Setting (set you and your team up for success by assuming the best and not the worst).

I know you can handle it. After all, I’m making the Hero Assumption about you.

Do you have any experience with implicit bias in your life? What about cognitive bias? When was the last time you tried to recognize some of your own biases. Does the Hero Assumption come naturally to you? Let us know in the comments.