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deming, leadership, lean, transformation

The Price of Fear

What does fear cost businesses each year?  Thousands? Millions? Billions?  It’s something that obviously can’t be measured accurately, but when I think about some of the organizations I have worked with in the past, I’m guessing the figure is extremely high.

Although the type and extent of fear differs for every organization, it affects virtually all companies in one way or another.  Since much of the cost related to fear is indirect and difficult to measure, though, most companies don’t think about it or put forth the effort to reduce its existence.

The Effects

Okay, fear is not necessarily a bad thing for the human race.  It is an emotion designed to lead us to take action when we sense danger.  As a fundamental instinct, fear is a short-term behavior that motivates us to avoid or escape from dangerous situations.  In this sense, fear can lead to bursts of energy and creativity to assure safety and survival.

Within the workplace, however, fear tends to be a chronic condition that wears people down over time.  Although chronic fear affects different people in different ways, most psychologists agree that it is destructive.  Any positive effects on motivation and action are short-term.

The fears that commonly exist within organizations include fear of layoffs, disagreeing with decisions and opinions, asking questions, and taking risks.  In business, the areas that are negatively affected by these fears include the following:

  • Creativity & Innovation: When people are stressed, the conscious mind blocks creativity and innovation.  Fear prevents people from relaxing to the point where they can access the right brain and develop creative solutions to problems;
  • Goals & Objectives:  People will avoid committing to stretch goals and objectives when they feel there will be repercussions if the goals are not met.  Fear also leads people to do whatever is necessary to meet a goal, whether or not it actually helps the organization meet its objectives;
  • Customer Focus: A culture of fear and blame causes people to focus on meeting the needs of their boss rather than the customer;
  • Learning: Effective learning requires the freedom to study the facts and test ideas in real situations.  Some ideas will fail, which is okay because of the learning that results.  Fear of failure blocks people from taking the time to clearly understand problems and test ideas;
  • Health Issues: There have been numerous studies on the negative effects of stress and fear on personal health.  Chronic stress suppresses the immune system, leading to an increase in colds and flu, in addition to a host of potentially more serious conditions.  At best, fear can drain energy and lead to indifference and mediocrity.

Taking Action

So what should business leaders do to address the problem of fear?  I have talked with senior leaders in the past who don’t see fear as a big problem because they don’t see it.  Company leaders unfortunately don’t commonly have the perspective to accurately judge the level of fear within the organization.

Since fear can greatly impede transformation, however, organizations pursuing lean thinking need to understand the level of fear that exists and begin to address it immediately.  I’ve seen this done with focus groups and surveys, but the most effective method is to increase visits to gemba.  Although go-and-see visits to the workplace can initially increase the level of fear and suspicion among team members when done well, the level of trust that results can significantly improve the situation.

Developing plans from the highest levels of the organization to reduce fear greatly improves the chances of success with lean.  Developing an army of problem-solvers throughout the organization requires that people feel comfortable enough to work toward what’s best for the company and its customers rather than what they think is important to the boss.  As the situation improves, the release of human potential to improve the organization can be staggering.

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About Gregg Stocker

Gregg Stocker is a lean advisor for Hess Corporation. He possesses over 20 years experience in a variety of disciplines including operations, manufacturing, human resources, quality, and strategic planning, and has worked in manufacturing, service, and oil & gas industries. He has extensive international experience, including successfully leading an $65 million business in The Netherlands. He authored the book, “Avoiding the Corporate Death Spiral: Recognizing & Eliminating the Signs of Decline,” (Quality Press, 2006) and was a contributing author to "The Lean Handbook," (Quality Press, 2012). Gregg is a frequent speaker and recognized expert in business and performance improvement having been interviewed on television, radio, and in a number of newspaper and magazine articles including The New York Times, Washington Post, BusinessWeek, and InformationWeek. Gregg has implemented change in organizations ranging in size from $10 million to more than $100 billion. He is a team-oriented leader who achieves results by improving teamwork, focus, and communication throughout the organization.

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