Invantage Advising

Category: Decision Making

  • The Single Most Powerful Tool For Assessing Other People

    The Single Most Powerful Tool For Assessing Other People

    Originally appeared in Forbes.com 2/4/18.

    Assessing other people as you interact with them is one of the most important tools you can utilize in your professional life. It’s to your great advantage to learn how to interpret and then use your subjective reactions to people.

    Knowing how to read yourself and then what to do with you the information is a skill that takes some development and practice. But the investment is well worth the effort since your own responses to people will provide you with information about them that you can’t get anywhere else.

    Take empathy as a prime example. As I’ve explained elsewhere empathy is absolutely critical to leadership—it’s one of five essential character traits and cognitive capacities a leader responsible for the fate of people and enterprises must have.

     Let’s say you’re a member of a board search committee looking for a new CEO and you really want to know if your potential leader possesses the quality of empathy.

    One source of data is the way the candidate talks about the human side of her past business experiences. Does she show awareness of other people’s perspectives, needs and feelings? Does she demonstrate an understanding that these are important? Can she talk about instances where her empathy failed and what she thought and did about it? These are self-reports about the person’s experiences—how they have operated in the world. Useful, but basically hearsay.

    A different and deeper level of data can be gleaned during a get-acquainted conversation. When you’re in a meaningful conversation with another person, you are essentially creating a laboratory situation where the data is being created in real time, not just reported historically.

     What’s your personal experience as you’re sitting with someone, getting to know him? Does the candidate you’re interviewing show empathy for you? I don’t mean whether or not he is nice.  Rather, does he have the capacity and interest to investigate what you want from the interaction and respond appropriately? Is he smart and perceptive about your point of view and needs? Can he track your subtle signals of interest and shift gears when your attention moves on? Does he quickly figure out the direction your questions are going and then help by giving you the insight you’re reaching for?

    Here’s the secret sauce: If you’re trying to get to know a potential leader who lacks empathy, your own subjective experience is deeply telling.  You’ll find yourself feeling frustrated and bored.  Time will go slowly. You’ll search for questions. Because the answers you’re getting won’t satisfy you, you’ll keep looking for other ways to ask the same question. The conversation will feel like hard work. Why do you feel that way?  Because the person across the table doesn’t have the capacity to connect with you. A connection can only happen when both parties have some degree of empathy. And without that empathic connection, a conversation lacks vitality.

    In contrast, if you’re sitting with a person who does have the capacity for empathy, there will be more flow. You’ll feel invigorated; the conversation will have its own spark and creativity.

    A client asked me to interview a candidate for a potential leadership position. The potential hire had tremendous technical skills. Reviewing the materials I received before the assessment, I learned about a corporate blunder in which the candidate had been involved in his previous position. It wasn’t a deal breaker, but I wanted to know how he viewed his role in the poorly led episode. After an hour of conversation, which had gone reasonably well (though I did have a bit of that feeling that time was moving slowly), I brought up the blunder. I said I wondered what his thoughts were about it. He immediately got defensive and dismissive, which startled me. I persisted, saying I really wanted to understand what he thought about what had happened. He made another excuse, looked away, seemed bored and changed the subject. I tried one more time but was unable to get him to engage.

    I was annoyed and frustrated. I felt I wanted something from him and he wouldn’t give it to me! I didn’t care about the blunder itself. It was one of those unfortunate things that could have happened to anyone. But I wanted to talk about it. Beyond that, I realized, I was looking for him to show some regret or shame or ruefulness. I wanted him to say, “Yeah that was really awful, and I don’t ever want to be in that position again. “ He would have totally won me over with a sentence like that, showing some feeling about the matter and an interest in sharing the story — maybe because of, rather than in spite of, the fact it was painful.

    So in that two-person interaction, I had a specific need — to hear a feeling-full story about the blunder. He was unable to read me successfully and either satisfy that need or tell me why he couldn’t. “It’s confidential, I can’t talk about it” would have worked too.

    Contemplating a partnership? You definitely want to establish that your potential partner has the capacity for empathy. A professional colleague and I were considering a joint venture. We went to dinner with a contact of his who was key to our meeting the people we wanted to work with. My colleague spent much of the meeting describing my accomplishments and what I could do for clients. While on the surface it was complimentary and all about me, I felt uncomfortable and strangely invisible. Thinking about my internal reaction, I realized he made me feel like an object, not a person.  If he had been in my shoes, I imagine he might have enjoyed the attention. But empathy requires you to know how the other person feels in their shoes, not how you would feel in their situation. I don’t like that kind of attention, and that’s not how I like to present myself to or get to know new acquaintances.  Despite a superficially exciting and successful meeting, my subjective discomfort and feeling of invisibility made me realize that this was not a partnership to pursue.

    Even in a business situation, you have subtle, personal and specific emotional needs and preferences for how you like to interact. Think of it as a unique personality fingerprint. If the person you’re assessing has the capacity for empathy, they will automatically detect that fingerprint and do their best to respond to it in order to facilitate a human connection.

  • Due Diligence: Why You Should Assess A Leader’s Capacity For Critical Thinking And Judgment

    Due Diligence: Why You Should Assess A Leader’s Capacity For Critical Thinking And Judgment

    Originally appeared in Forbes.com 1/25/18

    You might assume that “capacity to think” is something you don’t have to worry about if you’re in the process of selecting a new leader, whether it’s a new CEO or the founder of a company you’re investing in.  You’d be wrong.  Surprisingly, great credentials, a record of success and an impressive education do not guarantee that someone has the ability to do the high-level thinking required of a leader whose decisions have fateful consequences.

    Every search committee looking for a new CEO or organizational president and every investor evaluating the strength and promise of a business’ founder should include evaluation of the capacity for judgment and critical thinking as part of the vetting process when deciding to put the fate of their company in the hands of a new leader.

    How can someone even get close to a position as CEO or leader of a great organization without these fundamental cognitive strengths?  It happens all the time. Charisma, connections, luck, canniness, creativity and vision can all propel someone into a position of power.  It doesn’t mean their judgment is up to snuff.

    Elsewhere I’ve written about five core character traits and cognitive abilities that every leader who is responsible for the fate of an enterprise and its people absolutely must have.  Perhaps the most vital of all is the capacity for critical thinking and judgment. Which is not to minimize the importance of the other four:  empathy, trust (both the ability to trust others and inspire their trust), self-control/discipline and self-awareness.

    This model of the fundamental requirements for a leader is distilled from two broad sources—my own 35 years’ experience as a practicing psychiatrist, psychoanalyst and organizational leader, using the long traditions of thought and research in psychology and psychoanalysis, and a remarkable document (itself based on the same theoretical and empirical foundation), the Army Field Manual on Leader Development.

     Good judgment depends on the ability to think critically and strategically.  This can be broken down into multiple essential functions, including the ability to plan ahead in a way that is thoughtful and organized, the ability to organize information into a coherent and logical narrative and the ability to understand cause and effect.

    To my mind, the most important aspect of critical thinking is the capacity to anticipate consequences.  At the basic level, this is linear–what are the immediate, mid-term and long-term consequences of a decision?  But the best leadership mind anticipates consequences more expansively, perceiving a multidimensional outcome and, immediately, the range of complex secondary and tertiary outcomes that will spin off in response to each level of change.

    A leader’s thought process needs to be dominated by reason and facts, not emotion.  But it’s equally important for a leader to know the effects stress and emotion have on his own thinking and be able to discern when irrational forces are overtaking dispassionate logic.  This is harder than it might seem since we are all subject to unconscious mental forces that can distort thinking without revealing they are at work.

    Critical thinking requires the ability to compare current situations to similar ones encountered in the past, using the richness of previous experience with problems to inform present assessment.  But this necessary use of past experience has to be tempered by alertness to unconscious biases and fears.  Doctors are taught to beware of the “last grave error syndrome”–the tendency to overcompensate because you screwed up last time.  Just because you missed a case of heart disease doesn’t mean every patient you see now needs excessive cardiac testing.  In investing, just because you left a short position too soon and lost a mint doesn’t mean you should stay in your current short positions.

    The leader who can think clearly is able to set aside his own ego and self-esteem as he evaluates a situation.

    Critical thinking requires the ability to approach a problem with an organized assessment process:  knowing what information to gather, considering alternative explanations and points of view, actively seeking contrarian opinions and perspectives, identifying gaps in information and knowledge and identifying a process to fill them.

    Since problem-solving is dependent on thinking and judgment,  these capacities can be assessed by observing how the leader organizes her response to a crisis, an unexpected situation or a stalemate.

    How can you identify inadequacies in a potential leader’s critical thinking and judgment? Look for these specific signs of deficiency. Many of these I’ve extracted from the Army Manual, which does an invaluable job of operationalizing what otherwise would be abstract and difficult to assess capacities:

    • Signs of disorganization in thinking or speech.
    • Over-focus on details; inability to see the big picture.
    • Lack of clarity about priorities.
    • Inability to anticipate consequences.
    • Failure to consider and articulate second and third-degree consequences of an action or decision.
    • Inability to offer alternative explanations or courses of action.
    • Oversimplification.
    • Inability to distinguish critical elements in a situation from less important ones.
    • Inability to articulate thought process including the evidence used to arrive at a decision,  other options that were considered and how a conclusion was reached.
    • Unable to tolerate ambiguity/over-certainty.
    • Difficulty outlining a step-wise process to solve a problem or implement a change.
    • Thinking that is driven by emotion or ego.

    Besides recruitment and promotion, this conceptual model provides a useful framework in other contexts.

    Leadership coaches can use it to identify areas a client needs to attend to and strengthen. Mentors and managers developing leadership potential in individuals they’re working with can pinpoint strengths and weaknesses.

    Anyone in a leadership position herself or who aspires to one can also use this model, with its breakdown of the components of critical thinking, as a self-assessment and capacity development tool to identify personal deficiencies and look for ways to improve in this essential area.  Each of us has a unique hard-wired and learned set of cognitive tools and none of us has a toolkit that isn’t missing a few pieces.

    Critical thinking and judgment are among the most advanced and sophisticated cognitive skills, demanding difficult and fluid mental processes of synthesis, discrimination and complex analysis. Even the best thinker will lapse to a lower level of cognitive functioning at times of enormous stress, emotional overload, illness, sleep deprivation or fatigue.  Knowing when one’s capacity for critical thinking is sub-par is just as vital as being able to do it well.

    Additional reading:  The Unexamined Mind Doesn’t Think Well: Why Self Awareness Is A Fundamental Leadership Capacity and Empathy Is An Essential Leadership Skill–And There’s Nothing Soft About It

  • Is There Such A Thing As A Rational Person?

    Is There Such A Thing As A Rational Person?

    Originally published on Forbes.com 12/18/17.

    The short answer is no.  The harder you try to be purely rational the less likely it is you’ll get there.  What people have is the capacity for rational thought.  This capacity exists on top (literally) of a large neurobiological apparatus that is driven by emotion.  And to complicate matters further, we all have the capacity for thought that doesn’t appear to be emotional but is far from rational— “fantastic thought” let’s call it. Finally, there’s a fourth factor that comes in to play which is neither thought nor emotion—I’ll borrow the term “self-state” from psychology.  This refers to underlying individual mental patterns of inherent personal reactivity to the environment. How much stimulation do you need?  What happens when you are tired?  When and how do you get over-loaded?  What leads to under-stimulation or boredom, and what effect does that have on your capacity to think?

    As a leader, you are constantly making enormously consequential decisions.  If you can’t count on yourself to be rational (and you can’t) what can you do?  In each of us, there is an ongoing mental minuet where rational thinking, fantastic thinking, self-states and emotion dance with one another and exert mutual influence in ever increasing complexity. At any given moment, some of the thought and emotion is unconscious as well.

    There is nothing to be gained by trying to eliminate emotion and fantastic thinking.  Even if it were possible, you wouldn’t want to.  They are the source of vision, motivation, energy and creativity.  When operating outside of our awareness, they are also the source of big errors in judgment.

     The cure is to practice, develop and keep developing self-knowledge.  When is my capacity for rational thought most likely to be overwhelmed by emotion?  What direction do I typically go when it is?  What fantastic thoughts do I hang on to?  How do these lead to specific emotions and/or interfere with rational decisions?  What are the various self-states I experience, what triggers them, and what happens to my thinking? In an earlier Forbes post, I wrote about practicing the capacity for self-awareness, the analytic process that leads to self-knowledge.

    The idea of the rational human started to take hold in the 1600’s, thanks to the Scientific Revolution when, among other events, Newton defined the laws of gravity and Galileo promulgated Copernicus’ sun-centric vision of the heavens.

     In 1632, Rene Descartes gave birth to modern Western philosophy with his famous statement “I think therefore I am”, establishing that the capacity to doubt proves that there is a thinking entity—and this defined what it meant to be a person.  The scientific revolution gave birth to the 18th century Enlightenment also known as the Age of Reason.

    Time went on and we all came to count on the idea that we humans had a refined capacity for rational thought. This despite the contribution from Sigmund Freud in the early 20th century, unearthing the very irrational and emotional unconscious mind as a prime motivator of human action.  Nevertheless, the preference for a rationalist theory of who we are persisted.

    Famously, it led economists to develop the theory of “the rational market” where a rational consumer makes informed calculations about cost and benefit and arrives at a rational conclusion.  The idea of a rational market was exploded by the wave of observations generated by behavioral economists, who demonstrated that unconscious, non-rational cognitive biases played an enormous role in decision making.

    The now well-known cognitive biases illuminated by behavioral economists are one type of fantastic thinking.  Let’s take the “gambler’s fallacy” as one example.  If I’ve flipped a coin five times and gotten heads each time, I’m sure I’m finally going to get tails on the sixth try, even though the probability remains 50/50.  These are automatic, more or less universal cognitive sets (fantastic thoughts), having nothing to do with emotion.  Another set of fantastic thoughts are highly personal.  They too seem devoid of emotion:  they are thoughts, not feelings.  But they are distorted thoughts, part of one’s personal narrative, forged in childhood and reinforced by later experiences.  “Everything I do has to be perfect. “I’m responsible for everything going right.” “Nobody gets it but me.” These non-rational thoughts are usually semi-conscious—lurking just below the surface of our thinking—and very powerful influencers on our overall thinking process.

    A final word about self-states—those phenomena that are neither thought nor emotion but nevertheless strong determinants of our actions.  I pay a lot of attention to these when working with clients.  Restlessness, uncertainty, boredom, over-stimulation, under-stimulation, excitement, flatness—we each have different tolerances for these states and different needs to achieve internal equilibrium and optimal functioning. For example, I tend to get anxious when faced with uncertainty, but paradoxically always seek and need the excitement and stimulation of new ideas and projects.  One of my investor clients found it hard to hold a position because of innate restlessness.  An organizational leader wanted a new position but needed a familiar social group to feel confident.  A business owner selling the company he built from nothing thrives on the adrenaline rush of making critical decisions.  How could he take on a role that was less intensely stimulating and still feel vital and engaged?

    Knowing how you personally integrate emotion, self-states, fantasies and rational thought on an ongoing basis leads to the best possible decision-making process.

  • Want To Avoid A Catastrophe When Hiring A New CEO? Try Using This Simple Checklist

    Want To Avoid A Catastrophe When Hiring A New CEO? Try Using This Simple Checklist

    This post was originally published on the Forbes online Leadership Blog on 11/29/17.

    What are the fundamental cognitive capacities and character traits that a person absolutely must have to fulfill a leadership role when lives and fortunes are at stake?   I became interested in developing a simple tool that defined these fundamentals.   My search was initially prompted by curiosity about the language of the U.S. Constitution’s 25th Amendment, much in the news lately, which states, in Article 4,  that the Vice President and a majority of the Cabinet can remove a President from duty if he is “unable to discharge the powers and duties of his office.”

    I started to wonder how the Vice President and cabinet members would actually critically assess “ability to discharge the powers and  the duties of the office.”  What standard could they use?  A little searching led me to conclude that there really wasn’t such a standard readily available.  But as a psychiatrist, I knew about “ego functions” and “executive functions”, two sets of ideas that together describe in detail the specific mental and emotional components that go into the creation of  a high functioning, reliable adult.

    A little more searching led me to a remarkable document, the Army Field Manual on Leader Development (AFM). In over 130 pages, the AFM lays out the U.S. Army’s expectations regarding core capacities for leadership.  In fact, the AFM is based on the same well-founded psychological knowledge about adult development and functioning that I was familiar with.

    I distilled the AFM’s core leadership competencies, integrated it with my psychiatric knowledge and experience and created a five-point checklist for determining ability to serve in a position of high responsibility.

    But it occurred to me that the President of the United States is far from the only person to whom we entrust our lives or fortunes—the checklist would be useful in a Board’s search for a new CEO, a university’s search for its next President, or even your search for the next nanny you are going to trust with your children’s lives. VC firms considering an investment would be wise to  ensure a company’s CEO possesses these essential capacities.

    In assessing a potential leader, you can’t expect perfection.  But you should expect a leader to be acutely aware of any personal shortcomings and have a positive, ongoing plan to improve and compensate for weaknesses.

    Possession of these core competencies does not guarantee leadership success. It’s the reverse. Serious deficiencies in one or more of these capacities can predict significant problems or failures.

    Five Core Cognitive Capacities And Character Traits A Leader Must Have

    Here is a brief introduction to the five core cognitive capacities and character traits a leader at a very high level of responsibility needs:

    Trust—This includes both the ability to inspire trust and the ability to trust others. The leader lacking in trust can’t form functional teams, is drained of energy by habitually feeling beleaguered and consistently blames others. Mutual trust is essential to the maintenance of an ethical climate in an organization.

    Discipline/Self-control—A leader must have the capacity to contain himself in the fact of strong negative emotions and not resort to angry outbursts, blaming, or impulsive action. Self-control is necessary for a powerful leader to resist temptation, wait for additional information, think before acting, and avoid the abuse of power.

    Critical Thinking/Judgment— The abilities to assess, plan, strategize, problem solve and analyze are all dependent on critical thinking, perhaps the highest level mental function. The capacity for critical thinking allows a leader to anticipate far-reaching consequences of actions, gather and synthesize opinions and data, remember past experiences and use them to inform but not imprison current thinking.

    Self-awareness— A leader lacking in this trait is blind to her weaknesses and biases and therefore unable to compensate for them or grow in capacity. She cannot assess her impact on others and as a result her communications are confusing.  Because she is unable to monitor her own emotional states she is vulnerable to plowing into obstacles or creating crises. Without self-awareness, a leader is dangerously blind to what she doesn’t know.

    Empathy—Empathy is the capacity that allows a leader to understand the perspectives and feelings of others and foresee the impact of his actions and events on them. Effective communication depends on empathy. Without leader empathy, team morale is fragile.  The leader lacking in empathy is driven by his own needs and blind to or indifferent to the needs of others.   Empathy is not the same as compassion, or caring about others’ needs and experience.  Manipulative and authoritarian leaders can be adept at intuiting other peoples’ vulnerabilities and exploiting them.  Adding the capacity to care about—not just perceive—the experience of others creates a beloved leader.

    The search for the traits of great leaders permeates business literature, both popular and academic. What’s different about this model?  Most attempts to identify the traits of great leaders look to real-life examples.  For example, what made Jack Welsh, Steve Jobs, John D. Rockefeller etc. transformative business leaders?  The five core competencies model starts in the opposite direction.  Based on a solid century of psychological and psychoanalytic research and theory, the model describes the fundamental capacities of a strong, mature, wise, trustworthy, healthy adult human being.  Let’s start there in selecting our leaders.

  • When Leaders Share A Goal But Differ On Strategy–What Do You Do?

    When Leaders Share A Goal But Differ On Strategy–What Do You Do?

    This post was originally published on Forbes online on 10/29/2017.

    Leadership requires some tricky navigating when you share the same final goal with others but disagree about tactics or strategy. This isn’t the most frequent leadership dilemma (except in a partnership where it can be more common) but when it does arise the potential for conflict, rancor and estrangement is significant. How do you negotiate the situation?How do you proceed?

    I recently found myself in this kind of dilemma.In thinking about it, I realized it’s not the first time in my leadership career. My suspicion is that some of us more often find ourselves disagreeing with the larger group. Maybe we’re more contrarian, or maybe we’re more apt to be lone wolves in our thinking.

    I distilled a handful of guiding principles and repetitive patterns during a recent iteration of this dilemma. Observing my own experience as well as those of clients, I also have some suggestions for a meta-strategy (a strategy about strategy) to help in navigating same-goal-different-strategy conflicts.

    Principles And Patterns:

    • Even when we agree on the end goal, it is too easy to see those who have a different strategy as opponents. They’re not.

    • It is incredibly easy to waste energy and time fighting about strategy and tactics and lose sight of the goal.

    • Outsiders (with a different goal) will lump you together, not caring about the strategic differences that you think are so important and only noticing that you share the same goal. These are your real opponents.

    • Emotional attachment to our own strategy idea can cause any of us to lose sight of the goal and forget who are ultimate allies are.

    • Emotions can be very high in these situations, so it’s worthwhile to back off repeatedly from your own passionate advocacy and go through an analytic process (see below).

    • Anxiety is a big (and often unrecognized) part of the problem. Any way you can find to relax or help your “strategic opponents” to do so will help. Ultimately, follow your own path and let your colleagues follow theirs. You can’t control them and their action doesn’t reflect on you. Nor do you have to give up your identity or beliefs.

    What Can You do? You Need A Meta-Strategy

    The solution is a little different depending on whether the disagreement on strategy is occurring within a clearly defined organizational hierarchy versus a loosely knit group of peer leaders or an equal partnership.

    When disagreements occur within a hierarchy, in some ways it’s easier. A CEO or organizational president can, in the end, say, “We’re going to do it my way.” Lacking ultimate decision-making authority, a subordinate can argue her position and then yield when she must.

    But problems can arise here too. If the CEO uses her power to chose a strategy that others disagree with, she risks the disaffection or lack of enthusiastic investment by her team. She even runs the risk of unconscious sabotage if people are angry enough. On the other end of the power dynamic, the subordinate leader who argues her case for a certain strategy and “loses” may be a realist and yield but not be comfortable with the outcome. She has to ask herself then if she can live with the winning strategy. If it’s against her personal ethics or character, she may face a tough decision about leaving the organization.

    When there’s no power hierarchy, as in a group of co-equal professional leaders, the calculus is a little different.

    Dealing effectively with this kind of daunting and draining situation begins with some self-reflection and analysis:

    • Think about the strategy you want to pursue. What are the reasons you’re committed to it? Why do you think it’s going to work?

    • Analyze the strategy of those who agree with you on the ultimate goal but differ on strategy. What’s your objection to their strategy? If your feelings about the “wrongness” of their approach are intense, spend some time thinking about what’s behind that intensity. Do you have a stylistic problem, an ethical problem, or a tactical problem?

    Next take some time to think about the possibilities in your relationship with the person or group you disagree with.

    • Is compromise possible? If everyone stripped away their emotional attachment to his or her strategy (this means you too!) would there be an opportunity for compromise?

    • Can you convert the others to your position?

    • Could you give up your preferred strategy and join them — allow yourself to be converted? Are you holding on to your position out of stubbornness or narcissism, or do you really believe it is the best or most ethical way to proceed?

    Going through this process, it’s important to be realistic about your own personality. Some people are more temperamentally suited to compromise than others. You may be more or less gifted at persuasion — converting others to your point of view. For others, being “converted” and giving up their own position is just too uncomfortable. If you’re not temperamentally suited for compromise, persuasion or conversion, the best path ends up being peaceful co-existence. Know what your talents, skills and predilections are and proceed with that in mind.

    If you’ve considered and rejected or exhausted these three options — converting your allies to your strategy, finding a viable compromise or yielding and joining them, it’s time to go your own way.

    Try to maintain cordial relations with your allies whose strategy you oppose. This can be tricky when the controversy is public. I’ve been put on the spot in a TV debate where I was asked point blank what I thought about my colleagues’ position. I scrambled to say I admired their passion, disagreed with their tactics but agreed on the goal. I was impressed and grateful that my counterpart was very gracious and complimented my work even though I had made it clear that I thought his approach was not just wrong for me but wrong.

    For me, solving this leadership problem is a work in progress, so I’ll close with an inspirational quote.  According to biographer Jon Meacham, Thomas Jefferson’s political genius lay in his “building contingent majorities and pressing ahead and cutting deals.”

    NY Historical Society

    He was totally devoted to the survival and success of the American experiment, and he would do almost anything to serve that end. He was not at all handcuffed by ideology; if he believed it would serve the American cause, he would do just about anything … And I think that’s what great politicians do. They are committed to a philosophy but are willing to part from dogma to make great things happen.