When you apply the science of economics to the study of human behavior some wonderfully useful insights occur. For example; once you realize that there is a tangible and measurable value to behavior, you will begin to think about them differently.
This past Monday I addressed a group of about 400 Taxation Professionals, numbers people who work in a world of documentation, compliance regulations and statistics. When I presented this concept to them they instantly “got it” and, in fact, at the end of my speech they lined up to shake my hand and tell me how much they liked this way of thinking about behavior.
Here is the gist of the idea:
Every action we take or fail to take can be tracked sooner or later by measuring its value or cost, e.g. if we fail to prepare for an important event there will be a true cost to our lack of preparation. If we develop the habit of reviewing what we need to know just prior to meetings in which we will use the knowledge, then we will be able to participate in the meeting more spontaneously and usefully.
Behavioral Economics has three main components:
1. How we Think
2. How we Relate
3. How we Act
If people in an organization understand and embrace the purpose, vision, mission and values of the organization then they “embrace its genetic code.” These people bring more value to their work than their counterparts who think differently.
When you find meaning in what you do, you bring more value to how you do it.
This is merely one component of How we Think.
The ways in which people communicate or “Relate” to each other has a measurable value as well. Coworkers who don’t communicate openly and freely often operate with incomplete information and erroneous assumptions. This can have disastrous consequences financially.
There are three essentials for any relationship, whether it is with customers, colleagues or supervisors. These are: 1. Both parties must be committed to making the relationship successful. Nobody can bear the full burden alone. 2. Communication must be open and frequent. The truth must be told always and bad news must travel fastest of all. 3. Both parties must know what the others expect from them. Clear agreements are essential.
The ways in which we relate to each other have a tangible economic impact.
How we act both on and off the job will ultimately show up in our productivity. Bad health has an impact of clarity of thought, ability to perform and on attitude. Lack of organization produces unnecessary errors plus a waste of time and resources. Certain work habits have more value than others. There is a cost to each of our habit patterns.
In short, if we think about our behavior as having an economic impact, we will be more motivated to change unproductive behaviors and adopt profitable ones. It’s time the “human factors” in business were placed at the TOP of our priority list, where they belong.
In the final analysis, “it’s the people, stupid!”

As a member of various boards and committees in my community and industry I attend scores of meetings each year. And I can count on one hand the number of those meetings that are well conducted!
Meeting chairs and organizational officers don’t control the meeting, they simply follow the strongest personality in the group. If someone persuasive wants to abuse the meeting’s time frame or get off track onto subjects not relevant to this meeting, they let them.
One of my colleagues said the other day, “Joe (not his real name)sure runs a long meeting. I don’t attend very often because so much of the time is wasted.”
Now notice that he didn’t say that to “Joe”, he said it to me, a fellow member. I wonder how many people are saying similar things about you and me?
A meeting represents a huge investment of time, attention and talent. Every person in that room could be doing something else and probably earning money for it. All of them have other priorities in life. All of them have shown the leader the courtesy of showing up and doing nothing else during this time. The LEAST the leader could do is run a tight meeting!
Another area of leadership weakness is organizing projects. Plenty of people are willing to step up and get things started but not as many are skilled at making them happen. I remember when I was in the Jaycees many years ago, we were all required to learn a project planning process. We used a tool called “The Chairman’s Planning Guide.” It was a simple outline for organizing. It consisted of defining the primary purpose of the project, showing how it fits in with other priorities, setting specific goals, etc. It was such a good tool that I had my son memorize like a poem and recite it often. He was under ten years old at the time, but he still remembers the “7 Step Planning Process” today, in his thirties. And he has used it to accomplish goals. These “steps” are pretty much universal and all planning processes cover them, but we need more people to know and use them…daily.
A third area of leadership lack is motivating volunteers. Anyone can motivate another person when the motive is a paycheck or avoiding pain, but not so many are good at getting people to voluntarily commit to a goal. This involves accessing the part of a person that is totally under their control, something known as “discretionary effort.” That is where the true value of one’s involvement shows most. When they are giving it their full commitment instead of mere token effort.
These skills for: Running Meetings, Organizing Projects and Motivating Volunteers are not difficult to learn. But to learn them, we must do two things; Teach them well and Require their use. We must require those who lead our meetings to get better at it. We must speak up and demand that projects be organized and followed through to closure. We must teach each other how to discern the truth about what works and what doesn’t in motivating us.
Only when MOST organizations start requiring their leaders to be effective at leading will we get better results and at the same time produce a new crop of good leaders each year.
Effective leadership is not about being in charge. It is about getting the job done well.