Business Psychology - Latest Findings

Article No. 247
Business Practices Findings, by James Larsen, Ph.D.

The Psychology of Giving Up

Researcher discovers two reasons managers give up on improvement efforts.

There comes a time in the lives of many managers and supervisors when they reach out for the help that new management practices will offer them and then change their minds, believing they have made a mistake. They do this even when overwhelming evidence from other business settings testifies that they are wrong to abandon the new practices. They do this even though experts in the field urge them to stay the course and give new practices more of a chance. They do this even when colleagues in their own companies offer a positive example of the benefits of new practices.

Why does this happen? What leads people to believe they have made a mistake when they try new management practices?

This is an important question, and it exposes an important problem. Failed improvement efforts litter the histories of businesses of all sizes, and proven improvement approaches are dramatically underused. If managers and supervisors could be more patient with new practices, then the businesses they manage would be more successful.

Nelson Repenning of MIT is interested in these questions, and he recently took advantage of two improvement projects within a single large company to explore them. One of these improvement efforts was successful, but the other was abandoned. Repenning interviewed scores of managers, supervisors, and employees involved in these projects, and he gained an understanding of this abandonment problem. Here's the best of what he learned.

Most managers believe that the quickest way to correct problems is to increase employee effort. Increased effort produces more work, they reason, and accomplishing more work will satisfy most problems. "A kick in the pants," they will tell you, fixes a multitude of ills. Of course it also comes with undetected costs that often do damage, but the tactic of applying pressure to increase employee effort remains an attractive option as new practices are introduced.

The payoff for new practices, in contrast, is often delayed. For example, if you teach employees to analyze their own production problems and give them time to run experiments, you may prevent defects in future production, but you also reduce the useful work they accomplish in the present. Output falls, and with it, profits, deadlines, and hopes for the new practices.

With pressure to increase effort, you get immediate gains and delayed penalties. With new management practices, you get immediate penalties and delayed gains. Repenning found that the longer the delay in rewards for new practices, the greater the likelihood that they would be abandoned long before any rewards could be realized.

Another reason new practices are often abandoned, says Repenning, is that they require the cooperation of employees to be successful, and unfortunately, in many cases, our employees are uncooperative. He believes it's a problem we've created for ourselves.

The common tactic of increasing pressure forces employees to make choices about how they will spend their time when they feel our requirements force them to accomplish more than is possible. In this situation, they will chose activities that produce the results we measure. They will cut corners, lie, defer maintenance, learn ways of fooling us, put off solving problems that aren't yet a crisis, take risks, and work around requirements to save time. And they do this to produce the results that we are measuring. Measurement and control practices interact with added pressure to produce these undesirable results.

Repenning found that the more fully a work group is utilized, the more likely they will be to refuse to cooperate with an improvement effort. Since they are already quite busy, they will find it impossible to complete the added tasks associated with the new management practices without withdrawing effort from their existing work. And they will refuse to withdraw this effort because our performance measurement practices remain unchanged, including our performance standards and the rewards and penalties that relate to these standards. We say we want their cooperation, but we measure their output without consideration for the new expectations created by our management practices.

Why do managers and supervisors abandon promising new management practices? Two reasons: 1) they produce immediate penalties and delayed rewards, and 2) employees refuse to cooperate. If we can find ways to allow for these problems, we will have greater success with new practices.

Reference: Repenning, Nelson P., and John D. Sterman (2002) Capability Traps and Self-Confirming Attribution Errors in the Dynamics of Process Improvement. Administrative Science Quarterly, 47, 265-295.

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