The American football season has kicked off, the Presidential race for 2012 is in motion, and corporate earnings season is right around the corner. What do these three disparate events have in common? They all lead to the human propensity to overweight the impact that leaders have on the performance of organizations.
In a previous post, I covered a well known cognitive bias, the fundamental attribution error. That bias causes people to attribute another person’s performance or behavior to their character/ability and to underweight the role of random or situational factors.
A variant of Fundamental Attribution Error is something known as Leadership Attribution Bias. In this case, people tend to overweight the effect (positive and negative) that a leader has on different outcomes. This bias is seen when judging CEO’s, Political leaders (Presidents, Governors, Mayors) and coaches or managers of sports teams. A large body of research has shown that people will attribute outcomes to leaders for situations that are clearly beyond the individual’s control.
In a 2007 paper, the researchers Patty and Weber concluded that voters will overemphasize outcomes beyond the politician’s ability to influence that outcome. A 1964 study by Gamson and Scotch showed little relationship between baseball manager firings and improved team results. Despite that fact, managers, as well as other sports team leaders are frequently replaced after a short period of team underperformance. A number of studies in the corporate world showed CEO’s tended to be disproportionately credited or blamed for their company’s profitability or stock price.
Typically, when a leader is forcibly replaced, it is because their company/department/team has been underperforming. The new leader is likely to benefit from the phenomenon known as “regression to the mean“. That is, most organizations or people that are underperforming will naturally improve (without intervention) by reverting to their historical average performance. This leads outside observers to conclude that the new leader caused the rebound in performance.
There appears to be a strong human drive to look for a centralized cause when trying to determine effects. A leader, whether a head coach, quarterback, or mayor is a visible figure at the center of an organization’s activity. Intuitively it makes sense that this leader would have a large impact on their organization’s performance. People also tend to look the phenomenon from a moral angle. That is, even if they can’t assess all the factors at play that determine organizational performance, they want to hold the leader accountable.
Unfortunately, large organizations are tremendously complex systems. There are astronomical numbers of factors at play determining the outcomes of baseball games, performance of municipalities and profitability of corporations. Many of these factors are either random or beyond a leader’s control. Which means that leaders typically get unfairly blamed and credited for their organization’s performance.
Obviously, there still need to be standards of performance for leaders. The leader that behaves unethically, loses the faith of their organization, or presides over a prolonged period of significant underperformance needs to be replaced. Unfortunately, I don’t believe anyone has a magic metric that determines that timeframe precisely.
As will all cognitive biases, the key to countering them starts with self-awareness. Catching yourself, or others, engaging in this bias allows you to think more critically when evaluating a situation. Understanding the nature of leadership attribution bias, one can take a more critical view when evaluating the performance of those in charge. You will be less likely to buy in to the lazy storyline that an individual needs to be blamed or lauded for performance that they have only partially influenced.