The more any quantitative social indicator (or even some qualitative indicator) is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor – Campbell’s Law
Traditional management often seeks to reduce complex human behaviour to a single measure to manage. This approach works well for unthinking machines but it struggles with the complexity of human ability to shape behaviour on expectations.
People aren’t Widgets
Economists have been looking at the impact of human expectations on policy decisions for centuries. However, too little of this thinking has made it into industrial models of management thinking.
Traditional industrial models of management treat human beings on the same basis as other elements of machinery in the manufacturing process. This approach does not allow for the difference between a machine and a human’s ability to alter performance based on their own expectations and as result of interactions with others. The creative potential of collective human intelligence quickly outstrips this approach.
John Maynard Keynes highlighted in 1936 how expectations can make even the simplest choices quite complex when interactions of other human actors are involved. His simple example of a prize for nominating the best looking six faces in a beauty contest:
It is not a case of choosing those [faces] that, to the best of one’s judgment, are really the prettiest, nor even those that average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees.
The impact of expectations is found in many work activities. The expectations of peers can increase or decrease performance. Expected rewards shape behaviour, whether they are financial, status or emotional. Many highly skewed incentive schemes fail to achieve expected performance change because humans form a view of the likelihood or value of the returns for effort on offer. In some cases, a combination of human creativity, expectations and collaboration between employees & others will even produce totally unintended results.
Human expectations of the future change the behaviour of people now. The accuracy of expectations does not matter. A critical role for leaders is to be a part of the conversations that are shaping the ongoing expectations in a team. Designing an incentive scheme and tracking the measures is not enough.
Networks Accelerate the Making and Sharing of Expectations
In our increasingly networked world, it is much less likely that any individual in an organisation will behave like a machine that has no choice but to optimise performance. The networks inside and outside the organisation will create new expectations and accountabilities on individuals in the organisation. Expectations are just one part of the collective sense-making that will go on as people work to create value. No individual or organisation is an island any more.
Leaders need to prepare to engage with this increasing complexity and to join the conversations to shape the expectations that will drive human behaviour. Creating a collective vision, building trust, realising human potential and fostering collaboration can all contribute positively to the expectations of individuals in a network.
If you leave the conversation to the network, you are losing your influence as a leader. You are also surrendering the potential for better performance.