Leading People in a Status-Anxious World

Matt Bothner, Professor and Deutsche Telekom Chair in Leadership and HR Development

Sources: Bothner, Matthew S. and Richard Haynes. 2007. “When Do Matthew Effects Occur?” Working Paper, University of Chicago; Bothner, Matthew S., Wonjae Lee and Young-Kyu Kim. 2010. “Primary Status, Complementary Status, and Organizational Survival in the U.S. Venture Capital Industry.” Working Paper, University of Chicago; Gould, Roger V. 2002. "The Origins of Status Hierarchies: A Formal Theory and Empirical Test." American Journal of Sociology 107:1143-78; Podolny, Joel M. 2005. Status Signals: A Sociological Study of Market Competition. Princeton University Press; Merton, Robert K. 1968. "The Matthew Effect in Science." Science 159:56-63; Merton, Robert K. 1988. "The Matthew Effect in Science, II: Cumulative Advantage and the Symbolism of Intellectual Property." Isis 79:606-623; Pindyck, Robert S. and Daniel L. Rubinfeld. 1998. Microeconomics. Prentice-Hall; Rablen, Matthew D. and Andrew J. Oswald. 2007. “Mortality and Immortality.” Working Paper. University of Warwick Department of Economics; Spence, A. Michael. 1974. Market signaling: informational transfer in hiring and related screening processes. Cambridge, Mass.: Harvard University Press; Tapper, Jake. 2005. “Status-Conscious Monkeys Shed Light on Celeb Obsession.” ABC NEWS [cf. Robert O. Deaner, Amit V. Khera, and Michael L. Platt. 2005. "Monkeys Pay Per View: Adaptive Valuation of Social Images by Rhesus Macaques" Current Biology online as an Immediate Early Publication, 1/27/2005.] Bonacich, Phillip. 1987. “Power and Centrality: A Family of Measures.” American Journal of Sociology 92:1170-1182. Wunderli, Richard M. 1992. Peasant Fires: The Drummer of Niklashausen: Indiana University Press.

Status Defined and Contrasted

status is a “non-strictly-zero-sum” intangible asset “possessed” by individuals or organizations who are highly regarded by others who are highly regarded.*

status is the opposite of being at the bottom of a pecking order

status is not (although it is often related to) …

reputation quality power popularity

*Unlike other forms of capital—financial or human—status is a type of social capital and is therefore not fully owned by the individual who “possesses” it. Other members of the relevant social network mete out to you the deference that is the basis of your status.

confidence level reset

confidence(calm self-

assuredness)

extreme arrogance(insufferable

pride)

extreme timidity

(paralyzingfear)

time

status boundary (e.g., separating non-executive and executive band jobs)

Leading a Senior Manager on Both Sides of a Status Boundary

How will you coach him or herbefore promotion?

[put in “artificial space” withother execs to “play out” new role]

How will you coach him or herafter promotion?

[advise on selectively declaring “growth needs” early on,to bring focus and to set colleagues, and thus self, at ease]]

“The Matthew Effect in Science,” published in Scienceby Robert K. Merton (1968)

“To him who has, more will be given, and he will have an abundance. But he who does not have,

even what he has will be taken from him.Saint Matthew 25:29

Version 1 of the Matthew Effect: Higher-Status People Get More Credit

high status

greatercredit

independent discoveriescollaborative work

Newton Leibniz

Arthur Fry—inventor of 3M’s Post-It Note

an intrinsic taste for status: evidence from Duke University Medical Center Study

adapted from http://www.neuro.duke.edu/faculty/platt/gallery2.html

Version 2 of the Matthew Effect: Higher-Status People Enjoy Lower Costs

high status

lower cost of recruiting talent

higher qualityoutputs

What other kinds of costs can status lower?

labor costs

financial costs

marketing costs

Arthur Fry—inventor of 3M’s Post-It Note

A Unified Version of the Matthew Effect—and its Opposite

Version 1 + Version 2

The Matthew Effect = “More for Less” The Doom Loop = “Less for More”

How will you respond as a leader to Robert’s situation?

low status

high costs of attracting the best colleagues

low qualityoutputs

less relative credit for outputs

high status

low costs of attracting the best colleagues

high qualityoutputs

greater relative credit for outputs

Your Leadership

… Robert’s “doom loop”

… where Robert wants to go:back to the “Matthew Effect”

Application Case: Robert is a senior manager you knew previously in your first executiverole at the “Sigma” Division of your company. When you first took over at Sigma, youlearned that one of the project teams you’d inherited from your predecessor wasfloundering. Quickly sensing Robert’s strong leadership skills, you made the call to put himin charge of the project team, and you were right: Robert successfully turned the teamaround—giving him, and you, added recognition among colleagues. And when Robert laterasked you to release him to assume a new role at your company’s “Gamma” Division, youwere sorry to see him go, but you agreed and gladly gave him your strongestrecommendation as he made this career transition. Now, with the passage of time, you’veleft Sigma, having been promoted to another executive job, this time leading the GammaDivision, where you learn that Robert will again report to you. You’re elated to see him asyou walk toward your new office, but he greets you in the hallway with palpable anxiety.Something is wrong. So, you invite Robert into your office, close the door, and he begins toopen up: he confesses that “things went terribly wrong” on a project he’d been leading atGamma, and you realize he’s in a “doom loop”—much like the one in the bottom-left cornerof this slide. Although Robert doesn’t use the precise language of the Matthew Effect, youdiscern from his story that, instead of enjoying the upward spiral (like the loop in the upper-left corner of this slide) he’d experienced in the past while working for you at Sigma, Robertis now spiraling downward. Having been reduced in status, Robert now finds it harder toattract good people, it’s more difficult for him and his team members to make qualitycontributions to the company, and when things do go well, he gets little credit—and heseems to get virtually all the blame when things go wrong. All of this then reinforces hisweakened standing amongst his peers, and so the vicious cycle continues. He asks foryour help. What is your response?

© Matthew S. Bothner, 2012

How did Robert “Travel”?

Perceived “Soft” Skills

weakstrong

strong

Perceived “Hard” Skills

LOVABLE STARCOMPETENT JERK

LOVABLE FOOLINCOMPETENT JERK

weak

Adapted from: Casciaro & Lobo (2005) “Competent jerks, lovable fools, and the formation of social networks,” Harvard Business Review.

Another Look at How to Rescue Robert from a “Doom Loop”

Robert

E

A

D

F B

C

G

I

J

HL

Three “Dual” Steps to Successfully Rescuing Robert

(1) Wait for two events: the right opportunity for Robert and noticeable behavioral change (too soon = too dangerous)

(2) Assemble an audience for Robert marked by two features: dense closure among the “hearers” A, B, … E, F (for a positive echo effect for Robert), who also have brokerage networks outside the group (for rapid and wide diffusion of Robert’s success)

(3) Coach Robert on two dimensions: confidence andsobriety (there is risk and this is his last chance). echo effects

Identifying Who Has Status Quickly: Three Metrics

physical locationuniquecommon

visual attentionconstantnever

response to humorexcessiveindifferent

Leading People whose Quality and Status are Unequal—Part 1

Statuslow

Quality

high

low

high

scenery

hidden talent

overrated

star

Application Case—Part 1: You’re in your first week as thenew CEO of Alpha Services. You and Stephen, your Head ofHuman Resources, finally have time to continue an importantconversation you began months ago, before you became CEO,about a visible executive named Laurent. (Actually, years agoin the U.S., from which Laurent was hired, he went by thename “Larry,” but he now insists on being called “La-rahn,”preferably with an elegant Parisian accent.) The issue withLaurent is that, in your view, he clearly falls in the “overrated”category in the two-by-two table to the left of this slide.Endowed with exquisite political skill from years of experience,he has successfully retained the loyalty of several keyexecutives who report to him—executives who feel a deepsense of personal debt to Laurent because of his support oftheir promotions to coveted executive jobs in the past. Inaddition, your impression from asking around, before youbecame CEO of Alpha Services, is that Laurent is a “slider.”You’ve concluded that he’s now lacking in new ideas, and haslost his ability to energize his employees. However, as Head ofHR, Stephen has a very different view—a view that haschanged since your earlier conversation on this issue. Stephentells you that Laurent recently “woke up” and is “really startingto deliver again.” In other words, in the context of the two-by-two table, Laurent is moving north. He’s still in the overratedcategory, but he’s moving upwards, and will perhaps soontransition into the “star” category in the upper-right. Stephenfelt it was urgent to meet with you again about Laurent for thisreason: a new executive job has become vacant at AlphaServices, this job involves leading a division related to thedivision Laurent now leads, and Laurent wants the new job.Stephen needs to know: Will you support Laurent’s desire tomake this career move? What are the key issues in yourview? (Please turn slide over for part 2 of the case.)

© Matthew S. Bothner, 2012

Statuslow

Quality

high

low

high

scenery

hidden talent

overrated

star

Application Case—Part 2: Before wrapping up theconversation, Stephen takes the liberty of seeking yourperspective on a related topic. Your specific discussion aboutLaurent has brought into sharp focus for Stephen a moregeneral problem he’s been struggling with for years as theHead of HR. The general problem is simply this: Stephensenses that there are far too many people at Alpha Serviceswhose quality and status are unequal. That is, althoughStephen is thrilled to see rising “stars” and understands thatsome people necessarily constitute the “scenery,” he lamentsthe fact that Alpha Services employs quite a lot of “hiddentalent” as well as “overrated” executives and managers. InStephen’s thinking, Alpha Services must find ways to identifyand promote hidden talent and either “revive” or “counsel out”those who are overrated. But even he, as Head of HR, freelyadmits that “it’s hard to know who’s who.” So, he asks youdirectly: What can we do to identify the hidden talent andthose who are overrated? You’re sympathetic to hisdilemma, because talent that is hidden is, by definition, difficultto identify, and overrated managers are hard to exposebecause they’re protected by their status. You realize heneeds your advice. What ideas do you have for Stephen?

Leading People whose Quality and Status are Unequal—Part 2

© Matthew S. Bothner, 2012

[1] What increases and maintains status?

[2] Should you anchor your self-concept on your status?

Two Concluding Questions