Threat and organisations reactions to it

I recently attended a training course on getting the best out of teams by improving the managers skills. I was struck by impact of one of the modules in the course and its applicability to my parenting but also (and perhaps more attuned to you the readers needs) regulatory regimes and companies undergoing disruption.


The basic philosophy of the course was that as are 4 basic ways to change someone’s behaviour.  If you want them to do less of a certain behaviour you can either ignore (which stops reinforcement) or punish (direct consequence). It was the view that either will reduce the unwanted behaviour.


In terms of promoting or generating a type of behaviour, again only two ways existing. The most effective was reinforcement. You know this from your parenting. You go over the top when your toddler first walks and they keep trying.

The second method, and the one that i think has massive implications on business (if the agency is correct) is that of threat.  The statement that rang true to me is this.


If you use threat, you will in behavioural terms only get minimal compliance


That is to say, if you tell and employee that if they won’t get their bonus unless they do xyz, they will do xyz to a level that will only just meet the requirement. There will be no additional effort past that point.  

You tell your kids, “if you don’t clean your room no TV”. You get a rushed minimally compliant job.


How does this translate to business? Well if we accept the above hypothesis as true and you look at disruption then it has some really interesting consequences. First lets look at regulation.


Basically Governments impose regulatory control on an industry when after some ‘gentle coaxing’, that industry hasn’t done what the Government deems is ‘for the greater good’. That is they threatened the industry group (with more control), who respond but to a minimally compliant level, which of course disappoints.  So how does the Government react? They deliver the regulation, which forces companies to do a whole lot of stuff under threat of worse intervention…..


I’ve seen some of the documents…. “You will do this by date, if you don’t you will pay us $x million per day…“ Guess what the interfering Government is going go get? Minimal compliance that negates the intent of the regulation but delivers to the letter of the document…. Bet they’re surprised too….


A second example. To my mind you can transpose the word threat and disruption.  Right now there are a bunch of traditional ISV’s who are under threat by SaaS providers. How are thy responding??? Well those that who haven’t decided to embrace the change, only to react to the threat (like Microsoft, SAP & MYOB)  with minimal compliance. Doing just enough to get by and say ‘yip we’ve done this SaaS thing’. But the reality is a little ordinary (see Ben Kepes review of MYOB, and R/WW on Live)


Implications? Governments try incentivising the behaviours you want (either that or leave the market alone and let natural forces dictate). ISV’s, somehow you have to embrace the new technology and voluntarily let go of the old world. CEO’s need to start a process whereby the organisation decides to change and reinforce behaviours that drive that change. Trumpeting statements like “if we don’t change we’re gone” is only going to end up with crappy products.  Maybe this is another reason for the innovators dilemma.



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