In 2013, the US Air Force realised that more than 20 per cent of the nuclear officers at Malmstrom Air Force Base cheated on their certification exam. Many other officers knew about the problem but did not report it. The root cause for this behaviour was a culture of fear that led launch officers to believe they had to receive perfect test scores to get promoted.
Fear is not risk management. In fact it is quite the opposite. Fear kills initiative and pro-social behaviours. It renders your smart, talented people useless. It suffocates innovation and undermines your future growth. Paradoxically, the business becomes more risky, as critical conversations are either avoided or under-addressed.
Symptoms
The amygdala – the part of our brain that serves as our internal panic button – can be triggered by both internal and external sources. The cues can range from the macro to the micro, from the impending entry of an aggressive competitor to the “dirty looks” made by your peers as you’re communicating your best ideas. For many people, the main source of fear lies closer to home, in the shape of the tyrannical leader. This can be typified by the phrase “don’t bring me problems, bring me solutions”. Naturally, you often get neither until it is too late.
Whatever the source of the anxiety, there is a predictable pattern of characteristics that define a fearful organisation:
• An absence of frank and open dialogue. For example, when important conversations happen either before or after meetings, but everyone remains silent during the official discussion.
• A resistance to participate, for fear of being ridiculed, overlooked or “shot down”.
• Only notional alignment (“lip service”) on action plans, underpinned by a collective belief that those plans will be ineffective anyway.
• A partial or total reluctance to pass any bad news upwards.
• A culture of "going through the motions" without any real engagement; and
• A focus on salient but unlikely catastrophic outcomes.
The solutions
So how can we mitigate the effect of fear?
1. Emphasise the importance of executive-level collaboration: screen directors and executives for their emotional intelligence. Leaders who regularly display emotional outbursts or are bent on crushing internal dissent impose a cost on the organisation.
Develop a culture in which the leadership can be challenged: After the Korean Air Flight 801 crash on August 6, 1997, the airline company implemented a training programme to soften an authoritarian-hierarchical culture that prevented the co-pilot and crew from speaking up, even in a life and death situation.
2. Track the fear radar: discuss the topic of fear at high-level meetings. Specifically evaluate and address the potential effect that fear-driven behaviours could have on key interpersonal business relationships, information flow and timely decision-making.
3. Choose knowledge over retribution
• Focus on leading indicators – facilitate organisational dialogues where individuals feel safe to openly highlight and discuss near-threats and near-misses. These are situations and events that may not have resulted in failure but had the potential to do so.
• Conduct no blame-attached business post-mortems if something has gone wrong.
4. Speak the truth: encourage authentic dialogue. As a leader, set the tone by being upfront about the issues. Specifically recognise the concerns that individuals may have and admit when you do not have the answer to a question. Celebrate the successes but acknowledge the failures and the threats.
5. Reward what's right – optimise the reward system:
• Design incentives with the brain in mind - don't use overly powerful incentives. Research in neuroscience has shown that when the reward is too high, the brain reframes the hope of receiving a reward into the fear of losing it.
• Moderate the frequency of evaluation. Some professional partnerships review their junior associates on a weekly basis and dangle the threat of termination in front of them. Naturally, when junior associates become senior, they continue this approach.
• Design Key Performance Indicators with a behavioural component to deter individuals from focusing exclusively on results at all cost for the fear of missing the objectives.
The Pixar way
An organisation at the forefront of this process is Pixar, the creators of Toy Story and Inside Out. It operates in a high uncertainty environment that runs on larger-than-life personalities, cutting-edge creativity and fickle audiences. The need for critical appraisal, and straight talk is paramount.
Pixar created the “Brain Trust” as a sounding board at the developmental stage for large budget movies. Consisting of a loosely structured group of fellow movie directors, the role of mentor and mentee are regularly swapped. Thus sharp discussions do not carry penalty or stigma. Directors realise that this is about the process, not about them or their movie. This makes the Brain Trust particularly effective in pushing Pixar to release really innovative and successful movies.
* With input from Vip Viyas
Gilles Hilary is a professor of accounting and control at Insead and Vip Vyas is the managing director of the managing consultancy Alchimie Asia.
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