Why and how emotions matter in top management teams
Emotions matter at the top. Most of us already expected that to be the case, and recent academic research now confirms that this expectation is justified, in particular for top management teams. But…. maybe not in the way we tend to think.
Top Management Teams are responsible for making strategic decisions and initiating and leading organizational change. Knowledge, experience and good business sense are essential for carrying that responsibility. However, one of the key characteristics of strategic decisions is that they are about a possible future in today’s rapidly changing and complex economy. No amount of information, money or time can predict what exactly that future may hold, making strategic outcomes by definition ‘unknowable’ beforehand.
This means that just rational reasoning only gets you so far, and that personal preferences, moods and emotions play a pivotal role in strategic decision making. Especially in circumstances of high uncertainty, low predictability, high time pressure and high impact, the odds are high that emotions like anxiety, distrust or enthusiasm influence our rational decision making, making strategy not just ‘cold’ rational, but also ‘hot’ and emotional. This is true for individuals, and to an even higher degree for top management teams, where you don’t only have to deal with your own emotions, but also with those of your high powered colleagues, who, just like you, have to attend to different stakeholders and to sometimes conflicting demands.
For most of us familiar with the way top management teams function, all this may sound familiar and intuitively right. Yet, emotions sometimes matter in more counterintuitive ways. Some examples:
A little discomfort can go a long way.
You aren’t completely at ease with all your colleagues in the top team? You tend to be distrusting about information you get? Discussions in your team can be awkward or arduous? Good! Research indicates that minor feelings of discomfort can actually enhance good decision making. They help the team be more precise and more critical about information they receive and increase their ability to gather, discuss and accurately evaluate it. Just be careful not to confuse unease about the information with unease about the person presenting it. The first kind of unease can be helpful, as it may sharpen your mind. The second one however is more likely to have negative consequences, such as simply dismissing an idea because it came from the wrong person, or having to spend too much time on managing unnecessarily tense group dynamics instead of using that time for valuable strategic discussions.
Being cool and collected might work against you.
Have you ever found your top team saying things like: ‘We have to show confidence in our decisions, even if we don’t feel it’? Or ‘This is a business. Facts and figures are all that matter, we have to be neutral and matter of fact.’? Well, as logical as it sounds, this may not always be the right approach. Displaying unfounded confidence for example, while in reality you are anxious or worried about what is happening in the market place or in your organization, can give your organization’s members a false sense of security. This drives them to be less alert, and less inclined to actively look for information that might help your organization move forward. Being too ‘cool and collected’ can work against you as well. In times of organizational turmoil, emotions like insecurity, fear and anxiety are likely to run high among employees. If you signal that there is no room or reason for such feelings, chances are that employees will not only keep their emotions to themselves, but distance themselves and their information from you and your team all together. Getting support for the changes you are aiming for and getting feedback on how you are progressing, may then become a pretty tall order.
When you are feeling comfortable and at ease, you could be in for some real trouble.
Why? Firstly because researchers found strong indications that being too convinced that you are doing fine can lull you into false sense of security. You become less alert and less ‘tuned in’ to changes within your organization or in your context that could be of strategic importance. It leads you to missing out on opportunities or becoming aware too late of threats to your organization. Secondly, feeling at ease and comfortable is a state of mind (or state of feeling) that most humans, TMT members included, really like. And want to keep. For example by not stirring the waters too much, being a bit more lenient towards behavior that maybe isn’t quite right, or agreeing with your team members, even if you might have been more critical, just to keep the pleasant atmosphere. Even thought this can make you feel good in the short term, in the long term this can have very negative effects on the top management team’s responsibility to search for relevant information, the critical discussion of what they find, and having sometimes tough discussions about hard choices that have to be made.
Emotions aren’t inherently good or bad, but you do need to consciously manage them
As these examples show, pleasant emotions can have unpleasant effects, and vice versa. Even when our intuition tells us otherwise. To strike the right balance between ‘hot’ emotionally informed strategy and ‘cold’ rational decision making, top management teams need to be aware of the effects emotions can have, and be able to manage them effectively. Developing this emotional capability can be time consuming, hard to master, and not something we learn at most business schools. Not developing it however can be even more costly, as it may cause top management teams to loose out on opportunities, impact and bottom line results.
So, emotions matter, but we are only starting to understand how and why they matter in top management teams and boards. There is still a lot of unchartered territory to be discovered. At the VU Research Centre for Board and Executive Leadership Development, this is one of the field we are researching. Are you interested to know more about this topic, or would you like to participate in our research, please don’t hesitate to contact me.
This article is based on a review of the current academic literature I conducted. Please find references to this review and to some of the articles this blog is based on below.
Dassen, M. C. (2019). 'Hot'Strategy in TMTs: Emotions in Strategic Decision Making in Top Management Teams, a Review. In Academy of Management Proceedings (Vol. 2019, No. 1, p. 17886). Briarcliff Manor, NY 10510: Academy of Management.
Hodgkinson, G. P., & Healey, M. P. (2011). Psychological foundations of dynamic capabilities: Reflexion and reflection in strategic management. Strategic Management Journal, 32(13), 1500-1516.
Huy, Q. N. (2011). How middle managers' group‐focus emotions and social identities influence strategy implementation. Strategic management journal, 32(13), 1387-1410.
Liu, F., & Maitlis, S. (2014). Emotional dynamics and strategizing processes: A study of strategic conversations in top team meetings. Journal of Management Studies, 51(2), 202-234.