Managers, Fear and Impact Bias

Uncertainty makes people nervous*. The fear of not knowing can cause
stress and anxiety, and decreases our ability to make rational
decisions. I was trying to understand why the fear of not knowing is so intimidating, and this is what I found (source: Dan Gilbert’s TED talk):

When thinking about the future, we tend to overrate differences.

Example:
At some point in your life you were probably really anxious about
taking a test. Years later you realize that the outcome (good or bad
grade) was not a life changing event. This tendency when thinking about
the future to “believe that different outcomes are more different than
in fact they really are” is called impact bias. (Dan Gilbert, Professor of Psychology at Harvard University)

A manager works to reduce uncertainty Managers work to reduce uncertainty.

Managers are prepared to eat
uncertainty and swallow the impact bias when and where they can. By
deciding on a course of action (creating a future that the business unit
is going to ‘live into’) they shield employees from unnecessary worry.

Managers take in uncertainty and swallow the impact bias.

A manager eats uncertainty

A manager still has to deal with the ingested
uncertainty and may experience discomfort. Uncertainty (the impact
bias) can make you believe that scenario A will save the world and
scenario B will destroy it. Being aware of your natural tendency to blow
future events out of proportions can help you keep your cool when dealing with uncertainty. (Here are some other techniques.)

Ask
yourself if your present efforts and worries would still sound
reasonable/be warranted fifty years from now (pretend someone will publish an article about your actions in a history book…).

Uncertainty can cause discomfort Uncertainty
can cause discomfort. Managers may worry about possible outcomes,
entertain toxic thoughts (rationalize, lie or cheat to gain control) or
feel the desire to take the easy way out.

Alternatively, a manager might choose not to reduce ambiguity – Kris Dunn describes this as Manager Pass-Through. Manager Pass-Through is “what managers of people do when they don’t want to own tough or difficult news with employees.”

For
example, instead of doing some research and confirming, “You will get
paid three days late next week because Friday is a holiday,” a manager
does not want to be the bearer of bad news and may choose to say to an employee, “I am not sure when you will get
paid,” or “I am not sure how they (HR) will handle payroll next week.”

Don’t be a chicken – Delivering bad news can be great news

By
choosing certainty (“You will get paid exactly three days late next
week”), a manager creates an environment in which an employee can synthesize happiness.
Everyone has the ability to manufacture happiness, no matter if a
situation is ‘good’ or ‘bad’, and the more certain a situation is, the likelier people are to synthesize happiness.

We incorrectly believe that synthetic happiness is not as good as natural happiness.

Example:
You watch a story on the news and see people smiling in the midst of a
catastrophe. You discredit their positive emotions – “that kind of
happiness is not real.” It is difficult for us to believe that not getting what we want can make us just as happy as getting it. (Dan Gilbert)

Delivering ‘bad’, but certain news can take pressure off your employees.

In the illustration below, the condition “under which synthetic happiness grows” is represented by a flower pot.

When properly digested, uncertainty turns into an environment in which synthetic happiness can grow. A managers creates an environment in which synthetic happiness can grow

When you digest uncertainty and create an action plan, you produce a flower pot.

It’s
easier for your bosses, customers, suppliers, shareholders, and for
yourself to operate within the boundaries of the certainty you create.

Next time you eat uncertainty, remember:

● When
it starts making you sick, ask yourself if your present efforts and
worries would still sound reasonable/be warranted fifty years from now.

● Don’t be afraid to make a decision because many times any decision is better than no decision.

● Uncertainty
is an acquired taste; over time you develop a mental framework that will help
you not to turn green when eating uncertainty.

*Unless all possible outcomes are positive. I guess then it would be anticipation.

More information: Gilbert, D. T. (2009). What you don’t know makes you nervous, The New York Times, May 21.

Watch Daniel Gilbert’s talk on happiness at TED.
Related video: What it takes to be happy


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