Mediations #31: Increasing Efficiency and Effectiveness with Economics & Psychology - Part II
How Autonomy and Self-Regulation, Psychological Safety, Cognitive and Emotional Load can help
In the last Mediations, I discussed economics, in particular, how better technology, processes and infrastructure increase efficiency and effectiveness. However, economics alone can’t cover all six pillars of socio-technical systems.
I also realized that in the last issue, I made socio-technical systems theory look like an economics theory. It was actually born from psychology.
Psychologists sought to explain why productivity declined following technological improvements. They found that assuming people will adjust to the technological advancements without incentives was a mistake. They looked for motives that drive people to change their behavior. Their founding was groundbreaking back then.
No organization can evolve and survive without understanding and learning what drives people. Researchers covered those motives within the other pillars of socio-technical systems theory: people, goals, and culture—the heart of psychology.
Although all pillars are interconnected and can’t be considered in isolation, I will focus on the people pillar and briefly touch on the goals.
Designing effective incentives and systems requires understanding the needs of the exact people who will do the work. If the needs aren’t addressed, no infrastructure, technology or process can change the system’s productivity.
Over the decades since systems theory, extensive research has been done on what drives people to improve productivity. At the foundation, we find autonomy and self-regulation, psychological safety, and cognitive and emotional load.
Autonomy and Self Regulation (a.k.a. The Drive)
Without understanding why anyone would want to expand themselves upward, no leader can build what Daniel Pink calls, drive—our deep-seated desire to direct our own lives, to extend and expand our abilities, and to make a contribution. Without drive, people always choose the easy way: living in their comfort zones.
Although the underlying theory in psychology is called Self-Determination Theory (developed in the 1970s), I prefer Daniel Pink’s rebranded version, which has three core elements: autonomy, mastery, and purpose.
People don’t need to be managed in a traditional sense anymore, especially in the tech industry. They desire to be autonomous. When people own the decisions in their areas and can choose what and how to build, the rest is watching them create remarkable things without external pressure. Yet, autonomy is often misunderstood. It isn’t complete freedom. It means to have the desire to be self-directed. A good example of autonomy is Google’s 20% time policy: everyone may spend 20% of their time initiating and driving innovative projects as long as it supports Google’s mission.
However, autonomy only works when people have the mastery needed to make the right decisions.
Mastery is also often misunderstood. It isn’t the expertise; it is the urge to get better at something that matters (to the person). Anyone can approach mastery but never fully reach it, hence it keeps them engaged with what they do. The desire to learn how things work deeply and know what to do when faced with a challenge can only be built with experience. Combining autonomy and mastery brings a “can-do” attitude that is driven by pragmatism. The more people approach mastery and can work with autonomy, the more efficient they become.
Although improved efficiency is good, what about effectiveness? How can we align all pragmatic decisions with the organizational goals? The only way to ensure effective decision-making is sharing the same purpose or goal, something larger than individuals, something meaningful beyond quarterly earnings. If someone is convinced of the organization’s values and the rationale for those values, they will eventually make decisions aligned with the organization’s objectives.
When we work with people who have the drive, we observe a constant desire to do better, to push forward, and to increase effectiveness alongside efficiency, not separately.
It’s common that the same people also make many mistakes. We can’t expect anyone to make the right decisions 100%. When they take a faulty step or fail in their mission, does it imply they lack the desire to improve? Why do they create chaos even though they are autonomous? How do we expect them to take ownership of their actions and their consequences? How do we extract learnings from failures?
We can’t answer any of these questions or build a driving organization without establishing psychological safety. Without it, the drive has no room to shine.
Psychological Safety
Probably one of the most popular (yet often neglected) concepts in organizational thinking is psychological safety. It’s also the most fragile foundational element of any organization. While building it takes a mountain of effort, a tiny mistake shatters it.
Anyone can claim that they try to provide a psychologically safe environment, yet they can’t guarantee it. People can only feel safe, and nobody can control others’ feelings.
Most leaders struggle with psychological safety and get it wrong because they think it’s all about giving people space to talk or encouraging them to ask questions in company-wide meetings. They never learn what psychological safety really means.
Harvard Business School professor Amy Edmondson defines it as the shared belief that it’s OK to take risks, express ideas and concerns, speak up with questions, and admit mistakes—and here’s the important part—without fear of negative consequences.
Psychological safety demands showing vulnerability (while admitting mistakes) and facilitating a safe conversation, at all times. It’s not only about giving space to ask questions, but it’s also about welcomingly reacting to questions.
In a safe environment, people talk about the problems and mistakes openly and try to find the best possible solution instead of hiding things that might hurt them. This, in turn, increases the effectiveness: if someone is focused on the wrong things, others should be able to raise their voice even if it doesn’t bring individual benefits.
Although psychological safety enables people to take risks and try new ideas, it is equally important that they can manage information and emotions to operate in a safe environment.
Cognitive and Emotional Load
When the mental effort required to process information or hold it in memory, or when there is constant context switching between tasks or tools, cognitive load increases. Every new tool, notification, or system adds cognitive overhead, even if each seems minor individually.
High cognitive load directly impacts effectiveness in the short term and efficiency in the long term. High cognitive load introduces complexity. The higher the complexity, the lower the confidence in decisions. An incorrect decision can cause the team to work on the wrong things from the get-go. Although they can maintain a high delivery speed, it won’t matter if they work on the wrong thing.
A lot of unwritten documentation, bugs, workarounds built into the system, incidental complexity (or accidental), or entangled business logic cause high cognitive load. If adding a slight change to the system causes many “we need to look at where it needs changing” moments because people can’t keep it in mind, this indicates high complexity.
Meanwhile, emotional load can impact efficiency or effectiveness in the short term. Although acute emotional load can be sustained without a significant long-term impact on effectiveness, it must be resolved quickly. Chronic emotional load demotivates, destroys the drive, and drains people’s energy. When emotions are consistently high, the quality of decisions and output drastically reduces.
One of the main challenges of the “socio” part of socio-technical systems is that technical systems often include dashboards, metrics, and other means to clearly monitor progress day by day. Socio-systems have none.
Measuring Psychology’s Impact
Social systems usually have lagging indicators that are difficult to measure and to observe their impact. Because there is no “safety meter” for psychological safety, leaders struggle to gauge it. However, there are tools leaders can use, including 1:1 conversations, attrition patterns, the quality of conflict in meetings, trust levels between teams, surveys, communication patterns, and more. It’s always better to start with the leanest and most frictionless tools and observe and “measure” the changes.
You want to leverage psychology more, but where do you start?
There is no need to read Nietzsche, Jung or Adler’s academic texts at the beginning. Here are some recommendations:
Start with learning the intersection of both economics and psychology by checking out Daniel Kahneman’s Thinking Fast and Slow and Robert Cialdini’s Influence; popular psychology-driven practical books. Both books provide a clear understanding of how the human brain works in terms of decision-making—a crucial mechanism in systems thinking. Kahneman’s biases will help with understanding how to hire more effectively and manage projects, while Cialdini’s strategies will help with driving change in the organization and convincing people to follow your guidance.
Reducing cognitive load is all about proper team setup and clear domain boundaries. Looking into Team Topologies by Matthew Skelton and Manuel Pais is a great start. Also, reading about the incidental (and accidental) complexity is a good option.
Reducing emotional load is not that simple as it depends on relationships and communication. There is extensive literature on both, but I found Dr. Rosenberg’s book Non-Violent Communication the most helpful and practical.
Systems thinking theory is the overarching theory of socio-technical systems theory. Donella Meadows’ book Thinking in Systems explains systems thinking in depth. Highly recommended.
If you want to combine Systems Thinking, Team Topologies, organizational design, domain-driven approach in practice with Wardley maps, I recommend watching Susanne Kaiser’s talk (I have Susanne’s book waiting on my desk to read soon).
For some people, understanding others comes straightforwardly, but they can’t wrap their heads around organizations easily. For some (like me), it’s the other way around. So, you might be strong in one but not the other. Focusing on the weak skill is always a better option. Even developing a basic understanding gives you a big leap.
Until next time,
Candost