A good friend who is one of the founders of an enormously successful global investment company once explained to me one of the secrets to the success of the business: “we have a no a-hole policy.” This came up while we discussed a world-renowned investor; this individual having offered to migrate his own investment firm into the aforementioned partnership several years ago.
It all seemed like a great idea, except for the rather evident personality defects of this prominent investor. To bring him into the fold would most certainly violate the firm’s explicit policy. As a consequence, the invite wasn’t extended. The partnership made an investment in the personality-challenged investor, sourced for him office space and infrastructure, and ultimately the partners made a lot of money off of their investment. But they did so at arm’s length. Culture, and in particular a culture of harmony within the firm, wasn’t worth allowing inside the tent someone who, though preternaturally talented as a capital allocator, might upset the proverbial apple cart.
This story came to mind while reading John Tierney and Roy Baumeister’s fabulous new book, The Power of Bad: How the Negativity Effect Rules Us and How We Can Rule It. About halfway through, Tierney and Baumeister discussed why successful companies are so eager to root out the “bad apples” as quickly as possible. Just a few can quite literally wreck a corporation’s trajectory.
The authors found that within food service companies alone, “It was the deviant behaviors that made the difference to profitability” far more than did good workers. The bad ones, those “who showed up late, slacked off, or made fun of their colleagues” took down successful operations far more than the good lifted operations and profitability up.
Interesting is that Tierney and Baumeister found that bigger, theoretically more white-collar businesses happened on the same truth about the bad. They report that Men’s Wearhouse ultimately fired a top salesman whose sales dwarfed those of his fellow colleagues. As they put it, “impressive as his numbers were, he had repeatedly antagonized the other salespeople by refusing to help them with their customers – and sometimes trying to steal them away.” Interesting is that after the challenging employee was fired, the numbers of his relieved colleagues never rose to his. It didn’t matter. The work atmosphere was quite a bit more collegial such that “the store’s overall sales rose by almost 30 percent.”
At Stanford’s engineering school, the authors write of the department heads talking about hiring someone “who was known for his research (good) as well as his personality (bad).” One professor quickly objected to the hire in a way that will now be familiar to readers: “Listen, I don’t care if that guy won the Nobel Prize. I just don’t want any a-holes ruining our group.” There’s a pattern here, and it’s one that defines this excellent book. Bad has a tendency to overwhelm the good in all manner of situations, so the goal should be to root out what is bad whenever possible.
The problem is that “Bad is stronger” than good according to Tierney and Baumeister, so they’re trying to arm the reader with ways to counter what pushes around good. They aim to help the reader “deploy the rational brain to keep bad at bay in both private and public life,” and to even “learn how to stop fights before they can begin.” Easier said than done? Perhaps, but as they make plain, it’s usually small, seemingly (at least to you) innocuous affronts that set the stage for much worse. Since it is, they’re striving to help the reader detect ahead of time the small things that have the potential to be big, and by extension, bad.
All of this is crucial in consideration of their striking assertion that there “is no opposite of trauma, because no single good event has such a lasting impact.” With the latter in mind, it’s only fitting to focus on the good until it’s remembered how we’ve evolved as humans. As the authors so pithily put it, “To survive, life has to win every day. Death has to win just once.” All hope is lost to bad? Not so fast.
Indeed, it’s not unreasonable to rethink how we as humans think. Though we’re wired to focus on the unfortunate, the authors remind us throughout The Power of Bad just how good things have become. In 1950, most people in the world got by on less than $1/day. The world has never been more peaceful than it is now, people are living longer amid this peace, plus they’re living much better. The examples are endless, but the authors remind us how in 19th century Great Britain, which at the time was the world’s most prosperous country, the average citizen “worked more than sixty hours a week, with no annual vacation, from age ten until he died in his fifties.” Contrast this brutal existence with today, when “workers enjoy three times as much leisure over the course of their lives,” and food is so plentiful that the “biggest nutritional problem in many places is now obesity.”
What’s with all the negativity amid all this plenty? Per Tierney and Baumeister, “The healthier and wealthier we become, the gloomier the worldview.” So change the worldview.
When a friend lets you down, think of all the times that friend has come through for you. With a husband, wife or significant other, try to achieve a high frequency of intimate relations relative to arguments, plus lay off the whiney lament so commonly uttered sotto voce (or noisily) about the “other” along the lines of “Why doesn’t she appreciate me?” About this frequent complaint, the authors make the simple point that we all have a tendency to overstate just how special we are, or, in their words, our tendency to focus on the bad “magnifies their faults, real or imagined,” just as it “magnifies” our “own strengths.” So relax. Recognize that you’re not exactly an endless thrill ride, and then focus on the good.
In particular, keep in mind the power of bad while doing so. Though you may think yourself expert at giving compliments, or asking the right questions, or existing as a willing ear when the other just needs you to listen, the bad invariably overwhelms. Applied to relationships, all the good things are drowned by hostile tones, eye rolls, denials of responsibility, along with insults.
As the authors put it, “Being able to hold your tongue rather than say something nasty or spiteful will do much more for your relationship than a good word or deed.” Easier said than done? For sure, but then there’s an art to being successfully partnered in all walks of life. Tierney and Baumeister quote Supreme Court Justice Ruth Bader Ginsburg’s wedding day advice from her mother-in-law: “In every good marriage it helps to sometimes be a little deaf.”
In life more broadly, recognize how much the bad criticism overwhelms praise. In making this case, the authors quote a champion optimist in Ronald Reagan’s tendency to magnify the disdain of his detractors. In Reagan’s words, Nancy “says I only see the guy with the finger.” The authors quote movie and television director/producer Lee Daniels (movies including The Butler, and tv shows including Empire) as saying that even the rave reviews with but one critical sentence within them are for him “like taking a knife and stabbing you in the heart over and over.” Be careful with criticism in public or private.
Which brings up the one critique, if that’s what it can be called, of this excellent book. About it, it’s possible that a lack of clarity that will drive this point could be erased with a second read. This review, though written with the just-completed book very fresh in mind, is also being written after one read of The Power of Bad. In it, Tierney and Baumeister routinely make a case about how much the bad and hurtful overwhelms the good and uplifting, they quote Daniels as finding even one sentence of criticism as rather brutal, yet they assert that the “self-esteem movement is one of the sorrier mistakes of modern psychology,” that the proverbial sticks work better than carrots, that kids aren’t improved by easy promotion to the next grade, etc. Their explicit point is that penalties are good, that in a figurative sense “death concentrates the mind wonderfully.”
All of the above makes perfect sense, or seems to, only for there to be a pivot by the authors to Frito-Lay, and the successful doings of Dick Grote to improve factory performance there. Rather than use the stick, Grote very much dialed back the punishment. With errant factory workers he ceased having them suspended without pay, and instead sought to induce guilt with paid days off that he referred to as “Decision Making Leave” during which workers would “contemplate” their future. Not feeling attacked, and sensing management was really trying to work with them to improve the quality of their work, Frito-Lay employees would strive to improve. And it worked.
About the critique, this is one of not understanding where the authors stand: bad is powerful, but fear of bad doesn’t work. Or does the stick work? In this part of the book the authors’ viewpoint became a little bit opaque given their approving analysis of Grote, but maybe would be cleared up with another read.
It would also be interesting to ask the authors their opinion of B.F. Skinner. Skinner is briefly mentioned in the book, and is famous for making a case for “reinforcers.” Along these lines, a great friend who long owned a successful banking company once told me how very much he hated firing people. It was just awful. Thank goodness for Skinner.
A disciple of the man, my friend designed very specific, but also in a sense very vague, work structures. He hated office politics, so his rule was that those in his employ didn’t have set work hours. If they could complete very specific work requirements on a daily basis, he didn’t care if they departed midday, or earlier. Of course those who didn’t respond to these productivity incentives would see it in their pay, and they would clearly see their failure.
Essentially those who didn’t respond productively to the incentive structure would fire themselves, thus saving my friend the agony of letting people go. Skinner’s teachings led him to create very positive reinforcers and the banking company ultimately achieved more than impressive profitability. This is mentioned not as a critique of Tierney and Baumeister, but more as a yearning to know what they think of Skinner.
Arguably most fascinating about The Power of Bad is when Tierney and Baumeister report about social media. Maybe opinion writers have a skewed view of it as a source of endless negativity, but it sure seems as though Twitter is a place for one to fulfill a need to confirm that all is wrong with the world. Except that it’s not. The authors write that “The old mass-media dictum ‘If it bleeds, it leads’ doesn’t govern social media.” A study of New York Times articles posted on Twitter revealed that “negative articles were less likely to be shared than positive ones,” not to mention that among Twitter users, they “use more positive words than negative words” even on the worst days of the terrorist attack kind. If only our optimism could extend to work and relationships.
Which brings us to this excellent book’s best chapter. It’s Chapter Nine, which is the second to last. Here’s hoping every pundit, left, right, libertarian, anarchist, socialist and communist reads it. In it, Tierney and Baumeister critique the “Crisis Crisis” whereby everything is just that. They so correctly assert that “the greatest obstacle to freedom and prosperity, is the exploitation of people’s negativity bias by crisismongers.” Amen, thousands and thousands of times over.
Those on the left routinely write and talk of climate, obesity, and poverty crises among many other looming tragedies, while all too many on the right warn us daily of birthrate, debt, and entitlement crises among many other looming disasters. At least with those on the left, they want to expand the size and scope of government such that they regularly aim to foment immense fear. Members of the right, who at least talk a good game about limited government, have no excuses.
Funny is that both sides have lamented the “opioid crisis” of modern times. Funnier is that both point to too much economic freedom, and markets that are too open to foreign plenty, as one of the sources of this alleged problem. Thankfully Tierney and Baumeister aren’t so alarmist. They remind readers that opioids have given comfort to tens of millions suffering chronic pain, with the rate of addiction somewhere in the neighborhood of 1 to 2 percent.
The problem with Chapter Nine from a review perspective is that nearly every line was worth underlining, and discussing. Rather than do that, it should just be said that an already excellent book is made spectacular by the chapter on alarmism.
Ahead of hopefully reading this great book, it’s worth keeping in mind an essential interpersonal theme that permeates it: “It’s not so much what you do unto others. It’s what you don’t do.” The Power of Bad is a truly excellent read that will surprise you, make you smarter, and crucially improve you. Run, don’t walk.
This review originally published at RealClearMarkets