Tuesday, November 24, 2020

The Art of Improvisation: How to Do True Leadership

Anyone who has risen high enough in an organization knows some important dilemmas and tradeoffs. One is that organizations gain most of their advantages through routines – doing the same thing over and over again, with occasional small variations – but there are situations in which routines are exactly wrong. Instead, improvisation will save the day. Another is that organizations are collaborative enterprises in which people work together to accomplish outcomes, but there is also competition. You want to perform better than the rest, and many others do too.

How to choose between routine and improvisation, and how to balance cooperation and competition? Thanks to research by Pier Vittorio Mannucci, Davide C. Orazi, and Kristine de Valck published in Administrative Science Quarterly, we know much more about these choices than before. Their work tells a fascinating story about how improvisation is done in live-action role playing, but here I will omit the details of their research and focus on their findings, which tell us some new things about leadership skills.

The first thing to know is that what we call improvisation is often just the act of stepping outside the routine way of doing things. Actions do not have to be new and dramatic to be effective, and imitative improvisation is especially good for newcomers, such as recently promoted managers. What is imitative improvisation? It is to pay close attention to what others, more experienced in the same role, are doing and to match their responses to situations you encounter. It is smarter than imitation because it is done selectively, but it looks a lot like imitation.

With experience, you can learn better ways to improvise, but not everyone manages to do so. The next step up is to think of your own reactions to unexpected situations, stepping outside routines again but now without using others’ actions as a guide. This is effective but requires more knowledge than newcomers have. The third is to look for opportunities to improvise to make improvements that others have not thought about. This type of generative improvisation is no longer problem solving because your goal is to take an organization that functions well and make it even better. This is innovative but requires more knowledge and confidence than most managers have.

Not everyone can step up this ladder of increasingly effective improvisation. What do we know about those who can? This is where the research gets even more interesting. Recall that organizations feature both cooperation and competition. It turns out that competitive people get ahead fast, also in improvisation, because they are very situationally aware and quickly learn how to imitate and how to react. Cooperative people are slower. Yes, this matches our intuition that many people who rise quickly in an organization are on the shrewd side, but keep in mind that they are solving problems well when needed.

But then it stops. Cooperative people are better at recognizing opportunities and moving others along with them to generate new ways of improvising. If you are cooperative and late to learn how to react well, you will be even better at generating improvisation than competitive people will.

And even better, people can change over time. In particular, you may be one of those who start out competitive because so much is at stake and you feel insecure, but after initial successes you become collaborative. That is the best kind of improvising leader, because that means you will quickly go through each stage of learning how to improvise, and you will reach the peak of improvisation that is done by so few and needed by so many organizations.

Mannucci, P. V., D. C. Orazi, and K. de Valck. 2020. "Developing Improvisation Skills: The Influence of Individual Orientations." Administrative Science Quarterly, forthcoming.

Friday, November 13, 2020

Light ’em Up! How to Win Stigmatization Battles

What if you are selling a product that is stigmatized by many, yet you think it benefits society? Life insurance used to be that type of product, because gaining money from someone’s death was deeply sinful. Most who have driven around Silicon Valley have a similarly negative view of fully autonomous vehicles (they are VERY annoying to have around), yet they already drive more safely than cars with human drivers and are not that much slower.

Many organizations are dealing with products that have varying levels of stigmatization, so this is an important problem to solve. Thanks to research by Olga M. Khessina, Samira Reis, and J. Cameron Verhaal published in Administrative Science Quarterly, we have a better idea of what works best. They looked at firms that are still highly stigmatized by many – marijuana dispensaries – and asked the question of whether they benefited from subtle or brash self-presentations.

The question is important because the self-presentation shapes how customers respond in three ways. First, through shop naming, location, and design, the dispensary can make it easier or harder for potential customers to enter, given that some people are interested in the product but also worried about becoming stigmatized as, well, dope-heads or whatever the fashionable denigrating term happens to be. Second, a shop that is seen to celebrate its identity as a seller of marijuana can influence customers’ thinking, because its celebration can be a source of pride that counters the stigma.

The third mechanism is especially important. People influence each other very powerfully, especially when there is no clear profit motive (unlike the influence from a shop to a potential customer). Maybe when some of the shops celebrate their identity, that makes it easier for their customers to openly do the same. If that happens, the influence among people can greatly reduce the stigma.

The conventional belief is that a store selling stigmatized products, or even just controversial ones, should keep a low profile. The California dealerships selling three-ton trucks to consumers are often placed away from where the Priuses are found, and the Hermès-ish bags in Paris are not found near rue Saint-Honoré. Any benefits from being open would surprise a lot of people. But surprise is exactly what the data offered. Stores that openly celebrated their products increased acceptance of marijuana in their local communities. Customers posting online store and product reviews with more open discussion of the products increased acceptance of marijuana in their local communities.

These findings are not the same as saying that each of these stores benefited directly – the data are not fine-grained enough to allow that conclusion. But they do show that a community of stores with a shared stigmatized product are best off being open about their identity. Together they can change opinions, wear down the stigma, and gain acceptance as a legitimate form of business. And that is very useful guidance for organizations in need of advice because their products are stigmatized.

Khessina, Olga M. , Samira Reis, and J. Cameron Verhaal. 2020. Stepping out of the Shadows: Identity Exposure as a Remedy for Stigma Transfer Concerns in the Medical Marijuana Market. Administrative ScienceQuarterly, forthcoming.