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Who is Rich Hagberg?

Who is Rich Hagberg?

Richard Hagberg, Hagberg Consulting Group, ceo and executive coach and mentor.

I have been coaching executives since 1979. My focus today is helping entrepreneurs and their teams scale their leadership.  What separates me from other leadership coaches is that I realize that entrepreneurs need both a sounding board and some guidance in how to actually go about leading an organization through its natural growing pains. Although we start with assessments to get an objective view of strengths and weaknesses, my approach isn't just about diagnosis. It's about helping leaders understand how to become more effective leaders of fast growing companies.


Although I'm trained as a psychologist and hold a PhD in Counseling Psychology, I believe that it's my practical operating experience as an entrepreneur THAT completes the package. I have actually started and run a business that I grew over many years, at times very fast, and I've made a lot of mistakes and learned from them. I use this unique experience and education and combine it with the understanding that comes from years of research on effective and ineffective leadership, TO HELP LEADERS CREATE A DYNAMIC organizational culture and BUILD effective teams.

Review some of the frameworks we'll work with...

Leadership Blog

Accountability is the glue that ties commitment to results.
By Rich Hagberg 30 Aug, 2023
Setting the Conditions for Success
Relationship Building, part 3
By Rich Hagberg 15 Jul, 2023
Along with their natural strengths, Relationship Builders have a cluster of leadership problems which revolve around their warm and sympathetic natures.
By Rich Hagberg 15 Jun, 2023
The Relationship Builder is one of the Three Pillars of Leadership (Visionary Evangelist, Relationship Builder, and Manager of Execution.) In this section we will discuss the natural characteristics and strong points of people who are good relationship builders. In the final section we’ll discuss their weaknesses and challenges and make some suggestions for improvement.
The relationship builder leader, Part 1.
By Rich Hagberg 15 May, 2023
Leadership is the art of creating followers. It is not a solo performance, but a partnership, a dance between leaders and their followers. I may think of myself as a leader, but if I go charging up the hill shouting and carrying the flag and no one follows – am I a leader or a fool? To be effective, leaders must gain the support of others.
Is Your Ego Destroying Your Leadership?
By Rich Hagberg 24 Feb, 2021
Our research on almost 2000 leaders suggests that self-confidence is an important factor in effective leadership. However, this is not as straight-forward as one might think. Those who are rated as effective leaders by their coworkers have a healthy balance of belief in themselves and their capabilities but recognize their limitations.
By Rich Hagberg 22 Feb, 2021
There are many approaches to making an effective decision
By Rich Hagberg 16 Feb, 2021
Their Superpowers and Their Dark Side
By Rich Hagberg 11 Feb, 2021
Letting the Facts Win The most powerful method for improving the quality of your decisions is to follow a disciplined decision-making process. Decisions are often contaminated by biases, a tendency to jump to conclusions, emotional reactivity and by pressure to act quickly. In this blog we will review both the benefits of following a disciplined decision process as well as how to implement this this process to improve the quality of the outcomes. When making decisions with a team, the conscious or unconscious influence of the leader can sabotage the entire discussion. The principles and practical suggestions in this article will be useful for both individual and group/team decision making, and for both professional and personal decisions that you need to make. The goal is to make objective decisions and let the facts win. Accomplishing this is a challenge for every leader. The surprising key to effective decision making Just as with individuals, there are principles and dynamics that can promote wise and effective team decisions. You might be surprised to learn that an even more crucial factor than gathering reliable data is having in place a disciplined process for involving the whole team in the making of important decisions. Amazing and Relevant Research Research by behavioral economists Dan Lovallo and Olivier Sibony looked at 1,048 business decisions over five years tracked both the way the decisions were made, and the outcomes in terms of revenue, profits, and market share. Their focus was to understand the impact of bias on corporate strategy and the decisions that guided it. Most of the teams they studied had conducted rigorous analyses before making the decision, compiling financial models and assessing how investors might react to their plan. These were not decisions about what color chairs to buy for the conference room, but major decisions such as whether to launch a new product or service, change the structure of the company, enter a new country, or acquire another firm. They also looked at the results, the outcomes of these decision on revenue, profit, market share and return on investment. Lovallo and Sibony also asked the teams to describe their decision-making process: how they went about making the decision. For example: Did the decision-makers consider multiple points of view Did they recognize what they didn’t know and what was uncertain Did they include participation from a range of people with differing views on the desired outcome and how to get there? Did they search for evidence that contradicted their beliefs? Did they include in their discussion points of view that contradicted the senior executive’s perspective? Did they elicit participation from a range of people who had different views? What they found was that the decision-making process that the teams utilized was far more important than analysis and having the right data – astonishingly, by a factor of six! Having the right data clearly matters, but it’s not enough. In other words, good analysis in the hands of smart people won’t always lead to good decisions. Even though detailed analysis is important, the decision-making process itself was six times more crucial to successful outcomes. When the decision-making process was improved there was a statistically significant improvement in financial results. Why should this be? They concluded, "An unbiased decision-making process will do a lot is ferret out poor analysis. The reverse is not true; superb analysis is useless unless the decision process gives it a fair hearing…”. So, how can the leader ensure that a fair hearing is given to all the facts, relevant factors, and alternatives? How can we attain that level of objectivity and fairness required to minimize biases, challenge assumptions, and as much as possible neutralize all the other ways we tend to blind ourselves, distort our perspective and sabotage? One way to overcome bias and a tendency to jump to conclusions, is to explore multiple options to avoid focusing on conclusions that are too narrow, biased or reactive. A single individual may have trouble doing this effectively. Utilizing outside input from experts or using your team in a brainstorming session can usually generate numerous possible approaches. This can also help you avoid recency bias. Recency bias occurs when a leader or team puts too much emphasis on recent events and give less weight to those that have happened in the past. It skews perception toward short-term thinking. Another way to sidestep bias is to invite team members to challenge each other’s assumptions and ask disconfirming questions, such as: What could go wrong if we do this? What is the biggest potential obstacle you can see in the solution we have proposed? If you follow my proposed approach, what might happen that we haven’t thought about? What haven’t we considered, what are we missing by taking this approach? If we follow this plan, what problems might arise? How many leaders – especially if they have an idea of where they want to go on a specific initiative – are willing to ask themselves such questions and subject themselves to input that might cast doubt on their decisions? Yet questions like these, if taken up by the group, can yield insights that might avoid hidden danger and difficulty. Leaders often deceive themselves by thinking that they are gathering information when they are actually fishing for support their idea and trying to be right rather than trying to uncover the facts. If you want to get to the best answer rather than seeking confirmation of your viewpoint, invite the perspectives of people who have diverse backgrounds and experience in different domains and different companies. Don’t be afraid to spark constructive disagreement. In fact, encourage it. Ultimately you will create a more effective decision-making environment if you use your team, and this is particularly important around strategic decisions. The value of active participation in a disciplined group process Not all decisions require involvement of your team. Some decisions you may need to make by yourself. Some require you to consult with others who have a useful perspective and unique insight into the problem you are trying to solve. Some are best delegated to others who have demonstrated good judgment and capability. However, when you have the time, need alignment, buy-in and support for your decision, need to generate multiple creative alternatives, and functional or domain knowledge, involving your team may produce a better decision. Of course, this requires good team communication, effective collaboration and means you must actively facilitate a disciplined process. But the synergy of effective team problem-solving and lively discussion can bring exciting results and higher levels of acceptance of the ultimate decision. If you are going to lead the problem-solving or team decision process, here is a brief description of an effective decision process: Step by Step To Better Decisions Clearly identify what the problem is that you’re trying to solve and what you are trying to accomplish Define what success looks like and your criteria for evaluating the optimal outcome Collect the facts that are relevant to the problem or decision Actively encourage the participation of all team members Separate the facts from opinions and speculation about the facts Generate multiple alternatives for solving the problem Evaluate alternatives against your success criteria Consider the pros and cons, obstacles and potential consequences of the best alternatives Select the best option or multiple options Develop a plan of action and how it will be implemented (who does what, when etc.) Communicate your decision to those who will be affected This process doesn’t just happen. The leader needs to be sure a systematic, disciplined process is followed. The leader can help the facts win, or he/she can bias it, skewing the outcome. If you follow a well-defined, systematic and disciplined process, and the team gets used to following that process, the quality of decisions that are made by the team will be much higher. You may not always feel that you have the time to do this, but if the decision has important consequences, or is complex or has triggered strong conflicting points of view, it might be the best approach. Hagberg Consulting Group/Accenture Research on Cultures that Get Financial Results The many benefits of including your team in decision-making were borne out by data collected by both Hagberg Consulting Group and Accenture. In a study that looked at the corporate culture of over 300 companies, we found that financial results and retention of top performers were strongly influenced by team participation. Here are some of the key findings: The higher the level of team member participation in decision making, the more ideas were generated, and innovation and risk taking increased A higher level of participation by team members leads to greater alignment and a sense of ownership on strategic decisions A higher level of participation by team members means that they have an opportunity to openly share their views, reducing the chances of political maneuvering behind the scenes The higher the level of participation by team members, the greater the spirit of collaboration, communication, and coordination that is created on the team The higher the level of participation by team members, the more adaptable the organization The higher the level collaboration between team members, departments, and groups, the better the financial results The more team members were willing or able to challenge outdated assumptions and ineffective practices, the better the results The higher the level of cooperation and team spirit, the easier it was to retain top talent The more the organization’s leaders demonstrated trust in team members, the more likely the organization was to retain top talent The more conflicts were addressed directly and not swept under the rug, the more likely it was to retain top talent When team members have active input in decision making, they take pride in the decision, and feel more engaged with the company. When they are directly involved in the creation of strategy, for example, they have a deeper understanding of what the strategy is, and are more aligned, inspired, and motivated to work toward achieving whatever the plan is. Employee loyalty increases. When the players are more aligned, the team and the organization as a whole becomes more agile, able to adapt more quickly and move more coherently. Not surprisingly, financial results improve. Team participation in making important and critical decisions stimulates useful dialogue. The input from team members with different domain knowledge can lead to exploration of creative alternatives. This will take more time than a decision handed down from above but will likely yield higher quality solutions and produce greater buy-in and support for the ultimate decision. This collaborative problem solving/decision making process requires the leader to facilitate effective communication and skillfully guide the team to systematically work through the problem. But the leader must also be willing to share power and give up some degree of control. The dynamics of group decision making 1. Brainstorming : The decision-making process moves naturally through predicable phases. It begins with some version of brainstorming, in which ideas are generated and put on the table (or the whiteboard, or a digital equivalent) for consideration. In this stage, the goal is to come up with as many ideas as possible, not to censor some ideas as “unworkable” but rather, to encourage the ideas to flow. It is a process of divergent thinking, aiming at an expansion of possible options. 2. Getting closure : Brainstorming alternative solutions inevitably leads to the need to bring all the ideas to closure. Your task as leader is to help the team hold an in-depth discussion of the alternatives, and to provide some structure for selecting the best of them. The purpose of the discussion, of course, is to reach some sort of consensus, to narrow down the options in order to go forward toward a solution and then a plan of action. 3. Exploring differences : In the conversation, those who favor an approach or a solution have a chance to advocate for it. The job of the others is to listen respectfully and consider the idea with as little bias or prejudgment as possible. Typically, many ideas are put forward, without a clear solution emerging. 4. Getting bogged down : At this point, the team may struggle to comprehend the wide range of ideas that have been generated and reach consensus or at least a workable conclusion. This can be difficult and often leads to arguments and stalemate. The team may become bogged down in competing viewpoints. No way forward seems clear and obvious. Frustration mounts. There may be irritation or anger. Why does the team get stuck? Group members have different agendas, needs, biases and frames of reference. Often the discussion reveals that people don’t really understand one another. Some members push their own agenda aggressively. Some interrupt while others go on and on repeating their point of view. Some dismiss the ideas of other members. Some members attack, while others get defensive and withdraw. Some lose patience with the whole process, which can lead to frustration, and dysfunctional conflict or the adoption of suboptimal solutions that are a compromise, false consensus, or groupthink. If the trust level of the team is low and there are conflicts and tensions between team members, it is common for members to misinterpret or misrepresent each other’s ideas. Overcome the conflicts or stalemate : In order to break through the logjam, the team leader may need to switch styles and help the team engage in convergent thinking, in order to move together toward a decision. Convergent thinking is applying logic to evaluate options and narrow down to the best answer or alternatives. The leader needs to help the group develop a common understanding, generate alternative solutions, sustain motivation to work through the issues. and then integrating divergent into a mutually acceptable solution. The process of working toward a solution can be greatly aided by a leader or outside facilitator who is skilled in facilitating group discussions. This is an art that requires both learning and practice. As the leader, you may choose to find and hire such a person as a consultant when difficult or crucial strategic decisions need to be made. Or you may take it upon yourself to play that role. If you do, keep in mind the following basic guidelines: Don’t panic . Recognize that you or your team is stuck, and that it is a necessary stage in the transition from divergence (throwing out a multitude of ideas) to convergence (choosing the most viable solutions and formulating a plan). Encourage full participation . Get everyone involved in the dialogue. Foster an atmosphere of safety and respect. Draw people out. Ask team members to speak in order to be understood rather than to win an argument. Promote mutual understanding. This begins with listening. Encourage people to try to walk in each other’s shoes, to really understand what others are saying rather than looking for weaknesses or holes in their argument. Ask people to define their terms and explain their thinking and their conclusions. Work toward an inclusive solution . Avoid “my way or the highway” thinking and look for ways to incorporate everyone’s interests in a workable plan. With those basic principles in mind, consider doing some of the following: Confirmation and Sunflower Bias : Be aware that these biases are real problems in creating an atmosphere of open discussion of alternatives and reaching conclusions about what to do. As the team leader, be careful not to unduly influence the group or manipulate them into supporting your biases. Relinquish the desire to control the solutions and instead, allow all ideas to get a fair hearing, so that the facts can win. It’s often wise to speak last. Psychological Safety : Throughout the discussion, remember the importance of creating an environment of psychological safety for open dialogue to really be effective. People need to feel comfortable and safe enough to freely express their views. Be alert to the fact that not all team members may be putting their cards on the table. Despite your effort to encourage psychological safety, not everyone feels safe in expressing what they really think, want or fear. They may feel it is too risky, so they hold back. Try to draw out team members’ concerns in open discussion but also consider having each member anonymously write down anything they haven’t said on a slip of paper. Encouraging Participation: Try to listen to all points of view by drawing out team members, summarizing or paraphrasing their points. Each team member has a unique set of interests and concerns and needs to have the time and to feel safe to express them. Watch out for team members withdrawing or shutting down Digging Deepe r: Do your best to help team members develop a deeper understanding of each other’s perspectives. Encourage them to ask questions to clarify their understanding when other members’ ideas are confusing or complex. Remind team members that their goal in this phase is to understand one another, not to win arguments or points. Actively facilitate communication : This means you may need to play communication traffic cop or referee to make sure members are listening and really understanding other’s points of view. Sometimes this means providing some structure for the discussion such as setting a time limit for each team member to express their point of view, and/or encouraging other team members to ask the speaker to clarify what they mean or to give further explanation of key points. Then, ask any members who have asked questions if they now understand the speaker’s point. Look for patterns or ways to categorize the options or ideas that are generated that can help bring coherence to the discussion Clarify differences : When there is a misunderstanding – and there will be – try to clarify differences and see if there is a common ground. At this point your goal is to promote accurate understanding, not to resolve conflicts between members. Surface different assumptions, motivations and definitions : Be alert to team members having different assumptions about the problem, the meaning of various terms, the risks, the importance of different issues, and so on. Members may assume, rightly or wrongly, that other members have hidden or unexpressed motives for proposing a solution. Part of your job is to help members explain the real meaning of statements they make to one another so unspoken assumptions are really understood. Call out disruptive or non-collaborative behavior : When team members interrupt or are overly aggressive, dismissive or confrontational, the leader must firmly call out these behaviors. Separate facts from opinions : It is important in discussing the details of a problem or solution to separate the facts from people’s opinions, interpretations or speculations about the meaning of the facts. Before trying to explore the viability of different solutions, it is wise to list facts and opinions separately to help the team distinguish one from the other. Don’t allow false consensus: Once the team has begun to narrow down their options, ask each member to express their concerns about each proposal. In an effort to try and get the decision made, it is easy for the leader to assume agreement with a solution. This may result in hidden concerns masquerading for consensus. False consensus often sabotages real alignment and creates fertile ground for later problems in implementation. Resistance often has its roots in fears about how the implementation of a proposal may impact the individual team members or their teams. This is related to group think. A pparent tangents or wild ideas can be gold mines : Be alert to the fact that some members’ ideas or proposals may initially feel like they were off topic or represent a distracting tangent, when they actually might represent a subtle or new issue that others have not seen. If you explore these topics the team might develop a deeper, more nuanced understanding or better solution. Revisit original goal or decision criteria : Once you have narrowed down possible alternatives to a reasonable number, consider going back to your original problem definition and goal, and evaluating each alternative against your decision criteria. Ask the team to consider what are the most important elements of an ideal solution. It might be cost, ease or speed of implementation, fit with your strategic objectives, consistency with your core values or any other thing the team considers crucial for the proposal to be successful.
By Rich Hagberg 11 Feb, 2021
Your Decisions Create Your Future There is an old saying, “Leaders are paid to make decisions.” Whether in business or any other field, making decisions is one of the most critical things leaders do. Look at any company’s performance, and you can immediately see the results of its decision making. It is not an exaggeration that the success of your team or your organization depends on whether your decisions enhance your chances of success or set you up for failure. You are creating your future, one decision at a time. The results you get reflect the effectiveness of your decision-making. Take a quick look at your own past decisions, both personal and professional, and you will have to concede that your track record is far from perfect. Sure you will see smart, timely, effective decisions that got you where you are today. But if you look objectively, you’ll see over the long term the impact of decisions you made that were impulsive, where you trusted your gut, or you made decisions in the heat of emotion, or you had strong beliefs that got in the way of the facts, and you shaped the analysis to fit the mental model that you already had in your head. Improving your capabilities as a decision maker involves understanding and making use of what research has discovered about the decision making process, as well as understanding your own tendencies and the things in your behavior and your problem-solving process that can lead you astray. The fate of companies rises or falls based on the wisdom and efficacy of the decisions that are made. And so do the careers and destinies of the deciders. The Pressure to Make Important Decisions---Fast As all leaders know, the pressure of decision making is great, and gets greater the higher up you go. The torrent of problems requiring solutions and decisions is relentless. “This is the terror of being a founder / CEO,” said Andreessen Horowitz co-founder Ben Horowitz. “It is all your fault. Every decision, every person you hire, every dumb thing you buy or do — ultimately you’re at the end.” The list below shows just a fraction of the key decisions that entrepreneurs, for example, have to make: • Should I raise more capital to fuel growth but reduce equity? • Do I have the right people on the bus? • Do I have the right people in the right seats on the bus? • Should I change my role or my job? • Is it time to lay people off? • Is it time to give up and throw in the towel on this project? • Is it time to sell the company or should I go for an IPO? • How should I deal with this new competitive threat? • Should I pursue this merger opportunity? • Is it time to expand or should we stick with what we know? • Is it time to raise funds? • Should we make this huge capital investment? • Should we go all out or conserve cash? • Should I accept a term sheet now or hold out? “If There Is Time To Reflect, Slowing Down Is Likely To Be A Good Idea" Daniel Kahneman How do you make decisions of this importance? Do you take enough time to gather data and carefully weigh all the options, the pros and cons? Do you seek input and feedback from your team and/or your peers and mentors? Do you go with your gut? According to futurist Stowe Boyd, “There is an enormous lie underlying business, the lie that decisions are made rationally, applying logic and expertise, sifting evidence, and carefully weighing alternatives.” The reality, he says, is quite different. “The science is clear: in general, we don’t really make decisions that way.” [Source: “How to Untell the Lie at the Heart of Business”, quoted in “Don't Fail At Decision Making Like 98% Of Managers Do,” Eric Larson, Forbes, May 18, 2017] Most people are not totally rational when they make decisions. Far from it. According to Daniel Kahneman, the Israeli-American economist awarded the Nobel Memorial Prize in Economic Sciences in 2002 for his work on the psychology of decision making and behavioral economics, “irrationality often trumps rationality in the human decision-making process.” Kahneman’s findings on the prevalence and influence of cognitive biases challenged the assumption that human rationality was the key factor in decision making. His book, Thinking Fast and Slow (2011) was an international best-seller. Most people are not totally rational when they make decisions Because of cognitive biases, impulsiveness exacerbated by time pressure, failure to do due diligence and get all the relevant facts, and overconfidence regarding our brilliant decision-making ability, a disturbingly large number of our decisions turn out to be faulty. Most people are not totally rational when they make decisions. And because we are unaware of what we don’t know, key information may be lacking. Yet in order to make effective decisions, we need all the information relevant to the problem, viable alternative viewpoints, and we also need a process that minimizes the impact of our biases and blind spots. Ninety-five percent of our decisions use irrational mental shortcuts or rules of thumb that cloud our judgment and impair our decision-making. “The brain,” Kahneman wrote, “is a machine for jumping to conclusions”. Entrepreneurs are Wired to Move too Fast Hagberg research (and others) shows that leaders are often optimistic and self-confident risk-takers, who have strong opinions and a bias for action. These are valuable qualities in leaders, but they are a two-edged sword: This confidence, along with a forceful personality, action orientation and clear points of view can lead to a failure to consider what might go wrong, and that they themselves might be wrong. They over-trust their intuition and jump to conclusions, and are therefore more vulnerable to making bad decisions. The Impact of Biases on Judgment--200 Ways to Make Your Company Fail Cognitive biases are systematic mental shortcuts in thinking or judgment, mental models or rules of thumb that influence how we evaluate our experiences and make decisions. They can be helpful, in that they make our thinking and decision making faster and more efficient. But they can also lead to faulty judgment, illogical interpretations and irrational choices. Close to 200 cognitive biases have been identified and explained, many of them by the American-Israeli psychologist Daniel Kahneman. Over 40 years of research, Kahneman found that 95% of our decisions use irrational mental shortcuts that cloud our judgment and impair our decision making. As a leader, it is vital for you to be aware of these biases, which color not only the attitudes and behavior of team members, but also influence your own. But Kahneman’s later research suggested that this is very difficult and almost impossible for most leaders. “For every complex problem there is an answer that is clear, simple, and wrong.” – H.L. Mencken, American journalist and social critic Kahneman’s research makes it crystal clear that if we want to make better decisions, we need to develop preemptive “workaround” strategies that enable us to make decisions that are more rational. One of the best strategies for this is group decision making, where all members of the team weigh in with their insights and perspectives. As you learn about cognitive biases, you will be able to spot team members falling prey to them in meetings. And if you have built an environment of trust, in which your people can speak freely without fear of retribution, you can use the collective intelligence of your team to help you uncover your own faulty thinking and thereby enable better decisions. Common Biases That Derail Entrepreneurial Leaders Sunflower Bias : People lean in the direction in which the leader is leaning, as sunflowers pivot to face the Sun. Groups tend to align themselves with the views of their leaders, whether overtly expressed or assumed. If a team knows your position on a decision, or believes they know it, the team is likely to be an echo chamber. As Kahneman said, the decision-making process becomes contaminated when people believe they know the leader’s preference. Confirmation Bias : Confirmation bias is the tendency to search for, interpret, favor, and remember information that affirms our prior beliefs or hypotheses. (Remember this bias the next time you do a Google search. Are you looking for info that supports your position or your hunch, or are you truly looking to learn?) In the same way, people often discredit information that does not support their views. Overconfidence Bias occurs when a person's subjective confidence in his or her judgments is greater than the objective accuracy of those judgements, i.e., you think you’re smarter or more savvy than you really are, or you’re certain that your plan will bring great results when you really don’t have the data to back up your belief. In tests comparing confidence to actual ability, research data regularly show that confidence often exceeds accuracy, that is, people are more sure that they are correct than is warranted. Optimism Bias is at play when we overestimate our likelihood of experiencing positive outcomes and events and underestimate our likelihood of experiencing negative events. People with this bias are sometimes quite unrealistic about what might go wrong when making a business decision. When a leader’s subjective confidence in their own judgments is regularly greater than the facts would suggest, disaster could be right around the corner. Action-Bias : This is the pressure or tendency to take action NOW, without doing adequate research and/or taking time for analysis and reflection. “Let’s just get the deal done.” Thus we don’t consider all the possible ramifications of our action. When you have this bias, you will tend to overestimate your odds of a successful outcome, and minimize or discount the chances of failure. Bernard Baruch, American financier and advisor to several 20th century presidents said, “Whatever failures I have known, whatever errors I have committed, whatever follies I have witnessed in public and private life, have been the consequences of action without thought.” Other Common Biases That Can Damage Your Judgment Affinity Bias : The tendency to be biased toward people like ourselves, with similar backgrounds, interests, skills, and affinities. This is a common temptation in hiring but may not result in building the strongest team. Blind Spot Bias : This happens when you are able to recognize biased thinking by others, while failing to see the impact of biases on your own judgment and decision-making. This is extremely common: In one study of 600 Americans, more than 85% believed they were less biased than the average person. Status Quo Bias : Directly opposite the action-oriented bias, status quo bias is an emotional or unconscious preference for maintaining the current state of affairs. “If it ain’t broke, don’t fix it.” This is not based on analysis that shows the current state to be objectively better, but is simply an attachment to the way things are and have been. Sticking to what worked or works now is fine if a rational decision-making process shows it to be the best alternative, but status quo bias can interfere with openness to new ideas, new technologies, and to progress in general. Effective team leaders need to be willing to change as the company scales. They often hold on to practices that worked when the company was small and flexible and everybody was in one room, but all of a sudden they have 4,000 employees and holding on to what worked for a dozen or twenty just won’t work. Anchoring bias : This describes the tendency to base a decision on the first piece of information we receive; it makes a strong enough impression that we become “anchored” to it This happens consistently when making budgetary predictions and financial plans. When considering a decision or course of action, the decision maker gives undue weight to the initial input or information received. These initial impressions, estimates, or data anchor subsequent judgment or analysis. Self-serving bias : We believe our failures are due to external factors, that it is “their fault” when things go wrong, but we believe we are responsible for our successes. Framing : Frames, according to cognitive scientists, are the different perspectives through which we look at the world. They are mental models that simplify and guide how we make sense out of a complex reality. They limit the effectiveness of our decision-making. This happens when making decisions with a multi-functional or multi-cultural team who have a variety of perspectives based on their background. Marketing, finance, engineering, product, sales, human resources, operations and so on have very different perspectives on many other issues. They look at different factors, and see different risks, opportunities, and potential outcomes, and are driven by different values and interests, all of which frame their decision making. They may have competing perspectives and concerns. Team members from different countries and cultures see the world differently due to their differing values. “Mental models are deeply held internal images of how the world works, images that limit us to familiar ways of thinking and acting. Very often, we are not consciously aware of our mental models or the effects they have on our behavior.” - Peter Senge Trusting Your Gut or Systematic, Reasoned Judgment In his book, Thinking Fast and Slow, Daniel Kahneman distinguishes between two broad categories of decision making. Fast decision making is essentially intuition-based, and involves feelings, beliefs, hunches that come readily to mind, require little effort or gathering of information, and result in on-the-spot decisions. Slow decision making, on the other hand, is based on reasoned judgment, and involves decisions that take time and effort to make, require careful information gathering, generation of alternatives, and evaluation of the alternatives. “If there Is time to reflect,” says Kahneman, “slowing down is likely to be a good idea." Rapid decision making can be based on too-little data and too-little time to analyze it, increasing the odds of making miscalculations and mistakes that can have company and career threatening consequences. The antidote would seem to be to slow down, yet business and technology today are moving at warp speed, and leaders of fast-scaling companies must make multiple decisions every day. Not only that, but even the best-reasoned decisions come face to face with randomness and unpredictability. The challenge is to balance speed with the best possible judgment. Hiring Mistakes Caused by Trusting Your Gut A prime example of how biases can interfere with wise decision making is in the hiring process. An interviewer who makes snap judgments and lets his or her first impression cloud the interview can make critical hiring mistakes. You think you don’t do this? Guess again: A study from the University of Toledo found that the outcome of an interview could be predicted by judgments made within the first 10 seconds of dialogue! Interviewers then subconsciously spend the rest of the time seeking new information to confirm their first impression, rather than objectively assessing the person in front of them. What this means is that your initial or gut reaction isn’t always a product of hidden wisdom! It may be a result of unacknowledged biases that can lead you to overlook strong candidates or choose those who are less qualified. Example: Giving more credence to the fact that the candidate graduated from the interviewer's alma mater than to the applicant's knowledge, skills, or abilities. Studies and surveys over the last 50 years have shown that 80% or more of the hiring decisions from traditional interviews are based on rapport and likeability and often miss competency, accomplishments, ability, and potential. In short: We like to hire people who are like us, who share our interests, values and style. But they are not always best for the job. Hiring mistakes can be very costly. A common rule of thumb is that a hiring mistake ends up costing about 15 times the employee’s core salary, including both hard costs and lost productivity as you bring the new hire up to speed. That means a hiring mistake with a $100,000/year employee can cost you $1.5 million, or more. Another thought provoking statistic is that the success rate for hiring at senior levels is estimated to be about 50% - half of all executive hires do not pan out. According to Marc Bennioff, CEO of Salesforce, “Acquiring the right talent is the most important key to growth. Hiring was – and still is – the most important thing we do.” We Are All Blind to Our Biases and Mental Models You have probably recognized many of the biases and mental mind-sets described above, and no doubt you can see how they can and do interfere with clear thinking and thus to making the best decisions. However, it is not enough merely to understand the nature of various biases. Kahneman and other decision-making researchers have concluded that it is extremely difficult to eliminate your cognitive biases by yourself. They are too subtle and wired in. It’s like asking a fish to describe water. In addition, awareness of the effects of biases has done little to improve the quality of business decisions at both the individual and the organizational level. To combat the negative effects of bias on team performance, active steps need to be taken. Catalyzed by the research of Daniel Kahneman and many others, we now know vastly more about how the decision-making process operates, why it so often leads us astray, and what we can do to become a more effective decision maker. I will summarize some of that research in this and follow-up blog posts, with a special angle: much of the existing research concerns how individuals decide. In today’s corporate universe, an enormous number of decisions every day are made in a group setting by teams of various kinds, a far less studied field that I will look at in addition to discussing individual decision making. Evaluating Your Decisions Ask yourself : • Did you do enough analysis? • Did you follow a disciplined process to get all the right facts and views on the table? • Did you avoid letting your strong viewpoint influence your team and narrow the options that were considered? • Were you overconfident? • Did you make assumptions that were wrong? • Did you miss options that might have improved the results? • Did you miss the big picture? • Did you focus too much on short-term rather than long-term implications? • Did you let pressure and stress influence your choice and end up compromising your standards or violating your values? • Did you act impulsively without validating your intuition?
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Why should I do this?

 

  • Unless you are learning and growing you are setting yourself up for stagnation or failure
  • As the company grows, you will be challenged in new ways
  • Objective feedback gets more difficult to get the more senior your position
  • It's very useful to be able to identify the strengths you can leverage and the weaknesses  that may be holding  you back
  • Never underestimate your capacity  for defensiveness, denial, rationalization, and self-justification
  • It's helpful to understand "automatic  pilot" and how your personality may impact your leadership
  • You may know what some of the problems are with your management and leadership style but not know how to change them
  • You may be impacting the culture and the success of your organization in ways that you are completely blind to
  • You may know that you need to change a certain behavior but you may get caught up in the "tyranny of the urgent"
  • You are a role model to those who report to you
  • It's helpful to have an objective third party coach who can help you, support you, and challenge you

 

One Year Leadership Development Program

Core Program Elements

  • Personality and Leadership Profile
  • HCG Leadership 360
  • Best Leaders Profile and The Three Pillars of Leadership 
  • Identifying Development Goals
  • Action Planning and Targeted Skill Building
  • Developing a High Performing Team
  • Adjusting Your Leadership to a Fast Scaling Organization 

Optional Program Elements

  • The Role of the CEO
  • Gaining Leverage: Delegation and Empowerment
  • Coaching and Developing Talent
  • Holding People Accountable
  • Developing Emotional Intelligence
  • Setting Strategic Direction
  • Managing Conflict
  • Making Effective Decisions
  • Effective Employee Communication: Upward and Downward
  • Creating Buy-in
  • Inspiring and Motivating Employees
  • Building a Positive but High Performing Culture
  • Improving Interpersonal Communication
  • Improving Work/Life Balance
  • Mangaging Stress and Avoiding Burnout
  • Time Management
  • Running More Effective Meetings
  • Scaling Systems and Processes

 

Quite frequently coaching sessions begin with a high priority issue that has recently emerged. In this case a portion or the entire session can be focused on using me as a sounding board.

My 6 Differentiators

An Analytical Approach Based On Powerful Assessments 

Penetrating Psychological Insights To Help You Understand What Helps You And What Gets In The Way

Practical Operating Experience As An Entrepreneur Who Has Been There

Candid  Feedback That Others Won't Give You

An Objective Sounding Board When Your'e  Stuck

HCG IN THE NEWS

HCG IN THE NEWS

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