Numerous studies have examined what intangible and tangible factors might cause one organization to outperform others over a period of time.
There is no question that ideas and talent are invaluable, but it is no longer any surprise that the single most important factor affecting organizational performance is organizational psychology.
Ray Dalio runs Bridgewater Associates, one of the largest hedge funds in the world. In Connecticut, he's got 1500 people, some of whom are the best and brightest brains in the financial sector, but does Ray cite his PhDs, research acumen, and process as his number one a comparative advantage?
No he doesn't.
Ray says his number one comparative advantage is his open and critical organizational psychology, the principles that underly his organization's rapid growth and incredible returns.
Here in Canada, hockey is the national sport, it's our sport.
Every year, teams from other countries around the world dispute this, and usually Canadian hockey players prove them wrong.
But what makes a hockey team win?
What is the difference between a goal in the overtime of the seventh game and a riot?
Actually, it's no secret. Yes, teams need to bring together fast young players, big players, and skilled players, they need winning trainers and patient programs to develop deep talent, but success on the ice is about more than that.
It's about attitude, synergy, and confidence. It's about organizational psychology.
So what is organizational psychology, and why is it so important?
Organizational psychology can be described as a set of principles and philosophies that transcribe into actions and behaviours within a firm's culture.
Individuals and groups of individuals are constantly receiving information through their senses.
The information is passed to the brain where it is processed by a cognitive program, or psychology, that then produces not only an action decision, but also a chemical response from the neurological system that changes the individuals mood.
Changes in mood can influence other members of the team, trigger further chemical excretions, and lead to changes in results.
These cognitive programs can be described as snippets that are passed between individuals in the organization, or between managers, leaders, and their followers.
The upshot is that you can spell out success. It can be found in the ethos and pathos that goes into each project.
These in turn impact the rate of change in organizational knowledge capital, employee utility, and as a consequence, the quality of results delivered to clients.
So here are a few organizational psychology snippets:
1. Do it for the doing
Do it for the doing. People that are passionate about what they do get better at it. People who take pride in the quality of their work, do better work.
2. Success is about good habits.
Success is about good habits. Time management, exercise, planning, organization, are all just habits.
People that can manage their own habits grow faster and are more likely to achieve their objectives. Excellent habits lead to excellent results, excellent results lead to value for our clients.
3. Don’t hate the next guy
Don't hate the next guy, learn from him. There are 7 billion people in the world, on every block there is somebody faster, somebody smarter, somebody better off, don't worry about it.
Commit to excellence everyday, not relative the next guy, but relative yesterday.
4. Balance the standard with the innovative
Balance the standard with the innovative. Innovation is rarely lauded. A new approach, a different way of thinking, a creative strategy is typically laughed at and often scorned.
People like people like them, if you're doing something new you may risk some criticism. But everybody knows innovative organizations create market share.
Innovative procedures have to be planned for. Creativity needs to be fostered and supported.
At the same time, tried and true is successful for a reason. Man's success as a species is due largely to knowledge spillovers.
There is a lot to be said for engaging the standard procedures.
5. Constructively open criticism can lead to organizational growth
Constructively open criticism can lead to organizational growth. This practice is a cornerstone of Bridgewater's success.
If you have something to say about someone say it to their face.
This practice ensures individuals are getting the feedback they need, and forces critics to develop enough tact to deliver criticisms without sinking the ship.
Politic is an inherent property of human organization, but it is also a costly one.
How much of your organization's energy is spent establishing and maintaining hierarchy?
How many steps backward have to be taken because someone is sabotaging the success of the organization for their own personal gain?
Constructively open criticism is one way to streamline organizational politic. Good changes have a better chance of getting traction, if unwelcome disturbances are going to happen, they will happen more quickly.