The Power of a Positive Attitude by Roger Fritz

The Power of a Positive Attitude

By Roger Fritz
AMACOM, 2008

[powerpress http://gsbm-med.pepperdine.edu/gbr/audio/fall2009/jgoosby.mp3]

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3 stars: Valuable information and a good readIn The Power of a Positive Attitude, author Roger Fritz shares wisdom collected from decades as a top-level consultant, educator, and leader. This well-written and well-organized book is a quick read that dispenses useful advice for evaluating one’s own and others’ effectiveness in the workplace.

One worthwhile idea that Fritz presents is the LVP (Least Valuable People) Profile, which the reader can use first reflectively, then prescriptively to increase effectiveness in the workplace. The book also contains multiple checklists that managers and individual contributors can use to guide their professional development in managing effectively and developing or maintaining a positive attitude.

The author’s ideas seem valid and particularly useful during this time of economic uncertainty; however, there is little substantiation offered to back them up. As examples, the author presents characteristics of successful real-life leaders and methods for managing stress.

While these and other ideas offered in the book have “face validity” and are within the realm of conventional management wisdom, the author provides no basis for them in the psychological or management research literature. For these reasons, the book provides little conceptual contribution to seasoned managers or scholars who have already accepted the premise that a positive attitude aids personal and professional effectiveness.

That said, the author concisely and cleverly uses quotes and anecdotes to paint a broad brushstroke for those new to management. Fritz makes a clear argument for the benefits of a positive attitude in the workplace and provides behavioral markers that we can all use to gauge our own and others’ behavior.

I would recommend this book to new managers or students of management education who are looking to establish a personal philosophy of management and leadership.

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The Root Causes of Unethical Behavior

Business literature is replete with stories of unethical behavior in executive suites and board rooms, yet everyone is potentially capable of falling into the same traps. With a little insight into the psychological traps that increase the probability that individuals will behave unethically, perhaps such behavior can be curbed. To date, the authors have delineated a total of 45 traps, including “Obedience to Authority,” “Need for Closure,” “The False Consensus Effect,” “Lost in the Group,” and “Self-Enhancement,” and they fully expect more to be discovered.*




Image: P. We




What Are Psychological Traps and Why Do They Exist?

Psychological traps are the root causes of unethical behavior.

Psychological traps are similar to fish traps. A fish trap is comprised of a wire cage with an entrance shaped like a large funnel that narrows toward the inside of the cage; the design of the funnel directs the fish to swim into the trap. In the same way, an individual or organization is encouraged to move in a certain (unethical) direction once a psychological trap is present. Later, the action turns out to be disastrous and there are usually no simple means of reversing course.[1]

Because they are psychological in nature, some of these traps distort perceptions of right and wrong so that one actually believes his or her unethical behavior is right. If people are not aware of these traps, they can act as illusions or webs of deception. Once the traps are identified, however, they lose much of their power to ensnare, and people can more easily circumvent them just as voyagers who know the location of quicksand can navigate around it. When danger is clearly identified, one can prepare for it and avoid it.

Depending on their context, traps may be benign and can even exert a positive influence on our lives. For example, empathy is often considered the cornerstone of good ethics but in some circumstances, this personality trait can actually overpower our sense of fairness. This is because traps can incite tunnel vision; the pull to act on them is so strong that people can become blinded to other behavioral options. Individuals that we respect and admire even whole companies can descend rapidly down the path of corruption.

Traps exist because at any given moment in time people experience impulses that motivate them to act. These impulses are reactions to internal or external stimuli. Sometimes, a stimulus is so powerful or triggers such automatic behavior that the individual acts without recognizing that other options exist. At other times, he or she is aware of other choices, but the stimulus’ impact overrides these potential actions.

The essential question the authors posed was: What prompts the individual or organization to begin to move in an ill-fated direction? The diverse traps presented in this article provide descriptions of different internal or external stimuli that compel people to begin this movement toward disaster. In addition, the article introduces three main categories of traps: Primary, Personality, and Defensive.

Primary Traps

Primary traps are predominantly comprised of external stimuli. They are the main traps that impel people to move in a certain direction without regard for ethical principles. “Obedience to Authority” is a clear example of a primary trap. Children are primed to obey their parents their survival depends upon it and in school, this conditioning continues. Students automatically know that they must show deference to their teachers. Consequently, later in life, when the boss orders an employee to do something, many people quickly obey without thinking.

If a person of authority orders a subordinate to do something unethical, the compelling need to obey authority serves as such a powerful external stimulus that the individual will likely obey the order without being aware of its opposition to his or her own ethical principles. At other times, the subordinate might be aware that the order is unethical; nonetheless, the impulse to obey is so strong that it overrides his or her judgment.

Personality Traps

Personality traps consist exclusively of internal stimuli in the form of various personality traits that can make people more vulnerable to wrongdoing. An example of a personality trap is the “Need for Closure,” that is, “the desire for a definite answer on some topic, any answer, as opposed to confusion and ambiguity.”[2] It is the tendency to jump on the first opinion that comes to mind, rather than tolerating a state of uncertainty and taking the time to consider a problem or judgment from many different angles.

The need for closure is augmented under work conditions that make processing information more difficult, namely time pressure, fatigue, and excessive background noise. When such conditions exist, it is more difficult to tolerate a state of confusion and ambiguity.

While the need for closure is influenced by situational factors, it is also a personality trait some people are more able to tolerate states of ambiguity than others. Arie Kruglanski has developed a “Need for Closure Scale” to measure this personality dimension those with a high tendency towards the trait are more apt to endorse items on the scale, such as “I usually make important decisions quickly and confidently,” “I do not usually consult many different opinions before forming my own view,” “When I’m confused about an important issue, I feel very upset,” or “It’s annoying to listen to someone who cannot seem to make up his or her mind.”[3] Kruglanski and his colleagues have established that those who score high on the scale are more prone to stay with established impressions in the face of contradictory evidence.[4]

So, what does this mean in the real world? Let us say that a CEO has a high need for closure. Based on the CEO’s previous encounters with the CFO, he respects and likes him; however, the CFO has not been with his company long. One day over lunch, the CEO learns from a colleague that the CFO has accepted a bribe. “Impossible,” says the CEO. “He is not like that. He would not do such a thing!” Because of the CEO’s high need for closure, he stays with his established impressions and does not even consider the possibility that the CFO has acted illegally.

Within an organization, if coworkers ignore, justify, or condone unethical behavior, this supports the view of the transgressor that he or she did not do anything wrong or, if they did, that it is not that big a deal. Coworkers with a high need for closure can potentially cling to established impressions and, in so doing, discount unethical behavior.

Defensive Traps

Defensive traps are a very different category. Although some of them can, at times, be counted as primary traps, defensive traps are basically attempts to find easy ways to reverse course after a transgression has been committed. For the most part, defensive traps are maneuvers that are reactions to two internal stimuli: guilt and shame. Guilt and especially shame are very painful emotions because they call into question the positive view that people have of themselves.

Defensive traps are insidious because they are often very successful at annihilating or at least minimizing guilt and shame. They help people deny their transgressions, thus setting them up for repeated unethical behavior. An example of a defensive trap is the “False Consensus Effect.”

Consider this example: Thomas Gabor, professor of criminology at the University of Ottawa, interviewed employees that had illegally stolen equipment and materials from their jobs. A common rationalization was exemplified by the following employee’s statement: “We are as good as management. They commit employee theft. Everybody does it. If I don’t take it, someone else will.”[5]

Psychologists call this type of rationalization the “False Consensus Effect.” When people do something unethical, they appease their guilt by falsely assuming that it is something everyone does, and thereby minimize their transgressions “It’s not that bad; it’s something that happens all the time!” The insidious thing about the false consensus effect (as with most other traps) is that the person actually believes his or her own self-deception.

Gina Agostinelli conducted an interesting experiment at the University of New Mexico that validated the false consensus effect.[6] Two-hundred-and-thirty-five subjects participated in her study, and these subjects were randomly assigned to either two conditions: a failure condition or a neutral condition. Agostinelli administered a test that was described as a “decision-making problem that many career centers use to help companies hire employees…a valid indicator of future job success that measured general problem-solving abilities under time pressure.”

Following the test, subjects relegated to the failure condition were given false feedback: “Your score is poor and indicates that you are not good at solving problems under time pressure and cannot make important decisions efficiently.” Subjects in the neutral condition were given no feedback. All subjects were then given a questionnaire that asked them to estimate how well the general public would do on the problem-solving test.

The magnitude of the false consensus effect was impressive. In the neutral condition, 40 percent of subjects estimated that the public would be successful with the problem-solving test. In the failure condition, subjects estimated that only 15 percent of the public would be successful! Subjects who “failed” the test estimated that a large number of people would also fail the test, as in “If I fail, most people would.”

Executive Tactics

How can a company create a corporate culture in which psychological traps are less likely to nudge managers and employees toward unethical behavior? Let us focus on the three traps that were used as examples: “Obedience to Authority,” “Need for Closure,” and the “False Consensus Effect.”






Photo: Cat






Obedience to Authority

When trying to keep the trap of obedience to authority at bay, the most important thing an executive can do is to hire a psychologist to be part of his or her ethics and compliance team. Psychology can explain the nature of traps and often help structure the proper approach to avoiding or remediating them.

Joseph Badaracco, an ethics professor at Harvard Business School, conducted 30 extensive interviews with recent MBA graduates who had faced ethical dilemmas in the business world.[7] Many of the Harvard managers interviewed in Badaracco’s study confronted the trap of obedience to authority they had been overtly told to act unethically by their bosses. One manager was instructed “to make up data to support a new product introduction.” When he objected, his boss cut him off and said, “Just do it.”

When ordered to act unethically, these entry-level managers experienced intense anxiety. If they did not obey, they worried that they would lose their boss’ support, which was crucial to being perceived as “a candidate for the fast track and a team player.” Ultimately, employees worried about destroying their careers and losing their jobs.[8]

The crucial problem these managers faced was the intense anxiety that resulted from the obedience to authority trap. Emotions can bring people to their knees, and many of the traps incite powerful emotions that pull a person toward wrongdoing. The managers were able to cope with their anxiety by reassuring themselves that they were still young and their careers were just beginning. They told themselves that they could always find work in another company if being ethical resulted in the loss of their jobs. For the most part, the managers were able to resolve their dilemmas because of this flexibility.

The managers acknowledged, however, that had they been older, with families and invested status in the company, finding new employment would have been a much less likely option. So, what about middle managers who do not have this flexibility, who have spent years climbing the corporate ladder and have a family to support. What do they do when intense anxiety hits?

If middle managers are in a company that has a psychologist as part of its ethics team, the psychologist can help them cope with their anxiety when confronted with the trap of obedience to authority, as psychologists are well trained to mitigate intense anxiety.

Need for Closure

Psychological traps are insidious because they are often invisible. Managers with a high need for closure, for instance, are usually neither aware of having such a trait nor that it might lead them to disregard the unethical behavior of their coworkers. If managers know that they have a high need for closure and are aware of its implications, they are more likely to avoid being trapped.

To contend with the need for closure, the most important thing an executive can do is to have a psychologist administer the “Need for Closure Scale” so that managers and employees are aware of whether they have a personality trait that might incline them to act unethically.

False Consensus Effect

This trap is easily identifiable it basically sounds like: “What I (or we) did is not bad; it’s something that everybody does.” Once the company is aware of the false consensus effect, it is a signal that a transgression has already been committed. In such cases, established reporting and disciplinary procedures that are usually part of the company’s code of business conduct and ethics should come into play.

Conclusion

Because there are more traps than the three outlined in this article, there will likely be more than three tactics developed to deal with these traps. Nonetheless, the authors have identified the following tactics as universally important:

  1. Employ a psychologist to help coworkers contend with the strong emotions incited by traps;
  2. Ensure that the psychologist tests coworkers to make them aware of potential personality traps; and
  3. Recognize defensive traps as signs that transgressions have already been committed.

It should also be noted that one’s behavior can be affected by more than one trap simultaneously. Developing tactics to manage traps is an ongoing challenge, especially as more traps are discovered. But the fact that traps accurately define the root causes of unethical behavior will make this task easier and the solutions more effective and efficient.

*Editor’s Note: The material in this article has been adapted from the book by the same authors: The Ethical Executive: Becoming Aware of the Root Causes of Unethical Behavior: 45 Psychological Traps that Every One of Us Fall Prey To, (Stanford University Press, 2008).

[1] J. Platt, “Social Traps,” American Psychologist, 28 (August 1973): 641 651.

[2] A.W. Kruglanski, Lay Epistemics and Human Knowledge: Cognitive and Motivational Bases, (New York: Plenum Press, 1989): 14.

[3] Arie Kruglanski, Donna Webster, and Adena Klem, “Motivated Resistance and Openness to Persuasion in the Presence or Absence of Prior Information,” Journal of Personality and Social Psychology, 65, no. 5, (1993): 861 876.

[4] Arie Kruglanski and Donna Webster, “Motivated Closing of the Mind: Seizing and Freezing,” Psychological Review, 103, no. 2, (1996): 263 283.

[5] Thomas Gabor, Everybody Does It, (Toronto: University of Toronto Press, 1994): 183.

[6] Gina Agostinelli, Steven J. Sherman, Clark C. Presson, and Laurie Chain, “Self-Protection and Self-Enhancement Biases in Estimates of Population Prevalence,” Personality and Social Psychology Bulletin, 18, no. 5, (1992): 631 642.

[7] J.L. Badaracco and A.P. Webb, “Business Ethics: A View From the Trenches,” California Management Review, 37, no. 2, (1995): 8 28.

[8] Ibid.

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The Book Corner

The Book Corner offers reviews by Graziadio School faculty on a variety of books on business topics.

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In this issue:

The Leaders We Need: And What Makes Us Follow

By Michael Maccoby
Harvard Business School Press, 2008

Reviewed by Jody Brightman, PhD, Adjunct Faculty in Marketing

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Maccoby explains that the best leaders will have a personality intelligence that recognizes, embraces, and resonates with the dominant social character of its followers. Read more…


One Foot Out the Door: How to Combat the Psychological Recession That’s Alienating Employees and Hurting American Business

By Judith M. Bardwick
AMACOM, 2007

Reviewed by Jeffrey Schieberl, JD, MBA, Practitioner Faculty of Business Law

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One Foot out the Door explores the breakdown of commitment and loyalty on the part of the employee to his employer. Read more…


Executive Coaching for Results: The Definitive Guide to Developing Organizational Leaders

By Brian Underhill, Kimcee McAnally, and John Koriath
Berrett-Koehler Publishers, 2007

Reviewed by John Oppenheim, Adjunct Professor, Management Information Systems

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Executive Coaching does a good job of explaining how to set up personal and organizational coaching within a company. Read more…


From Difficult to Disturbed: Understanding and Managing Dysfunctional Employees

By Laurence Miller, PhD
AMACOM, 2007

Reviewed by Leo A. Mallette, EdD, Supporting Faculty; Decision Sciences and Marketing

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Dr. Miller covers all types of mental disorders, using insightful vignettes to explain them and to provide advice to both the person with the disorder and the employer-essential information for managers and supervisors. Read more…

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One Foot Out the Door by Judith M. Bardwick

One Foot Out the Door: How to Combat the Psychological Recession That’s Alienating Employees and Hurting American Business

By Judith M. Bardwick
AMACOM, 2007

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One Foot out the Door explores the breakdown of commitment and loyalty on the part of the employee to his employer. Traditionally, the unspoken “social contract” between employer and employee acknowledged that employers would take care of the well-being of their employees and, consequently, employees would work hard and contribute to the success of the employer. Job security was understood to be part of the bargain. In this book, Dr. Bardwick considers several factors that, in combination, appear to be causing the demise of the somewhat sacred social contract.

Bardwick cites the development of a true global economy as the primary factor in the disintegration of the social contract. With a global economy comes restructuring, downsizing, rightsizing, and layoffs, she writes, all of which have contributed to the erosion of job security and consequently, the loyalty employees once felt towards their employers.

In addition, as many as two-thirds of U.S. employees are afflicted with what Bardwick calls the “psychological recession,” an emotional state in which people feel extremely vulnerable and afraid for their future. This condition negatively impacts creativity and innovation in business by creating deep pessimism and a general sense of doom that discourages employee from making any extra effort at work—it is futile to believe that any work goals can be accomplished, so why try? It also increases the sense of vulnerability and deepens aversion to risk.

Bad management furthers this psychological recession by alienating employees. This leads to low productivity, retention problems, and increased absenteeism, all of which negatively impact the bottom line, according to Gallup surveys and Corporate Advisory Board data cited by Bardwick. After exploring just how expensive bad management really is, the book transitions to a discussion of positive management practices. Good management values employees and involves them in management decision-making, which results in higher productivity and better communication between employees and customers.

Dr. Bardwick concludes that the way to combat the psychological recession is through psychology—that is, nurturing the relationship between the employer and employee—not economics. She emphasizes the importance of establishing employee commitment and engagement. The effort requires that employers address the needs and interests of employees on an individual basis, and it all begins with the employer’s hiring practices, she writes. Money, on-the-job challenges, empowerment, and an opportunity to engage in significant work are the elements of customization of the employee/employer relationship that are most effective. Although some may quibble with the positions taken by the author, her core arguments are supported by credible studies and data.

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The Positive Psychology Approach to Goal Management

Business leaders manage goals by setting and systematically striving to achieve them. While management and organizational researchers have laid the groundwork for goal management, the emerging field of Positive Psychology appears to offer many additional findings and insights that will help managerial leaders be more effective as they define and pursue goals. Factors such as character strengths, optimism, and resilience can play significant roles in how well goals are managed. In the end, a managerial leader’s ability to make wise choices and to implement pathways that lead to attaining desired goals is critical to success. Drawing from the field of Positive Psychology, this article provides guidance to help you more effectively manage goals by focusing on such factors as personal values, persistence, and confidence.

Personal Values Commitment




Photo: Barrett Phillips




Our values are at the heart of what is important in life and work. Effective managerial leaders serve themselves and others best when they are committed to a set of core values. This commitment takes three forms:

  • First, leaders need to be clear about what values they hold.
  • Second, they must effectively communicate their values clearly and meaningfully to key stakeholders.
  • Third, managerial leaders need to ensure that their actions are in alignment with their espoused values. This connection between what one says and what one does can be described as one’s “Behavioral Integrity Quotient” or BIQ. Leaders need to have a high BIQ act consistently with their espoused values in order for others to trust them. (To learn more about clarifying values, read “Creating and Sustaining an Ethical Workplace Culture,” by Dr. Kerns.)

Value-Centered Goal Setting

Having committed to a set of core values, a managerial leader has a meaningful context within which to make relevant decisions about the nature of the goals he or she sets. Values give purpose and meaning to one’s goals. Values serve as a strategic foundation for goal setting. Conversely, goals represent values applied to specific life and work circumstances.[1]

While there are many useful resources to assist leaders in setting goals, as well as empirical studies demonstrating the importance of goal setting in organizational settings, these efforts largely ignore how to make the connection between core values and the goal setting and attainment processes. For example, Doug Smith, in his book Make Success Measurable! A Mindbook-Workbook for Setting Goals and Taking Actions,[2] offers the SMART approach to specifying goals: goals should be Specific, Measurable, Aggressive, Relevant and Time-bound. On the empirical side, we read about important relationships between goal attainment, expectancy and effort, with little explicit connection to the role of core values in this important process.[3]

To enhance goal commitment and to build confidence in the goal setting process, managerial leaders must personally commit to a set of core values.

The Effect of Core Values on Commitment and Confidence

An extensive body of literature relates levels of commitment and confidence to goal attainment.[4] This line of study shows that commitment to goal attainment is enhanced when goals are perceived as important and when the performer has a high level of confidence that the goal will be achieved. Commitment and confidence will wane when goals are perceived as unattainable. The conclusion to be drawn is that managerial leaders should not be setting or pursuing goals that are unimportant or unattainable.

When reviewing the impact of core values on the level of commitment to goals and confidence, we find a paucity of literature. It stands to reason that a leader’s personal commitment to an important goal will be greater if the goal is consistent with his or her core values. The alignment of core values to goals can serve as a barometer of executive commitment. The executive must also be confident that the goal is attainable. If an important goal is consistent with a leader’s core values, he or she is more likely to persist in pursuing that goal, even in the face of frustrating setbacks. This tendency to persevere increases the likelihood that a goal can be attained, thereby inspiring confidence in attainment. Thus, structuring important goals to be consistent with personal core values will increase the commitment and confidence concerning one’s goals.

During the goal setting process, managerial leaders should ask themselves these important questions:

  • How important is this goal?
  • How confident am I in the pathway/s chosen to attain the goal/s?
  • Is this goal consistent with my espoused core values?

This connection of value-centered goals with high managerial leadership commitment and confidence likely contributes to executives and their organizations feeling optimistic about where they are headed.

Balancing Persistence and Disengagement

Value-centered goals create a potent package for success when they are driven by discerning managerial leaders who have confidence in their chosen implementation pathways. In this scenario, value connected goals pursued with confidence help drive executive persistence, even in the face of obstacles and setbacks. Executive perseverance is a strength. However, if used without discernment, perseverance can lead to disastrous results.

It is also critical for executives to know when to quit. Giving up on value-centered goals is especially difficult and stressful when the goals are aligned with core values. In most cases, hard charging executives will find alternative pathways to achieving value-centered goals. Executives and others will make creative adjustments and implement alternative activities in seeking to implement highly important value-centered goals.




Photo: Lisa at Windward




Nevertheless, when there is convincing evidence that realistic pathways for attaining the goal do not exist, it is time to disengage. Doing so might be necessary, for example, when the resources needed to achieve the goal diminish to the point at which goal achievement is impossible or impractical. The wise executive faced with this situation will know to stop and thereby avoid escalating the commitment toward a lost cause.

To further refine the goal management process, Positive Psychology offers some empirically supported practices that can help give balance to executive decision making as it relates to setting and pursuing goals.

Seven Helpful Practices

The field of Positive Psychology was developed by Martin Seligman along with his research associates at the University of Pennsylvania. Seligman’s own work[5] and work with others[6] is helping to build a scientific basis for the study of Positive Psychology. As Fred Luthans[7] notes, this work has increasing application for organizational behavior and managerial leadership. This area of thought provides us with a variety of frameworks and tools useful to help leaders effectively manage goals.

In setting and pursuing goals, managerial leaders can apply seven practices identified in the field of Positive Psychology:

  1. Commit to a set of core values to enhance meaning and purpose.
  2. Be sure that your goals are aligned with and are driven by your core values.
  3. Align actions or pathways to achieve your goals with your Character Strengths.
  4. Ask yourself regularly, “How confident am I that the actions and pathways we are pursuing to achieve our goals are appropriate?”
  5. Be persistent in pursuing your action plans and pathways for achieving your goals until you obtain convincing evidence to do otherwise.
  6. Display realistic optimism.
  7. If you are confident about achieving your confirmed value-centered goals, apply the proven skills of resilience when facing inevitable obstacles.

When the practical resources necessary to set and attain your goals are in place, the above seven practices will help you clarify your personal commitment, gain confidence, and persevere when engaged in the goals management process.

An Executive Snapshot

To walk through these practices, consider the example of George Wilson, CEO of ABC Enterprises. Wilson designed, developed, and implemented a “Value-Centered Approach to Goal Setting and Action Planning” for his organization using these seven practices. Let the following highlights from this work be your “take aways” for goal setting and management:

Take Away #1: Values Commitment

Wilson indexed his core values and focused his commitment by using the Value-Based Checklist (http://gbr/pepperdine.edu/index.php/2010/06/Strengthening-Values-Centered-Leadership/.) [8]Wilson’s five core values are:

  1. Integrity
  2. Responsibility
  3. Fairness
  4. Hope
  5. Achievement

Take Away #2: Aligning Goals to Core Values

Wilson set five strategic goals, including one to downsize an operating division, then rated each of his goals against each of his five core values. On a self-rated scale of 1 to10 (10 being highest), all of Wilson’s goals aligned with each of his core values with a rating of 8 or higher. “Fairness” was a particularly important element in his organization’s downsizing activities.

Take Away #3: Aligning Character Strengths with Action

Wilson outlined five to ten key actions or pathways for attaining each of his five strategic goals in light of his five character strengths. He had identified his character strengths by completing the Values In Action (VIA, see authentichappiness.org for the VIA strengths inventory). He considered how he could utilize his character strengths to help achieve the five strategic goals. For example, he brainstormed specific ways in which he would use his top strength, “wisdom,” to selectively counsel/advise his key reports on critical issues related to downsizing. Wilson also decided to have his key reports identify their five primary strengths by completing the VIA online.

Take Away #4: Regularly Check Your Confidence Level

After implementing his action plan, Wilson conducted quarterly self-audits over a twelve-month period. He determined that his selected pathways to goal achievement were effective.

Take Away #5: Be Persistent

Wilson regularly reviewed his action plans and determined that his pathways were consistently on target. These self observations reinforced his perseverance in pursuit of his course of action to attain his strategic goals.

Take Away #6: Be Realistically Optimistic

Based on his review of the books Learned Optimism[9], Authentic Happiness, and the “Stockdale Paradox” found in Collins’ book Good to Great, Wilson did three things to maintain an optimistic outlook as he pursued his five Strategic Goals:

  1. He learned to separate factual evidence concerning potential obstacles to achieving his strategic goals from subjective negative self talk.
  2. He practiced positive self talk.
  3. He made at least one encouraging positive statement weekly to each of his key reports as they implemented aspects of the various action plans for the five strategic value-centered goals.

Wilson identified the above three actions with the help of an executive coach and information that Wilson gleaned from taking the Seligman Optimism Test.

Take Away #7: Be Resilient When Faced With Obstacles

After determining his Resilience Quotient (RQ), Wilson was better able to cope with obstacles and setbacks proactively and more effectively as he pursued his strategic goals. His RQ was obtained by completing the 56-item “RQ Test” found in Reivich and Shatte’s book The Resilience Factor: 7 Essential Skills for Overcoming Life’s Inevitable Obstacles. He found the skills of calming and focusing especially useful when dealing with resistance from some of his key reports regarding setting specific performance targets.

Conclusion

The effective management of goals can spell the difference between executive success and derailment. You can put this process on track by understanding and applying some of the scientifically based practices from the field of Positive Psychology, such as aligning goals with personal values and character strengths as well as being confident, realistically optimistic, and persistent. These applications to goal management can help you more fully utilize your character strengths and optimism and be more resilient as you pursue your goals.

Beyond the practices offered here, executive coaches and managerial leaders are encouraged to explore other ways that the findings from Positive Psychology can be applied to enhance leadership and organizational effectiveness. One fruitful starting point would be to review the Handbook of Positive Psychology edited by C.R. Snyder and Shane J. Lopez[10]to enhance your understanding of potentially relevant frameworks and tools that you may want to consider applying in your work. This article’s application to goal management of practical “take aways” from the field of Positive Psychology may well provide you with a useful springboard for achieving your goals.

Additional Resources:

  1. See Character Strengths and Virtues: A Handbook of Classification by Christopher Petersen and Martin E. P. Seligman for a detailed review of 24 empirically derived character strengths. Also, go to authentichappiness.org and click on the “Quick link to VIA Signature Strengths Survey” and complete the survey to determine your top five character strengths.
  2. To enhance your optimism, refer to Authentic Happiness by Martin E.P. Seligman and take the optimism test found in Chapter 6, or go to authentichappiness.org and take this test on-line; review “The Stockdale Paradox” found in From Good to Great by Jim Collins.
  3. Skills of resilience have been extensively researched and documented by Karen Reivich, PhD and Andrew Shatte, PhD in their recent book, The Resilience Factor: 7 Essential Skills for Overcoming Life’s Inevitable Obstacles. To assess your resilience abilities, you are encouraged to take the self-rated “RQ Test” offered in the Reivich and Shatté book found in chapter two. The seven core abilities of resilience include: 1) recognizing and managing emotions, 2) impulse control, 3) thinking favorably about the future, 4) causal analysis, 5) empathy, 6) self-efficacy and 7) reaching out.
  4. For a more detailed review of goal theory and related research, refer to: Locke’s “Motivation Through Conscious Goal Setting.” [11]

[1] Locke, E.A. “Setting Goals for Life and Happiness,” Snyder, C.R. and Lopez, S.J. (Eds.), Handbook of Positive Psychology. (New York, NY: Oxford Press, 2002). (For a more detailed review of goal theory and related research refer to: Locke’s “Motivation Through Conscious Goal Setting.”)

[2] Smith, D.K. Make Success Measurable: A Mindbook-Workbook for Setting Goals and Taking Action. (New York, NY: John Wiley & Sons, 1999.)

[3] Pintrich, P. & Maehr, M. (Eds.). Advances in Motivation and Achievement, Vol. 10. (Stamford, CT: JAI Press, 1997).

[4] Carver, C. & Scheier, M. “Three Human Strengths,” Aspinwall, L. G. and Staudinger , U. M. (Eds.), A Psychology of Human Strengths: Fundamental Questions and Future Directions for a Positive Psychology. (Washington, D.C.: American Psychological Association, 2003.)

[5] Seligman, M. Authentic Happiness: Using the New Positive Psychology to Realize Your Potential for Lasting Fulfillment. (New York, NY: Simon & Schuster, 2002.)

[6] Peterson, C. & Seligman, M. Character Strengths and Virtues: A Handbook and Classification. (New York, NY: Oxford University Press, 2004.)

[7] Luthans, F. “Positive Organizational Behavior: Developing and Managing Psychological Strengths,” Academy of Management Executive. 16 (1) 2002:57-75.

[8] Kerns, C.D. “Strengthening Values Centered Leadership: What, Why and How,” Graziadio Business Review, 7 (2) 2004. (http://gbr/pepperdine.edu/index.php/2010/06/Strengthening-Values-Centered-Leadership/).

[9] Seligman, M. Learned Optimism: How to Change Your Mind and Your Life. (New York, NY: Pocket Books, 1998.)

[10] Snyder, C.R. and Lopez, Shane J. (Ed.) Handbook of Positive Psychology. (Oxford, England: Oxford University Press, 2002.)

[11] Locke, E.A. “Motivation Through Conscious Goal Setting,” Applied and Preventive Psychology, 5, 1996:117-124.

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Negotiating Effectively

The decision as to whether or not to make the first offer or demand in a negotiation needs to be a strategic choice rather than a default. The first offer can have a significant effect on the final outcome.

The author has also provided for use in a classroom or business training class a negotiation exercise that may be accessed by clicking on “The Car Deal.“

The Editors

Negotiation is a constant factor in business life. While most business people will not be involved in negotiating the sale or purchase of an entire company or of multi-million-dollar contracts, many will be involved in negotiating a new lease on a building, employee salaries and raises, the division of resources among departments in a tight budget year, or, even less happily, the resolution of a lawsuit. At the very least, most people at some point will need to negotiate their own salaries.

Elements of a Negotiation

Given the ubiquitous nature of negotiations, it is important to understand how best to approach them. Three of the most important facets of a negotiation are preparation, the opening gambit, and the ability to walk away. This article addresses the importance of making the opening gambit a product of rational consideration, not a default reaction.

When asked, “Who should make the first offer/demand?” most people respond, “The other guy.” When asked, “Why?” the response usually is, “That’s the way it’s always done.” This can be a serious mistake and can deny a negotiator a crucial tool — the effective opening offer/demand.

Timing

No matter who makes the first overture, a paramount question going through everyone’s mind is, “Why is this offer being made at this time?” If the timing is correct, a settlement figure fits into the natural flow of the negotiation. If not, the settlement discussion may raise suspicions. Poor timing may indicate fear or weakness, anxiety for some reason, or a lack of sophistication about the process. Poor timing also creates the risk of polarizing one or more parties into positions which if viewed in a more objective light, are contraindicated.

There is no fail-safe formula for telling a negotiator the right time to make an opening offer. Negotiation is a dynamic exercise, and there are many considerations that impinge upon when to make the first move toward settlement. However, when the negotiations reach the appropriate point for making an opening offer/demand, the opening gambit is a crucial move. It demands very careful thought and planning — not a knee jerk default reaction.

The Advantages of Making the First Offer/Demand

Making the first offer/demand can give a psychological advantage.

During a negotiation, issues, positions, and even interests shift and realign in accordance with a managed disclosure of information. Understanding the power of perception is paramount. If one person acquires the power to manipulate the perception of others, that person enjoys a subtle but powerful advantage. Making the first significant move can be a powerful statement and can affect others’ perceptions of the one making the offer and of the situation in general. In military terms, the opening gambit is “taking the initiative.” Once one party takes the initiative, the other side frequently finds it difficult to regain its own momentum.

Making a competent first offer/demand can take control of the entire negotiation.

A competent opening gambit goes hand in hand with the idea of creating a psychological advantage. The concept is analogous to the theory of “primacy” in a courtroom trial. That is, once a participant gets the initiative and competently runs with it, the other side usually remains in a reactive mode. There are techniques that good strategists can sometimes use to regain the initiative, but such procedures tend to be “dicey.” Unless recovery strategies are executed deftly by an experienced negotiator, the party trying to regain the initiative runs the risk of turning a negotiation into a confrontational/adversarial event. Such an outcome gives rise to a host of difficulties.

Making the first offer/demand will often set the ultimate settlement point, thereby allowing one to claim more of the difference between two reasonable offers.

One of the commonly taught maxims in negotiation is that usually the settlement point is approximately halfway between the first two reasonable offers.[1] A practical example can help make this point more clear. Assume “Seller” is selling a piece of property we will call Blackacre. Seller’s reservation point (S/RP), the point at which he will go no lower, is $100,000. “Buyer” wants to purchase the property. Buyer’s reservation point (B/RP), the point above which s/he will not go, is $135,000. Comparative market analyses (comps) indicate that the fair market value of this property is somewhere in the $115,000 to $130,000 range. Both parties have prepared in advance and know the “comps.”

Experience suggests that if Seller opens with an offer to sell for $140,000 — a figure higher than the B/RP, but not an insulting offer — it is unlikely Buyer will respond with $100,000 or less. The spread would be too great to be satisfactory, and Buyer risks insulting Seller. While $100,000 could have been a very rational opening if Buyer had made the first offer, when such an offer is given as a response to the $140,000 opening, it might be taken as an insult and could jeopardize the negotiation or polarize Seller into a position at or near $140,000. Consequently, depending on how badly Buyer wants the property, s/he may be required to counter at a significantly higher amount in response than could have legitimately been offered as a first bid.

The difference between the first two reasonable offers is termed “the surplus,” or the “zone of agreement.” If each party made an offer at the other party’s reservation point (Seller making a demand of $135,000 and Buyer making an offer of $100,000), the zone of agreement would be $35,000. Half of the surplus would be $17,500, thus putting the anticipated final selling price around $117,500, with each party claiming approximately half of the surplus.

However, when Seller demanded $140,000, Buyer was forced to respond at a higher amount. If Buyer responded with an offer of $120,000, the higher figures would mean the zone of agreement is now $20,000 ($140,000 minus $120,000 = $20,000). Now the halfway point between these two offers would be $130,000. By making a strong opening, Seller likely bumped the sale price from approximately $117,500 to something close to $130,000. Thus Seller stands a good chance of claiming a greater share of the surplus based on the two reservation points.

Making a well-thought-out first offer/demand shows confidence in your position.

It has been said that the law is what is forcefully stated and plausibly maintained.[2] Likewise, in negotiation, if one party makes a strong plausible opening, that opening can often convince the other party that this offer merits careful consideration — that it is credible. If presented in the right way, a well-thought-out first offer can send a message that the party making the offer is strong and confident. Such an offer can cause the other party to rethink his or her position.

It is important to note, however, that this confidence factor edge is limited to a good faith offer made with the intent of actually making a deal. If the offer or demand is merely a fishing expedition, that is tantamount to positioning by making a very low or very high opening. Then the tone and words used to couch the offer should be chosen so that they effectively transmit the intent behind the offer. Giving unsupportable figures wrapped in a mantle of credibility is very confusing and could sabotage the whole negotiation process.

Making an effective first offer/demand shows preparation.

A well prepared, strong, confident opening offer/demand sends a message that “This person did his/her homework.” Unfortunately, too many times the parties do not adequately prepare for a negotiation. When one party prepares well and the other does not, the result can be intimidating to the less prepared person. Without even intending to, the better prepared party takes the initiative and does not lose it. The prepared negotiator is usually the one who claims the larger surplus in a given negotiation.

However, in some circumstances a better prepared person might choose to wait and let the other party make the first offer. Such a strategy still can be consistent with the overall theme presented here, namely, that the first move – the opening gambit – should be a thoughtful, considered move. It should not be a default.

The Disadvantages of Making the First Offer/Demand

Going first gives intelligence to other side.

There are dangers of going first. By making the first offer/demand, the party is giving away a lot of information. For one thing, making a legitimate offer is a sign that the party is ready to reach an agreement. That signal in its own right is an important item of information.

In many sophisticated negotiations in which all the parties have done their preparation, each side has a rough idea of the zone of agreement – that area where the parties’ authority to accept an agreement or sale price overlaps.[3] Making the first move provides the other parties with a sense of the amount of the surplus that the moving party intends to claim. An offer that is ridiculously out of line may indicate a sense of urgency. It is reasonable to assume that the other party will consider this non-verbal information when it comes time to make his/her response.

Making a poor first move can also signal to the other side that the party is not prepared, or, less charitably, that the party is “bush league.” For example, consider a buyer who is shopping for a product priced at $250. If the buyer offers $150 without giving any real reason for offering such a low figure (such as the product’s being torn, dented, soiled, or out-of-date), the offer appears insulting and may not even elicit a response from the seller. On the other hand, if the buyer did his/her homework and found that the product was a discontinued model or that it was selling online or at a discount house for less money, then there might be some credibility for an offer of $200. As our hypothesis indicates, the final sales price is generally halfway between the first two reasonable offers. By doing the requisite preparation, the Buyer stands a good chance of purchasing the product for around $225. Such a result assumes, of course, that the product is an item the price of which is open to negotiation (which may be true more often than many people realize) and that the buyer can deal with a person who actually has the power to negotiate. In many retail situations, such negotiation may be hard to carry out.

An ill-conceived first offer/demand could terminate the negotiation.

An insulting opening offer (see above) conveys a number of messages to the recipient — the prospective buyer’s lack of seriousness, lack of appreciation for the value of the object or service, and/or lack of understanding of the negotiation process. Except for the most motivated recipients of such an offer, an insulting offer/demand is likely to shut down the negotiations.

Another adverse effect of an insulting offer/demand is that it tends to invite an insulting response, which in turn tends to polarize the transaction. The responding party may hold to an insulting response or may choose another response and hold to it even if such a response is against his/her interest to do so. Either way, an ill-conceived opening can chill any relationship developed over the course of the negotiation. If the negotiation is to be continued, the original insulting offer needs to be retracted. In so doing, the party making the offer/demand stands to lose face in the process and is likely to become less flexible as well, thus further adding to the chilling effect of a poorly conceived opening offer/demand.

The opening offer provides a cue to your anxiousness to settle.

A person’s body language, tone and volume of speech, as well as the words chosen can all indicate how anxious the opening party is to settle. If there is a sense or tone of anxiety in the opening offer, the respondent has more information by which to adjust his/her response.

In Introducing Neuro Linguistic Programming, (NLP), O’Connor & Seymour[4] assert that 93%of our communication is non-verbal. Stated another way, if all people do is listen to the words, which are often ambiguous, they miss 93% of the communication.[5] There are many indices of anxiety that are widely recognized. The more obvious cues include perspiring, a heightened pitch in the voice, inclusion of excessive details, and failure to maintain eye contact. There are more subtle signs as well.

Conclusion

Three of the critical stages in a negotiation are the preparation, the opening gambit, and the ability to walk away. One cannot say that any one stage of negotiation is more important than another, any more than one can say that the heart is more important than lungs or brain to a healthily functioning body. Each stage is an indispensable part of a successful negotiation.

If a negotiator has not prepared, that lack of preparation shows. The other party picks up on such faux pas in negotiation. Lack of preparation indicates a weakness on which the other side will pounce just as a lion attacks the weakest member of a herd. Even if the weakened party recovers from his/her misstep, s/he will experience difficulties during the remainder of the negotiation because s/he will be negotiating from a defensive position.

In the same way, the opening gambit is a critical move in a negotiation. It is a move that must be weighed and considered carefully. Whether one goes first or lets the other party go first should be an intentional tactic. The evaluation of the move should be predicated upon valid reasons for moving the negotiation ahead in the direction one feels is most effective. One must also remember that sometimes it is better to walk away than to accept a totally unacceptable offer. Not every negotiation reaches a successful conclusion.

[1] This writer first heard this settlement point information from Professor Randy Lowry, Director of the Straus Institute for Dispute Resolution at Pepperdine University.

[2] This is an old saying whose source is probably lost in antiquity. This author has heard it attributed to Jefferson, Hamilton, and even to Ezra Pound. However, in his 1997 seminar, David Kendall, presidential counselor and adjunct professor at Georgetown University, reminded his listeners to, “Remember the words of Aaron Burr: Law is whatever is forcefully asserted and plausibly maintained.”

[3] In the Blackacre example, S/RP-B/RP = Zone of Agreement. In this example, $35,000 was the real focus of the negotiation. It was the Zone of Agreement. Anything over half of the $35,000 represented an increased share of the surplus. Thus if the property sold for $120,000, Seller received an additional $2,500 of the surplus.

[4] Joseph O’Connor and John Seymour, Introducing NLP, (Thorson, 1995): 18.

[5] One of the difficulties of carrying out negotiations over the phone is that the parties miss all of the nonverbal communication, including body language, eyes movements, and gestures.

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