The squeaky wheel gets the grease, correct? Not always it seems. Sometimes we get accustomed to that wheel squeaking and don’t even realize we have begun ignoring it altogether. In the field of Psychology, the reduction of psychological or behavioral response occurring when a specific stimulus occurs repeatedly is known as habituation. Business leaders often suffer from habituation. Since they cannot correct problems overnight, mental notes are made regarding an issue or concern, emails are sent and follow-ups are scheduled with the appropriate parties. But daily occurrences of the multitudes of “squeaks” in our business can overcome the most astute CEO. Habituation sets in over time and the noises of the business are allowed to go unnoticed and uncorrected. Unfortunately, some “noises” are symptoms of larger problems.
We All Suffer From Habituation
To better understand habituation, let’s look at an example. Suppose your neighbors have a new home alarm system installed. Because the system is new, they accidentally set it off frequently. At first, the alarm going off is a novel sound in your environment. It would likely draw your attention initially and perhaps be distracting. After this has occurred a number of times, you become accustomed to this sound, paying less attention to the noise as your response to the sound diminishes. This diminished response is habituation.
The Effects Habituation Has On Business
If you always stumble a bit on the same broken stair in your home, one would think it would become a priority to repair it immediately. What occurs in reality is that human nature steps in and tells us we’ll get around to solving that problem when there is time. Meanwhile, we continue to encounter the broken stair until we are conditioned to navigate around the loose step. Before long, it no longer registers with us that repairs are needed.
When corrective actions are deferred for long periods of time in a business organization, the problem may be quite damaging. They can be internal in nature, or outwardly damaging and affecting customers on a daily basis. Worse yet, habituation can effect ethical behaviors in the workplace as well.
Habituation can desensitize leaders into having murky gray boundaries between right and wrong through repeated exposures to less-than-ethical business acts. Enron was not idiosyncratic in this regard. Just consider those involved in world financial crisis, America’s housing crisis, countless political scandals and enumerable insider trading schemes. Business maneuvers are made to cover mistakes, starting a cycle that perpetuates bad behaviors and ensnares others into the scheme. Regardless, a psychology of fraud almost always grows far out of proportion to the original ethical violation.
The truth is, only a fraction of corporate executives who manipulate or misrepresent their companies’ performances get exposed by regulators for such misdeeds. An indication of just how common such behavior is appears in a study analyzing fraudulent financial reporting in the decade through 2007 that was released by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. As the economy has faced mounting stress, many companies have been feeling pressure merely to survive. This pressure may lead to fraudulent behavior to mask decaying operations, the COSO points out. 1
Why Doesn’t Somebody Do Something?
If people in the organization realize that something is wrong, especially something unethical or illegal, why would they go along with it? It may be that groupthink, blind trust and compromised decision making come into play and add to the habituation problem. In fact, this whole notion of not seeing the obvious has caught the attention of researchers. Over the past couple of decades, psychologists have documented many different ways that our minds fail to see what is directly in front of us. They’ve come up with a concept called “bounded ethicality”. According to Max Bazerman, a professor at Harvard Business School, bounded ethicality refers to the systematic and predictable ways in which humans act unethically beyond their own awareness. The basic concept is that cognitively, our ability to behave ethically is seriously limited, because we don’t always see the ethical big picture. Bazerman says that boundedness extends beyond ourselves and leads to not noticing the ethicality of others. 2
Ann Tenbrunsel, a researcher at Notre Dame who studies unethical behavior, was recently interviewed on NPR’s “All Things Considered”. Tenbrunsel asserts that certain cognitive frames obfuscate the ethical dilemmas we face in situations. In the interview, she described a recent experiment designed to demonstrate cognitive framing. The experiment involved two groups of people. One was told to think about a business decision. The other group was instructed to think about an ethical decision. Those asked to consider a business decision generated one mental checklist; those asked to think of an ethical decision generated a different mental checklist. She then distracted the subjects with an unrelated task, before coming back to the original task and giving them an opportunity to cheat. Those cognitively primed to think about business behaved radically different from those who were not — no matter who they were, or what their moral upbringing had been. According to Tenbrunsel, the business frame cognitively activates one set of goals — to be competent, to be successful; the ethics frame triggers other goals such as “don’t cause harm to anyone”. Once you’re in one or the other frame, you become completely focused on meeting those goals, and other goals can completely fade from view.3
Breaking the Cycle
Leaders will never be able to master the multitude of responsibilities on their shoulders, while simultaneously tightening screws with a screwdriver to eliminate every creak, groan or squeak in the business. They also cannot depend upon themselves to always make the “right” decisions when their livelihoods are at stake. The responsibility of correction must be shared as a part of the organization’s culture. Executives, managers and employees should be held to the philosophy of staying on the right side of right. That applies to doing one’s part to inform the appropriate people when problems are first noticed and certainly when unethical trends in the organization are suspected.
Breaking the cycle of habituation boils down to three major points:
Leaders need to do more walking around, and getting real feedback from their employees. They should keep involved with their managers and workers, holding people accountable and asking others to help hold them accountable as well. Policies should be implemented to promote and reward ethical behaviors. Likewise, open door policies and frankness should be encouraged. Recognition of bad behavior is easier to spot and correct in environments where every person is held accountable be their peers. Left unchecked, it evolves into blind acceptance.
1 – Why Corporate Fraud Is On The Rise, Forbes, James A. Kaplan, 06.10.10
2 – Max Bazerman, Professor at Harvard Business School
3 – NPR, All Things Considered, Chana Joffe-Walt and Alix Spiegel