No matter what major you are studying, you should know something about governance.

by ssfmyrcgn on 2011-05-05 17:16:50

【Butterfly Effect】【Frog Phenomenon】【Crocodile Law】 【Catfish Effect】 【Herd Effect】 【Hedgehog Rule】 【Watch Law】

【Broken Window Theory】【80/20 Rule】【Barrel Theory】 【Matthew Effect】 【Birdcage Logic】 【Responsibility Diffusion Effect】【Parkinson's Law】

【Halo Effect】【Hawthorne Effect】【Learned Helplessness Experiment】【Eyewitness Memory】【Rosenthal Effect】【False Consensus Bias】

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【Butterfly Effect】

Butterfly Effect: In the 1970s, an American meteorologist named Lorenz explained air system theory by saying that a butterfly flapping its wings in the Amazon rainforest might cause a tornado in Texas, USA two weeks later.

The butterfly effect means that a very small change in initial conditions can lead to enormous differences in future states. Some small things can be overlooked, but if some small things are amplified through a system, they can be very important for an organization or a country and cannot be ignored.

Today's enterprises are also affected by the "butterfly effect". Consumers increasingly trust their feelings, so brand consumption, shopping environment, service attitude... these intangible values will become factors in their choices. So as long as we pay attention, we can see that in the company philosophy of some well-managed companies, there are such sentences:

"In your statistics, if only one out of 100 customers is dissatisfied, you can proudly claim that only 1% is不合格, but for that customer, he gets 100% dissatisfaction."

"If you are once unkind to a customer, the company needs 10 times or more effort to make up for it."

"In the eyes of the customer, you represent the company."

Today, the "butterflies" that can change the fate of an enterprise are far more than just the "planned hand." With China Unicom participating in telecommunications competition, private enterprises contracting railway special trains, foreign-funded enterprises in Nanjing participating in bus competition and other news, the monopolistic position of enterprises sitting worry-free is gradually weakening. Open competition makes enterprises have to consider various potential factors affecting development.

Streamlining institutions, officials laid off, canceling welfare housing and other measures make more and more people move away from traditional security, followed by relying on themselves to decide their fate. The result of free combination of organizations and individuals is: whoever can capture the "butterfly" beneficial to life will not be abandoned by society.

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【Frog Phenomenon】

Frog Phenomenon: If you put a frog directly into a pot of hot water, because it is very sensitive to adverse environments, it will quickly jump out of the pot. If you put a frog into a pot of cold water and gradually heat it up, the frog will not immediately jump out of the pot. The final outcome of the gradual increase in water temperature is that the frog is boiled to death because when the water temperature becomes unbearable, it is either too late or unable to jump out of the pot.

The frog phenomenon tells us that some gradual events often raise people's vigilance, while what leads people to death is being in a self-satisfied situation without realizing the gradual deterioration of the actual situation.

One revelation is: the main threat to our organizations and social survival does not come from sudden events, but rather from slow, gradual, and imperceptible processes. People are short-sighted, only seeing part of the picture and unable to see the whole, they can calmly face changes from above, but for quietly occurring large changes, they fail to detect them, ultimately bringing us greater harm!

Another revelation is: Frogs are like ordinary people in our lives. We should look to the future, think about new problems, learn new knowledge diligently, and not live a drunken life of "if today there is wine, get drunk today" and "be a monk for a day, ring the bell for a day." In the end, it will be very sad!

A third revelation is: Today's society is an era of explosive knowledge and rapid progress. Knowledge also needs constant updates, so we should not indulge in the status quo, be content with the status quo, and not strive for progress. Otherwise, we will definitely be eliminated by the times and face the risk of unemployment!

A fourth revelation is: We should not simply only face sudden dangers and ignore those slow and minute dangers because those slow and minute dangers are the most terrifying!

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【Crocodile Law】

Crocodile Law: Its original meaning is that if a crocodile bites your foot, and you try to free your foot with your hand, the crocodile will bite both your foot and your hand. The more you struggle, the more it bites. Therefore, if a crocodile bites your foot, your only option is to sacrifice your foot.

For example, in the stock market, the crocodile law means: when you find that your trade goes against the market direction, you must stop losses immediately without any delay or hoping for luck.

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【Catfish Effect】

In the past, during transportation, the survival rate of sardines was very low. Later, someone discovered that if a catfish was placed among the sardines, the situation would improve, and the survival rate would greatly increase. Why is this?

Originally, after arriving in a strange environment, the catfish would become "temperamental" and swim around everywhere, which undoubtedly stirred the many quiet sardines; and when the sardines found this "alien element," they naturally became tense and swam faster. This solved the problem of oxygen deficiency for the sardines, so the sardines did not die.

When an organization's work reaches a relatively stable state, it often means a decrease in employee enthusiasm. A "harmonious" group may not necessarily be an efficient group. At this time, the "catfish effect" will play a good "medical" role. If an organization always has a "catfish-like" person, it will undoubtedly activate the employee team and improve performance.

The "catfish effect" is one of the effective measures for enterprise leadership to stimulate employee vitality. It manifests in two aspects: one is that enterprises continuously replenish fresh blood, introducing young energetic forces into the workforce and even management levels, giving competitive pressure to those who are stuck in their ways and lazy employees and bureaucrats, thus awakening the survival awareness and competitive spirit of the "sardines." The second is to continuously introduce new technologies, new processes, new equipment, and new management concepts, allowing the enterprise to withstand storms in the market tide, enhancing its survival ability and adaptability.

Regarding the application of the catfish effect, there are currently applications in human resource management and leadership activities, specifically including the establishment of a competitive mechanism, the promotion of strong individuals, changes in leadership style, etc. However, I believe that the analysis and application of the catfish effect go far beyond these. Different perspectives on thinking about problems lead to different methods of identifying and solving problems.

First, if the catfish itself represents the leader.

A leader is an individual or group that influences others to achieve tasks. In a lifeless sardine box, the sardines symbolize a highly homogeneous group. They have similar skill levels, lack innovation and initiative, are overstaffed, and inefficient, making the entire institution bloated. The arrival of a catfish leader (or an internal sardine evolving into a catfish) brings new fire, reorganizes discipline, standardizes systems, reforms processes, reasonably allocates positions and resources, and gradually improves the operation of the organization. Costs are reduced, the bloated institution is simplified, incompetent sardines are eaten or driven away, capable sardines receive positive incentives, presenting a flourishing scene under the leadership of the catfish leader. Under the leadership of the catfish leader, the vitality of the entire organization is mobilized, making the collective strength stronger, laying a solid foundation for occupying and maintaining the market.

From this perspective, a catfish leader should possess the following qualities:

1- Decisive action, swift implementation: Quickly identify the symptoms of organizational stagnation and decisively solve problems swiftly and effectively.

2- Reliable words, strong leadership style: Make scientific decisions and supervise their implementation, timely evaluating the effectiveness of policies.

3- Advocating innovation, results-oriented: Promote innovation, create an atmosphere that encourages innovation, and reflect innovative thinking in business processes, job design, personnel recruitment and allocation, salary design and evaluation, showcasing the benefits of innovation.

4- Achievement-driven, forward-looking vision: Have short, medium, and long-term development plans and goals, able to predict the direction of organizational development and the gap between existing human resources and future needs, effectively identifying future talents and eliminating those who hinder organizational development.

5- Systematic perspective, courageous reform: Observe changes and functions in the organizational system structure inside and outside the system. Treat oneself as part of the organization (relative to the fisherman, the catfish leader is also a sardine, and the fisherman is the leader), and also see oneself as a leader in a small system, able to drive the workforce to open up situations, break conventions, and achieve good results.

For the employee group striving for common goals under the leadership of the leader, if the leader has catfish characteristics, the way to survive is to move and stimulate one's energy, at least keeping pace with the catfish and ensuring the same direction (corporate goal). This way, you won't be caught and eaten by the catfish or squeezed to death by other sardines.

Secondly, if the catfish represents a member of the team.

Then it means something new, strange, and different, including different viewpoints, behaviors, and habits. Because of the differences, wisdom is stimulated. A team needs people with different personalities, skills, and work experiences to join. If all employees are the same, the possibility of the team generating creative ideas and achieving high performance is negligible. In today's emphasis on team building and communication, appropriately attracting some catfish to join the team will bring a lively working atmosphere, innovation, and win-win outcomes. However, the number of catfish should be controlled. If all are catfish, the whole team will exhibit the phenomenon of "everyone is a hero, collectively they are cowards" because every catfish wants to stick to their own views, cooperation and communication do not exist, and the whole team is in chaos. Therefore, some Japanese companies believe in the employment creed of "first-class managers, second-class employees." Since one catfish can stir up a group of fish, there is no need for a second one. The principle of "one mountain cannot accommodate two tigers" also applies here. From this perspective, members of the team who are like catfish should focus on benign communication and influence shaping, and other employees should strengthen collaboration with them based on work.

Thirdly, if the catfish represents invigorating work content.

Initially, in many enterprises, organizational structure and job design still remain major topics for process reform. Unreasonable, monotonous, uninspiring, and boring work content makes people feel like a bucket of crowded sardines, lacking passion, unwilling to think more and improve on their positions, gradually leading to group inertia. If the catfish effect of expanding and enriching work can be applied to job design, the financial contribution to the organization is undeniable. How to place the active and passionate catfish in a stagnant pool of work? This is a tricky subject. Some suggest expanding the scope of work horizontally and vertically, deepening the content of work, letting employees experience rich work activities, feel the achievements of hard work, and let them experience the excitement and desire when facing challenging and invigorating work; others suggest using job rotation to increase employee capabilities, making their catfish in the work swim happier; I advocate using the above methods while paying attention to matching people with job characteristics. Catfish should do catfish things, and sardines should do sardine things. Jobs should contain both catfish-like and sardine-like work content. Most importantly, it is necessary to discover employees' preferences and see which jobs can generate the energy and passion of the catfish. Only after proper matching can the catfish effect truly take effect. Otherwise, even if catfish-like work content is set up, it is found that this work cannot make employees moved or strive, then this catfish becomes a dead fish.

From this perspective, the catfish in work represents enriched work content, invigorating responsibilities and rights, full of challenges work aspirations, fresh experiences in other positions, etc. For leaders and human resource managers, whether to set up catfish work in the workplace and at what level to set up catfish work will be a strategic issue for an organization.

In summary, analyzing from different angles, the content represented by the catfish is different. For a practitioner, the leader may be the catfish, so your efforts are best aligned with the organization's direction, not going backward, otherwise, there is a risk of being eaten. Always full of passion moving upward, maybe one day you also become a catfish, driving a group of sardines to strive upward; your colleagues may also be catfish, so compete with him to see who stirs more energy; your subordinates may also have catfish, so while encouraging subordinates to grow, don't forget to recharge yourself, maintain a strong momentum of development, otherwise, you also have the danger of being eaten by subordinates; your work may also have catfish, so reasonably arrange your work, distinguish priorities, let the catfish work swim happily, and ideally reach the next level of work position to stir things up.

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【Herd Effect】

Herd Effect: Wherever the lead sheep goes, the sheep behind follow.

The herd effect was originally a term in stock investment, mainly referring to the learning and imitation phenomena in the trading process of investors, "learning from each other", blindly imitating others, thereby causing them to trade the same stocks within a certain period.

Herd Effect Theory (The Effect of Sheep Flock)

In front of a flock of sheep, place a stick horizontally. The first sheep jumps over it, and the second and third sheep will also follow. At this point, if the stick is removed, the sheep that come later will still jump as if the previous sheep did, despite the fact that the obstructing stick is no longer there. This is called the "herd effect" or "conformity psychology." It refers to a common phenomenon in management where some corporate market behaviors occur. It refers to the difficulty of investors in making reasonable expectations about future uncertainties due to insufficient and lack of understanding of information. Often, they observe the behavior of people around them to gather information. In the continuous transmission of this information, many people's information will be roughly the same and mutually reinforcing, thus resulting in conformity behavior. The "herd effect" is a non-linear mechanism where personal rational behavior leads to collective irrational behavior.

The herd behavior is a relatively typical phenomenon in the field of behavioral finance, which mainstream financial theories cannot explain. In economics, "herd effect" is often used to describe the conformist and bandwagon psychology of economic individuals. A herd of sheep is a very chaotic organization. They blindly rush left and right together, but once the lead sheep moves, the other sheep will follow without hesitation, completely ignoring the possible presence of wolves or better grass nearby. Therefore, the "herd effect" is a metaphor for the tendency of people to follow the crowd, and conformity easily leads to blind following, which often leads to falling into traps or suffering failure.

The appearance of the herd effect usually occurs in a highly competitive industry, and in this industry, there is a leading player (the lead sheep) that captures most of the attention. Then, the entire herd will continuously mimic the actions of the lead sheep. Wherever the lead sheep goes to "eat grass," the other sheep also go there to "mine gold."

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【Hedgehog Rule】

Hedgehog Rule: Two tired hedgehogs huddle together because of the cold. But because each has spines, they separate a bit, but then they can't stand the cold anymore, so they huddle together again. After much tossing and turning, the two hedgehogs finally find a suitable distance: they can obtain warmth from each other without getting pricked.

The Hedgehog Rule mainly refers to the "psychological distance effect" in interpersonal interactions.

French President Charles de Gaulle was a person skilled at using the hedgehog rule. He had a motto: "Maintain a certain distance!" This deeply influenced his relationship with advisors, strategists, and counselors. During his more than ten years as president, no one in his secretariat, office, and private advisory department could work for more than two years. He always said to newly appointed office directors: "I will use you for two years, just as people cannot make advisory work a career, you cannot make office director a career." This was De Gaulle's rule. This rule stemmed from two reasons: one, in his view, transfer is normal, and fixation is abnormal. This was influenced by military practices, as armies are mobile and never fixed in one place. Second, he didn't want these people to become indispensable to him. This shows that De Gaulle was a leader who relied primarily on his own thoughts and decisions, and he didn't allow anyone close to him to become indispensable. Only through transfers could a certain distance be maintained, and only by maintaining a certain distance could the thoughts and decisions of advisors and counselors remain fresh and vibrant, avoiding the formation of cliques using the president's and government's names for personal gain.

De Gaulle's approach is thought-provoking and admirable. Without a sense of distance, leadership decisions overly depend on secretaries or a few individuals, making it easy for advisors to interfere in politics and further enabling these people to exploit the president's and government's names for personal gain, eventually dragging down the leaders, which is dangerous. Comparatively, maintaining a certain distance is better.

The former president of General Electric, Stone, paid great attention to the hedgehog theory in his work, especially regarding middle and upper-level managers. In terms of workplace and treatment issues, Stone was never stingy with showing care for managers, but in his spare time, he never invited managers to his home nor accepted their invitations.

This practice of maintaining a moderate distance in management enabled General Electric's various businesses to flourish. Maintaining a certain distance from employees neither made you appear aloof nor confused your identity with theirs. This is the optimal state of management. The maintenance of distance relies on certain principles, which apply equally to everyone: it can constrain the leader himself as well as employees. Mastering this principle is the key to successful management.

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【Watch Law】

Watch Law: When a person has one watch, they know what time it is. However, when they have two watches simultaneously, they cannot determine the time. Two watches cannot tell a person a more accurate time; instead, they make the person lose confidence in the accurate time.

The Watch Law provides a very intuitive implication in enterprise management: for the same person or organization, two different methods cannot be applied simultaneously, two different goals cannot be set simultaneously, and even one person cannot be commanded by two people at the same time, otherwise, it will leave the enterprise or individual uncertain.

The Story of Monkeys and Watches

A group of monkeys lived in the forest. Every day, they went out to search for food when the sun rose and returned to rest when the sun set, living an ordinary and happy life.

A tourist passing through the forest left a watch on a rock under a tree, which was picked up by a monkey named "Mengke." The smart "Mengke" quickly figured out the purpose of the watch, thus "Mengke" became the star of the entire monkey troop. Every monkey asked "Mengke" for the exact time, and the entire troop's schedule was planned by "Mengke." "Mengke" gradually established authority and became the king of the monkeys.

As the king of the monkeys, "Mengke" believed that the watch brought him good luck, so he patrolled the forest every day, hoping to find more watches. With effort, "Mengke" owned a second and a third watch.

But "Mengke" encountered a new problem: the time indicated by each watch was not entirely the same, so which one was the correct time? "Mengke" was puzzled. When subordinates came to ask for the time, "Mengke" hesitated and couldn't answer, causing the troop's schedule to become chaotic. After some time, the monkeys revolted, dethroning "Mengke" from the throne, and his collection was claimed by the new king. However, soon the new king faced the same confusion as "Mengke."

This is the famous "Watch Law": having one watch allows you to know the time; owning two or more watches makes it impossible to determine the time. More watches cannot tell people more accurate time; instead, they make the person lose confidence in the accurate time.

The Watch Law gives us a very intuitive inspiration:

For any matter, you cannot set two different goals simultaneously, otherwise, it will leave people unsure what to do; for a person, you cannot choose two different value systems simultaneously, otherwise, their behavior will fall into chaos.

A person cannot be commanded by more than one person simultaneously, otherwise, it will leave the person unsure what to do; for an enterprise, adopting two different management methods simultaneously will prevent the enterprise from developing.

In this regard, the merger of AOL and Time Warner is a typical failed case. AOL is a young internet company with a corporate culture emphasizing flexible operations and rapid decision-making, requiring everything to serve the goal of quickly capturing the market. Time Warner, through long-term development, built a corporate culture emphasizing integrity and innovation.

After the merger of the two companies, the senior management did not properly resolve the conflict between the two value standards, leaving employees completely unclear about the future direction of the company. Ultimately, the century marriage of Time Warner and AOL ended in failure. This fully illustrates that to know the time, one accurate watch is enough.

Choose what you believe is correct

Two watches cannot tell a person a more accurate time; instead,