Pop Psychology Book Club, Episode 1: A New Way to Think: Your Guide to Superior Management Effectiveness by Roger L. Martin

Carrie Ott-Holland

Welcome back to Pop Psychology Book Club! Whether you’re having Orville Redenbacher or Pop Secret, you’re in the right place. Just kidding! If you are somehow thinking this column is centered around popcorn (or soda), you are in the wrong column, and probably the wrong publication. (However, if you own a popcorn or soda company that would like to sponsor this column, please reach out to the editor, Adriane M.F. Sanders, for further inquiry.)

Readers, your votes are in. People voted for a very wide range of titles! We had a tie for the top-choice book, with 26% voting for each of the following:

• A New Way to Think: Your Guide to Superior Management Effectiveness by Roger L. Martin
• Toxic Positivity: Keeping It Real in a World Obsessed with Being Happy by Whitney Goodman

I’ll be reviewing both of these books, starting with A New Way to Think in this Q2 issue, followed by Toxic Positivity in Q3. Expect another reader poll later in the year to pick more books!

Ok, what are we doing here? Before we kick off the review, let me reiterate the goal of this column: I am reading popular press psychology and business books in search of quotes, metaphors, models, and ideas that can provide additive value to I-O psychologists. Without further ado, on to the first book!

The book: A New Way to Think: Your Guide to Superior Management Effectiveness by Roger L. Martin. Published in 2022 by Harvard Business Review Press.

The background: Roger Martin is a strategy professor and former dean at the University of Toronto’s Rotman School of Management. He has worked for the past 4 decades as a strategy consultant and has written 12 books, including the best-selling Playing to Win: How Strategy Really Works.

The general idea: Martin suggests that in business, it’s human nature to apply “models”—that is, frameworks, theories, general practices, or ways of thinking. When our models don’t produce the desired outcome, we start to assume we haven’t applied them rigorously enough. This assumption leads to a flawed approach: We decide we need to better prioritize the model, mandate the model, and in general, seek to deepen our commitment to the model. To overcome this fatal flaw, managers need to (a) develop skills to determine what would need to be true for [the thing they’re trying to achieve] to happen and (b) set aside existing market data when true innovation is needed.

As Martin writes: “You can’t chart a course for the future or bring about change merely by analyzing history” (p. 77).

Three Ideas I-O Psychologists Can Use

1. Prioritize your customers to generate long-term organizational value.

Martin argues that our current era’s attempts to appease shareholders result in short-term strategies that detract from shareholder value in the long run. He offers two suggestions for creating shareholder value more sustainably: (a) focus on customer needs and customer trust, and (b) give leaders monetary incentives that vest over long periods and connect to continued organizational success.

To illustrate the latter, he describes the compensation model used for Proctor & Gamble’s former CEO, Alan Lafley. Lafley had his company equity as restricted stock units (RSUs) that began vesting after his retirement and lasted for 10 years. If shareholders believed the company's performance would peak at his retirement, he would hurt his personal compensation. The compensation model gave him the incentive to groom an outstanding successor and focus on the company’s very long-term success.

I-O takeaway: How might we, as I-O psychologists, incentivize long-term thinking in organizations? Now that the employee experience of work is changing rapidly and constantly, it’s easier than ever to undermine the psychological contracts of our customers (i.e., employees). What can we do to create consistency and buffer the frustration of regular disruption?

2. Don’t use old data to forecast radically new paradigms.

According to Martin, when an organization needs to envision a radically different future, past data aren’t always relevant. He suggests we should primarily rely on data when the situation is defined by elements we cannot control (i.e., a small range of possible futures) and should primarily rely on strategy when the situation is defined by elements we can control (i.e., a broad range of possibilities exist.).

Martin illustrates how situations can be mistaken as “beyond control” using a case study from the Lego Brand Group. When Jørgen Vig Knudstorp was the CEO of the Lego Brand Group in 2008, 85% of Lego players were boys. Company management believed that girls must be inherently less interested in Legos, but Knudstrop disagreed. He thought the company hadn’t found the right way to inspire girls to play with construction. By focusing the company strategy on a possible future where girls were part of the target market, Legos launched the successful Lego Friends line in 2012 and saw a 35% rise in profits.

I-O takeaway: I-O psychologists love data. But are we guilty of pushing data in situations when a strategy is needed? How can we help support businesses when the future requires more speculation than a description of what is measurable in the past or present?

3. Generate strategic possibilities using inside-out, outside-in, and far-outside questions.

The book’s fourth chapter outlines a practical approach to developing an organizational strategy. Although the full method is too long for me to cover here, here are three probing questions he recommends for strategy sessions when you’re seeking to articulate possibilities (p. 61):

• Inside-out questions: These questions start with the company’s assets and capabilities and then reason outward: “What does this company do especially well that parts of the market might value and that might produce a superior wedge between buyer value and costs?”
• Outside-in questions: These questions look for openings in the market: “What are the underserved needs, what are the needs that customers find hard to express, and what gaps have competitors left?”
• Far-outside questions: These questions use analogy to think imaginatively: “What would it take to be the Google, the Apple, or the Walmart of this market?”

I-O takeaway: Here are some examples of what these questions could look like in HR contexts:

• Inside-out question: “What do we do especially well with our manager population?”
• Outside-in question: “What manager needs or expectations are we not meeting? What pain-points do they face?”
• Far-outside question: “What would it take to serve as a model for good management across the industry?”

Should I read the whole book?  If you’re keen to improve your understanding of business strategy (did someone say half-day MBA?), this is a worthwhile book to read. The author didn’t stick tightly to the thesis, but it included a wide range of practical and insightful recommendations.  The chapters focused on business strategy were particularly insightful. The chapters covering more traditional I-O topics (e.g. culture change, talent management) will likely feel shallow to an I-O psychologist reader.

That’s all for now! Have you read A New Way to Think, or next quarter’s book, Toxic Positivity?  I’d love to discuss over email: c.ottholland@gmail.com. Until next time!