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Overcoming Perceived Fear in the Organization

Alex, a well-known senior executive joined a reputed organization as a business head. He had been recognized for several business turnaround success stories. The unit he joined had been underperforming for the previous two and half years, while peer companies were doing better; in his new role, Alex was expected to bring it back to industry-leading growth.

To diagnose the reasons for the unit’s poor performance, Alex spent his initial days interacting with several employees on the ground. The analysis suggested employees were falling into the following patterns:

1. They were averse to taking new initiatives and committing to customers.

2. They were concerned about how to align well with their bosses and therefore not sharing information freely within teams.

3. They were not sufficiently engaged with clients and were therefore less attuned to customers’ pain points.

4. They were generally resistant to new technologies.

5. There was a demonstrated absence of ownership in closing transactions.

The above behaviors contributed to loss of productivity and hence decline in overall business performance. But when Alex analyzed further, he found that employees wanted to “play it safe” because of what I call “Perceived Fear—Perception of Punishment.” In other words, “What if I make a mistake?” The fear had clearly arisen from well-circulated stories of how mistakes had been dealt with punitively in the past. Alex also noticed that people murmured about the fear but did not speak explicitly at the workplace, as they perceived management as more concerned about shrinking profitability and market share than what could have led to the productivity decline.

Perceived fear leads to adverse consequences. But it often goes unnoticed and remains unspoken at senior management levels due to a variety of reasons.

The Psychology of Perceived Fear

Fear, an intense emotional state, occurs in response to a certain stimulus in the present, or in anticipation of a future threat perceived as a risk to body or life. The perception of danger leads to either confrontation with or escape from the situation, known as “fight or flight” response. In extreme cases, fear can freeze or paralyze people.

In humans and animals, fear is modulated by the process of cognition and learning; in other words, it is a learned or acquired mental state. For example, a child is not afraid of darkness as long as he or she does not associate it with danger. When people go through fear, they experience conditions like muscular tension, ringing in the ears, shortened breath, anxiety, increased heart rates, and so on.

In her research, Dr. Wendy Suzuki, a pioneer in Neuroscience at New York University, found that sustained fear in an individual alters two specific portions of the human brain: the  amygdala and the hippocampus. By design, the amygdala is responsible for triggering emotions in an individual that, in turn, determine his or her decision-making ability. When fear affects the amygdala, it impairs both emotional response as well as decision-making. Similarly, when the hippocampus portion of the brain gets impacted, it distorts long-term memory and formation of associations between various objects in one’s earlier life. This distortion can then have an adverse effect on the individual’s creativity and imagination.

Fear is contagious and at an organizational level, fear psychosis leads to consequences such as high voluntary employee turnover and loss of revenue. One study published in the Academy of Management Journal shows a direct cause and effect relationship between downsizing and voluntary employee turnover. Another published in the Journal of Business Ethics highlights a direct correlation between organizational leaders who treat their teams with contempt and in an abusive manner and those team members leaving the organization. This phenomenon is also termed “organizational terrorism.” A tyrannical management style can also cause low self-esteem, damage team cohesiveness, lead to work alienation and ultimately sap performance.

In our experience, we have observed perceived fear getting triggered by personal, organizational and environmental factors:

1. Personal factors: Often, when we commit to an action and are then not able to fulfil the commitment as promised, we may experience inner anxiety, which leads to perceived fear. For example, repeatedly missing delivery timelines, not discharging our duties in consonance with the role we play, stagnation in learning new skills in environment where being agile is must for success, lack of preparedness during key meetings, compromise in personal values, etc. All the above can be potential causes of perceived fear if not tackled appropriately.

2. Organizational factors: At an organization level, conflicting priorities, frequently changing goal posts, lack of clarity, differences in management styles, tough organizational measures to promote performance without taking people in confidence and, last but not least, a lack of open and transparent communication—all of these may create fear in the minds of employees.

3. Environmental factors: Job-stealing automation, macroeconomic recessions, the launch of disruptive business models making existing ones obsolete, geopolitical threats and trade wars between large economies, hostile takeovers are just a few of the macro causes of perceived fear in the minds of our employees.

The Solutions

While these problems are often systemic, there are absolutely ways to solve them, and to stop fear from eroding morale, creativity, innovative thinking and ultimately, profitability. The following are some solutions we have seen work for companies that have previously been plagued by perceived fear:

1) Focus on creating a “psychological contract.” Succes of an individual or an organization highly depends on how ideas are capitalized to solve pressing problems—yet, people resist coming forward to share their ideas. That reluctance is often due to fear of consequences, such as rejection or belittling by managers, peers or clients. If, as leaders, we proactively prepare not only the team members but also ourselves to identify possible blockers and detractors to overcome the fear of criticism, it will lead to better relationship with team members. We believe mindful listening to the ideas of members without attributing any motive to what they are saying will help build trust and hence a better psychological contract between the managers and team members.

2) Magnify success markers and create a culture of celebration. In his recent TED talk, network theorist Albert-Laszlo Barabasi made an interesting distinction between performance and success where he defines performance as something that people do when in flow while success is something that others notice and reward. We need to pay attention to what makes our teams successful; articulate unambiguously some of the things our clients consistently notice and appreciate about our teams; and celebrate the success with the team shamelessly in order to help employees learn and perform better. By doing this, we deactivate the fear-related neural pathways to the brain and activate pleasure-related pathways. As leaders, if we align our goals and priorities and create opportunities where our teams’ success can be multiplied and magnified on success markers such as customer obsession, cost-effective delivery, innovative solutions, and the like, then a culture of collaboration, trust and high performance will not be a distant dream.

3) Tolerate failure and drive accountability to show early wins. If organizations and their leaders really want team members to be decisive and take faster actions, we must tolerate their failures in letter and spirit. Certainly not the same mistake committed repeatedly. It may sound utopian, but in fact, no decision is good or bad when it’s made. Good or bad is qualified by the outcome and consequence of the decision. We suggest that when team members fail, hold them accountable not for the failure, but for turning the situation around. Help them have the experience of early wins in those areas. More importantly, constantly scan for competency and skill gaps that clutter their decision-making ability and enable them with learning opportunities to make bold decisions in the future. Lastly, leaders must model this behavior in the form of holding themselves accountable to show quick turnarounds when they fail to accomplish a goal.

4) Being nice is good; being fair is better. Though affability increases one’s persuasiveness in teams, leaders need to be watchful that it’s not coming at the cost of being fair. The latter sustains long-term trust among team members as they see consistency in leaders’ actions. Be it resource allocation, workload sharing, goal setting, performance appraisal and reward distribution, or even day-to-day affairs, one must adopt fairness in approach. To reduce anxiety, leaders should frequently communicate the guiding principles behind decision-making. In an incident that occurred recently, the country head of a well-established bank resigned to pursue other interests. When rumors, though untrue, circulated later that she was fired for poor performance, her team members believed them because they perceived a lack of procedural fairness in the organization.

As the nineteenth century American philosopher Ralph Waldo Emerson famously said, “Fear defeats more people than any other one thing in the world.” One must never underestimate the consequences of fear in the workplace. We must remember that as leaders we are interested in the organization’s performance and the organization will perform only when employees and team members do not fear their leaders’ actions. By adopting the above-mentioned practices, we believe organizations will be able to create such a fearless culture, which will fuel performance, growth and happiness in the organization.


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