The Predictably Irrational Manager
Of course, there are no irrational managers. The rational manager cares about performance, that is, results and retention, which drives the desired outcomes and helps the organization succeed in the market.
Exactly as much as investors are rational — they always act to maximize their financial gains.
Oh, wait, this was disproven many years ago! Examples are emotional attachment to a losing stock, sunk-cost fallacy, loss-aversion or non-financial considerations that affect results, such as emotionally preferring an industry or a country regardless of their performance.
However, we still stick to the underlying assumption that managers will optimize performance toward the desired outcome. After all, that’s what they should do because that’s what they’re paid for. Should…
What causes the irrational manager
A few years ago I was working in a company that had 2 major software modules. The technology manager led two initiatives at the same time — one to merge them into a single module, and the other to split them into 3 modules. Obviously they contradicted each other and caused a lot of confusion and wasted effort without any benefit to the company. I couldn’t understand why. None of us did.
There are many incentives and factors that dictate the desired outcome and behavior of the manager that have nothing to do with performance or “common sense”. In many cases, we’re simply not aware of all the considerations our managers have, like optimizing for their whole department over our team.
In others, they’re driven by internal fears or desires, such as:
- Ego — “I decide what to do”, regardless of the benefit to the organization
- Having peace and quiet, not rocking the boat for a long enough tenure
- Avoiding giving feedback, having difficult conversations or getting into conflict
- Difficulty to make a decision and persevere
- Cultural differences, e.g. inability to show a mistake or say “no” to power
- Pursuing an evidently futile endeavor because their bonus depends on it
- CV-driven strategy such as growing headcount
- Social proof, behaving like others because it’s the norm, even if ineffective
- Locally sub-optimizing, preferring their own team over the whole company
- Fear of change, even when truly understanding it is the right thing to do
There is nothing here that you’d say is illegal, but you couldn’t really argue it’s very ethical. Ethical behavior would mean having the interest of the company in mind, not acting for personal gains or avoiding fears, but we all know this is an unavoidable reality.
This “irrational” behavior is evident even when this manager is a direct report who manages others. For example, as a Director, you explain to the Engineering Manager the benefits of pair-programming, show data to back it up and paint the bright future image after making this change. But the manager is dragging their feet, finding reasons and excuses for not doing it even after agreeing to.
“ Change is easy, transition is hard “ — every change, however beneficial, incurs a loss: not being the “go to” person anymore, loss of identity, power, comfort, speed or meaning.
That explains inattention to results, not doing all they can to improve the performance of their team, not investing in 1:1s, giving feedback, coaching or delegating.
Such “irrational” behaviors are not a one-off mistake. They are consistent and repeating, hence the title “predictably”.
How to mitigate the irrational manager behavior
What can you do as upper management to instill a bit more rationality — doing the hard right over the easy wrong?
- Define the desired outcome and what success looks like. This is sometimes missing, and then each defines their goals in totally different ways, often defaulting to output, that is some activity that is easy to measure, like “features released”, over the harder outcome, which changes the behavior of the customers.
- Define strategy — a short document outlining the diagnosis of the challenges, guiding policies, and coherent actions, as beautifully described in Good Strategy, Bad Strategy
- Set company values and repeat them to promote desired behaviors and ease decision-making, e.g. what type of customer do we prefer? Is innovation above all? Is playing safe?
- Clarify who is accountable — the opposite of the vague “let’s”, “we should”, and no repercussions when goals are not met
- Focus — repeat what are the fewest and most impactful problems to work on, not “15 top strategic priorities” accompanied by 25 initiatives from various stakeholders
- Set psychological safety that encourages learning, innovation and engagement
- Hold weekly 1:1s with direct reports to create trust and rapport
- Give timely feedback, positive and negative, to improve future behavior
- Coach to make sure direct reports grow
- Delegate for business continuity and allow higher impact activities for managers
