Managing in the Gray

Joe Badaracco: Sure. I imagine most of the people listening have a pretty clear idea from their own experience, and if you've got a position of responsibility there's lots of them.

Let's say you're running a factory and you've got a couple of products or a couple of complaints about a product, and you're not really sure that there is a problem or how serious it is or what you should do. That's pretty gray. You can imagine at the extreme, sort of disastrous scenarios, and you could imagine there's nothing at all there. How do you resolve a situation like that? That would be one of, I think, countless examples of gray.

Rachel Salaman: And what's at stake if we don't get it right? How important is it that we make the right decisions when it's not obvious what the right decision is?

Joe Badaracco: Well, the basic answer to that is that getting gray area decisions right is the core of managers' jobs. And the better you do the job, the better your career prospects, the better you feel about your work.

The reason I say it's the core of managers' jobs is that in organizations typically the standard and routine problems get delegated downward, you know, to people who can handle them, and the hard problems actually get delegated upwards. These are the ones with the bigger impact - they're messier, they're more open-ended, they're gray - and these are the ones that land on your desk. And the higher you get in an organization, typically the more complicated they are and the higher the stakes are.

So that's why you've got to get them right. It's your work.

Rachel Salaman: And as I mentioned in the introduction, it's not easy. One of your first tips in the book is that we should work through gray areas as a manager but resolve them as a human being. So what do you mean by that?

Joe Badaracco: Sure. That's actually the central theme of the book, and by working through the problem as a manager, I mean doing a lot of things that everyone I think recognizes as good management. So you get the best data you can. When you don't have all the data you need, which is typically the case in gray areas, you try to get some expert judgment, if there's some relevant judgment. Or you try to get some people with on-the-ground experience with the problem. You have really good meetings where people are open and candid and talk about what they think is really going on.

In other words, you really work the process to try to learn as much about the problem and your options and which options look better. And that's just managing really well, and sometimes that takes care of a gray area problem. You and your team come up with something.

On the other hand, there are situations where, even after you've worked through the problem as a manager, it's still gray, and then it becomes a judgment call. That's what I mean by you decide as a human being - you rely on your judgment. And in the background, sort of your character and experience then become decisive, but first you work it through as a manager, see if you can get an answer, and, if not, then you face it as a human being.

Rachel Salaman: Right, and your book explores five questions that can be asked by managers grappling with any difficult decision, and you draw a line back through history to show the timelessness of these ideas. Could you talk a bit about humanism?

Joe Badaracco: Sure. There's two ways to think about humanism. One is kind of a Renaissance movement that rediscovered classical Greek and Roman writings. I mean humanism in a broader sense, that says basically human beings at work and in life confront lots of problems that can't be reduced to technique or algorithms, they can't be resolved by formulas. And this is why, as I said a moment ago, you end up often approaching them as a human being and relying on your judgment. And you shouldn't hope that artificial intelligence or Google or something you learned in an MBA program, some framework, is going to give you the answer. You've got to come up with the answer as a human being.

Rachel Salaman: How, in your view, is humanism relevant today?

Joe Badaracco: I think it's relevant in a couple of ways. A lot of people think that if you use the right sort of formulas and heuristics or analytics, you know, you can resolve most problems and come up with a good answer. And often you can - that's why I say you start by approaching things as a manager - but humanism is relevant, or at least looking beyond technique, because lots of problems just can't be resolved that way.

Secondly, management still is what it always has been - a fundamentally human enterprise, of sort of understanding situations and motivating people to work on them and to try to get things right. So, in a way, management still is and always has been what one great writer called "a humanistic art," and I don't think that's ever going to change because the core of management work, as I said a moment ago, is dealing with these messy, open-ended problems that land on your desk.

Rachel Salaman: Now, as I said, your book is built around these five key questions, which are for managers to ask about a tricky situation. The first one is "What are the net-net consequences?" What do you mean by net-net consequences?

Joe Badaracco: Well, gray area decisions often have ripple effects, sometimes the ripples reach really far. So before you make the decision, my advice in the first chapter, which goes back centuries, millennia, is you look at each one of your options and try to understand as best you can the consequences of picking that option - who wins, who loses, who gets hurt, who benefits - and try to get as accurate a sense as you can of the full impact of picking Option A, B or C. That's what I mean by looking at the net-net consequences.

Rachel Salaman: So, by "full impact" you mean the extent to which everybody and everything is impacted. So you look beyond, for example, your own team, it might be.

Joe Badaracco: Your own team, your own company, sometimes even your own industry. You know, you can't quantify all these things - there's lots of judgment calls involved - but you want to make sure you're seeing the whole playing field, the whole picture, everything that is at stake, before you start making any choices.

Rachel Salaman: What's difficult about this question for managers?

Joe Badaracco: Well, you know, the basic difficulty is, first, the world is a complicated and uncertain place and there's lots of things you just can't figure out and, secondly, we are not particularly rational beings - we tend to be impulsive and emotional - and third, especially today, a lot of people are under pressure just to get things done.

So, for all those reasons, it can be really hard to get this sort of panoramic sense of the consequences of the choice you've got to make.

Rachel Salaman: One of your tips here is to focus on process. What do you mean by that?

Joe Badaracco: Well, I said a little bit earlier about what I mean by process, and what I mean is basically managing well. I see management as working with and through other people to accomplish something, so at a fundamental level I think it's something simple - working with and through other people.

You know, there's a common view today that there's leaders and then there are managers, and there's a hackneyed expression that I really dislike that says, "Leaders do the right thing and managers do things in the right way." So managers keep the trains running on time, they get the memos, they handle the budgets, and all that stuff. I think getting the process right is often the critical foundation for getting the decisions right.

So that's what I mean by process - it's managing really well.

Rachel Salaman: Now, you stress in the book that none of your five questions is much help on its own, so let's add the second one to the discussion now. And that is, "What are my core obligations?" Do we all tend to share the same idea of core obligations or does it depend on our culture or even religion?

Joe Badaracco: That's a tricky question. And the answer is that, to a significant degree, who we are and what our cultural background is matters, but you can look beyond those differences and find that almost across the board there are a handful of things that seem to be really important, and typically they come out of not philosophical or political thinking but religious thinking. And almost all of the great religions say, and I think most people who respect these traditions or believe in one of them accept, that human beings are special. You know, we're not just another link in the food chain or on the chain of animal life.

So when you're making a decision, you may have certain core obligations to other people. Not to put their lives and their health at risk, for example, and to treat them with the respect they are due as human beings, which typically means, in most cases, in most cultures, being honest with them, showing them respect, not putting them at risk.

You can get beyond some of these core obligations but I think those are pretty profound. It's hard to find cultures and traditions that just throw those out the window.

Rachel Salaman: A tip you offer here in the book is to awaken our moral imagination. Can you explain what that means?

Joe Badaracco: Sure. It's actually an old idea, was a favorite idea of Adam Smith, the great economist, who, by the way, was a great psychologist as well, and he pointed out a basic human frailty, which is that we can hear about some situation or be in the middle of it and really fail to appreciate what it means for all the individuals in that situation.

So when you're making a tough decision, my suggestion here is you try to think about the individuals and the groups that are going to be affected by the decision, who are really vulnerable, may really get whipsawed or hurt by the decision, and then – here's where the moral imagination comes in – try to put yourself in their shoes. What would you be feeling? What would you be thinking? What would you think is right? If you were not the decision maker, you know, sitting in a corporate tower, but you were this vulnerable individual? Or you can try to imagine, what if one of your children or somebody you really care about is in that situation? That's a way of picking up on some of these basic human duties that you might otherwise overlook.

The moral imagination is this imaginative leap from being decision maker to somebody at the other end of the decision.

Rachel Salaman: And what are some ways for managers to do this, other than just to try to do it?

Joe Badaracco: Well, you know, you can sometimes bring people into a situation, to a meeting or talk with them, people who are going to be adversely affected by it. You can have people in your meetings trying to represent these vulnerable outside individuals that you might be overlooking. But I think, at the end of the day, since these are your calls, your judgment calls as a manager, you've got to exercise your own moral imagination and you've got to say, "If you were in one of these situations and you were the person at the end of the chain who might get whipsawed, what would you be really concerned about?"

There's the golden rule that everybody knows, "Do unto others." There's another ancient Hebrew version of it which doesn't say, "Do unto others." It says, "Ask what would really be hateful if you were in another person's position." And I think this idea of looking at what you would experience as just wrong, just hateful, if you were in this situation and going to be affected by the decision is a way of kind of awakening this moral imagination that Adam Smith said was so important.

Rachel Salaman: So moving on to question three now, that's, "What will work in the world as it is?" And here you introduce Machiavelli and the idea of pragmatism. Could you give us a brief summary of Machiavelli's philosophy?

Joe Badaracco: Well there's two versions of it. So there's the popular version which you find in the media a lot, and this is, "The end justifies the means." And the means can be all sorts of awful things, you know, in Machiavelli's time it was poisoning people and stabbing people. The idea here is just get it done and don't worry about ethical niceties. That's not correct. If you go back and think about what Machiavelli said, you know, we wouldn't know his name today if all he said is, "You can get ahead by being sleazy." You know, the Greeks knew that, the Israelites knew that, the Romans, everybody knows that.

Machiavelli said that, if you've got real responsibility in life, he was thinking about princes and renaissance city states, you've got a hard decision, you've got to do something, to use his phrase, "that will work in the world as it is." And by "the world as it is" he means a place that's uncertain, or you've got people pursuing their political interests, you know, their self-interest, however they see them, in a variety of ways, and all these things kind of crash in together. And you've got to find your way through that and you need the sort of resilience and determination and flexibility and opportunism to get yourself and your organization through that.

He actually goes a little further and says, "If you don't think you're up to it, you shouldn't even take responsibility for people's lives or for organizations." If you don't think you can, in most cases, find something that's going to work at least pretty well in the world as it is. That's his key phrase.

Rachel Salaman: So how can a manager take some of Machiavelli's ideas and use them effectively in their workplace dilemmas?

Joe Badaracco: Well, I think, step one is to be very realistic about your situation, and do kind of a quick mental map of power and interest. So who are the powerful parties who are going to be affected by this decision and what are they interested in? And if they're really powerful and they're really opposed to one of the options that you may think is a pretty good option then you've got to do some hard thinking about whether you can move around them, ally with them, do a deal with them, or whether you've got enough clout to sort of overrule them and whether or not you want to do that.

You've got to really understand the politics and the power of your situation, and then you've got to, as I was suggesting just a moment ago, see if you can find some way to move towards your goal without setting off landmines as you move across what sometimes is a hazardous stretch of territory.

Rachel Salaman: So we've covered consequences, duties and pragmatics - all useful but not enough on their own. Question four is, "Who are we?" This moves the discussion from individuality and autonomy to relationships. What does history tell us about balancing "I" and "we?"

Joe Badaracco: Yes. What it basically tells us - history tells us this, evolutionary theory tells us this, and if we stop and think about a lot of our everyday experience we also see this - that we are in profound ways social creatures, that the "we" or the various "wes" of which we are a part are really important. They're important to us and they're important if you're in an organization.

So every organization has got its history, it's got its commitments or things it's trying to accomplish, typically it's got its stories about what makes people in that organization special. And the fourth question essentially is, "Who are we?" and it says, "You've got to try to understand these narratives, these stories, the community of which you're a part, and you need to come up ideally with a decision that's going to resonate with who the people in the organization think they are and what they care about." Otherwise, you know, you can meet not necessarily with opposition, that's what you're concerned about when you think in Machiavellian terms, you just sort of meet with indifference or incomprehension. In other words, you're not speaking the language and you're not advocating something that resonates with the experience and the values and the aspirations of the people in your organization. You're like some outsider who wandered into the tribe. Yeah, he's giving a speech people are only half listening to.

Rachel Salaman: So how can we determine which of our many relationships matter most in each particular decision?

Joe Badaracco: Well here, I think, you come back again to imagination and, you know, we were talking earlier about why humanism, and I contrasted a humanistic approach with kind of a technical, analytical approach. And, while I think it's important to get all you can out of the analytics, you've really got to look beyond that.

So before you make a decision, imagine yourself explaining the decision and trying to explain it in a convincing, motivating way to long-time people in your organization so that, as they hear you, they're thinking, "Yes, that's a good decision. That's the kind of thing we do. That's the kind of thing our founder," if there's a founder in the picture, "would have done. That's the way in which we work on problems here. That's who we are." And I mean literally try to imagine yourself getting up and giving a little talk to some people you actually know and seeing if you can come up, test your options and your ways of explaining them in ways that you think really are going to resonate and illicit nods, people nodding their head up and down rather than shaking it sideways and kind of saying, "No" or "What's here? What's he talking about?"

Rachel Salaman: The final question out of the five is, "What can I live with?" And here you draw a distinction between finding an answer and creating an answer. Could you tell us what the difference is?

Joe Badaracco: Yes. Sometimes, if you work hard and work well on the problems as a manager, you get a solution to a gray area problem. Sometimes you can go through those first four questions - consequences, basic human duties, political pragmatics, organizational values - and the answer is pretty clear. But sometimes it still isn't, you know, and the pragmatics may pull you in one direction, you may feel some obligations or organizational values pull you in another direction. And then you've got to decide, and that's where the mantra I mentioned at the beginning, "Work the problem as a manager and resolve it as a human being," really comes into play. That's when you've just got to make a choice, and the right answer for you and for your organization on this problem is the solution you decide on or the approach that you create. You don't find it out there. You've tried to find it out there in the analysis and the thinking with others but it's not there, so you create it. You say, "This is what we're going to do and why I've come down here on this decision. And this is what each of us is going to do to follow through and this is how we're going to benchmark and let's get going."

That's what I mean by creating the answer, and that's ultimately what resolves these gray area problems.

Rachel Salaman: And you say that, in many workplace decisions, the challenge is to balance reason with intuition. What tips can you offer for that?

Joe Badaracco: Well my basic tip is implicit in some of the things I've been saying all along, that as much as possible you want to rely on data and expert judgment and deliberation in your own mind and working with other people, and try and do that as rationally and as clear minded a way as you can. It's only at the end of that process, not at the beginning of the process, only at the end that you say, "Look, so what is my gut feel about this, having worked through all this stuff? I've struggled with it, what do I think is the right way for us to handle this problem?"

So I am talking about what I call tempered intuition - tempered by lots of analysis, lots of back and forth with others, lots of back and forth in your own mind - which is often a struggle in your own mind. And then at some point, obviously, you've got to decide, and so you decide. And that ultimately is intuitive but it really ought to be tempered by struggling with all the complexities that you typically find in these gray area situations.

Rachel Salaman: As we've heard, managers are advised to use all five questions to reach the best solution or decision. Should each of them be given equal weight, or does it depend on the situation?

Joe Badaracco: Well I don't mean to do a sort of a cop-out, but that's a judgment call, how much to weight them. But let me say one thing clearly, which is don't ignore any of the questions, don't pick your favorite.

I think most of us have a basic inclination, you know, some people naturally think about consequences, others think of other duties, you know, we all know some people who are a little too political we think, and so forth. But these questions really sort of balance and counteract each other. You know, if you only think about consequences, you may violate some basic duty. You can lie to people, okay, and often, in the short run, that gets things done, but that's wrong, okay? And if you think only about what's going to sort of work politically and not think about the aspirations of your organization, consequences for other people, duties, which include legal duties, you know, you're at some real risks there. And if you're only going to think about, "Gee, what can I live with?", I've got to say who put some stamp of approval on your judgment, that you see the truth in a complicated gray area situation where a lot of people are unsure and there's lots of complexity?

So you really need to start with and think about all five questions. In the end though, and this is the judgment call, you may say that, "We're coming down here because the consequences are decisive" or "We've got certain duties as human beings," or just pragmatically "This is the best we can do." But you ought to look at all five of those questions first.

Rachel Salaman: So finally, can you talk us through an example where applying these five questions led to a successful outcome for a manager?

Joe Badaracco: Sure. You know, one case that comes to mind immediately was actually a young woman, in her early career situation. She was running a small team, there were two people who just weren't performing, and she had to give them performance evaluations. And the evaluation they deserved, on a scale of 5, was 2.5. That basically meant they were out of the organization.

That would have been, in terms of consequences, better for the team, because they would have been replaced by stronger people. She sort of owed it to the rest of the team, who was working a lot harder and a lot smarter and a lot more effectively. This team really had an ethos that, "We're going to get the job done and get it done well." These guys were sort of slackers. The only problem was that they were really well connected with their bosses, okay, her bosses, and so she had a political minefield that she had to sort of navigate. And she really did want to move them on, but she really focused on the third question, like, "How can I find my way through this situation?"

She had some luck, okay. One of the individuals had been ill. She was able to persuade HR to create an extra slot while this guy was dealing with his illness. The other guy was in perfectly fine health, so she sat down with him and said, "Look," you know, she really believed in being very honest, very transparent with her employees. She said, "Look at the other people on the team here. How do you compare?" And she said, "You know, I've thought through this and I'm going to give you a 2.5," which he didn't like. But she kind of reminded him of her power to give him a 2.5, and then she kind of explained why, you know, "Look at the other people on the team." And she went on to say, "You know, I'm not sure I'd want to be in a situation, long term, where I was always behind everybody else and kind of marginal." And she said, "I'm not going to fire you, but I'm going to give you some time to really look around for another job, inside or outside the organization, and I'm not going to tell you how much time that's going to take and I'm not going to talk to anybody else about this. I want you and me to just see if we can find a way to resolve this."

The luck was that this guy understood that he really didn't belong. He spent a couple of months looking and he actually did find something better, but she didn't take on her bosses and she didn't take him on directly and she didn't fire him. She had some luck, and I recommend luck to everybody listening to this, but there was a lot of astute political maneuvering to avoid big problems for her.

Rachel Salaman: Joe Badaracco, thanks very much for joining us today.

Joe Badaracco: You're welcome, Rachel, glad to be here.

Rachel Salaman: The name of Joe's book again is "Managing in the Gray: Five Timeless Questions for Resolving Your Toughest Problems at Work."

I'll be back next month with another Expert Interview. Until then, goodbye.