6 ms·

When Employees Misinterpret Managers

55 points by revorad 15y ago

signa11 15y ago
i am sure folks here have already looked at this : http://www.youtube.com/watch?v=u6XAPnuFjJc http://www.youtube.com/watch?v=u6XAPnuFjJc (RSA Animate - Drive), but doesn't hurt to spread the word again. maybe marginally related to the article...
bfe 15y ago
I love how forthright Ben is in detailing his own mistakes in management, to show how he learned from them. He's insightful here on how to avoid managing for short-term metrics in a way that sacrifices value and long-term growth, one of the most widespread and persistent management mistakes. Ultimately, no metric can substitute for having individual employees who really care about producing work that the end user will love.
wccrawford 15y ago
I don't think the employees misinterpreted at all. I think they knew exactly what they were doing. I think instead, the manager simply failed to realize what his actions would do. He gave them different incentives, and they reacted to them. Employees are there to work for the company, but they will not promote the company at their own expense. If your incentive plans incentivize the wrong things, you'll get the wrong things. 'Clever' incentive plans are rarely actually clever.
- dpritchett 15y ago
  It'd be really nice if people read Freakonomics before sitting down to design workplace incentives. I know it's not the most rigorous treatment of economics but it does a great job of hammering the point home with some memorable and accessible anecdotes.
  - munin 15y ago
    do you think people that design "workplace incentives" can read? ;)
sp332 15y ago
"In all three cases, managers got what we asked for, but not what we wanted. How does this happen? Let’s take a look." So, the managers failed to communicate what they wanted to the employees, but this is spun in the headline as the employees' fault.
- bryanlarsen 15y ago
  The title is "when employees misinterpret managers". Anybody who thinks that phrase implies it's anything but the manager's fault is either not a manager or is a bad manager.
  - sp332 15y ago
    In that sentence, employees is the subject, and managers is the object. It's the employees who are doing the misinterpreting of the managers. Only a manager would think that the title sounds like owning up to a mistake. :)
    - sedev 15y ago
      I reinforce this comment. The title "When Employees Misinterpret Managers" at best very weakly implies that the managers are doing something. It plainly states, in normal English, that employees did something (they misinterpreted) to managers. Only by the most convoluted thinking could you remove that plain meaning and substitute in "managers gave instructions excessively prone to misinterpretation" or something similar. `bryanlarsen`'s point is absolute bullshit. Now: reading the article, that does indicate that it's the managers' fault, and it's a bang-up job of doing that. But the headline - oy!
      - dpritchett 15y ago
        In business communications the onus is usually on the speaker to frame things in such a way that the audience can understand them. When employees misinterpret managers then it can be assumed that managers misspoke.
praptak 15y ago
This Wikipedia page is the best piece on incentives of all time: "The term 'Cobra effect' stems from an anecdote set at the time of British rule of colonial India. The British government was concerned about the number of venomous cobra snakes. The Government therefore offered a reward for every dead snake. Initially this was a successful strategy as large numbers of snakes were killed for the reward. Eventually however the Indians began to breed cobras for the income. When this was realized the reward was canceled, but the cobra breeders set the snakes free and the wild cobras consequently multiplied."
- sp332 15y ago
  I heard a version about an archeologist paying per-piece for shards of ancient pottery. So the locals broke the artifacts into little pieces to get more money!
- zipdog 15y ago
  I'd heard the version about the French paying a bounty for dead rats, both are great examples of how difficult it is to incentivize an behavior when all you can reward is a concrete outcome.
- gruseom 15y ago
  Great story, but from the briefest of googlings, it seems poorly sourced. References to business literature are unreliable. Are there good historical sources for this? The story itself reminds me of John Gall's classic book on systems (originally Systemantics, now The Systems Bible).
- matt_s 15y ago
  Similarly if you start measuring LOC (lines of code) on your developers and rewarding or penalizing as such. You are guaranteeing that the number of LOC increase. Same applies to things further up in the stack - # bugs fixed, # tickets closed, etc.
- Splines 15y ago
  At our work we sometimes have unofficial rewards for reaching goals (e.g., as a team if we reach X number of bugs we get doughnuts). I joke with my co-workers that we should immediately stop finding bugs once we reach X, since anything further than that is wasted effort (and sets the bar higher when the next doughnut offer comes around).
zipdog 15y ago
One thing about "you get what you measure/pay for" is that if you're clear about your incentives its much easier to see how your expectations and the employee's actions misalign. If you hide your measurements and incentives behind a complicated or arbitrary system you'll never spot the misalignment.
lmkg 15y ago
See also, http://en.wikipedia.org/wiki/Goodharts_law http://en.wikipedia.org/wiki/Goodharts_law . There are several take-aways, but the relevant one here is "a metric becomes useless as soon as it is a goal."
sedev 15y ago
That's a lovely article with a wincingly bad headline. The author does a very good job of describing what happens when managers give instructions and then discover that they have instructed people to act counter to the managers' desires. That is not 'misinterpreting'. That is essentially a compiler error; the manager told the employees to do the wrong thing, and the employees trusted that they knew what they were talking about. In a normal business environment, human cognitive biases about authority act very strongly. I think that a big part of what causes 'bad management' is that managers may tend to think of themselves as buddy-buddy with their subordinates, and rationalize that surely someone will tell them if they make a mistake, issue instructions that seem counterproductive, make bad tradeoffs like the ones in the article, et cetera, et cetera. That's almost always wrong. The incentive structure for normal employees means that you go along with the boss' idiot idea in almost every case, or alternatively that you take it on good faith that your wise and benevolent manager knows what they're doing, and in both cases employees do not critique managers in ways that the managers can hear (by which I mean, both covert conversations and social cues that managers miss).
- dkarl 15y ago
  It's more like simple user error than a compiler error. "Aaaagh, why did the computer do that?" "Because you told it to." s/computer/employees/ Also, in his retelling, he skipped the part where the employees pointed out situations where they would be punished for making the right decisions, asked for assurance that doing the right thing for the business would be rewarded (or at least not punished) regardless of the official "goals" and "incentives", and were told not to expect any such consideration. I guarantee that happened, but for some reason he doesn't remember it as an important part of the story.
  - sedev 15y ago
    I hope that we can more widely spread the news: power makes you stupid. I wouldn't say 'for some reason' - I would say 'because of cognitive biases that would afflict any other ordinary human being in his situation'. Power makes you stupid, a summary: http://www.washingtonpost.com/wp-dyn/content/article/2007/11/25/AR2007112501236.html http://www.washingtonpost.com/wp-dyn/content/article/2007/11... - the article in question cites work by Adam Galinsky of Northwestern University and Dacher Keltner of Berkeley. "Keltner and others have shown that power exacerbates many cognitive biases. People who lack power turn out to be more accurate in guessing the opinions of those around them, whereas those in power tend to be inaccurate. Because subordinates are also hesitant to tell superiors things they do not want to hear, the problem gets worse, with powerful people having even less input and perspective about how others think and feel." So I believe that that's a cause of a great deal of bad management - I also believe that's part of why the 37Signals folks have done so well with a minimal-management strategy, they're consciously trying to avoid the way that information becomes tainted when it travels vertically in a hierarchy.
neelm 15y ago
Ben Horowitz's actual topic is the challenge of incentivizing management. His subject is covered very well by one of the best to write about this subject, Charlie Munger (Warren Buffets right hand man and Director of Berkshire Hathaway). Charlie Munger discusses extensively the challenge of not only incentivizing managers and employees, but demonstrating that it is difficult to even fully understand what really incentivizes them (hint: it's typically different than what their superior thinks it is). He talks about human mis-judgement and its role in distorted intending incentives. Munger says over 30+ years in business, this is the one area he continues to make judgement mistakes year after year, since this is such a difficult topic to get right. That doesn't mean you can't get it right or that proper incentives don't work however. Check out the FedEx example in Munger's 1995 speech to Harvard. http://www.rbcpa.com/Mungerspeech_june_95.pdf http://www.rbcpa.com/Mungerspeech_june_95.pdf

55 points by revorad 15y ago

i am sure folks here have already looked at this : http://www.youtube.com/watch?v=u6XAPnuFjJc http://www.youtube.com/watch?v=u6XAPnuFjJc (RSA Animate - Drive), but doesn't hurt to spread the word again. maybe marginally related to the article...

bfe 15y ago

I love how forthright Ben is in detailing his own mistakes in management, to show how he learned from them. He's insightful here on how to avoid managing for short-term metrics in a way that sacrifices value and long-term growth, one of the most widespread and persistent management mistakes. Ultimately, no metric can substitute for having individual employees who really care about producing work that the end user will love.

wccrawford 15y ago

I don't think the employees misinterpreted at all. I think they knew exactly what they were doing. I think instead, the manager simply failed to realize what his actions would do. He gave them different incentives, and they reacted to them. Employees are there to work for the company, but they will not promote the company at their own expense. If your incentive plans incentivize the wrong things, you'll get the wrong things. 'Clever' incentive plans are rarely actually clever.

dpritchett 15y ago
It'd be really nice if people read Freakonomics before sitting down to design workplace incentives. I know it's not the most rigorous treatment of economics but it does a great job of hammering the point home with some memorable and accessible anecdotes.
- munin 15y ago
  do you think people that design "workplace incentives" can read? ;)

sp332 15y ago

"In all three cases, managers got what we asked for, but not what we wanted. How does this happen? Let’s take a look." So, the managers failed to communicate what they wanted to the employees, but this is spun in the headline as the employees' fault.

bryanlarsen 15y ago
The title is "when employees misinterpret managers". Anybody who thinks that phrase implies it's anything but the manager's fault is either not a manager or is a bad manager.
- sp332 15y ago
  In that sentence, employees is the subject, and managers is the object. It's the employees who are doing the misinterpreting of the managers. Only a manager would think that the title sounds like owning up to a mistake. :)
  - sedev 15y ago
    I reinforce this comment. The title "When Employees Misinterpret Managers" at best very weakly implies that the managers are doing something. It plainly states, in normal English, that employees did something (they misinterpreted) to managers. Only by the most convoluted thinking could you remove that plain meaning and substitute in "managers gave instructions excessively prone to misinterpretation" or something similar. `bryanlarsen`'s point is absolute bullshit. Now: reading the article, that does indicate that it's the managers' fault, and it's a bang-up job of doing that. But the headline - oy!
    - dpritchett 15y ago
      In business communications the onus is usually on the speaker to frame things in such a way that the audience can understand them. When employees misinterpret managers then it can be assumed that managers misspoke.

praptak 15y ago

This Wikipedia page is the best piece on incentives of all time: "The term 'Cobra effect' stems from an anecdote set at the time of British rule of colonial India. The British government was concerned about the number of venomous cobra snakes. The Government therefore offered a reward for every dead snake. Initially this was a successful strategy as large numbers of snakes were killed for the reward. Eventually however the Indians began to breed cobras for the income. When this was realized the reward was canceled, but the cobra breeders set the snakes free and the wild cobras consequently multiplied."

sp332 15y ago
I heard a version about an archeologist paying per-piece for shards of ancient pottery. So the locals broke the artifacts into little pieces to get more money!
zipdog 15y ago
I'd heard the version about the French paying a bounty for dead rats, both are great examples of how difficult it is to incentivize an behavior when all you can reward is a concrete outcome.
gruseom 15y ago
Great story, but from the briefest of googlings, it seems poorly sourced. References to business literature are unreliable. Are there good historical sources for this? The story itself reminds me of John Gall's classic book on systems (originally Systemantics, now The Systems Bible).
matt_s 15y ago
Similarly if you start measuring LOC (lines of code) on your developers and rewarding or penalizing as such. You are guaranteeing that the number of LOC increase. Same applies to things further up in the stack - # bugs fixed, # tickets closed, etc.
Splines 15y ago
At our work we sometimes have unofficial rewards for reaching goals (e.g., as a team if we reach X number of bugs we get doughnuts). I joke with my co-workers that we should immediately stop finding bugs once we reach X, since anything further than that is wasted effort (and sets the bar higher when the next doughnut offer comes around).

zipdog 15y ago

One thing about "you get what you measure/pay for" is that if you're clear about your incentives its much easier to see how your expectations and the employee's actions misalign. If you hide your measurements and incentives behind a complicated or arbitrary system you'll never spot the misalignment.

lmkg 15y ago

See also, http://en.wikipedia.org/wiki/Goodharts_law http://en.wikipedia.org/wiki/Goodharts_law . There are several take-aways, but the relevant one here is "a metric becomes useless as soon as it is a goal."

sedev 15y ago

That's a lovely article with a wincingly bad headline. The author does a very good job of describing what happens when managers give instructions and then discover that they have instructed people to act counter to the managers' desires. That is not 'misinterpreting'. That is essentially a compiler error; the manager told the employees to do the wrong thing, and the employees trusted that they knew what they were talking about. In a normal business environment, human cognitive biases about authority act very strongly. I think that a big part of what causes 'bad management' is that managers may tend to think of themselves as buddy-buddy with their subordinates, and rationalize that surely someone will tell them if they make a mistake, issue instructions that seem counterproductive, make bad tradeoffs like the ones in the article, et cetera, et cetera. That's almost always wrong. The incentive structure for normal employees means that you go along with the boss' idiot idea in almost every case, or alternatively that you take it on good faith that your wise and benevolent manager knows what they're doing, and in both cases employees do not critique managers in ways that the managers can hear (by which I mean, both covert conversations and social cues that managers miss).

dkarl 15y ago
It's more like simple user error than a compiler error. "Aaaagh, why did the computer do that?" "Because you told it to." s/computer/employees/ Also, in his retelling, he skipped the part where the employees pointed out situations where they would be punished for making the right decisions, asked for assurance that doing the right thing for the business would be rewarded (or at least not punished) regardless of the official "goals" and "incentives", and were told not to expect any such consideration. I guarantee that happened, but for some reason he doesn't remember it as an important part of the story.
- sedev 15y ago
  I hope that we can more widely spread the news: power makes you stupid. I wouldn't say 'for some reason' - I would say 'because of cognitive biases that would afflict any other ordinary human being in his situation'. Power makes you stupid, a summary: http://www.washingtonpost.com/wp-dyn/content/article/2007/11/25/AR2007112501236.html http://www.washingtonpost.com/wp-dyn/content/article/2007/11... - the article in question cites work by Adam Galinsky of Northwestern University and Dacher Keltner of Berkeley. "Keltner and others have shown that power exacerbates many cognitive biases. People who lack power turn out to be more accurate in guessing the opinions of those around them, whereas those in power tend to be inaccurate. Because subordinates are also hesitant to tell superiors things they do not want to hear, the problem gets worse, with powerful people having even less input and perspective about how others think and feel." So I believe that that's a cause of a great deal of bad management - I also believe that's part of why the 37Signals folks have done so well with a minimal-management strategy, they're consciously trying to avoid the way that information becomes tainted when it travels vertically in a hierarchy.

neelm 15y ago

Ben Horowitz's actual topic is the challenge of incentivizing management. His subject is covered very well by one of the best to write about this subject, Charlie Munger (Warren Buffets right hand man and Director of Berkshire Hathaway). Charlie Munger discusses extensively the challenge of not only incentivizing managers and employees, but demonstrating that it is difficult to even fully understand what really incentivizes them (hint: it's typically different than what their superior thinks it is). He talks about human mis-judgement and its role in distorted intending incentives. Munger says over 30+ years in business, this is the one area he continues to make judgement mistakes year after year, since this is such a difficult topic to get right. That doesn't mean you can't get it right or that proper incentives don't work however. Check out the FedEx example in Munger's 1995 speech to Harvard. http://www.rbcpa.com/Mungerspeech_june_95.pdf http://www.rbcpa.com/Mungerspeech_june_95.pdf