Your Brain and Business: The Neuroscience of Great Leaders (38 page)

In order to switch tasks, leaders have to move from one situation to another and one approach to another. When they leave an old approach behind, there is some conflict due to giving up familiarity for a new but potentially effective approach. For this change to actually occur, the left frontal cortex must be engaged.
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Therefore, to increase cognitive flexibility that requires a switch to a new approach to sales, filing, meeting times, and other variables, you can use the approaches
that stimulate the left frontal cortex, as outlined in
Chapter 6
, “From Action Orientation to Change: How Brain Science Can Bring Managers and Leaders from Action Orientation to Action.”

An Approach to Managing Breach of Trust

Trust is an important variable in business, because lack of trust can breed fear and anxiety, which can significantly dampen the enthusiasm of workers.

Trust is relevant because it can significantly impact branding and customer satisfaction. When customers are satisfied, they will attach again and again to a brand.
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Trust is the basis of financial investment as well.
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People buy shares in a company based on whether they trust that the company will do well. Companies owe it to their investors to be transparent and accurate about their financial state and their own development. A trusting relationship between an investor and a company can be mutually beneficial.

Trust allows workers to feel physically and emotionally safe at work.
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As a result, workers will be able to focus more on the task at hand and increase productivity. Trust is an essential ingredient of transformational leadership and can significantly impact job satisfaction and self-efficacy. In addition, it may significantly relieve work stress and stress symptoms.
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Thus, it is clear that trust is not just a “soft skill” that managers and leaders need to have with their employees. In the brain, we have seen how trust deactivates the amygdala. When trust is breached, this increases amygdala activation, and approaches to managing a breach of trust involve the amygdala and its connections. In fact, the breaking of a promise is associated with increased activation in the DLPFC, ACC, and the amygdala.
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ACC Intervention

The SAFE-Frame approach is something to reflect on here. For example, when JetBlue’s “overwhelmed” customer service department left millions of passengers stranded during a snow storm on Valentine’s Day of 2007, the CEO was left with the task of rebuilding the image of a previously admired airline. Trust in the airline was breached. However, the CEO, David Neelman, used parts of the SAFE-Frame approach to compensate customers for their losses as best he could.

He resolved the issue by admitting blame and compensating the customers; he engaged the public through the media; he reframed what seemed like a calamity by saying that the airline might have “overreacted,” and he refocused on getting the problem solved. The public responded; their amygdalae deactivated and JetBlue was back to being the number-one airline in a short period of time. When trust is breached, it increases amygdala activation and in so doing, sends shock waves through the brain, eating up brain resources necessary for task completion and productivity. Thus, investing in trust is an important aspect of business development.

When breach of trust is exhausting (because it eats up brain resources), leaders will compromise their abilities to retain followers. They will lose money in trying to recruit employees over and over again. Thus, this translates into financial losses.

The diminution in function of the reward system also decreases motivation, and managers and leaders will find themselves having to find numerous ways trying to motivate people to work. This is draining to people.

Breaches of trust may also have a ripple effect in the company because the mirror neurons that activate when mistrustful intentions are read get reflected in the brains of people throughout the company. This exponentially threatens the integrity of the company. The mirror neuron interventions mentioned earlier are relevant here.

Amygdala Intervention

Managers and coaches should advise leaders that being upfront and honest about whatever breaches in trust have occurred is probably the best path in terms of rewiring the amygdala and its connections. Appointing necessary representatives of trust throughout a company can be helpful in intervening. All of the other priorities discussed so far can calm down the amygdala: focusing attention, placing attention on a higher purpose, and introducing perspective (admitting what has been wrong and focusing on how to make it right). Active listening to what is needed can help relieve the fear and heightened amygdala activation. The crisis over the oil spill for which BP is responsible is a good example of how inconsistencies in information and shocking media photographs of affected wildlife keeps the public amygdalae activated. Right from the beginning, it is important to try to understand how to engage public trust.

Ventral Striatum, VTA, and Septal Nuclei Intervention

Rewards are essential to keeping people engaged in an active and alive way. One fundamental technique that leaders can use in reengaging trust is to go out of their way to solve a problem, setting a powerful example of their abilities to “come through” at a time of need. For example, instead of firing people, if leaders want to keep more people, they may cut the pay of a certain group of people (including the leader) with a clear plan to not only reinstate the pay, but to reward them for this sacrifice with a plan to increase productivity. This kind of sacrifice reengages the thinking brain and relieves the brain of increased amygdala activation. The hormone oxytocin (which deactivates the amygdala) has been associated with self-sacrifice in promoting human trust.
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Having an image of warmth and competence can significantly bias workers in favor of a leader.
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Leaders who “go to bat” to fairly compensate workers during maternity or paternity leave, or work closely with a follower who is
having trouble getting work done due to personal issues, provide a powerful example of reward in action. This will have a powerful impact on the problem at hand. The brain regions that activate when people choose to back such a leader (who appears warm and competent) involve the brain’s accountant (medial PFC), short-term memory (DLPFC), and the cognitive flexibility region (OFC),
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indicating that the effects of trust may spread beyond the amygdala.

vmPFC Intervention

Leaders should think of trust as a business strategy to promote retention, team building, and efficiency and productivity. The vmPFC is responsible for having a social conscience and feeling guilt. Once critical vmPFC exclusion is reached in a decision, breach of trust is highly likely,
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and people will no longer care about others and are much more likely to defect. Leaders can prevent this by focusing on trust and on the risks and benefits of actions. One should not assume that people take these into account automatically. When managers or leaders are asked to think deeply about this, the vmPFC will likely be activated and convey the risk-benefit decision to the action center of the brain. Setting up safe places where people can complain, and actively having a problem-solving exercise concerning complaints may actually increase productivity by focusing on solutions rather than problems. Also, overt risk-benefit evaluations can help bring the vmPFC into play.

An Approach to Managing Ambiguity

In business, ambiguity can have deleterious effects on outcomes because it compromises trust and also thwarts decision making. Humans are more averse to ambiguity than to risk.
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In other words, heightened uncertainty suits us less than calculated risk.

Consumer confusion can affect profit generation for any business, and it can compromise the comfort needed for buying.
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Thus, reducing ambiguity about a product for customers can significantly impact whether or not they buy that product.

Institutional change in the current economic climate is rampant. This leads to tremendous uncertainty, not all of which can be measured and much of which is ambiguous. Improvising at times like this can be helpful in promoting individual and institutional development.
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The extent to which a leader is a representative of a group (leadership prototypicality) may significantly impact perceptions of that leader’s effectiveness. Studies show that the degree of uncertainty and change in an organization (such as role ambiguity, where employees’ roles are not clearly defined) makes employees rely on leaders being a prototype even more.
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Understanding the impact of ambiguity can therefore be helpful to leaders who may or may not be prototypes of the groups they lead. Excessive ambiguity is also related to burnout, in that it increases stress levels.
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Ambiguity can therefore affect employees, leaders, and customers alike. Ambiguity affects how we value others and ourselves. The brain imaging findings indicate several overarching ideas:

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Ambiguity creates more anxiety than risk.
The lack of information in ambiguous choices also activates the fear center (amygdala) and the cognitive flexibility center (OFC)
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more than risk—again indicating that the anxiety induced by the ambiguity keeps the brain flexible and in navigation mode more than risk mode, where the probabilities are known and the registration of fear determines the level of vigilance. In fact, the greater the ambiguity, the greater the OFC and amygdala activation.
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When choices are ambiguous or risky, the brain has to assess the risk-benefit equation (with the accountant) and the reward potential (with the reward center).
Under conditions of risk (where probabilities are known) and ambiguity (where probabilities are not known), the brain’s reward center (the striatum) and accountant (mPFC) are activated, indicating that the risk assessment has to be figured out by the brain’s accountant and then registered as a reward or not.
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However, one study showed that the ventral and dorsal aspects of the medial prefrontal cortex respond more during ambiguous than unambiguous inferences,
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possibly indicating that the assessment of risk draws on more “work” from this region.

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The greater the ambiguity, the greater the anxiety and the less the reward.
One group of researchers found that the level of ambiguity in choices correlates positively with activation in the amygdala and cognitive flexibility region (OFC), and negatively with a striatal system. Moreover, striatal activity correlates positively with expected reward. Thus, the brain responds to different levels of uncertainty.
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When ambiguous or risky information is processed by the brain, the brain stays in a “no-decision” state and does not act.
When something ambiguous (as opposed to risky) is anticipated, the posterior inferior frontal gyrus and the posterior parietal cortex (the brain’s navigator) are both activated.
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They inhibit accepting an ambiguous option. Risk preference also activates the PPC, whereas ambiguity preference activates short-term memory (DLPFC).
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The PPC is thought to play a special role in maintaining an alert state,
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so heightened activity in ambiguity may indicate a heightened state of alertness.

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Energy is used by the brain in trying to constantly update information when information is not known.
When ambiguity exists, the brain has to constantly update information as we make decisions that are either right or wrong. The ability to update this information and have cognitive flexibility is probably controlled largely by the right ventromedial (accountant) and dorsolateral (short-term memory) prefrontal cortex. These two regions are thought to mediate shifting away from disadvantageous choices through their sensitivity to accumulating negative outcomes.
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DLPFC activity has been negatively correlated with an independent clinical measure of behavioral impulsiveness.
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When you encounter customer confusion, organizational change, role ambiguity, or burnout, you can utilize your knowledge from these brain findings to reduce uncertainty and increase the probability of continued action. So how can knowledge of these brain regions and their roles in uncertainty be utilized? Here are some interventions you can use:

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Decrease amygdala activation.
Sometimes change is uncertain, and uncertainty is an inextricable part of the business environment. However, because we know that uncertainty activates the amygdala more than risk, converting uncertainties into probabilities will decrease amygdala activation. As with prior examples, amygdala interventions and SAFE-Frame interventions can help with converting ambiguity to risk. Here are two examples of SAFE-Frame interventions: