Jun 2009

The inertia of fear

“Fear” is not a much-used word in the workplace, for whatever reason, although in bad times, people are more open to talk about it, e.g. “fear of losing a job”, etc. Nonetheless, fear is one of human being's basic emotions. It is ever present in the workplace, consciously or unconsciously, bad times or good times. Managing people, in one way or another, requires managers to understand how fear can affect corporate performance.

Both in personal and corporate life, “fear” can either be an incentive or a disincentive for change. It affects people's propensity to upset or maintain the status quo.

Fear in the workplace

Managers are responsible for many many bad decisions, including the decision to not decide in timely manner. “Bad” decisions can be due to lack of understanding (e.g. cluelessness) or due to ego or due to, commonly enough, fear. Ironically, fear of making bad decisions (either for the company or for oneself) can lead to indecisions which in many cases is a bad thing itself. It is a vicious circle.

Fear is often used to drive employee performance, too. Some companies openly tell their employees that the bottom performers are candidates for layoffs. This tactic drives employee behaviours. Employees find out what “perform” means and they do whatever it takes to get high marks on those measurements. This can be good and at the same time, this can lead to unexpected consequences.

Fear inhibits change

Employee behaviour that is driven by fear are difficult to change. There is an inertia that builds up and then takes on a path of its own. Many times, this path diverges from a strategic direction that senior management wants to pursue. Deservedly, many strategic corporate initiatives fail due to poor change management that fail to address the fear factor properly.

As an example, take a company who is disciplined in meeting their budgets and financial goals. In this company, managers can get fired if they miss their budget. Then the CEO gets religion on “innovation” and tells his managers to take risks and invest in new projects that can potentially yield innovative products (or services). Guess what? If investing in new projects involves the risk of missing the budget, and if missing the budget still means they can get fired, there is only a small chance the managers will change. If the managers do not change, the staffs are unlikely to change either. And the CEO wonders why the company is not responding to the strategic initiative to be innovative.

To reiterate, fear can build up inertia against change. And lack of change, in turn, can build up even more inertia against change.

The elephant in the room

To state the obvious, a normal human being always has fear in him / her. And fear is not, in itself, bad. It is part of human being's survival strategy. What makes it good or bad is how it is managed within corporate settings.

The goal is not to eliminate all fear; the goal is to align fear to the “right” framework and context according to corporate strategy. Management needs to look at the pre-existing “carrot and stick” and ensure that they do not inhibit the change which is being pursued by the corporate strategy. If they do, then they need to be pre-empted with a new set of “carrot and stick” that fits the strategy.

For companies that operate globally, cultural and socio-political differences have an obvious impact to what will work as “carrot and stick”. What works in one country may not work in another. For example, fear of unemployment is not the same between countries that have strong unemployment benefit versus countries that have none.

Also, different industries face different challenges when it comes to managing staffs and fear. Industries that are growing fast, or where the job market is dynamic, have a different set of challenges from industries where the industry is slowing down.

Another important point is that a strategy needs to be balanced. It ought not eliminate fear completely such that it encourages one-sided behaviour and disregard everything else. To revisit the above example, the CEO ought not encourage risk taking without putting in place suitable check and balances to identify reckless or irresponsible risk taking.

It is about managing people

Managers' attitude toward staffs needs to be kept in check; fear should not be misused. There is a trust relationship between staffs and managers that needs to be respected. Company reputations, and often performance, depends on managers respecting this sometimes invisible social contract.

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