CHAPTER 1

WHY PRACTICEPOSITIVE LEADERSHIP?

The University of Michigan's Ross School of Business recentlyannounced a new strategic plan to guide businesseducation through the next decade and beyond.A key strategic pillar is an emphasis on the positive—positivebusiness, positive leadership, and making a positivedifference in the world.

Humana, one of the largest health insurance providersin the United States, recently changed its identityfrom being an insurance company to being a well-beingcompany. The primary objective is to create benefits foremployees and customers by implementing practicesbased on positive leadership and positive organizationalscholarship.

Toshi Harada, Director of International BusinessDevelopment at Hayes Lemmertz—the world's largestproducer of automobile wheels—equates positive leadershipwith Japanese manufacturing principles. "A signaturefeature of Japanese manufacturing philosophy is theelimination of waste. Negative leaders represent wasteand inefficiency," he suggests, "whereas positive leadershipproduces sustainable improvement."

Jim Mallozzi, former CEO of one of the PrudentialFinancial Services businesses, turned around the financialperf ormance in his organization by providing histop team "the latitude to experiment on being positivelydeviant leaders." Financial results changed in one yearfrom a $140 million loss to a $20 million profit throughapplying practices of positive leadership.

George Mason University has recently engaged in aninstitution-wide effort to become the world's first well-beinguniversity by, among other things, integrating positiveleadership practices throughout the entire system.Both top-down and bottom-up interventions are beinginitiated.

Producing extraordinarily high performance, generatingpositively deviant results, and creating remarkablevitality in the workplace are the primary objectivesof positive leadership. Positive leadership involves theimplementation of multiple positive practices that helpindividuals and organizations achieve their highestpotential, flourish at work, experience elevating energy,and reach levels of effectiveness difficult to attainotherwise. The practices included in this book can helpproduce such extraordinarily positive results.

Empirical research by recent scholars, as well as anecdotalevidence such as the examples described above,confirms that positive leadership practices produce resultsthat exceed normal or expected performance. Andwhile the evidence that positive leadership brings improvementin organizational productivity, profitability,quality, innovation, and customer loyalty might not beunexpected, many may be surprised to learn that thereis published evidence that this revolutionary approachto leading and managing produces benefits in terms ofindividual physiological health, emotional well-being,brain functioning, interpersonal relationships, and learningas well.

Lingering questions have been raised regarding positiveleadership, such as: Exactly how are these resultsachieved? What tools or techniques can managers implementto obtain positive results in their organizations?What specifically can leaders do to practice positiveleadership? This book will show you. It builds on andsupplements my previous book Positive Leadership.That earlier work provided evidence showing how fourpositive leadership strategies—t hat create a positiveclimate, positive relationships, positive communication,and positive meaning—can produce exceptionalresults.

Here I present specific practices and activities thatcan serve as guides for implementing those four positiveleadership strategies. As Figure 1 shows, each of the practices(in the box corners) interacts with more than one ofthe leadership strategies (in darker-colored ovals). Thefigure illustrates the relationships among the positiveleadership practices presented in this book and thefour strategies in the Positive Leadership book.

Throughout the book I will summarize empirical researchthat has established the validity of the practicesand discuss how real organizations have successfullyapplied them to produce positive results. Activities areprovided in each chapter so that you can immediatelyimplement the practices in your own organizations.

POSITIVE LEADERSHIP IS HELIOTROPIC

Practicing positive leadership is important because positivityis heliotropic. That is, all living systems have atendency to move toward positive energy and away fromnegative energy, or toward what is life-giving and awayfrom what is life-depleting. One form in which we experiencepositive energy in nature is sunlight. In humaninteractions, it often takes the form of interpersonalkindness and gratitude. Positive leadership practices engenderpositive energy and unlock resources in peoplebecause, like all biological systems, human beings possessinherent inclinations toward the positive.

You can see examples of the heliotropic effect inboth individuals and organizations. For instance, peopleare more accurate in processing positive information—whetherthe task involves verbal discrimination, organizationalbehavior, or judging emotion—than negativeinformation. People reported thinking about positivestatements 20 percent longer than negative statementsand almost 50 percent longer than neutralstatements, and positive information can be recalledmore easily and more accurately than negative information.People more effectively learn and remember positiveterms and events than neutral or negative ones: whenpresented with lists of positive, neutral, and negativewords, for example, people are more accurate in recallingthe positive, and the longer the delay between learningand recalling, the more positive bias is displayed. Managersare much more accurate in rating subordinates' competenciesand proficiencies when the subordinates performcorrectly than when they perform incorrectly.

We tend to seek out positive stimuli and avoid negativestimuli, as evidenced by people's judgments thatfrom two-thirds to three-quarters of the events in theirlives are positive. Further, most people say they are positive,optimistic, and happy most of the time. Positivewords have higher frequencies in all the languages thathave been studied to date, and positive words typicallyentered English usage more than 150 years before theirnegative opposites (for example, "better" entered before"worse"). Central nervous system functioning (i.e., vagusnerve health) is most effective, the density of the brain'sgray matter is enhanced, and coherence of bodilyrhythms is at its peak when people experience positiveand virtuous conditions compared to neutral or negativeconditions.

Several studies have highlighted how being exposedto positive influences increases life expectancy. Pressmanand Cohen, for example, examined the journals offamous psychologists of the past and counted the positiveand negative words used in their writing. Psychologistswhose writings used a greater number of positivewords lived an average of six to seven years longer thantheir more negative colleagues. Pressman also studiedfamous singers and found that those who sang love songswith positive words lived an average of fourteen yearslonger than those who sang love songs with angry words.(Interestingly, the content of the song did not affect thelife expectancy of the person who wrote the song, onlythat of the person who repeatedly sang the song.)Snowden's well-known study of 678 Catholic nuns alsofound that those using the greatest number of positivewords in their journals and autobiographical essays whenthey entered the convent lived an average of twelve yearslonger than their counterparts.

A bias toward the positive, in other words, characterizeshuman beings in their thoughts, judgments,emotions, language, interactions, and physiologicalfunctioning. It is natural for humans to incline towardthe positive, and empirical evidence suggests that positivityis the preferred and natural state of human beings,just as it is among other biological systems. Positiveleadership practices promote a heliotropic effect, helpingpeople to move toward the positive.

YEAH, BUT NEGATIVE DOMINATES POSITIVE

On the other hand, a great deal of evidence also existsthat human beings react more strongly to the negativethan to the positive. Negative news sells more newspapersthan positive news, people pay more attention tocritical comments than to compliments, and traumaticevents have greater impact than positive ones. All livingsystems react strongly and quickly to threats to theirexistence or signals of maladaptation.

For example, the effects of negative information andnegative events take longer to wear off than the effectsof positive information or pleasant events. A single traumaticexperience (e.g., abuse, violence) can overcomethe effects of many positive events, but a single positiveevent does not usually overcome the effects of even asingle traumatic event. A positive event is rememberedmore accurately and longer, but a negative event hasmore effect on immediate memory and salience in theshort run. Negative events have a greater effect onpeople's subsequent moods and adjustments than positiveevents, and negative or upsetting social interactionsweigh more heavily on people than positive or helpfulinteractions, often producing depression or bad moods.People tend to spend more time thinking about threateningpersonal relationships than about supportive ones,and about personal goals that were blocked compared tothose that were not blocked. When negative things happen(for example, people lose a wager, endure abuse, orbecome a victim of a crime), they spend more time tryingto explain the outcome or to make sense of it thanwhen a positive outcome occurs.

In human interactions, undesirable human traitsreceive more weight in impression formation than desirabletraits. Bad reputations are easy to acquire butdifficult to lose, whereas good reputations are difficultto acquire but easy to lose. In initial hiring decisions,3.8 unfavorable bits of information are required to shiftan initial positive decision to rejection, whereas 8.8 favorablepieces of information are necessary to shift aninitial negative decision to acceptance. To be categorizedas good, for example, one has to be good all the time, butto be categorized as bad, one only has to engage in a fewbad acts.

Events that are negatively valenced (e.g., losing money,being abandoned by friends, and receiving criticism)will have a greater impact on the individual than positivelyvalenced events of the same type (e.g., winningmoney, gaining friends, and receiving praise). This isnot to say that bad will always triumph over good, spellingdoom and misery to the human race. Rather, goodmay prevail over bad by superior force of numbers:Many good events can overcome the psychological effectsof a single bad one. When equal measures of goodand bad are present, however, the psychological effectsof bad ones outweigh those of the good ones.

An important function of positive leadership, therefore,is to demonstrate tools, techniques, and practicesthat can overcome the effects of the negative. When positivepractices are given greater emphasis than negativepractices, individuals and organizations tend to flourish.

POSITIVE LEADERSHIP ANDORGANIZATIONAL PERFORMANCE

Individual effects are not the same as organizationaleffects, of course. In organizations, leaders must addressmultiple constituencies. Processes, routines, and structuresmust be considered. Cultures, embedded values,and traditions must be respected. Employee preferencesand relationships must be taken into account. An importantquestion, therefore, is whether positive practicesproduce positive outcomes in organizations as they do inindividuals.

In the last decade, substantial empirical evidence hasdemonstrated that positive leadership practices producegood outcomes in organizations, just as positivity doeswith individuals. Studies in several industries and sectorshave shown, for example, that organizations thatimplemented positive practices increased their profitability,productivity, quality, customer satisfaction, andemployee retention.

One early study, for example, assessed positivepractices and outcomes in seven organizations in thetransportation industry. The results (shown in Figure 2)suggest that the greater the positive practices in thesefirms, the higher the organizational performance onsix dimensions—profitability, productivity, quality, innovation,customer satisfaction, and employee retention.This study was then expanded to include organizationsacross sixteen different industries and included both for-profitand not-for-profit organizations. The organizationsstudied encompassed both large firms such as GeneralElectric, National City Bank, and OfficeMax as well assmall and not-for-profit firms such as the YMCA, hospitals,and educational organizations. The results matchedthose in Figure 2: organizations that implemented positivepractices were significantly more effective than organizationsthat did not.

Another investigation was conducted in the U.S. airlineindustry following the tragedy of September 11, 2001.After the World Trade Center towers came down and thePentagon was attacked, all flights were suspended forseveral days. When the airlines were allowed to fly passengersagain, ridership topped out at 80 percent of previousridership levels. The problem is, the economicmodel of the U.S. airline industry was based on an 86percent seat-fill rate, so all of the airlines had substantialexcess capacity and costs. Figure 3 shows the amountof downsizing implemented by each company.

Each airline approached downsizing and cost cuttingin a different way. Some approaches were more consistentwith positive leadership practices than others Forexample, US Airways responded by downsizing morethan 20 percent and by declaring financial exigency,which meant that it could lay off employees with nobenefits and no severance and that union contracts wererendered null and void. Southwest Airlines, on the otherhand, laid off no one: "You want to show your people thatyou value them, and that you aren't going to hurt themjust to get a little more money in the short run. Not furloughingpeople breeds loyalty. It breeds a sense of security.It breeds a sense of trust."

The problem is that failing to reduce the number ofemployees and lower the associated costs can put theairline company's viability at risk. Stockholders and investorsare impervious to how employees are treated.Wall Street has just one goal: provide a return on investment.This might suggest that Southwest Airlines wouldbe punished severely by Wall Street investors for its refusalto cut jobs.

Nine airline companies were distinguished in termsof the extent to which they followed practices of positiveleadership in their approach to downsizing. Somedid so in a way that preserved the dignity, financial support,and safety nets of employees, while others did not.As illustrated in Figure 3, the correlation between stockprice or financial return to these companies in the followingtwelve months and the extent to which theyconsistently utilized positive leadership practices is .86.Firms that implemented positive leadership practicesmade significantly more money and recovered morequickly than those that did not.

Two additional studies—one investigating forty financialservices organizations and one looking at thirtyhealth care organizations—produced similar results. Inthose studies, performance improvements over a multiyearperiod were examined to determine the relationshipbetween positive leadership and organizational performance.Positive leadership practices were measured overa two-year period, and then a year later performance wasmeasured. In both industries, when positive leadershippractices were implemented, performance scores alsoimproved significantly. Figure 4 shows the health careorganizations' outcomes after positive leadership practiceswere implemented: double-digit improvement occurredon a variety of performance dimensions.

These studies clearly show that positive leadershippractices can produce significant improvement in alltypes of organizations. The practices introduced in thisbook have been implemented in organizations acrossseveral industries, including health care, the military,government, education, financial services, manufacturing,and retail. Their usefulness is not limited to a particularsector or type of organization.

POSITIVE LEADERSHIP PRACTICES, TOOLS,AND TECHNIQUES

Chapter 2, "How to Create a Culture of Abundance,"details five specific steps aimed at organizational culturechange. The first step focuses on creating readinessfor culture change—for example, by identifying standardsfor comparison and by altering language and symbols.All change is accompanied by resistance, so thesecond step discusses tools and techniques for overcomingresistance. When readiness has been created and resistancereduced, people need to know what the new culturewill be like, so the third step involves articulating avision of abundance. A vision of abundance always containsboth left brain and right brain attributes. The fourthstep features activities that will generate commitment tothe vision and to the new culture. Commitment and participationare highly related. The fifth step, fostering sustainability,ensures that the culture of abundance willbecome institutionalized and can be sustained over time.