The People Realization - The Key Underlying Factors of Organizational Success
Dominic Shaughnessy, SPHR
People & Culture Lead | People Operations Strategy | Leadership Development | Employee Engagement | Recruiting | HRCI - SPHR & Certified Coach
The People Realization
People are the foundation of business and it's not only people, it’s also about having the right people. To fully embrace this understanding, we need to take a brief dive into the neurology of our inner experience.?As humans, it has been estimated we have anywhere from 12k – 60k thoughts per day (National Science Foundation). More recent research pins that number around 6.2k thoughts per day (Dr. Jordan Poppenk, Canada Research Chair in Cognitive Neuroimaging). When it comes to the thousands of thoughts, we experience daily, it is estimated that 80% of those thoughts are negative and 95% of them are repetitive thoughts we’ve experienced before (National Science Foundation).?
Thinking is also draining – think about this, our brain is 2% of our body mass and consumes 20% of our body’s energy.?It is no wonder we’ve developed cognitive biases to help conserve energy from decision-making. In psychology, there is an actual term for this – Decision fatigue -?the deteriorating quality of decisions made by an individual after a long session of decision-making. It is now understood as one of the causes of irrational trade-offs in decision-making.
This information is foundational for us to how our brains work along with perception.?It is very easy for us to become wrapped up in our negative thoughts and become reactive to people and situations we don’t like.
?“You have power over your mind – not outside events. Realize this, and you will find strength." - Marcus Aurelius
Something important to note here is, while we don’t have the ability to control the thoughts that pop into our heads, we do have the ability to disengage from negative or disturbing thoughts.?This is essentially meditation, becoming familiar with our thoughts and letting them go.?It’s important to note that we are not a product of our thoughts and our thoughts do not control us, it is in our power to engage with or disengage with our thoughts as they come and go.
To better understand our peers and selves we’re going to look into the dynamics of personalities before we visit the most common cognitive biases that plague us in business and life.
Personality – Personality refers to the patterns of thoughts, feelings, and behaviors that are characteristic of an individual, and that make them distinct from other individuals. Individuals have unique personalities that are determined by a combination of genetic, environmental, and cultural factors.
There are numerous models and theories of personality, and they can differ in terms of the specific traits and dimensions they identify. However, most models of personality agree that there are certain fundamental dimensions that are important in describing and understanding personality. These dimensions can include traits such as extraversion, agreeableness, conscientiousness, emotional stability, and openness to experience (the Big Five - OCEAN model).
The Myers-Briggs Type Indicator (MBTI) and the Big Five (OCEAN) model are two commonly used personality assessment tools that are used to evaluate individuals based on their psychological traits and preferences. While both models are used to understand individual differences in personality, they differ in terms of the specific dimensions and theories they use to describe personality.
The MBTI is based on the theories of Carl Jung and identifies four dimensions of personality.?These four dimensions create a list of 16 different personality types which can be fun to explore with coworkers.?The four dimensions that create those 16 personality types are:
Extraversion vs. Introversion: This dimension refers to an individual's preference for either focusing on the outer world (extraversion) or on their own inner world (introversion).
Sensing vs. Intuition: This dimension refers to an individual's preference for either focusing on concrete and practical information (sensing) or on abstract and theoretical information (intuition).
Thinking vs. Feeling: This dimension refers to an individual's preference for either making decisions based on logical analysis (thinking) or based on personal values and feelings (feeling).
Judging vs. Perceiving: This dimension refers to an individual's preference for either organizing and planning their activities (judging) or remaining open to new information and experiences (perceiving).
The MBTI is commonly used in organizations to evaluate employees and to provide insight into their personalities and preferences. It is also used in a variety of other settings, such as education and counseling.
Myers-Briggs Type Indicator (MBTI) identifies 16 different personality types based on an individual's preferences for the four dimensions of personality. These 16 personality types are:
Each personality type is characterized by a unique combination of preferences for the four dimensions of the MBTI. These personality types can provide insight into an individual's strengths, weaknesses, and preferences, and can be useful in a variety of settings, including organizational management and development.
The Big Five (OCEAN) model identifies five dimensions of personality that are believed to be the most fundamental and important in understanding individual differences:
The five dimensions of the Big Five model are:
Openness: This dimension refers to an individual's level of openness to new experiences and ideas. Individuals who are high in openness are curious, imaginative, and open-minded, while those who are low in openness are more conventional and traditional.
Conscientiousness: This dimension refers to an individual's level of organization, responsibility, and reliability. Individuals who are high in conscientiousness are organized, disciplined, and hardworking, while those who are low in conscientiousness are more spontaneous and impulsive.
Extraversion: This dimension refers to an individual's level of sociability, assertiveness, and energy. Individuals who are high in extraversion are outgoing, talkative, and energetic, while those who are low in extraversion are more introverted and reserved.
Agreeableness: This dimension refers to an individual's level of cooperation, empathy, and compassion. Individuals who are high in agreeableness are cooperative, considerate, and helpful, while those who are low in agreeableness are more independent and self-oriented.
Neuroticism: This dimension refers to an individual's level of emotional stability and resilience. Individuals who are high in neuroticism are more sensitive, anxious, and emotional, while those who are low in neuroticism are more stable, resilient, and calm.
The Big Five (OCEAN) model, is believed to be the most fundamental and important in understanding individual differences in personality. The Big Five model is based on a number of different theories and research studies and is considered to be more comprehensive and objective than the MBTI.
Regardless of which model we use the main takeaway is, individuals, differ in their personalities in many ways, including in terms of the specific traits they possess, the balance of traits within their personalities, and the relative strengths and weaknesses of different traits. These differences in personalities can have a significant impact on the way individuals think, feel, and behave, and can affect their interactions with others, making these tools helpful to implement in an employee workshop. ?
This information is useful not only at work but in our home lives as well.?Understanding the range of differences in how we all interpret, interact, and process the world gives us the knowledge to approach situations with more awareness helping us realize the foundational dynamics of our everyday interactions.?Building on our understanding of personalities and our neurological wiring its important for us to next understand the cognitive heuristics we all experience.?
Cognitive Heuristics - also known as Cognitive Biases are an inherent part of the human experience and have a significant impact on our thoughts, behaviors, and decisions.?Cognitive biases are mental shortcuts or errors that our brains make when processing information. These biases can shape our perceptions and decisions in significant ways, often without our awareness. Understanding cognitive biases is important because they can lead to distorted or incomplete views of reality and can impact our judgment and decision-making processes. Let’s explore a few of the cognitive biases that exist and the ways in which they can influence our thinking and behavior in business and life.
Understanding the role that biases play in our lives is essential for personal and professional growth and development, as well as for creating a more inclusive and equitable business and society.
There are many different types of cognitive biases, and they can occur in a variety of contexts, including decision-making, problem-solving, and interpersonal interactions. Organizations can mitigate the effects of cognitive biases by promoting critical thinking and evidence-based decision-making, and by providing employees with training and support to recognize and overcome cognitive biases.
This short list of cognitive biases to follow consists of the biases that are most prevalent in culture change.
Loss Aversion - Loss aversion is a cognitive bias that refers to the tendency of individuals to strongly prefer avoiding losses to acquiring gains. This means that individuals are more motivated by the fear of losing something than by the prospect of gaining something.
For example, if an individual is given the choice between losing $10 or gaining $10, they are more likely to choose the option that avoids the loss, even though the two options are effectively the same. Loss aversion is a common bias, and it can have a significant impact on decision-making and behavior.
Loss aversion can lead individuals to make irrational decisions, as they may prioritize avoiding losses over other potential benefits. For example, an individual may avoid taking risks or trying new things out of fear of losing what they already have, even if this means missing out on potential opportunities for growth and development.
To overcome the effects of loss aversion, individuals and organizations can focus on framing decisions in terms of potential gains rather than potential losses and can consider the long-term benefits of taking risks and making changes. By doing so, individuals and organizations can make more rational and effective decisions that support their goals and objectives.
Sunken Cost Fallacy - The sunk cost fallacy is a cognitive bias that refers to the tendency of individuals to continue to invest in a project or decision even when it is no longer beneficial. This is because individuals feel that they have already invested time, money, or other resources into the project, and therefore feel that they must continue to invest in order to avoid wasting these resources.
For example, if an individual has already spent $100 on a movie ticket, they may feel that they must continue to watch the movie even if they are not enjoying it, in order to avoid "wasting" the money they have already spent. In this case, the individual is basing their decision on the sunk cost - the money they have already invested - rather than on the potential benefits or drawbacks of continuing to watch the movie.
The sunk cost fallacy can lead individuals to make irrational decisions and to continue to invest in projects or decisions that are no longer beneficial. To overcome this bias, individuals and organizations can focus on the potential future benefits and drawbacks of a decision, rather than on the resources that have already been invested. This can help to make more rational and effective decisions that support the organization's goals and objectives.
Confirmation Bias - Confirmation bias is a cognitive bias that refers to the tendency of individuals to seek out information that confirms their existing beliefs and assumptions and to ignore or discount information that challenges or contradicts those beliefs.
For example, if an individual has a belief that a particular political candidate is dishonest, they are more likely to pay attention to information that supports this belief and to ignore or dismiss information that contradicts it. This can lead individuals to make decisions and judgments that are not based on objective evidence and can result in distorted or irrational thinking.
Confirmation bias can have a significant impact on individual and organizational decision-making and can lead to poor judgment and decision-making. To overcome the effects of confirmation bias, individuals and organizations can focus on seeking out diverse and objective sources of information and can strive to be open-minded and objective in their decision-making. By doing so, individuals and organizations can make more rational and effective decisions that support their goals and objectives.
Hindsight Bias - Hindsight bias is a cognitive bias that refers to the tendency of individuals to believe, after the fact, that they could have predicted an event or outcome that was previously uncertain. This is known as the "I knew it all along" effect, and it can lead individuals to overestimate their own knowledge and foresight.
For example, if an individual reads about a stock that has increased in value, they may believe that they could have predicted this increase and that they would have invested in the stock if they had known about it beforehand. In reality, however, it was impossible to predict the stock's increase with certainty.
Hindsight bias can have a number of negative effects, such as undermining confidence in one's own abilities, and leading individuals to underestimate the role of luck and chance in outcomes. To overcome hindsight bias, individuals can focus on acknowledging the role of uncertainty and chance in decision-making and can strive to be open-minded and objective in their thinking and judgments.
Framing Bias - Framing bias is a cognitive bias that refers to the tendency of individuals to be influenced by the way that information is presented or framed. This means that the same information can be perceived differently depending on how it is presented and can lead individuals to make different decisions based on the framing of the information.
For example, if an individual is given the choice between two options - option A, which has a 90% chance of success, and option B, which has a 10% chance of failure - they may choose option A, as it is framed in terms of the likelihood of success. However, if the same options are presented as option C, which has a 10% chance of success, and option D, which has a 90% chance of failure, the individual may choose option D, as it is framed in terms of the likelihood of failure.
Framing bias can have a significant impact on individual and organizational decision-making and can lead to irrational or suboptimal decisions. To overcome the effects of framing bias, individuals and organizations can strive to be aware of the potential influence of framing and can make decisions based on objective evidence and analysis rather than on the framing of the information.
Overconfidence Bias - Overconfidence bias is a cognitive bias that refers to the tendency of individuals to overestimate their own knowledge and abilities. This can lead individuals to make overly optimistic judgments and predictions and to underestimate the risks and challenges associated with their decisions.
Overconfidence bias can have a number of negative effects, such as leading individuals to make poor decisions, to underestimate the role of luck and chance in outcomes, and to be overly optimistic about their own abilities. For organizations, overconfidence bias can lead to poor decision-making and suboptimal outcomes.
To overcome overconfidence bias, individuals and organizations can strive to be aware of the potential for overconfidence and can seek out diverse and objective sources of information. In addition, individuals and organizations can promote a culture of critical thinking and evidence-based decision-making, and can encourage open-mindedness and humility in decision-making. By doing so, individuals and organizations can make more rational and effective decisions that support their goals and objectives.
In conclusion, cognitive biases are systematic errors in thinking that can affect the way individuals process and interpret information. These biases can lead individuals to make decisions and judgments that are not based on objective evidence and can result in distorted or irrational thinking.
Cognitive biases often have a significant impact on individual and organizational decision-making and can lead to poor judgment and decision-making. To overcome the effects of cognitive biases, individuals and organizations can focus on promoting critical thinking and evidence-based decision-making and can provide employees with training and support to recognize and overcome cognitive biases. By doing so, individuals and organizations can make more rational and effective decisions that support their goals and objectives.
lastly, we’re going to cover another three important theories that are similar to biases and should be known as general rules:
Parkinson’s law - Parkinson's law is a principle in organizational management that states that "work expands so as to fill the time available for its completion." This means that individuals and organizations tend to take as long as they are given to complete a task, regardless of the actual amount of work involved.
For example, if an individual is given a week to complete a task that would normally take one day, they are likely to take the full week to complete the task. This is because they have been given the time to do so, and they may not feel the need to prioritize or rush the work.
Parkinson's law can have a number of negative effects, such as leading to inefficiency and wasted time and resources. To overcome the effects of Parkinson's law, organizations can focus on setting clear deadlines and expectations for tasks and projects and can encourage employees to prioritize and manage their time effectively. By doing so, organizations can create a more efficient and productive work environment.
Reactance Theory - Reactance theory is a psychological theory that explains how individuals respond to attempts to control or restrict their freedom of choice. The theory proposes that when individuals feel that their freedom is being threatened, they will experience a psychological state of reactance, which can lead them to resist or reject the attempts to control their behavior.
For example, if an individual is told that they are not allowed to eat candy, they may experience reactance and become more determined to eat candy. This is because the attempt to control their behavior has threatened their freedom of choice, and they are motivated to restore that freedom by defying the restriction.
Reactance theory has important implications for organizations, as it suggests that attempts to control or restrict employee behavior can lead to resistance and resentment. To avoid this, organizations can focus on promoting autonomy and choice and can avoid imposing strict rules and restrictions on employees. This can help to create a positive and supportive work environment that encourages employee engagement and motivation.
The Pareto principle: also known as the 80/20 rule, is a business principle that suggests that a small number of causes often account for a large portion of the effects in a given situation. The principle is named after Italian economist Vilfredo Pareto, who observed that approximately 80% of the land in Italy was owned by 20% of the population. Pareto noticed that this pattern held true in other areas as well, such as in business, where a small number of customers often accounted for a large portion of a company's sales.
The Pareto principle has since been applied in a variety of contexts, including business, economics, and project management. It suggests that in many situations, a small number of factors or inputs are responsible for the majority of the outputs or results. This principle can be useful for identifying areas where a small amount of effort or resources can have a large impact, or for prioritizing tasks or goals. However, it is important to note that the Pareto principle is not a hard and fast rule, and the specific percentages may vary depending on the situation.
Cognitive Biases along with, Parkinson's Law, Reactance Theory, and the Pareto Principle are important theories related to the process of human cognition that should be understood as general rules. These biases and theories are useful for organizations to understand and overcome the biases and people-related frustrations we all experience so we can create a more efficient and productive work environment that promotes autonomy and choice.
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