How Fortune 500 Companies Use Psychology to Increase Success

Fortune 500 PsychologyOnce a year Forbes magazine publishes a list of 500 public and private companies that have successfully ranked in an extensive revenue-based research study. While it might appear to the disinterested or casual observer that the revenue ratings are merely talking points for the corporate-minded; the list is in fact, one of the tools used to assess the nation's economic health and predicted outlook. For example, the 61st publication of the list (the latest as of 2015) reveals how Fortune 500 companies account for 12.5 trillion in revenues; almost 100 billion in profits; an aggregated market value of 17 trillion and a yield of 26.8 million jobs. While membership in the Fortune 500 club is prestigious as well as something to talk about; what it represents is, in reality, serious business.

This is where psychology comes into stark focus.

Without the infusion and intervention of highly trained psychologists into the lifeblood of Fortune 500 companies, the above numbers would not exist. Historically and economically speaking, the psychologists responsible for inspiring, developing and maintaining corporate leadership and healthy work environments have been the silent strength reinforcing the backbone of the world's economy for decades. The field itself is vast, highly diverse, and in a state of perpetual progress; making it one of the most dynamic of the psychology career fields.

In this article we will take a brief look at the different roles and specialties in which psychologists are integrated into corporate success as well as share an interview CIP had with world renowned expert Dr. Randall P. White, who is both an international scholar and practitioner.

How Do Psychologists Help Fortune 500 Companies Succeed?

According to Dr. Paul M. Muchinsky (1947-2015); author of "Psychology Applied to Work", there are 6 general ways which psychologists help companies succeed:

  1. Selection and Placement
  2. Training and Development
  3. Performance Appraisal
  4. Organization Development
  5. Quality of Work Life
  6. Ergonomics

The following descriptions of these categories are basic at best. In reality, each specialty is a world unto itself, highly diversified and supplemented by other specialties.

Selection and Placement

Psychologists who utilize their talents in this specialty area design and develop processes and techniques that assess employees in terms of strengths, weaknesses, skills and interests. Applying scientific psychological methodologies, the psychologist can then create effective systems for hiring, placing, transferring and promoting workers within the company.

These psychologists must have the dual capability to determine both the needs of a company in terms of human resources; as well as comprehensively take into consideration the needs and natures of individuals found in that particular industry's available workforce.

Training and Development

Psychologists working in training and development are experts at identifying the skills and talents of employees and subsequently creating ways to enhance them; thus transmogrifying the human asset component of an organization. This process effectuates invaluable improvement in organizations: its workforce improves both internally (by boosting self-esteem and morale) and externally (by increasing the quality and possibly quantity of output).

These psychologists are the key to change at the managerial level as well. Armed with scientific data and objective insights, they look at the big picture and assess how groups of employees and work processes might benefit from maximizing interactive roles and systems in which managers are integrated in revamped fashion both personally and productively.

Performance Appraisal

As the title suggests, psychologists involved in performance appraisal within organizations develop ways of assessing exactly "what is" maximum or good performance and what is not. The company as a whole is analyzed as to its role as a hindrance to or support system for workers individually, in groups, divisions, sections, and the like. They also look at the dynamics of the groups or units and interpret scientifically whether their performance is being maximized; and if not, what can be done to improve both the quality and quantity of job performance.

Within "performance appraisal psychology" comes a myriad of factors that can and do influence the performance of the workforce. Psychologists in this field must be able to look not just at employee and output components, but at all elements present in the industry of the particular company's work world.

Organization Development

Psychologists involved in organization development look at how a company is structured; if the structure serves the business in the best way possible and how the existing business construct affects all levels of employees as well as the end users of products and/or services. This specialty is sensitive to a plethora of factors which affect human behavior and how that behavior is defined in the workplace. Organization development can draw in other areas of psychology, such as consulting psychologists; who might for example, work with a company's top level leadership.

Quality of Work Life

Psychologists practicing in this area operate from this premise: the healthier and happier people are at their jobs, the better their work product can and will be from both a production and quality standpoint. Quality of worklife applications can include issues of great diversity; from safety and physical considerations to emotional and relational components within an organization.

Ergonomics

Dr. Muchinsky probably describes this area best; he says,

"Ergonomics is a multidisciplinary field. It is concerned with designing tools, equipment, and machines that are compatible with human skills. Psychologists who work in this field draw upon knowledge derived from physiology, industrial medicine, and perception to design work systems that humans can operate effectively."

Hearing it From an Expert

Dr. Randall P. White

Dr. Randall P. White

Most psychologists who work within the big picture of corporate structure did not set out to pursue the areas in which they are now experts. This might be due in part to the fluidity of the field: it changes as quickly as business organizations change. For example, technology expands at a rapid pace, which changes production systems and leadership structures. With the Internet connecting businesses throughout the world, understanding how to integrate and negotiate cultural challenges are all questions awaiting the scientific and experiential solutions of learned psychologists in the field. Recently, CIP had the privilege of interviewing Dr. Randall P. White; a psychologist internationally revered for being on the cutting edge of the inner workings of the business elite.

Dr. White has a Doctorate in Social Psychology from Cornell University and has studied at Georgetown University and Virginia Polytechnic Institute. Some of his major accomplishments include:

Our Interview With Dr. White

CIP: Dr. White, you have had such an extensive career as an ongoing leader in the APA, co-author of a groundbreaking best-selling book, business founder and renowned professor. Currently you are an internationally recognized expert in developing excellence in leadership at some of the world's largest corporations. How did you plan your career goals?

RW: I never planned to do what I'm doing! I fell into this! I started out to be a social psychologist; I have a Ph.D.; then I thought I'd be a university professor, and I was for a while. I also went to a think tank and studied leadership at the Center for Creative Leadership. After that I got to be a co-author on a book which became somewhat famous.

CIP: You are a founder of a firm which works with executives; and you are someone who transmits knowledge or wisdom, if you will, as an educator. What is the focus of your work and research?

RW: Basically, "Who makes it as a leader in large organizations?" I continue to research, learn and teach this. I teach at the Fuqua School of Business, Duke University. I also work with executives and students at the Johnson Graduate School of Management, Cornell University. I am the co-head Academic Coordinator of Leadership courses in HEC Executive MBA, Paris. I travel to   Shanghai, Beijing, Doha, London, Copenhagen. I spend a lot of time in the air!

CIP: So you are both a scholar and practitioner?

RW: I end up on a very applied side of psychology where I take psychological principles and apply them to the study of leaders and leaderships. Who makes it as a leader? What are their psychological attributes? What do effective leaders look like? Then when I'm not teaching I actually am what would be referred to as a "clinical professor" in the medical world. So I teach but then I also apply what I teach in real life so I coach; work with senior teams. I take what I teach (which continues to intrigue me; the research that I do and the papers that I write) and apply it to life so I am a practitioner as well.

CIP: It must be very interesting coaching executives and teaching around the world.

RW: I'm still learning a lot. I learn a lot every single day. How do you teach leadership to a woman who is probably brighter than I'll ever be and is completely covered; all I can see are her eyes? And then have her sit with me on the last day of class (this happened two or three years ago) and have her tell me how much the class meant to her? I kept wondering if we had even made a difference.

CIP: Thank you for sharing that story. So you are helping those who vary drastically from the stereotype to achieve success in corporations?

RW: Yes. We try and figure out how to get people other than "white males" to be in better positions and more fairly represented in organizations--at the top of these organizations. It's about, "How do we get people ready to lead who do not look like the "traditional" leader (the white male)."

There is a lot of room for people who understand the psychology of diversity, gender dissent. How do we help people with emotional intelligence? Can learning agility be taught? Can leadership be taught? What are the best ways to teach these things and what about cultural differences? When there are differences (which is good) how do you make the most of those differences? Not "How do we take them over?" We ask, "How do we leverage difference?"

Years ago schoolteachers used to have a logo on a bumper sticker that said "I touch the future-I teach." I get to touch the future because yes, I teach and I teach a lot of different people all over the world; and most of the time they teach me more than I could ever teach them.

CIP: What is it like to work with companies that change the world?

Well, as a "white male" I have a very privileged perch. But not everyone I teach with; not everyone in our firm is like me. We all have different backgrounds. Those I work with at companies are not all psychologists; some have other disciplines, and they work closely with people like me--"leadership people." We might have an economist working with a social psychologist; or a political scientist or someone trained in straight business school stuff. Some have had real leadership positions in very large organizations; the CEO of a company like Michelin, or other big huge global company. We work together and we see the world differently.

CIP: What is that process like?

RW: We teach people to hold up a mirror, gaze into the mirror and then ask "Do you like what you see?" "Could you better leverage what you see?" "Could you better leverage your skills?" You see, I think training in the psychological sciences helps people appreciate the complexity of human behavior; I am a behaviorist.

I also think there's a dignity that every human being brings; there's a story that every human being has. I think as you go through your first studies in psychology you gain an appreciation for the fact that every human being does have a story and every story is important. People are interesting. Our role, in applying psychological principles to various situations helps people. In my particular way of doing things, if they want to "lead;" if they want learn about "leadership" then they become better at what leadership means for them; what their characteristics and capabilities are as leaders. That is my role. That is what I do.

CIP: If you were to walk into a big corporation to work with a CEO, what kinds of things would you be discussing with them?

RW: That's a really good question because it depends. Sometimes I might be with the CEO because she or he wants to contract with me to do a program for her senior team. She might want to know what it would be like to work with 7-10 people around the table and how we are going to do that.

Sometimes I might be there because that CEO is really, really interested in growth and development for herself; she knows that I will keep a confidence. Thru a fairly elaborate process, I can go out and collect a lot of data about her from people in the organization who have known her, and I can give her some feedback. We can design a process (she'll want to discuss what that process will look like) and how I can help her to look at that feedback. Then from that feedback we are going to develop a plan for her so she can be the best CEO she can be.

It is also possible that I am there for her to discuss with me someone she is getting ready to groom to become a much more senior level person in the organization. There's one of two situations; they are doing just fine and she wants them to make a really good transition into a more senior, stressful job; or, they are good and have a lot of promise, but they are struggling and she wants to find a way to get them some feedback about their struggles. Maybe they are trying to do too much by themselves; maybe they are trying too hard and the CEO would like this person to have a confidant (a coach) who can help them take a look at some of the ways they are not doing so well.

CIP: How do you quantify growth?

RW: Boy, what a good question. It's very rudimentary at this point. But I'm going to tell you, the next generation is going to get this much better. Now what often happens is we set a plan in place, the person markets the plan, tells people about it- much like this: you tell me you are going to go on a diet and in the next 60 days your goal is to lose 15 pounds. Well, now I'm going to be on the lookout. If you enlist me in your inner circle and say, "Tell me how I'm doing. And when we see each other socially, if you think I"m violating my diet, remind me about it. Don't do it in front of anyone, but do pull me aside and tell me." Then after 2 months we have you step on a scale and we say "Look! You've lost 18 pounds!"

That's basically what we do, only I go quickly behind and quickly re-interview to see if that person really has changed.

CIP: What would you like to say to those individuals who are considering a career in psychology?

RW: Certainly in my division of APA, Division 13, Society of Consulting Psychologists, as well as Division 14; Society of Industrial and Organizational Society (SIOP); are very welcoming to all students, younger students. When I was in school there weren't classes on coaching or as many classes on ethics or doing organizational development or organizational behavior. There weren't as many classes that gave you ideas about how to create a contract with a client in an industrial, not a clinical setting; how to enter an organization. Now there are all kinds of classes (depending on where you go) on how to "do" all of these things. We are so inviting because so much of what they are studying now; some of the people in my division helped to actually create these new fields.

So there's the generational effect of us handing over to those studying these things and we're saying; "Come on, come learn how to do this stuff! Come enter organizations and help them; help the organizations be better places to work, help the organizations be healthier places to work; come help individuals and teams work more productively--more effectively together. Let's figure out ways for us to work better together when we're not all in the same place (if we're geographically dispersed) and let's use technology to link us together better."

Reaching those individuals who are interested in a career of psychology is very important because we're at a stage now where the leadership in for example the APA; is an "aging" organization. We need to be able to reach those who are early on in their careers or haven't started one yet, and say "Here's what you can do with this stuff!"

Summary

In an extremely poignant and pivotal moment in the interview with Dr. White, he beautifully summed up the unlimited possibilities for someone pursuing a psychology degree and taking that education to create a unique path based on their own interests and proclivities. And this applies to any individual considering any career in psychology; whether it is in a specialty involving corporations or beginning a private practice.

"I've had a great career. I never planned to do what I’m doing; trust me on that. My career didn't exist! It made itself up! I fell into it! It was a trek not a track!" - Dr. Randall White

Thank you Dr. White for speaking with CIP and for all the wonderful work you are doing around the world.