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Business IS behavior

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The following is an excerpt from “Performance Management: Changing Behavior That Drives Organizational Effectiveness,” Fifth Edition, revised, by Aubrey C. Daniels, PhD., and Jon S. Bailey, Ph.D., for Performance Management Publications, a division of Aubrey Daniels International Inc.

Success in business is defined by an organization’s ability to produce results. If you don’t make a profit, you will go out of business. The same is true for each managerial position within your organization. If a manager does not produce results, he/she will not be judged as successful.

All organizational results are the products of human behavior. Every result is produced by someone doing something. If you want to improve results, you must first get employees to change what they are doing. You want people to do some things either more or less often, or in some cases, to do something entirely different.

To change results, you must change behavior. Managing by results is a reactive approach and is very inefficient and in the long run, ineffective. Because results are always the end product of behavior, by the time you get the result, the behavior that created it is long gone.

To be a proactive manager, you must define the results that you need and then determine the behaviors that will produce those results. You then manage those behaviors as they occur. If you do so consistently and systematically, you will know the result before you see the report at the end of the day, week, month, or quarter. When you manage behavior daily, you are creating the future results that your organization values.

Build behavior and results will come

Business is behavior. Without behavior no organizational accomplishments are achieved. Before businesses discovered behavior, they tried to improve results by eliminating people through downsizing, moving them around through re-engineering or by changing the types of people hired. These approaches had only limited success. It is safe to say that billions of dollars have been wasted because the designers and initiators of these activities didn’t understand some of the basic laws that govern human behavior (See “OOPS: 13 Management Practices that Waste Time and Money and What to Do Instead”.) Within the last few years, business has become acutely aware of the need to change behavior, not people. This is an important distinction because the distinction between changing behavior and changing people is still often confused.

Some employees are turned off by the term behavior because it indicates that employees are at fault. But actually, this approach relieves the individual of fault and places fault, or the causes of behavior, on the environment in general, comprised of the dynamic relations between the organization/infrastructure, managers, and employees. Company owners, managers, and supervisors can design environments where employees are effective and efficient, and enjoy their work.

International competition has accelerated the need for dramatic change in virtually all aspects of business. Executives realize they must change the way they are doing business and they’d better do it in a hurry! It’s difficult to find a current business publication that does not contain quotes from some executive about the necessity of changing the behavior of employees. However, if you read carefully, you will see that they are not talking about behaviors at all, but are still talking about results, only using another name.

This confusion extends to the word results as well. For many people the word results means the bottom line. In the context of organizational performance, results and bottom line are entirely different. The bottom line refers to the accounting for, and valuing of, mission critical behaviors and results. It is, if you will, the overall scorecard for the organization. A result, as we use the word, refers to the outcome of the process you design to convert inputs into outputs. These results, along with certain economically valuable behaviors, are then converted into some accounting format that assigns them an economic value. This simplifies analysis at an organizational level and allows for an easy prioritization process for the allocation of resources. While the bottom line may be the place to start your analysis when defining the potential for improvement, you must trace any result to its behavioral components to actually realize that potential. You do not manage the bottom line; you manage the processes that create it, most especially the conditions that support organizationally valuable behaviors!

Traditionally, managers have been held accountable for attaining results, so management’s focus on results is understandable. As a group, managers have had little formal training in behavioral methods but have nevertheless been successful by identifying the measurable, bottom-line results to be accomplished and by holding others accountable for producing them. The problem with this approach is that it is often a costly and unpredictable way to get results, in both financial and human terms. By the time a result is produced (profitability, for example), many behaviors have occurred. If those behaviors have not been deliberately managed, in almost all instances, results could have been more efficiently and effectively produced, thus saving time, energy, and cost. By more carefully managing performance, even in very successful companies, such gains in effectiveness and cost reduction can add up to many millions of profitable dollars.

A quote attributed to former President Theodore Roosevelt is, “The best executive is the one who has enough sense to pick good men [sic] to do what he wants done and self-restraint to keep from meddling with them while they do it.” This kind of managing by results was exemplified decades later with the Watergate escapade. One can imagine that the official who instructed the would-be burglars must have said something like, “I don’t care how you get it; just get it!” Of course, the way they got it is now well known around the world. This infamous event at least started a concern in business and government that values should be placed high on any boardroom or political agenda. Unfortunately, many companies thought they could manage values without understanding behavior and, in our opinion, this has resulted in the scandals at Enron, WorldCom, Arthur Andersen, and, of course, the now-infamous Bernard L. Madoff Investment Securities, to name just a few.

Of course the opposite extreme exists as well. Many managers involve themselves too deeply in their subordinates’ behavior. Although the term micromanagement is often misused, it describes the activity of many managers who attempt to control every single behavior of others. This is a self-limiting approach since the manager feels that, to be successful, he or she must know everything that each employee knows and does. Very few managers ever succeed with this process and even more rarely do their employees succeed. Whether intentional or not, micromanaging is a punitive approach that inhibits or prohibits employees’ professional growth.

Unbreakable behavior laws

Laws govern our behavior. Knowledge of those laws allows you to more effectively accomplish the things that are important. While a common sense approach to behavior tells us that you never know what people will do, behavior analysis shows you that is not so.

Behavior is more predictable than you might realize. Some habits you acquired as children stay with you all of your life. Although many people don’t like to be thought of as predictable, they don’t mind when others say they are dependable. Dependable by another name is predictable. Those who are dependable do what they say they will do and that allows one to predict the future to some extent. The best predictor of what people will do today is what they did yesterday. This includes what we call habits or patterns of behavior and reflects such things as observed thinking styles (the logical assembly of words in patterns) and observed problem-solving approaches that are highly consistent over time and situations.

People often react negatively to the idea that there are laws that govern behavior. These same people do not object to the fact that the law of gravity also governs our behavior. We make choices based on the law of gravity, whether we have been schooled in physics or not. A scientific understanding of gravity allows us to invent things that make work easier, allows people to travel faster and farther, and in other ways increases the enjoyment of life. In the same way, our knowledge of the laws of behavior does not change how they affect our behavior but guides us in developing effective, efficient, and satisfactory interactions with others at work and at home. If you do not have this knowledge, the behavior of others will continuously frustrate and baffle you.

The key to producing consistent results in business and industry is the effective management of behavior; it is behavior change that produces measurable results. Businesses run on human behavior, and anything else — downsizing, re-engineering, or changing selection profiles — will be less successful. Managing by results can lead to a Watergate-scale disaster; micromanaging, a punitive approach, clearly reduces employee growth and creativity. The laws of behavior as we understand them allow managers and supervisors to arrange conditions that produce predictable patterns of behavior that are consistently productive over time. This goal is easily within reach of behaviorally trained business owners, managers, and supervisors.

Aubrey Daniels, Ph.D., who coined the term “performance management,” is founder of management consultancy Aubrey Daniels International, president of the Aubrey Daniels Institute, and author of Performance Management: Changing Behavior That Drives Organizational Effectiveness and five other business books. He can be reached at [email protected].