The Price of Gold: 2.9013

2.9013

No, this is not the U.S. postal zip code for Beverly Hills, California, 90210, it’s the price of gold, 2.9013.

Memorize that number.

2.9013 is statistically significant and scientifically grounded.

2.9013 is the “Losada Line” named for positive psychologist Marcial Losada, PhD, who discerned a critical “positive/negative” ratio and it’s relationship to success in business.

“Based on Losada’s extensive mathematical modeling, 2.9013 is the ratio of positive to negative interactions necessary to make a corporate team successful,” writes Shawn Anchor in his 2010 book, The Happiness Advantage (Crown Business).

Dip blow this ratio, fall below the Losada Line, and you risk (read guarantee) diminished performance–personally, within teams, and across organizations.

2.9013 is a measure of health and more: living and working above the line predicts increased happiness, and increased happiness, says Anchor, yields improved success.  (Success follows happiness, asserts Anchor, in a self-described Copernican reorientation of the common belief that happiness follows success.)

Positive messages from work-group leaders to members must trend above the nearly 3-to-1 ratio if the work group is to have any chance of success.

Many companies and work groups suffer below, and some, far below, 2.9013.

Now, the 2.9013:1 ratio does not mean that one negative communication or interaction is necessary to counter-balance every third positive communication, it simply sets the point below which one dare not fall.

It seems remarkably low to me and, thus, highly attainable.

Feedback–immediate, certain, and positive–is a powerful force in modifying behavior, inducing feelings of happiness and well-being, and affecting success.  Unfortunately, of nearly equal potency is feedback of the opposite sort: immediate, certain, and negative.

Negative feedback gets results.  This is why negativity is so widely, wildly, and recklessly wielded by managers, co-workers, customers, and even partners in a vain attempt to get results.

If we understood the Losada Line and the power of recognition, reward, and positive reinforcement, we would never consciously use negative management methods (which is not to be construed as avoiding necessary and sometimes difficult conversations).

Consider the two well-established behavioral and performance paths shown in Figures 1 and 2, below.

 

Figure 1. Impact of Negative Intervention

 

 

Figure 2. Impact of Positive Intervention

 

The trend lines tell the story, and, frankly, go a long way toward explaining why managers use, continue to use, or intensify negative intervention with work-group members and others.

The answer to the adoption, use, and persistence of management techniques that are bound to fail lies in the short-lived improvement response shown in figure 1.  For many managers, this is good news.  Things get better, even if goal performance is not achieved.  Just look at the trend line (and, please, ignore for now where the trend line ends up).  It goes up after the application of negative intervention, and often goes up quickly.  (“Get this done now or you’re fired!” delivered with enough threat of force usually gets a prompt response.)  This fact *positively* reinforces the manager’s *negative* methods, and such reinforcement–immediate, certain, and positive–is enough to dupe the unaware and unskilled manager.

Why does this negative management style persist, when a predictable performance decline is certain?  Because, at just the moment of a decline in performance, the adroit-but-misguided manager delivers yet another dose of negative stimulus, perhaps with practiced aplomb, which once again gets a predictable, though perhaps diminished,  positive uptick in performance.

This manager is blind and deluded, but without alternatives, negative intervention may be the only management practice that gets results.  Worse yet, such behavior may also receive praise from the boss because, again, things get better.  Any positive reinforcement of negative management techniques–including neglect–reinforces them, and strong, overt reinforcement quickly entrenches the behavior.

Things may get better, but only in the short term.  Now take a look at the end of the trend line where performance has eroded to a point below the original, unacceptable starting point.

Success is now impossible, time is lost, good-will, eroded; trust, broken; money, wasted; staff, lost; and business, if it remains, is in decline.

Compare this scenario to the familiar and desirable S-curve of continuous improvement that ultimately exceeds goal and elicits extra, discretionary behaviors:  How can I grow?  What else do you need?  How can I help?  I have an idea!

Gold!

And the price of gold these days?

2.9013

Cheap.

But when engagement, encouragement, and positive interactions are frequent, focused, and genuine, they are priceless.

Oh, and in case you were wondering, there is an upper boundary to the Losada Zone.

11.6345

See how close you can get.

Today.

Learn.  Do.  Teach.  Lead.

What is your experience with the Losada Line (whether you knew it by that name or not)?

 

–Erik
Follow @erikjul

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6 Responses to The Price of Gold: 2.9013

  1. Eric P. says:

    Really enjoyed this. So true; those positive, genuine interactions do more for motivation than any forceful, misguided crack of the whip ever will.

  2. Padma Rajan says:

    Hi Eric,

    Very interesting and informative! I loved the facts and graphs that shows how the positive and negative feedback affects the performance of an individual.

    Thanks,
    Padma

  3. Mike Meier says:

    Erik, I looked up the Wikipedia article (linked from the upper bound). This is very interesting in that the research shows that excessively positive and excessively negative environments produce the same qualitative result—a rigid and inflexible approach that inhibits creativity. While this seems selbstverständlich, the implications shouldn’t be dismissed. All stress and no stress are both to be avoided (in life as well as in the workplace). What this implies (for me) is the need for presence on the part of the manager—an awareness that will require some level of constant effort to attain and sustain. Clearly, too, the stimuli can’t be applied rigidly to a team or group but must be applied where needed for maximum ROI. Thanks. PS: I would consider an addict the perfect example of someone who is dominated by “affirmation” to the extent that they are powerless to break out of its hold.

    • erikjul says:

      Mike: Thank you for adding this dimension to the discussion, and you are quite right. Awareness, commitment to task, and skill are necessary components of productive coaching. “Mindless” positivism is, in fact, detrimental. What’s the point? At best, it does nothing but take up time that could be devoted to more productive workplace communication (which is not to say that being happy and having fun on the job are at loggerheads with performance). At worst, it reinforces unacceptable performance, as does benign neglect.

      However, attention paid by a work-group leader to a work-group member is powerful: if negative, powerfully negative; if positive, also powerfully so.

      Behaviorally speaking, consequences have three dimensions:

      * Certainty (How likely will I experience the consequence? On a scale from definite to uncertain)
      * Time (When will I experience the consequence? On a scale from immediate to never)
      * Affect (What sort of consequence will I experience? On a scale from positive to negative)

      Psychologically, the most powerful feedback responses are certain-immediate-positive and certain-immediate-negative.

      Because both are effective, both get used. However, as outlined in Figure 1, the effect of negative stimulus is short-lived and ultimately yields diminished performance. With this knowledge, borne out by decades of research in behavioral psychology, one would not consciously use negativity to elicit improved performance.

      This is not to say that the only alternative is some sort of “happy speak.” In fact, positive reinforcement is best delivered in response to a particular performance. This means that work-group member and leader have clear, common, near-term, and “top-of-mind” goals. The more astute leader builds commitment to personal growth, quickly spots and recognizes effort, improvement, or accomplishment, and delivers praise and continued coaching in a joint dedication to continuous improvement.

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