Three Ways Behavioral Science Will Shape the Future of Leadership Development

In 2020, businesses went through the most rapid and challenging changes in modern history. Unlike the technology-driven industrial and digital revolutions, a virus ignited this one, accelerating a revolution in people’s attitudes and approaches to work.

The roots of this behavioral revolution have been in the making since Frederick Taylor’s scientific management began to shape modern industrial companies in the early 1900s. Influenced by Taylor and the success of the US military in WWII, most corporate organizations were characterized by top-down hierarchies with distinct divisions and narrow roles. It was clear who did the work, managed the workers, or led the managers. Business schools and corporate programs taught generations of managers to optimize processes, be effective with command and control, and motivate through money, perks, and promotion.

Today, we’re living through a realignment of the employee-employer dynamic. People are re-examining their priorities; they want different things from their employers including the option of hybrid or remote work when on-site work isn’t a necessity. People have high expectations of transparent, ethical leadership with trust and psychological safety at the core. The implications are enormous for organizational leaders because decades-old models and approaches to training and development will not adequately prepare managers for this revolution.

In the 19^th century, industrialists turned to scientific management to improve productivity. Today, enlightened CEOs and senior leaders increasingly recognize that people who understand and effectively influence human behavior deliver better results. They are placing behavioral science — the blend of insights from psychology, behavioral economics, and neuroscience — front and center as they rethink leadership development. As organizations realize the impact behavioral science can make, a challenge emerges: Which of the many behavioral science insights and tools will be the most useful?

Putting Trust and Psychological Safety at the Core of Leading

You only need to scan the news to understand why trust and psychological safety are vital to modern organizations. Companies with toxic cultures experience increased turnover, and employees suffer from diminished physical and mental health and overall lower wellbeing. Instances of bullying, sexual harassment, misogyny, misandry, or racism can quickly metastasize cancer-like within companies. In their 2019 Access Economics report, Deloitte estimated that sexual harassment in Australia, a country with less than 10% of the population of the US, cost businesses there $2.6 billion in lost productivity. That number doesn’t begin to capture the total cost of behaviors that destroy trust and psychological safety.

Years ago, Stephen Covey observed that without trust, people don’t truly collaborate; they merely coordinate or, at best, cooperate. He pointed out that trust transforms a group of people into a team. Amy Edmondson and Sandra Sucher from Harvard Business School, Paul Zak at the Claremont Graduate University, and People Teams at Google provide broad, compelling evidence of the benefits of creating high trust, psychologically safe cultures. People in those organizations benefit from more energy, less burnout, higher productivity, lower stress, and higher life satisfaction.

A new generation of managers are finding that creating and maintaining trust and psychological safety is the most potent leadership ‘soft’ skill they learn. Yet, few organizations treat those as competencies that can be developed and measured. Behavioral science can help by developing the habits that put trust and psychological safety at the core of a manager’s leadership approach. When combined with software, it can also provide tools to measure and track a managers’ effectiveness in sustaining them.

Inspiring Intrinsic Motivation

The second way behavioral science influences leadership development is by helping managers learn to inspire motivation in every team member. Jay is part of a Customer Success (CS) team at a software company. While sales have grown, there has been a significant increase in customers not renewing their subscriptions. The CS team has repeatedly told their manager that the issue is due to ease-of-use challenges with the software. The head of engineering has insisted that the problem is poor support by the CS team. The CEO asked Jay’s manager to create a bonus plan for CS teams doing extra customer training and reducing subscription loss. While excited at first by the bonus opportunity, Jay and his teammates quickly found that without addressing the software issues the extra effort made little difference. The weekly reporting on progress towards the bonus was demotivating. It reinforced the lack of voice the CS team has within the company.

Frustrated by the lack of focus on solving the root cause of unhappy customers, Jay joined the CS team at a fast-growing startup. The pay is slightly better, but the integrated approach to product and customer success attracted Jay to the company. While Jay is responsible for his customer accounts, he is also a part of the product management, development, and design team. On that team, Jay’s responsibility is to represent the customer’s point of view. While this requires several extra hours of work each week, Jay is excited by the opportunity to make a difference for customers and to build new skills. Most days, Jay wakes up energized, has a great day working with great people, and finishes his day feeling fulfilled.

Decades of behavioral science research have shown that while extrinsic motivators like money and perks are important, intrinsic motivation – meeting people’s need for purpose, developing new capabilities, and being given autonomy – drives energy and engagement. Behavioral science provides insights and easy-to-use frameworks that managers can use to inspire intrinsic motivation by helping meet those core psychological needs.

Nudging Behavior Change

As Jo listens to her team debate the feature set of a new product, she feels conflicted and frustrated. They are becoming increasingly hostile to one another and the engineering team, and Jo is unsure of what to do. Three months ago, Jo was quick to throw her hat in the ring when a Group Manager position opened. She saw an opportunity to build and support a great team that would significantly impact the business. Now, as Jo sits in that manager’s chair, with a deadline looming, her experience tells her that she should step in, take charge, and tell people how to complete the task – just as her manager always did. But Jo isn’t from her manager’s generation. She never liked being told what to do and when to do it, and she didn’t take this role because she wanted power over people. Jo’s instinct is that there must be a better way to get her team on track.

In his 2008 book Nudge: Improving Decisions about Health, Wealth, and Happiness, behavioral economist and Nobel Prize laureate Richard Thaler introduced the world to the idea of nudges. Rather than commanding or demanding behavior change, nudges are small psychological pushes that guide people towards desired behaviors. Nudges are especially powerful when identifying the smallest possible behavior change that delivers the most significant benefit. Nudges do that when they are specific, aligned with a team’s values, and evoke positive emotions.

There is a better way for Jo to get her team on track. She can work with them to identify what behaviors are getting in the way of delivering on the new product feature set, create a nudge to change the behavior, and ensure that people hold one another accountable for implementing it. Behavioral science can help leaders shift from reactive command and control to proactively seeing gaps on and between teams and learning to close them with nudges. Developing nudges as a team builds trust and psychological safety, reinforces team values, and creates peer accountability.

From Scientific Management to Behavioral Science: Reshaping Leadership Development

The pandemic has caused unprecedented organizational disruption while creating significant opportunities for leaders who embrace the idea that work will never be the same. At the heart of those opportunities are the people whose expectations of their employers have shifted, sometimes dramatically, over the past two years. Combined with a generational shift as Millennials and Gen Z become the most significant portion of the workforce, the implications for both work models and approaches to leadership development are enormous.

Behavioral science offers innovative, human behavior-centric approaches to reshaping leadership development. As a start, three capabilities should be a top priority for inclusion in programs:

• Developing habits that put trust and psychological safety at the core of leading.
• Inspiring intrinsic motivation by meeting people’s core psychological needs at work.
• Proactively seeing gaps on and between teams and closing them with behavior nudges.

Most of today’s leadership and team development models were designed in the 20th century when managers watched over subordinates who performed narrowly defined, repetitive work. Over the past 30 years, some of these models have seen incremental improvement. But now, organizations need leaders at every level who can adapt and transform their teams and organizations to meet the demands of this new world of work. Today’s enlightened CEOs and senior leaders are placing behavioral science front and center as they rethink leadership development.