How to manage irrational employees

By now it’s generally accepted that if senior leaders suffer from cognitive biases their decisions can severely undermine company performance. Yet, leaders are not the only members of organisations that exercise poor judgment: Non-leaders are sometimes irrational too. Bearing this in mind, it is imperative that strategy-setters make explicit allowance for just how cognitively fragile their employees might be – or else they risk not fully understanding why their “perfectly rational” strategies don’t work.

Maurice Ewing, the author of forthcoming book “The Leap Factor,” writes in the Harvard Business Review about how to remove an employee’s preconceived notions and replace them with a unifying goal. Here are four key steps:

Collect employee goals.

All employees have personal goals driving them to work. Knowing those goals will give you a clear picture of who your employees are and why they are in your office. Plus, you’ll find out where your people and the company do not blend. “They want job security, good compensation, career progression, etc.,” Ewing says. “Using anonymous surveys, well-structured retreats, and other devices to itemise these goals is an important starting point in overcoming biases that result from misalignment between corporate leaders and the people doing the work,” he writes. “The aim should be to gather a list of the most important goals that characterise what the staff ‘is thinking about.'”

Identify biases.

Now you need to identify your employees’ biases and see how they compare with the company’s strategy. Pay particular attention to your staff’s misperception of how their goals, their actions, and the company’s strategy are linked. “If employees believe that the company’s current direction will ultimately lead to meeting their goals (when it doesn’t) and that a new direction will miss their goals (when it won’t), they will become resistant and inactive and other biases will flow,” Ewing writes. At that point, you must decide whether they have an accurate perception of reality.

Dispel biases.

The next step is to address your employees, without singling anyone out, and explain how a certain perspective is not reality. This is your chance to dispel the biases and show how they hurt the company–and your employees’ goals. “For example, your staff may highly value job security and defend the status quo,” Ewing writes. “However, if the current strategic direction is leading the company to disaster, as a leader you need to demonstrate the fallacy of the status quo.”

Give an alternative strategy.

Finally, this is when you align everyone behind one cohesive goal. “Having demonstrated the fallacies, you’re now positioned to win the staff over to your camp in forging, launching, and executing a better strategy,” he writes. “That strategy should aim to meet–in addition to the standard financial and operational performance goals–feasible goals for employees.” When those goals aren’t feasible, explain why.