Monday, November 9, 2015

Leadership Sensibilities and Sensitivities: A Theory of Statistical Behaviour of Organizations

A modern day leader is no longer like a monarch who commanded everything and everyone he or she saw. Monarchy had a very structured system of regular court and advisors in statecraft and governance (“rajya neethi” and “rajya dharma”). Along with monarchies (some of which misused or disregarded such systems), these systems have also disappeared. Modern day leadership emphasizes performance with accountability. It teaches us that the contemporary leader has to be both sensible in how leads his followers and sensitive to how his followers (as well as other stakeholders) respond to his leadership. This advice is well merited given the premium we place on hiring aggressive leaders who can fulfil ambitious targets and make businesses more competitive than ever. When the leader conforms to this fast-forward template, and more so when he happens to be a newly hired leader, it is quite possible that he would be racing ahead almost like an engine without the carriages!

Governments and agencies concerned with good governance in this context have come up with two ideas to facilitate responsible leadership. The first is an improvement to the longstanding mechanism of board governance, with increased focus on independent directors and criteria of good governance. The second is the definition of Key Managerial Personnel (KMPs) with accountability to the Board and the Regulators, besides of course to the Chief Executive Officer (CEO). In addition, the companies also have direct accountability to the investors through annual shareholders’ meetings as well as listing agreements with stock exchanges. The quarterly calls with analysts and the focus of stock markets on material developments add multiple extra layers of watchfulness to keep the CEOs on toes. One may, therefore, conclude that sensibility and sensitivity are both assured in the leadership governance system. The reality, however, is probably otherwise. There can be no better leadership governance than self-governance for which the need is for real time feedback.

Forums, and forums…

Leaders do realize that they need to keep track of, and on a reasonably real time basis, as to how they are doing. Unfortunately, however, a leader is perched lonely at the top of the organizational pyramid. With so much at stake in terms of perceived performance, leaders find it difficult to ease up, or let their colleagues ease up, on how they are performing. All organizational structures are hierarchy driven, more so in India. Even in developed countries, it is observed that while interactions seem to be open, the underlying agenda is often influenced by hierarchy. While an intrinsically astute and sensitive leader may manage to pick up signals from the various meetings and interactions, the odds are that such pickups are not the same as structured conversational feedbacks.

Leadership practice has evolved to put in place certain mechanisms to make leaders sensible and sensitive. From one-on-one conversations with employees to town halls, and from video chats to dipstick surveys, a range of options are available for leaders to ascertain how they are doing. As is true with most things, substance is more important than style and content is more relevant than form. If leaders do not appreciate the importance of the science of statistics and the art of organizational behaviour in structuring interactive sessions and receiving feedback, such interactions cannot be of real help. Statistical science is important to ensure quantitative representativeness of interactions while organizational behaviour is needed to facilitate qualitative integrity of responses.

Barriers to feedback

The barriers to feedback are many in a modern corporation. Each leader, however independent he may seem to be, tends to be a prisoner of his immediate team or a few confidential advisors. Only in certain situations does the leader get to savour the freedom of open interaction with the larger organization. Secondly, there is so much emphasis on execution and accountability that there is little time for bilateral or multilateral discourse. Thirdly, the broader organization does not usually have an ability to communicate appropriately in the forums provided. More importantly, the meetings with leadership tend to be so few and far between that the team prefers to listen than to speak. The challenge of open feedback is compounded exponentially when the leader is authoritarian and egoistic. At least, in such cases, the Boards have a responsibility to mentor and coach such leaders to basic levels of openness to feedback before any of the interactive sessions are planned.

Organizational structuring through conventional departments and established hierarchy is another barrier to feedback. If the feedback pertains to, say, morale, HR would quickly volunteer that they are on top of it. If someone worries about growing capex, Business Planning would say that all of the concerns have been factored in. If technology connectivity and productivity is desired, IT would express concerns of low priority. Or, in contrast, all of the sessions may end up as feel-good interactions, with little surfacing of issues and advocacy of solutions. Behavioural scientists aver that having a right organizational culture is essential for communication sessions to succeed, especially if bottom-up feedback is desired. If the barriers to feedback are to be overcome, the leaders have to meet the right people with the right processes. A combination of statistical science and organizational behaviour termed ‘Statistical Behaviour’ herein is required!

Statistical behaviour

In spite of the foundations of culture, pillars of training and canopy of leadership, the rank and file of leaders tend to behave in random manner when it comes to expressing opinions. Many times, the forums are organized without taking into account the statistical representativeness of the sample to the universe. The participants for the physical sessions, in particular, are selected without statistical rigour, and unfortunately with bias of comfort in selection, either by rank or acceptability.  Even leaders themselves do not seem to appreciate the importance of statistically scientific selection and managerially artful communication to obtain representative feedback. There are two laws which are relevant in this context. The first is the Law of Small Numbers to which most leaders fall a prey to; the law of small numbers triggers leaders to come to hasty generalizations and quick judgements just based on initial interactions and/or incomplete and incoherent data sets. Obviously, it is a logical fallacy to assume that small interactions can reflect collective viewpoints of the larger organization.

The Law of Large Numbers is a statistically supported principle that states that the larger the sample the greater is its representativeness in reflecting the opinion of the universe. Given the randomness that is inherent in organizations, larger numbers are essential to balance extremes and enable inclusivity. As data points from a large sample become available, convergence towards a representative collective viewpoint emerges. Selection of participants by the law of large numbers alone is not sufficient. Leaders must have the discipline to interact in consonance with the composition of the large sample (ie., touch each participant of the sample). In the absence of that, the leaders would be introducing the travesty of small numbers in a sample of large numbers. Statistical behaviour requires a behavioural skill on the part of the leader to bring out the multiple reactions to the leadership style and corporate course of action. Sensibility and sensitivity on the part of the leader as important as statistical behaviour of his broader organization. 

Sensibility, sensitivity 

Often, sensibility and sensitivity are seen to be the same. While there is considerable overlap, there are subtle differences too. Sensibility refers to the quality of having an acute perception or responsiveness as to what an event or statement would mean to the stakeholders, especially in terms of emotions. It is the ability to experience and understand deep feelings. Although sensibility is used in the realms of art and literature, it is quite applicable to business and commercial activities too. A sensible leader makes good judgements based on reason and experience rather than emotion. Sensitivity is the expression of one’s sensibility levels. It is an ability to fathom the depth of emotions and feelings of others. It also is the capability to calibrate one’s statements and actions keeping in view the impact they would have on others. A sensitive leader would be conscious of how his judgements, even if they are sensible, would be perceived and experienced by others.

The interplay of sensibility and sensitivity may be illustrated by a right-sizing decision in an organization. A company may withhold organizational expansion in the context of business downturn, and it may take the decision as the only sensible option, fully cognizant of the emotional impact. The way the decision is communicated, however, requires considerable sensitivity to the emotions it actually stokes when announced and the responses that could arise. The reality is also that it is impossible for a leader to make decisions that are sensible to all. A major investment decision may evoke positive sensibility and sensitivity internally within the organization but external investors, who tend to be perpetually concerned about the return on their investment, could well be uncertain and would, therefore, need to be handled with sensitivity. Being sensible and sensitive need not cramp a leader’s style; it would actually enhance his or her effectiveness. A leader who is seen as sensible and sensitive would have greater acceptance and hence greater effectiveness. The theory of statistical behaviour of organizations, proposed in this blog post, helps leaders in the process of leadership acceptance and effectiveness.

Posted by Dr CB Rao on November 10, 2015      

1 comment:

AadvikKumar said...

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