Harvard Business Review

People Problems Masquerading as Business Problems


Posted on Harvard Business Review: January 6, 2011 9:43 AM

In 1993 I launched a company that grew very quickly, from four employees to 400 in the span of eight years. Among other things, we produced very successful long-distance cycling pilgrimages to raise money for AIDS. I happen to be gay, and, as we grew, I looked to my network of contacts to find potential new employees. The nature of my, and eventually my team's, network meant that, in the first few years, probably half of our employees were gay.

1993 was not an easy time to be gay. The AIDS epidemic was decimating the community. If you were gay, you were going to the funerals of 27-year-old kids as often as straight people were going to birthday parties. There was no talk of gay marriage. Few openly gay icons existed. Gay bashing was not politically incorrect. And so to be gay was to live with tremendous grief, shame, self-hatred, and fear. As a result, and in numbers disproportionate to the general population, there was a lot of drug addiction, alcoholism, sex addiction, and depression.

This meant that my company had a lot of employees compromised by drug addiction, alcoholism, sex addiction, and depression. But I didn't realize this. Even though I was dealing with some of the same issues myself, I couldn't see them in others. I had "gay-dar," as they say, but not "addiction-dar." By their very nature, diseases of the psyche hide under the radar. It was only years later that I could fully appreciate the underlying dynamics that were really running my company. It wasn't me. It was a legion of demons.

I was a young entrepreneur. And so I was reading business books — The Corporate Mystic, Built to Last, and so on — trying to make sense of and improve my company's culture and performance, like everyone else. But I was working off of woefully incomplete information.

For example, one day an employee lashed out at me, threatening to quit, for looking over his shoulder at a document that needed to go out looking just right. I was taken aback. I proceeded to analyze my behavior. The business books would advise me to micromanage less, delegate more. Empower the person to make decisions on his own. What the business books didn't tell me was to first make sure the person wasn't high on and addicted to crystal methamphetamine, which he was. A few weeks later that person was in rehab. Important information to have before you judge yourself or anyone else as being too much of a micromanager. I could give you dozens of examples like this.

The problems we get so giddy about laying at the door of things like founder's syndrome, dysfunctional organizational structure, leadership deficiencies, or lack of innovation are often ill-assigned. We look at everything through the lens of management practice. We assume that all problems are business problems and that they all have business solutions, when in fact many of them may be human problems. Including the business problems. Maybe the CEO isn't a very good innovator because he suffers from depression, has undiagnosed obsessive-compulsive disorder, or is having an affair. Maybe the problems between management and the union have nothing to do with poor conflict resolution training and everything to do with the fact that the union foreman is an unrecovered alcoholic.

Consider that:

  • In an average year some 30 million Americans drive drunk

  • 14% of the population suffers from chronic insomnia.

  • 15% to 18% of people have had a sexual partner other than their spouse while married.
  • If you think these problems don't affect business you may be suffering from a psychological disorder yourself.

    Only humans could routinely overlook human beings as an important part of the mix in the discussion about business. It should come as no surprise. These issues a) aren't as academically fascinating to us as corporate ethics and finance, b) are messy, and c) often hit too close to home. It's no wonder they get pushed aside.

    But the attention paid to them is inversely correlated to their impact. The human factor is where the big-league levers of business productivity live. Compare the productivity of an employee before he's been in rehab for crystal meth addiction and after, and any doubt you may have harbored about the matter will soon be obliterated.

    What's the answer? Give as much attention to what may be going on under the surface as to what is taking place on the surface. Develop a sixth sense that helps you distinguish between legitimate business issues and issues that go beyond business. Hone your intuition. Become a Jedi at sensing a person's inner peace and psychological health. Break out of the hypnotic business literature box that instructs and advises in oblivion to the human psyche. Make psychological and spiritual well-being as much a priority in your company as all of your other key operating indicators. If you're a business owner or an entrepreneur with a small start-up or small employee population, you're in a unique position to take that kind of action.

    Unless you're running a business on Mars, or one on earth that employs only Martians, get adult, get smart, get brave, and get human about the one factor that affects all the rest — the human factor.

    Copyright © 2012 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.

    Dan Pallotta is a leading expert on innovation in the nonprofit sector and a pioneering social entrepreneur. He is the founder of Pallotta TeamWorks, which invented the multiday AIDSRides and Breast Cancer 3-Days. He is the author of Uncharitable: How Restraints on Nonprofits Undermine Their Potential.

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