Memorandum
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- Delaney Sawyer via Fast Company
- Date
- Filed
- Business·5 min to read
- Re
Three common leadership habits keep managers stuck in the past
ReThree common leadership habits keep managers stuck in the past
Research on employee engagement and motivation suggests that many managers fail by treating work as a pure transaction, leaning on incentives, and assuming talent is fixed.
Many managers are underperforming not because they lack good intentions, but because they rely on outdated assumptions about how people work. Research cited in a recent Fast Company analysis suggests that managers account for at least 70 percent of the variance between motivated and unmotivated employees, a finding drawn from Gallup data showing that only 30 percent of American workers are engaged at work. Pew research, meanwhile, finds that most people like their bosses, yet about one in five give their direct managers low ratings.
The analysis argues that most leaders are not trained for the role. They are often promoted because they excelled at a different job or because a position needed filling, and they learn by imitating dramatic portrayals of tough bosses in films and popular culture. The result, the authors contend, is a set of misconceptions about what effective leadership requires. Three habits in particular stand out.
The first is treating the employment relationship as a simple transaction. Many managers view work through an economist's lens: employees perform tasks, and the employer pays for them, with each side acting out of self-interest. The analysis points out that Adam Smith's well-known line about the butcher and the baker was an observation about how markets coordinate strangers, not a prescription for workplace relationships. Smith himself, in The Theory of Moral Sentiments, wrote at length about the importance of empathy. Centuries of evidence, including the prisoner's dilemma thought experiment, suggest that pure self-interest often leaves everyone worse off.
The article cites organizational psychologist David Burkus, who argues that people are prosocial and tend to perform better when they understand and identify with who benefits from their work than when they are offered financial incentives alone. A study by Adam Grant is referenced in which the performance of call-center employees more than doubled after they had regular conversations with people who benefited from their work. Similar results, according to Lisa Earle McLeod and Elizabeth Lotardo writing in Harvard Business Review, have appeared in studies of lifeguards, hospital workers and sales teams.
The second habit is overreliance on incentives rather than norms and rituals. Leaders often assume that the right mix of rewards and penalties will shape behavior, but the analysis says human behavior is more complex than simple triggers allow. It points to the ultimatum game, in which one player proposes how to split a sum and the other can accept or reject the offer. A purely incentive-driven player would accept even a single penny, yet offers below roughly 30 percent are routinely rejected. Variants of the experiment, including the dictator game and the public goods game, show that people often act against their own financial interest to express their sense of fairness.
The authors argue that these responses reflect underlying norms and rituals that vary by culture, and that most incentive programs fail to account for them. Rewards and punishments cannot be separated from the cultural context in which they are applied, so managers who want to motivate people must first understand what drives them.
The third habit is treating talent as innate rather than something that can be developed. The article recalls a 1997 McKinsey report that declared a "war for talent" and argued that recruiting the best people mattered more than capital, strategy or research and development. The report was highly influential, and the analysis suggests its framing still shapes how many leaders think about their teams. The author describes a former employer whose senior leadership meetings repeatedly returned to the need for "better people," with executives wishing they could replace current staff with smarter, more skilled and more ambitious hires.
The underlying message is that leadership is a learnable skill, and that managers who depend on transactional thinking, incentive-based control and fixed views of talent are likely to fall short. Leaders who see their role as building relationships, shaping shared norms and developing people, the analysis suggests, are better positioned to close the engagement gap that the research describes.
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