The “Nocebo” Effect and Strategy Execution

All business proceeds on beliefs, or judgements of probabilities, and not on certainties.   ~Charles W. Eliot

By now nearly everyone has heard of the “placebo” effect, particularly as it pertains to medicine.  Just a reminder: The Placebo Effect is an inert substance (sugar pill) or otherwise medically ineffectual treatment for a disease or other medical condition for which the patient has a perceived or actual improvement in their medical condition.  People suffering from chronic migraine headaches or lower back pains for years have been “cured” after being given a “new experimental and promising drug” which actually turned out to be simple sugar pills.

“Expectation is a powerful thing,” says Robert DeLap, M.D., head of one of the Food and Drug Administration’s Offices of Drug Evaluation. “The more you believe you’re going to benefit from a treatment, the more likely it is that you will experience a benefit.”

So I was rather surprised the other day to read about the Nocebo Effect.  In medicine, a Nocebo reaction or response refers to harmful, unpleasant, or undesirable effects a patient experiences after receiving an inert dummy drug or placebo. Nocebo responses are not chemically generated and are due only to the subject’s pessimistic belief and expectation that the inert drug will produce negative consequences.  An extreme example of nocebo effect would be someone who dies of fright after being bitten by a non-venomous snake, thinking it was poisonous.

We humans are pretty complex!

Well, learning about the Nocebo Effect got me quickly thinking about the power of negative belief in relation to strategy execution.  I have seen numerous companies with pretty good strategies and experienced leadership teams and employees fail miserably at strategy execution.  Much of the fault of poor execution lies in a lack of robust and disciplined business processes, especially in relation to strategy governance, accountability and cross-functional teamwork.

But one of the things I have also been noticing in my work on strategy execution, is the power of a cynical and pessimistic culture and how those pervasive habits of negativity, lack of trust, and low expectations, can bring even the best business processes to a grinding halt. Over time some organisations can develop extremely strong pessimistic and cynical cultures.  And as a result, nothing will ever really improve, because they hold such strong negative beliefs about new leaders, new ideas, new processes.  Here is the Nocebo Effect in business! Excellent training, excellent business tool and processes not taking hold due to strong beliefs that “nothing is going to change”!

This is one of the key reasons that over the years we have addressed strategy execution and turnaround assignments by focusing on “culture reshaping” as the first order of business.  Companies don’t change until people change and since organisations tend to be “shadows of their leaders”, the shift in culture and beliefs has to start at the top. As my mentor used to say, either change the leaders or change the leaders!

“For those who believe, no proof is necessary. For those who don’t believe, no proof is possible.”  ~Stuart Chase

 Tight Lines . . .

John R Childress

john@johnrchildress.com

About johnrchildress

John Childress is a pioneer in the field of strategy execution, culture change, executive leadership and organization effectiveness, author of several books and numerous articles on leadership, an effective public speaker and workshop facilitator for Boards and senior executive teams. Between 1974 and 1978 John was Vice President for Education and a senior workshop leader with PSI World, Inc. a public educational organization. In 1978 John co-founded The Senn-Delaney Leadership Consulting Group, the first international consulting firm to focus exclusively on culture change, leadership development and senior team alignment. Between 1978 and 2000 he served as its President and CEO and guided the international expansion of the company. His work with senior leadership teams has included companies in crisis (GPU Nuclear – owner of the Three Mile Island Nuclear Plants following the accident), deregulated industries (natural gas pipelines, telecommunications and the breakup of The Bell Telephone Companies), mergers and acquisitions and classic business turnaround scenarios with global organizations from the Fortune 500 and FTSE 250 ranks. He has designed and conducted consulting engagements in the US, UK, Europe, Middle East, Africa, China and Asia. Currently John is an independent advisor to CEO’s, Boards, management teams and organisations on strategy execution, corporate culture, leadership team effectiveness, business performance and executive development. John was born in the Cascade Mountains of Oregon and eventually moved to Carmel Highlands, California during most of his business career. John is a Phi Beta Kappa scholar with a BA degree (Magna cum Laude) from the University of California, a Masters Degree from Harvard University and was a PhD candidate at the University of Hawaii before deciding on a career as a business entrepreneur in the mid-70s. In 1968-69 he attended the American University of Beirut and it was there that his interest in cultures, leadership and group dynamics began to take shape. John Childress currently resides in London and the south of France with his family and is an avid flyfisherman, with recent trips to Alaska, the Amazon River, Tierra del Fuego, and Kamchatka in the far east of Russia. He is a trustee for Young Virtuosi, a foundation to support talented young musicians. You can reach John at john@johnrchildress.com or john.childress@theprincipiagroup.com
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