Businesses are organizations of people and the rules for how they work are governed by both psychology of an individual person and the systems that exist. When you’re looking for someone to fix a problem for you, you look for someone who understands both dimensions of the problem.
Many believe that economists study money. However, they actually study how humans behave with money. That sounds like a subtle difference until you realize that people rarely behave the way you expect that they’ll behave. For instance, in the ultimatum game two people split an amount of money – say $10 – the first person decides the split. The second decides to accept it or not. If the second accepts the offer both parties get the agreed upon sum. However, if the second refuses neither gets any money. (We first ran across the ultimatum game in our review of Drive.)
From a purely logical point of view no one would ever refuse the offer because logically you get something if you accept it but people aren’t logical. People are emotional and logical and sometimes the differences are important. Johnathan Haidt describes a model for understanding behavior in The Happiness Hypothesis that involves a rider, an elephant, and a path.
In organizational psychology we look at how people really behave and how they interact and use that to develop strategies that help move the organization forward by leveraging how they work – not how we want them to work. The result is that you’re no longer fighting to get people to do what you want. Instead you’re creating guide rails to create the right results from their own natural tendencies.
Working with Systems
Beyond the dynamics of individual people and how they interact verses the way they want to believe they’ll act there is another important part to achieving business results. That is what might be called chaos theory – that given a small change you get a potentially large and unexpected result on the other side. This is what Horst Riddle called a wicked problem. (You’ll find more in our review of Dialogue Mapping.) The core of wicked problems is that there is no stopping rule. That is you don’t know when you’re done.
Wicked problems are wicked because there are a complex set of interactions that are constantly changing so each time you make a small change you create a result that you cannot accurately predict. Most managers have tried to make a change to get better behavior and have seen the opposite result – worse behavior instead.
However, with careful study of a system there’s often opportunity to make small, seemingly insignificant changes, which can yield large results. A small investment in employees can help them become more engaged and more productive.
We understand the dynamic nature of the systems and help organizations deliver results by finding the right changes to the right systems to get the results they want.