Micro, Macro, and the Minimum Wage

Meme showing man in office with coffee mug looking skeptical saying "Yeah, I'm going to have to go ahead and disagree with you there."Economists disagree. It’s so common that there are jokes about.  For example,

If all of the economists in the world were laid end-to-end they would scarcely reach a conclusion.


Economics is the only field in which two people can get a Nobel Prize for saying the opposite thing.

Why?  I can’t explain all of economists’ disagreements here (I don’t have enough pixels!), but I can explain some of the disagreement over questions of raising the minimum wage.  There are numerous calls for Congress to raise the minimum wage, yet Congress has remained bitterly divided on the issue. Their disagree to a large extend reflects the disagreement among economists. To non-economists, the disagreement seems to either indicate that there really isn’t any science in economics and it’s all opinion, or that some economists must be lying or deliberating obfuscating.  In truth, though, there’s another reason for the apparent disagreement: the difference between micro and macro level economic analyses.

First, let’s establish some historical perspective on the debate. I want to clarify the difference between “normative” and “positive”.  Positive arguments are statements or conclusions about what the predicted effects of a proposal will be without taking a stand on whether those effects are desirable or tolerable. (note that the word “positive” here denotes “factual or likely”, not “good”) Normative arguments are when someone argues whether a proposal should be done. Normative arguments typically are based upon a combination of predicted outcomes and a value judgement as to whether those outcomes are desirable or tolerable compared to the alternative.  For a long time in economics, economists were actually largely in agreement on the positive science, or the predicted effects, of a rise in the minimum wage.  It was generally agreed that raising the minimum wage would give larger incomes to those who continued to work at minimum wage (i.e. low skilled) jobs but that the rise would decrease the numbers of those jobs and thus raise unemployment rates among those seeking low-skilled jobs. Historically the disagreement over minimum wage hikes was over the normative aspects: was the rise in unemployment and loss of jobs worth the increased incomes to others.

The agreement over the predicted positive effects wasn’t always unanimous. There have always been some dissenters. But in the early 1990’s Card and Krueger studied a “natural experiment” by comparing fast food restaurants on two sides of a state line when one state raised the minimum wage and the other didn’t. Their results started a fierce debate that still rages over the predicted effects of rises in minimum wages.  On one side there are now many economists who side with Card & Krueger in saying that raising the minimum wage, even if raised very significantly such as to $15 per hour from less than $8, will not decrease employment and will have a very large increase incomes. On the other side, maintaining the older stance are those such as Don Boudreaux who doggedly argue that any rise in minimum wage must increase unemployment significantly.  Like most topics in economics the practicality of measuring and analyzing the empirical data is somewhat equivocal.  Although there have been numerous studies since Card and Krueger that have buttressed their results, the empirical data along always leaves enough room for some argument.  So what does the theory say?

Don Boudreaux and others of the “increases in minimum wage MUST increase unemployment” camp, would have use believe that theory is unequivocal. The essence of their argument is that low skilled labor is a commodity sold in a market. It has a demand (firms want to buy it) and a supply (low skill workers want to sell it and get paid).  The wage that gets paid is the price of this labor commodity. The most basic supply-and-demand analysis tells us that if the government forces the price up somewhat artificially by setting a price floor (i.e. a minimum wage) below which transactions cannot occur, then there will a smaller quantity of hours of labor demanded. In other words, firms will hire and pay fewer workers. There’s often an appeal to the concept that if the price (cost) of an input or resource goes up, then the firm’s profits will go down and the firm will be less inclined to produce that good or service and therefore will buy less (hire fewer workers).

How can good theory-toting economists dispute this?  Isn’t it supply-and-demand, the most basic micro economic concept as taught in the first few chapters of any principles of econ text?  It’s easy actually. The key is that this supply-and-demand theory as argued against a rise in minimum wage has three major flaws. Two flaws are the result of the theory as applied being too simple (there’s more chapters in the micro text!) and the other  flaw reflects the difference between micro and macro in economics.

The first flaw in the simple supply-and-demand model application to minimum wage type jobs is that there’s really very little evidence that labor markets behave like commodity markets or that they conform to the assumptions necessary to use a supply-and-demand model.  Most jobs, including minimum wage jobs, are more like long-lasting relationships. They aren’t commodity, transaction based like a market for selling widgets or apples or even theatre tickets.  There are dramatic transaction costs involved. Put another way, it’s expensive to hire people (and to fire them and then replace them). Minimum wage jobs aren’t homogenous (they aren’t all the same) the way the theory requires.  Further, the wage paid affects the productivity of the worker, which in turn affects the value of that worker’s output to the firm. When the wage is boosted, workers work harder, stay longer on the job, quit less often, and gradually acquire more productivity and skills. Firms often find that when forced to pay the higher wage, the firm’s total costs, including hiring costs, etc, stays level or even declines.  This is the essence of Arindajit Dube’s studies.

The second flaw is in focusing on the cost of the worker’s wages as if it were the sole consideration in the firm’s decision of how much to produce. The standard theory of the firm and production, which is covered in-depth just a few chapters later in the same economics textbooks after the supply-and-demand model makes it clear:  a firm will produce whatever quantity makes it the most profit. The primary constraints on the output are the demand for the end product, the pricing of the end product, and the core technology used. In other words, if the firm can still sell the output to consumers, it will produce it and the technology (means of production) will require it to hire the necessary labor. A rise in the price of a particular input does not necessarily mean a drop in the quantity produced.

The other two flaws in the arguments against minimum wage increases require shifting to a macro perspective. Micro economics is often described as studying individuals and individual products/markets.  That’s only partially true. Actually micro is a methodology. It’s more properly called “comparative statics using partial equilibrium analysis”.  Micro theories and models explicitly focus on only one particular shifting variable (the wage in this case) and it assumes that all other variables or influences are held constant or unchanged. (Economists call this the ceteris paribus assumption).  In contrast, macro theories are often described as focusing on large aggregate phenomena such gross national product or the inflation rate or the national unemployment rate.  But again, there’s actually a methodological difference. Macro theories require a general systems approach accounting for multiple effects and ripples of many variables that are interrelated.  Let’s look at minimum wage increases as an example of these differences in methodology between macro and micro.

In micro, there’s really only the price (i.e. the wage itself), the quantity of jobs offered, and the quantity of workers available, all of it in the low skill arena.  That’s it. So the micro analysis sees that when the minimum wage is boosted, the firm pays more per worker and each employed worker gets more. End of story.  The only micro question is how it all affects the quantities of jobs.

Macro, however, recognizes that nothing happens in isolation in the economy. There’s a circular flow. Workers are also simultaneously customers. So when the minimum wage goes up, yes, the workers get paid more and firm pays out more money. But what do those workers do with the additional money income? They buy things. Who do they buy them from? Firms that sell and produce products. So the firms not only pay out more money to workers, the firms also get to collect more money by selling more to the increased consumer demand.  But, you say, Acme’s newly enriched minimum wage workers don’t buy that much stuff from Acme. Doesn’t matter. The workers spend it somewhere. And that firm uses the additional money and additional demand to buy more inputs and pay more profits. And those firms and workers then experience income increases and so on and so on as the money circulates throughout the economy. Eventually even Acme sees an increase in sales and revenue collected which in turn helps pay for the wage boosts.  Macro looks at the whole system.

In recent years, many cities and some states have taken it on themselves to raise the minimum wage, often to a so-called “living wage”.  The empirical results have pretty clearly supported the macro analysis. Rises in minimum wages tend to not depress employment and actually tend to stimulate the local economy.  This is the macro analysis.

Sometimes economists just disagree and sometimes they let their ideological and political biases color their professional arguments. Some of that happens in the debates on minimum wage increases.  However, much of apparent disagreement arises from the choice of whether to view the issue through a micro lens or a macro lens.

To read more about the economic analysis of minimum wage increases see these earlier posts:



Speaking on Mythbusting Fears of Social Security Insolvency – Again

Today I’m speaking to the Birmingham NEXT community organization

today.  I’ll be reprising a slightly updated version of my talk on “Mythbusting the Fears of Social Security Insolvency”.  It’s a talk I’ve given to many classes and community groups but I love it and I think it’s critical for people to hear.  So I’ll repeat the main point:  Social Security is NOT going “bankrupt”.  It will be able to pay benefits and young people are NOT being “screwed” by the program.

Today’s slides are here. To download the file, click on the little gear icon. The presentation is Creative Commons licensed BY-SA-NC.

Some other links that viewers might find interesting where I’ve discussed Social Security and how the “trust fund” really works are:

Understanding the Social Security Trust Fund

Why Students and Young People Should Care About Social Security

Out of the Traps: The Paradoxes of Successful Change

Note: This is the second of two three posts that summarize the presentation Sue-Anne Sweeney of Madonna University and I made at the Higher Learning Commission 2016 annual conference in Chicago in April 2016. The first post in this series is The Leadership Traps That Stop Transformative Change in Higher Ed. The slides for the whole presentation are available at the original post Iterating Toward Disruption: The Paradox of Becoming Agile (HLC 2016). The thoughts are our own based upon our research and our years over eight decades of change management experience as both leaders and consultants in both higher ed and many other organizations. They do not necessarily reflect those of our respective institutions.

shutterstock_201808379.jpg-550x0In this Part II, I we explain two of the paradoxes by which we can escape the six leadership traps we identified in Part I. These six leadership traps, while well-intentioned, actually prove self-defeating in our quest to achieve transformative change in higher education.  We labelled those traps as

  • Unquestioned Brilliance
  • Urgency
  • Vision Delusion
  • Technical Solutionism
  • “They just….”
  • Telling, Not Listening

man-solves-world-largest-and-hardest-3d-printed-rubiks-cube-1 (1)Solving the Puzzle With Paradox

These traps are largely of our own doing as leaders. We choose  how to react. The traps are made of our own values and perceptions.  The traps intertwine with each other. We choose to emphasize urgency and discount studied learning which in turn leads us to emphasize Grand Vision to the neglect of detailed context. We choose to make quick analyses and choices which lead to discounting contradictory information via confirmation bias, which in turn leads us to conclude “they just…don’t get it” or, worse, “they just…don’t want to change”.

But the reality is that people do embrace change. In fact, our very institutions of higher education are monuments to just how much people not only embrace life-altering change, they seek it out. Life-altering change is what we’re about. Everyday, students enroll and attend classes, often at great hardship or difficulty for themselves, simply because they want their lives to change. Our research faculty dedicate their lives and work extensive hours in search of information that will change lives and change how we all think. Our teaching faculty dedicate their lives to helping others learn so they can change lives.

Yet as institutions we often seem stuck. Trapped. Change as an institution is difficult and frustrating, often due to the leadership traps we’ve identified. The intertwining of the traps combine with the nature of higher education (if the confidence of unquestioned brilliance is a trap, then higher education is certainly a target-rich environment!) to make change seem intractable. It’s a giant puzzle – a kind of n-dimensional Rubik’s cube. The key to solving the institutional change puzzle lies in Paradox.

paradoxes-quotes-2So let’s revisit what a paradox is. We turn to Merriam-Webster:

something (such as a situation) that is made up of two opposite things and that seems impossible but is actually true or possible

How can a paradox help us? The seeming contradiction embedded in a paradox opens our thinking. The paradox acts as a siren to our reasoning mind.We want to “solve” the paradox, so we begin to question assumptions and terms and we open ourselves to new perspectives. It’s fun especially for intellectuals like us in higher education. Therein lie the solutions to our puzzles – and our puzzle of change leadership. Edward Teller, the famous theoretical physicist observed that

two paradoxes are better than one; they may even suggest a solution.

Well, if two paradoxes are better than one, we go even better. We are going to offer five paradoxes that can help unlock the transformative change puzzle and help us escape the traps. Each paradox takes the form of a simple directive or rule (I actually prefer guideline) that at first glance seems to be internally contradictory.

Paradox #1: To Move Faster, Start Slower

We feel the urgency. We know we need large-scale change and we need it as soon as possible. We want to move fast – the urgency trap. The key to moving fast though is to start slow. Traditionally, especially in the U.S., we stress and reward accomplishment, and tend to place less importance on the planning needed to effectively prepare for the implementation.  I recall many years ago back in the early 1980’s when I first began to learn and absorb Continuous Quality Improvement concepts and the teachings of W. Edwards Deming and William Ouchi. At that time Japanese industry, particularly electronics, precision machinery, and automotive, far exceeded their American counterparts in quality, both real and perceived. I remember an illustration of how the typical American firm at the time approached change. It looked like this. Americans were accomplishment-focused and in a hurry. They were proud of their “bias for action”. Traditionally, especially in the U.S., we stress and reward accomplishment, and tend to place less importance on the planning needed to effectively prepare for the implementation.
HLC2016-Iterating To Disruption-Change Mgt3The contrast was this diagram which illustrated the approach of high-quality, continuous improvement focused organizations. Many Japanese firms led the world in quality in the early (and in most any other metric of success) in the early 1980’s because they spent more time up front planning and studying. It was once they really knew and understood the whole system, as a system, that they could take decisive action. Organizations with successful change management reverse the traditional model and spend more time and energy in planning in order to be able to implement rapidly and efficiently.

HLC2016-Iterating To Disruption-Change Mgt4


It is indeed ironic that in higher education leadership there seems a real fear of “analysis paralysis” and a real desire to quickly move through the plan phase to the doing. We seem to measure leaders by their appearance of doing rather than their understanding. It is ironic because higher education is all about study and learning. Whether it’s research or teaching, that’s why we exist. Yet when it comes to our own affairs we skimp on the learning part. It’s the Unquestioned Brilliance trap in action.

Albert 55So we need to start slow. But how does slow become faster? There are three reasons why starting slow can actually lead to a faster overall implementation of change.

  • First we need to thoroughly understand the phenomenon and how it affects everyone involved with it. Once we know and really understand, we can identify the right actions to take. Study, planning, and learning is vastly cheaper and less disruptive than implementing actions. It’s better to be less efficient at planning & studying and be more efficient at doing. Planning helps set better priorities. Precision helps when defining the destination.
  • Second, a more in-depth planning and study phase enables us to not only identify the change we want to have happen, but also to identify the best method of making that change happen.  There may be many routes to our destination. Planning enables us to consider the most efficient and efficacious.
  • Finally, starting slow allows us to practice and refine our skills, new processes, and new tools. What we do in practice, even when slow, determines how we react when we speed up. Again I turn to a lesson learned from my adventures in auto racing. When I first started racing I attended a race-drivers’ school.  I was so excited. Real race cars. A real race track (sports car road course). I was geeked to prove how fast I could go. But the order of the first day was to lap the track in these 150 mph cars at 40-50 mph. We were scrutinized in incredible detail for the lines and approaches we made to each turn on each lap – when it was so slow. But that practice at slow speed built the habits and reactions that enabled us to go really fast a few days later. What we do slowly, we will  attempt to do fast. So we need to practice the right way first.

Paradox #2: To Achieve Big Change, Rapidly Iterate Small Changes

9099796942_c4a9ce1d2e_bHigher education is in love with the Grand Initiative. That is perhaps why higher education leaders have been so taken by Christiansen’s “disruptive innovation” hype, despite the Christiansen’s own revisions and clarifications or the many criticisms of it. It sounds so good – so attractive to how we think in higher ed. A single “innovation”, a single initiative that conquers all. What greater legacy could a college president or university provost ask for? It seems so plausible too. After all we see what appear to be dramatic change in many industries led by some significant change in some organization, right? So, despite the evidence that the theory really doesn’t work that way and the evidence that it really isn’t applicable to higher education, we embrace the rhetoric. It sounds so exciting. But rhetoric has consequences and may get misled by our own rhetoric. (Confession: I, Jim, have used the term “disruption” in titles of presentations at conferences a few times – mostly as a blatant attempt to use the latest buzzword to attract attendees so I could evangelize what I knew better. Sue is innocent of this charge).

We want BIG change, but we can get there by biting off small little pieces, making small changes, and then rapidly repeating.  Change one aspect of a system quickly, then repeat on other parts. Change one unit and then repeat on the other units.  Learn from experience and practice.

The big bang concept very rarely works. What does work is iteration. he easiest way to achieve dramatic change, so-called “innovative disruption” or transformative change, is to focus on smaller changes and to rapidly iterate or cycle through them. Change, by definition is doing things differently. We need practice. As we practice, the changed behavior becomes  second-nature. It enters procedural memory. Iteration is how some of most successful organizations have accomplished dramatic change. The core of Deming-inspired Continuous Quality Improvement processes is a cycling of small, incremental improvements made an a relentless schedule with the result that a small organization such as Honda or Toyota eventually conquer their world industry.

IHLC2016-Iterating To Disruption-Change Mgt5n a more modern context, the software package WordPress has largely conquered the World Wide Web in less than a decade. Over 25% of all websites now are powered by WordPress. Yet WordPress doesn’t produce new dramatic versions. Instead, the entire open source WordPress community – it’s not even a single company, but rather a community of ‘000’s of volunteers – creates powerful software by adhering to a philosophy of releasing updated versions every 4 months. Sometimes the changes are big and sometimes small. But the key is to relentlessly keep making modest changes. Eventually the changes accumulate like a snowball rolling down hill conquering.  Web browsers work the same way. Remember the old days when there were major updates with dramatic changes at long intervals? Nowadays, Firefox and Chrome get updated regularly at frequent intervals with small changes each time. Gradually the experience changes dramatically, but without the drama of the big bang.

How does iteration work its magic? One way is because small changes also allow people to manage the amount of distress and extra energy involved in doing things differently.  As the changes are iterated, they develop some “change stamina” and skills, such as collaboration across silos and routinely engaging in debrief and lessons learned to improve the process for the next go-round. Practice makes perfect.

1280px-San_Antonio_DerailmentA second way iteration works magic is because it lowers risk. Regardless of whether you measure risk as “the potential damage done by an error” or “the probability of making an error”, risk slows change efforts. A higher perceived risk means people proceed cautiously and slowly. When we have the grand initiative approach, risk is higher. We can’t risk any mistakes. So we use “proven solution” even though it doesn’t really produce the transformative change we want or need, but it’s safe and predictable. The big bang or Grand Initiative approach is like having the organization take the train together. All parts of the organization are going to go through the same journey at the same time and are expected to arrive at the same central station even if their real destination is a few blocks or a mile away from that station. To move the entire organization safely down the same path at the same time requires us to build a railroad to get to our destination. That takes time and investment. We could use somebody else’s railroad, but then we won’t get to our destination, we’ll arrive at theirs. If we rush the track building process, the result can ugly. The whole organization derails and fails.

Transformative change necessarily involves innovation & creativity. And creativity & innovation require the ability to make mistakes and then correct and learn from them. If you’ve got all the eggs in that one basket, you’re not going to run with it. Iteration lowers risk. We can move faster. We can try different approaches or tools. If one doesn’t work we can easily regroup and the damage, if any, is limited. Instead of sending the entire organization down the same track at the same time and same speed (which by the way is too slow for some and too fast for others in our institution), we could use fleets of cars or trucks that communicate. They can follow similar paths and learn from each other. They can deviate slightly to better fit their circumstance. And, if one fails, the others survive and thrive.

The great inventor aBiggest-mistakend innovator Charles Kettering knew that iteration, repeated attempts, was key to innovation and creativity. He knew that to minimize risk we need to learn from each attempt so that the next attempt had a greater chance of success.  He said:

We often say that the biggest job we have is to teach a newly hired employee how to fail intelligently.

Unfortunately “failure” is too often a 4-letter work in higher education. Again it is ironic. Our researchers know that learning from failure in the labs is how science advances, but we don’t apply the concept to our own institutions.

A word on “pilots” is appropriate here. Doing a “pilot” of some initiative is not iterating. Pilot projects can be useful. They can be great laboratories to learn and explore. But too often they are treated as “let’s do a small version of the concept first and when we show some evidence that it works, we’ll turn around and ‘roll it out’ to the whole organization”. Pilots have many issues. One is that the real purpose often isn’t to learn or explore – we’re convinced with unquestioned brilliance that it’s the right or best solution, so what’s to learn? Instead the real purpose is often to simply demonstrate that it will work. We’re trying to demonstrate that our idea is as brilliant as we think. Never mind that we’re likely to fall prey to confirmation bias in our judgement that it works. The pilot cannot be allowed to fail. So additional resources, energy, and attention are given the pilot – resources that cannot be scaled or applied to the larger organization. Further, doing a pilot really is just a slight postponement in the big bang. Iteration doesn’t work that way.

Let’s consider an example that many institutions are pursuing today. In the name of increasing student completion rates, the assumption is that students have too many options and choices in the curriculum. The favoured idea is that if we reduce the choices and provide a clearer pathway to a degree that has no options for getting “off-track”, then students will arrive at the destination (degree) in larger numbers. I don’t want to discuss the relative merits of the concept here – that’s a topic for other future posts. What we want to consider is how an institution goes about changing all of its degree plans of study to conform with the pathway idea. A common approach is to do a pilot first. Pick one or maybe two degree programs and redesign them. Often the pilot programs are either smaller, already more coherent, or just staffed by true believers. The pilot is deemed a success because the degree pathways have been redesigned. Note that success has already been redefined. Success is now actually doing the idea, not achieving the transformative goal the idea is supposed to accomplish. The pilot succeeded because we have proof of a redesigned plan of study, not because we have proof of higher completion rates. With the success of the pilot, the institution’s leadership is eager to “roll out” the innovation to all programs and all degrees. Phase II begins with a massive simultaneous effort to redesign all degree pathways. It takes time. Conflicts arise. Questions and issues not seen in the pilot arise. It seems each program has its own problem fitting the template. That’s not iteration. That’s big bang Grand Initiative.

Iteration approaches the challenge differently. Iteration appears more like a series of “pilots”. It might start with a pilot too, but the purpose of the first pilot is different. It’s to learn and to see what’s involved in doing this. A second pilot can be rapidly dispatched with some modification based on lessons of the first pilot. Then a third and fourth “pilot” might be started in parallel. Rather than doing all programs at the same time, iteration calls for repeatedly taking each program individually but learning the whole way. Early efforts are used to create tools to accelerate and simplify the next program. Rather than emphasizing all programs doing the same thing simultaneously, each program is urged to make it fit to their needs, pass along lessons to the next program, and complete the change rapidly.

That should bring us to the third paradox, but this post is already getting quite long. So in the interest of iteration, we’ll stop here and pick up the story with paradoxes 3-5 in another post soon. I hope to get the next post up this weekend.





The Leadership Traps that Stop Transformative Change in Higher Ed

Note: This is the first of two posts that summarize the presentation Sue-Anne Sweeney and I made at the Higher Learning Commission annual conference 2016 in Chicago in April 2016.  The slides for the whole presentation are available at the original post Iterating Toward Disruption: The Paradox of Becoming Agile (HLC 2016).  The thoughts are our own based upon our research and our years of change management and consulting experience in both higher ed and many other organizations.  They do not necessarily reflect those of our respective institutions. 

4483120The message is clear. Higher education needs to change. We, the leaders of higher education – and although I’m only a teaching Professor, I consider myself one of those leaders – are constantly getting the message. Sometimes it’s delivered from outside by those politicians, venture capitalists, entrepreneurs, philanthropists, and self-appointed thought leaders who say we need to be “disrupted” or “unbundled” or just “fixed”. More often the message is from inside – the realization that student loan debt is sky-rocketing, costs are difficult to control, funding sources are drying up, grades are inflating, and enrollment is declining. While the nature of the needed changes may not always be clear, one thing is clear: We need to change. And not just small changes or small additions. We need large-scale, transformative change. We need to change everything.

Virtually all colleges and universities are in the midst of major change initiatives and have been for many years. Indeed, all the accreditation pathways of the HLC now focus entirely on Continuous Quality Improvement efforts of some kind – in other words accreditation depends on successfully changing.  Yet it often seems we’re running in place. Lots of action. Lots of effort. Not necessarily a lot of successful, positive change to show for it.

Change can be frustating and challenging.

Change can be frustrating and challenging.

For higher ed leaders, trying to trigger transformative change in their institutions is often challenging and frustrating.  Hanging out in the halls at any conference with higher ed leaders one will often hear that repeated refrain that “people don’t like change”, that “they” (whoever “they” are – I suspect it’s most often faculty) are just too resistant.  Caught between a “resistive” organization that seems stuck in place and  the increasing pain and complaints posed by finances, accreditors, regulators, and boards, we leaders often find ourselves in a stressful, discouraging position.

In this presentation, we want to take a closer look at how to lead change in higher education organizations.  We apply to higher ed the lesson learned from a variety of organizations and of the research on change management of the last 20-40 years.  Yes, most of the research and ideas we bring originated in “business”, that part of society that higher ed sometimes views with suspicion. However, the ideas have been applied, demonstrated, and proven in many non-business sectors including government, non-profits, NGO’s, healthcare, volunteer open source software communities, and even education.

We split our comments into two parts. In the first part, which I will summarize in this blog post, we will diagnose the change challenge as lying within ourselves. The reasons our institutions fail to complete the transformative changes we desire lies as much within ourselves as leaders as it does within the organization. Simply put, we get caught in the traps of leadership.

Why? Why Is Transformative Change So Difficult?

Leadership. It sounds so powerful, so romantic. The word conjures images of heroes saving the day with some brilliant, daring, or inspiring action. Or perhaps we imagine generals leading the troops to victory against the odds through their brilliance and strength of character. Yet our very expectations of ourselves as “leaders” set the trap of our own undoing.

Trap #1: Unquestioned Brilliance

uqbrillcoverThis is the biggest leadership trap. This is the phenomenon former Penn State and U. Washington management professor John Austin describes in his book of the same name Unquestioned Brilliance. This is the combination of urgency and expectations that feeds on confirmation bias. We charge off to lead the organization, sometimes with their blind support, fully confident of the brilliance of our solutions and diagnoses.

As academics we are often particularly vulnerable to the unquestioned brilliance trap.  The trap depends on the expectation, both our own and that of our people about us, that we are very smart people – that we know the answers.  Since nobody rises to any level of success or prominence in higher education without having demonstrated that they are indeed very smart persons, it’s a natural for us.  Nobody rises to increasing leadership roles in higher ed, be it in administration or in faculty, by adopting a constant persona of “I don’t know..” through out their career.  Yet this skill that gets us recognized as leaders is often our very own undoing.  We start to believe the press releases in our head.

How does it work?  A typical cycle goes like this. It’s the cognitive path of least resistance.Trap meme 964556

  1. We feel an urgent need for solution.
    — People look to us for an answer partly because they think that’s our job, partly because they don’t know, and we’re eager to show why we’re the leader by providing the answer.
  2. We assert a solution based our limited experience or based on other authorities. Often these other authorities might be the funders/foundations or speakers at some conference we attended.
    —  People they expect us to know and we’re eager to prove why we’re the smart leader by giving them a solution. “here this one looks good!”
  3. Seek supporting evidence and confirmation bias sets in.  
    — We become more convinced of the rightness and brilliance of our proposals/ideas/initiatives because we collect confirming evidence. But we discount and ignore critical contrary information and data that might cause us to re-think or adjust our approach. In the interest of sounding positive and providing what we believe to be “leadership and direction” the meetings and efforts of the organization become exclusively focused on implementing this solution.  
  4. We see the organization as split into supporters and resisters.
    — Some people are eagerly following the leader’s direction and pushing for action in implementing this solution. But others, those who question the solution and want to look closer at the “problem” are marginalized and discounted as anti-change resisters. We don’t hear them.  We think we know what they’re feeling, but we’re wrong.
  5. Things stall or go awry.
    — Our solution peg turns out to have square corners and our institution’s hole has round corners. We either jam the solution in and damage either the solution or the organization, or we eventually abandon the attempt. That brings a new perception of a crisis begging for solution.
    Rinse and Repeat. 

Trap #2: Urgency

running-man-1149787_960_720We feel the need so powerfully for the change, that we feel we have to hurry. We, college leaders, are being bombarded with messages of how “unsustainable” our current models are, of how technology is going to “disrupt” our “industry”. We see enrollment declining. We see the debts being piled up by students. We see students taking entirely too long to complete. We feel either the institution or we personally are running out of time. We feel the pain.  We feel the tentativeness of our current situation. It feels as if we are running on cracked glass floor. We don’t when or how soon it might all collapse. So we run.

if-you-dont-have-time-to-do-it-right-when-will-you-have-the-time-to-do-it-over5We are again affected by our own expectations of what it means to be “leader”. This is particularly true in our Western and uniquely American culture. We believe leaders do things. Nobody ever imagines a leader in our culture as somebody who in response to a crisis says “hmm. Interesting. Let me think about this awhile and get back to you.”  No, leaders take action and they do it in a hurry. And being good leaders we want to take dramatic action. In particular we want to be seen as taking action. Being able to report that all our plans of study have been revised takes precedence over making sure that the revisions are really well-thought out. After awhile, organizations tune out. They come to see such crisis du jour action-oriented leadership for what it often is: theater.

Fundamentals have to be in place.   Doing it wrong, using ineffective process isn’t really any “faster”.  It’s just the appearance of action but without effective or positive change. It’s more theater.

In sports, where one might expect competitive dynamics to foster urgency one sees the opposite amongst champions. The winningest college basketball coach John Wooden (and countless Continuous Quality Improvement coaches ) asked “if you don’t have time to do it right, when will you have time to do it over?” In my favorite sport, auto racing, two-time Formula One World Champion Graham Hill was quoted as saying the objective was to win the race at the slowest possible speed. His observation aligns with one of oldest aphorisms in racing. There are old drivers and bold drivers, but no old, bold drivers. When urgency is allowed to override following proper process and practice, the outcome usually not pretty.

Trap #3: Vision Delusion


The seriousness of the need for change and the urgency of that change causes us to describe, define, and envision larger, more dramatic change. We don’t want to tweak things and polish the edges. We want TRANSFORMATIVE change. It also appeals to our egos to be the author of a grand solution. Again, our expectations of what it is to be the “leader” come to play. We expect leaders to provide grand, inspiring vision.

Don’t get us wrong. Vision is a good thing – but only in context and when grounded. A grand vision is often necessary. If the degree of change needed is great, then the vision also needs to offer corresponding grandness. Nobody wants to plunge forward tearing up things without an idea of what or how to replace them with something better. The problem is when we focus only on the grand vision.  A grand vision of how the major parts fit together is useful. It’s necessary. The big picture is needed. It provides clarity of purpose. It also helps motivate. But the 30,000 foot level “future picture” looks like this:

HLC2016-Iterating To Disruption-Change Mgt-final

The reality on the ground is different and more complex. The big picture abstracts and glosses over critical inter-relationships, parts, processes, and details.  The reality of the organization is more like this:

HLC2016-Iterating To Disruption-Change Mgt-final2

The larger the change, the bigger the transformation, the more foreign and overwhelming it is to the organization. There are more inter-related parts or details that aren’t understood. And uncertainty can lead to fear. And fear can lead to paralysis or even resistance. It’s likely not that the people in your institution are resisting your grand vision so much as it’s more likely the uncertainty and the incompleteness of your grand vision engenders fear and concern.

Trap #4: Technical Solutionism

best-practices-bart-simpsonIn order to flesh out the large-scale vision of how the organization will be different, we feel we need to “engineer” the details, the parts.  Working out project workplans becomes a technical exercise in designing the new. We feel like we have more control. We are designing the future. The problem of change seems to be one of implementing some kind of solution – a “technical solution”.  Technical solutions are not necessarily IT data systems, although they might be. If we think the solution(s) to our problems lie primarily in adopting/implementing a new data system or tool, in creating a new policy, or in making some structural change to the organization, we are likely pursuing a technical solution. Technical solutions are the things that we  already know how to do. We apply those solutions when there is disequilibrium  (their term) in the system. For those of us in education we would call those solutions best practice.

In higher ed technical solutions abound. Attend any conference and walk the show floor. An army of vendors will gladly tell you how this data system will transform your institution into a paragon of assessment or how student retention and completion is only a different data system away. All technical solutions. Now move away from the show floor and attend the sessions, especially the keynotes. Consultants and other higher ed leaders explain exactly how what they are doing or want you to do is the way. It’s a best practice. Best practices. It sounds like the solution. Who wouldn’t want to adopt the best practice? I mean we don’t seriously want to adopt worst practices do we?  Of course not. But the language deceives. No practice stands alone. Context and the institution matter. No two institutional contexts or exigencies are the same. But it’s a trap. We think all we have to do is follow and copy what they did. Adopt the best practice. But what worked for them might not (actually likely won’t) work the same way for our institution. We aren’t them. The best practice ignores all those detailed interrelationships we talked about in the vision delusion trap. We could try to learn from the best practices – identify what nugget of new insight is there and adapt it to our institution and our students. But typically we don’t. The best practice itself becomes the magic bullet – a technical solution. We ignore the evidence that perhaps what worked at one place might be the same situation as ours (that confirmation bias in unquestioned brilliance again). We’re in a hurry (urgency) and this solution seems to provide the promise (the grand vision).

14166E_500 Ronald Heifitz (and co-author Linksey) have written and researched this problem extensively in the past 20 years. Their work has led to the concept of adaptive leadership. It’s based on understanding the difference between challenges or needed changes that can be solved with a technical solution versus the adaptive challenges that face most organizations today. Heifitz and Linskey ask:

  • Is this a problem that an expert can fix? Or is this a problem that requires people …to change their values, behavior, or attitudes? If an expert can fix it, then it’s a technical problem. If it requires people to change, then it’s an adaptive challenge.
  • Do people have to learn new ways of doing business? If so, then it’s an adaptive challenge.

Why does it matter?  Because how we go about successfully inducing change – the role of the leader – is different in each context.

technicalvsadaptive-clergy-conference-2012-presentation-by-archbishop-colin-johnson-10-728“Indeed, the single most common source of leadership failure … is that people, especially those in positions of authority, treat adaptive challenges like technical problems.” – Ronald Heifitz

The problems we face in higher education, whether you think of retention, completion, finances, new technology, or whatever are generally adaptive challenges. We have to jointly, collaboratively develop solutions with all stakeholders in a way that we produce adaptive learning.  No matter how much Silicon Valley or the philanthropic foundations want it, there is no magic bullet technical solutions or policies that will get us out of our challenges.

Trap #5: “They just…”

theyjustPushing a technical solution on an institution facing an adaptive challenge is a recipe for what appears to us to be resistance. The people in the organization itself, the staff, the faculty, and perhaps even students don’t seem to perceive the brilliance of our technical solution and grand vision. They just …. don’t get it. They just … don’t want to change.  They just…are adversarial. They just…don’t care.

That’s what we tell ourselves when the initiatives bog down. We find ourselves frustrated and saying “they just…..” They just don’t want to cooperate. They just don’t get it. They just don’t want change. That’s an indication that we don’t understand the root cause of the change problem. It’s easier to fall back on a stereotype than to do the hard investigative work of root cause analysis. It’s true that change takes an extra effort. The trick is finding out why people aren’t willing or able to invest the extra energy to make the change happen.

45c8d6428387dcb206a391d752abd9eaPeople fear what they don’t understand. Remember all those detailed relationships we glossed over with the Grand Vision? Those details which seem like “stuff down in the weeds” to those in the corner C-suite or Dean’s office are reality for the people of the organization.  It’s necessary to get into the weeds. If you don’t you’ll never know where the poisonous snakes are or whether you’re actually standing in a swamp. But your people know. Fear, and distress.  And additional effort.  It takes a lot of energy to adopt new changes and processes – at least until the new becomes old habit.  Example: when they ask you to change your password, don’t you keep re-typing the old one for a while?

To us, the leaders with the urgent Grand Vision and our beautiful technical solution (it must beautiful, it looks so good in the brochure!), we think we’re the Agents of Change. We too easily discount what our people say (after all we’re unquestionably brilliant!) and assume they are simply recalcitrant or slow. Either way we push harder. Big mistake. We can easily appear to be Angel of Death.

agent-of-changeTo overcome the apparent resistance, we need to first back off our own assumption that it’s resistance. We need to understand why people aren’t doing what we want right away. To do that, we need to respect them, listen, and ask questions. We need to borrow a practice from Continuous Quality Improvement: Ask 5 Why’s.  Why are they saying or doing that? And why again and again. We need to keep investigating what is happening, asking “why”, until we understand the underlying root cause of the reluctance to get on board.



Trap #6: Telling, Not Listening

Leader_thumbWe all acknowledge that communications is critical to successful change. But what do we really mean or do?  As leaders we too often feel that people look to us for direction.  We feel like we have to “have something to say, have a strategy, have an answer, have a solution”. So communication too often becomes one of the last tasks in the change initiative. Indeed, how can we do the communication until we know what we need to tell them?  Communication with stakeholders then comes as part of implementation which is seen as a separate activity that follows planning and design.

It’s communications, right? We’re supposed to be the knowledgeable leader with the answers, right? So we wait till late in the project to begin to “communicate” TO the faculty, TO the staff, TO the students, what the changes are. But sending a message out isn’t listening. We miss the listening half of communication.  By not listening, we reinforce our confirmation bias. By not listening, we miss the details and critical relationships that could put the Grand Vision in context. By not listening, we miss the opportunity to engage in the adaptive leadership needed to change habits, beliefs, processes, and norms. 

news_09_11_2015We want to reassure people. We want to have the whole solution in a nice package. And that’s part of the reason why we wait so late to communicate the change. It also helps, sometimes, that it can feed our own need, and theirs, for us to appear like the leader who’s got the answer, who’s in charge. The leader who is unquestionably brilliant.

But it’s all a trap. It’s theater.  It won’t really produce the transformative change we wanted and needed.  Now if you’re suitably discouraged or depressed, take heart.  In the next post we propose some ways out of the traps. They may seem paradoxical at first, but they work.


Some Links on Economics of Immigration

These are some links and key points on the economics of immigration for a guest talk I’m giving to a class tomorrow.

Iterating Toward Disruption: The Paradox of Becoming Agile (HLC 2016)

Our presentation to the 2016 Higher Learning Commission Annual Conference on change management in higher ed, Iterating Toward Disruption: The Paradox of Becoming Agile.

This is the slide deck.  Come back in approximately a week for a long-form written version of our presentation to accompany these slides.

If the embedded viewer doesn’t display, use this link to open the Google SLides in a new tab/window.

For a long form explanation of the slides, I’ve created some blog posts to explain.

The Leadership Traps that Stop Transformative Change in Higher Ed

Out of the Traps: The Paradoxes of Successful Change

more coming soon.



OpenLCC + WP: A Revolution in Higher Ed (Presentation to WP Meetup Detroit)

Presentation to Metro Detroit WordPress Meetup, March 21, 2016. June 14, 2016

Direct link to Google Slides presentation here.


Single Assignment Sites: Writing in Public

Social Reading, Commenting, and Annotation

Student Projects as Living Community Resources

OER (Open Educational Resources & Textbooks)

Student Blogs & Course Hubs via Syndication

Digital Identity, Life-Long Portfolios, and Community for Faculty & Students