Which comes first: succeeding in business or the belief that you’re succeeding in business? I say the belief comes first, and “acting as if” you’re succeeding is a great strategy for achieving success.
A Bad Act
I once consulted for a company where the founding CEO had everyone believing we were thriving. He wasn’t frivolous with money, but he consistently let employees know that the company had enough money to make the right investments and run at the top of its game. Plus, without fail he was generous in charitable contributions in response to disasters anywhere in the world, and he would frequently fly the company’s disbursed management team to fun destinations just to build camaraderie. He was unswerving in these practices, even through periods when the company’s profits dipped temporarily. During his tenure, the company was consistently the most profitable in the industry by a significant margin. When he retired a new CEO assumed the reins.
The new CEO believed in being very thrifty and immediately changed many of the practices that had made us feel like we were thriving. Without delay, he sent us a barrage of messages telling us we couldn’t sustain our level of spending. A huge earthquake occurred in the world shortly after he assumed office, and he proclaimed that the company was not financially able to make a donation to help the cause. And he instantly curtailed all celebratory or camaraderie-building events that required significant expense. He made these changes at the beginning of his tenure while the company was very profitable, but during his tenure, the company’s profits fell significantly, by well over fifty percent. He would say that profits fell because of market conditions, but the fact is that other companies in our industry were increasing their profitability while we declined.
The Science behind “Act as If”
At the onset of the new CEO’s tenure, I saw a telling shift occur in the beliefs of the people. We began to believe that success wasn’t possible, and we focused on what we couldn’t do rather than what we could do. In short, whereas we once perceived ourselves as thriving, we began to perceive ourselves as failing. It’s not surprising that this led to profit declines.
Neuroscience clearly tells us that people must feel positive in order to perform their best and innovate. You can feel the truth of this in your body. You feel more resourceful and creative when you feel positive. There’s even evidence that beliefs impact the very form of matter. I hold that the change in beliefs provoked the decline in profits.
As a leader, “acting as if” your organization is thriving is one of the most powerful things you can do to achieve success. It solidifies a belief system that triggers the most positive emotions from every employee, heightening their creativity and performance. In contrast, an inspirational speech can prompt positive thinking for a short period of time, but a thriving belief system makes positivity and creativity sustainable. I’ll add that creativity is paramount to success, as a 2010 IBM survey of over 1500 global CEO’s concluded that creativity of the workforce is the number one requirement for handling the unprecedented complexity that businesses face.
Proving “Act as If”
Do we see universal evidence showing that when organizations act as if they are prosperous, this leads to greater business profits? Business research does show that when organizations are generous in charitable giving and employee bonuses, they have significantly higher financial performance. However, it’s tricky to determine whether the generosity caused the profitability or the profitability caused the generosity. Therefore, the study of start-up companies is particularly useful because they all start from a position of zero profitability.
A study of 136 start-up companies in the Silicon Valley found that the companies that were generous, with more liberal spending on items such as employee bonuses, were far more likely to survive five years. Now you may say that their generous employee bonuses sparked greater motivation and that led to their success, but there’s solid research showing that higher compensation does not create higher motivation for people in jobs that require use of cognitive skills, such as those required to get a start-up off the ground.
The cause-effect relationship between “acting as if” and actual achievement is difficult to prove conclusively using our “scientific” method, but indications are that the believing precedes the achievement and “acting as if” your organization is successful is a sound leadership practice.
As we learn more from neuroscience about the incredible power of group emotions, we see reasons to adopt techniques beyond the ordinary. For more on shaping team emotions to increase creativity and performance, including research references, get notified of the upcoming book Primal Teams: Harnessing the Incredible Power of Group Energy or sign up for a monthly summary of articles.Share