Your Brain and Business: The Neuroscience of Great Leaders (12 page)

Concept 1

One set of experiments has shown that monetary incentives are by themselves insufficient to serve as rewarding stimuli. Humans are excruciatingly sensitive to fairness, so much so that in a recent neuroimaging study, fair offers led to higher happiness ratings and increased activity in several reward regions of the brain compared with unfair offers of equal monetary value. Other neuroimaging studies have similarly shown activation in reward regions in response to cooperative partners or cooperative play.
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Thus, as Tabibnia outlines, human behavior is not solely driven by material outcome; fairness and equity matter as well.

Concept 2

When people are in control of a situation, their treatment of others can significantly impact how the group will function as a whole. Preference for hierarchical rather than egalitarian social relations correlates with neural responses within left anterior insula and anterior cingulate cortices.
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This study found that the higher the degree of preference for social dominance orientation, the lower the activation in the brain centers for pain recognition in others (anterior insula and ACC). This indicated that there was less feeling for the significance of another person’s misfortune, and this reflects in brain activation.

Concept 3

Supporting the role of the insula in inequity, other studies have confirmed that when people are averse to inequity, the insula lights up.
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This makes people reject monetary rewards if they think they are unfair relative to the rewards of others. (Recall that the insula, apart from registering disgust, also registers gut feelings and sends this to the cortex to be interpreted.) Thus, the gut feeling of unfairness can make people reject offers. Increased ACC activation to social empathy has also been shown.
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However, the degree of empathic brain responses is changed by the intensity of the displayed
emotion, the appraisal of the situation, characteristics of the suffering person (such as perceived fairness), and features of the empathizer (such as gender or previous experience with pain-inflicting situations).
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Thus, because empathy is modifiable, the response to fairness may depend on the empathic ability of the manager or leader.

Concept 4

When people do accept unfair offers, it appears to be due to emotional control with increased activity in the VLPFC and DLPFC and decreased activity of the anterior insula exerting influences that make them tolerate their treatment.
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Thus, acceptance of unfair offers requires significant control by the thinking brain that quiets down the emotional brain. The decision-making centers override gut feelings.

Concept 5

Reciprocal altruism also falls under the category of fairness. Studies have shown that when altruism is not reciprocal, this is associated with greater activation in the bilateral anterior insula, left hippocampus, and left lingual gyrus, compared with reciprocated cooperation.
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Also, functional connectivity between anterior insula and lateral orbitofrontal cortex (OFC) in response to unreciprocated cooperation predicted subsequent defection. The anterior insula interprets gut feedback and provides this information to the OFC to bias future decision making. Thus, when altruism is unreciprocated, the brain responds accordingly.

Therefore, whereas business leaders often think of fairness and compassion as “soft skills,” they are in fact not. To ensure retention and cooperation, the business leader needs to be socially aware of how and why people stay and leave. Brain science can shed a light on this and also provide some basis for interventions to improve business performance.

The application:
Combining these concepts, we may conclude that people can sense when unfairness is occurring in the work environment. Their own mirror neurons are likely to activate to unfair intentions in leaders. Leaders should not assume that they can “pull the wool over the eyes” of followers, because followers are sensitive to unfairness even prior to the execution of any actions (the insula registers this at a “gut feeling” level). This can significantly disrupt teamwork. Thus, fairness can work to a leader’s advantage if followers sense this, because it will also increase cooperation and alignment, which will eventually impact productivity. Coaches can use this information to take the emphasis off of blaming the leader and explain how unfairness may be responsible for greater attrition in the company. Rather than accusing the leader of being unfair, coaches can focus on how unfairness affects productivity by decreasing activation of the reward brain and disrupting the emotional brain and thereby the thinking brain as well.

In addition, many leaders believe that they can throw money at problems. Although more money for an employee would undoubtedly be well received, employees are also sensitive to the context surrounding this money. Is it a fair amount for the work done? Is it fair compared to other employees? If it is not, the brain’s reward center will not activate to the material gain because it will be countered by the unfairness.

Leaders often put aside fairness goals, believing that their followers are impervious to this. However, we now know that fairness activates reward centers and increases motivation, thereby increasing productivity. Although people do accept unfair rewards, their brains register this (in the lateral frontal cortex) and this self-control is not sustainable over time.

To change the mindset of preference for social dominance and hierarchies requires interventions aimed at increasing empathy and allowing people to feel a sense of agency that is not only about self-control but also engenders cooperation. We know from studies that empathy is not hard-wired and that leaders can be taught to have these skills, which they are critical to the adequate functioning of an organization.

The registration of unfairness is also demonstrated by the study that showed that nonreciprocated altruism is registered at a gut feeling level and may affect future cooperation.

Thus, four fundamental facts are based on these experiments so far: (1) Unfair intentions can be automatically read by mirror neurons; for this reason, even unarticulated intention needs to be authentic and not devious. (2) The brain responds not to just money but fairness as well. If leaders are looking to increase productivity, consider whether the money fix is fair or not; otherwise, the intended reward-based motivation will be less than desired. (3) When leaders seek and achieve cooperation from their followers, they are activating the brain’s reward center, which will have tangible effects on motivation and productivity. (4) Cooperation is heavily influenced at the level of the brain by unreciprocated altruism. If a follower goes out of his or her way to accommodate a leader, the leader should seek ways to compensate that action to ensure future cooperation. The brain studies add to this seemingly obvious fact in emphasizing that this registration does occur in the brain, but also that it can occur even at a subtle “gut-instinct” level as well.

The Neuroscience of Trust

The concept:
Creating an atmosphere of faith and trust is critical to growing organizations.
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Trust is important throughout the chain of command in any business organization, starting with the customer and going all the way to the CEO. If the customer does not trust or have faith in a product, that business will not succeed. Similarly, if a follower does not have faith in an organization, the business will not function optimally either. All too often, leaders are willing to worry about faith and trust later, not recognizing that it is one of the most important factors that glues the component parts together. For example, if the sales force did not create trust in customers, customers would not want to buy a product. If the sales force did not trust senior management, they would be far less motivated to do their jobs optimally. Even in literal ways, trust may enhance safety,
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new product alliances,
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and group functioning.
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A recent large-scale survey in three European countries (Austria, Slovenia, and the Czech Republic) revealed that corporate success depends not only on the quantity of cooperation experience but to an even greater extent on the quality of cooperation, with trust being a critical component of quality.
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Building trust in a time of crisis is the backbone of stable functioning of an organization. Understanding the biology of trust helps us understand why this is the case and also helps us think of interventions we might not ordinarily have thought of. Data from a heterogeneous sample of employees from four organizations indicates that the relationships that link individual and organizational values to outcomes are explained primarily by the trust that employees place in the organization and its members.
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Concretely, trust can lead to job satisfaction, identification with an organization, greater intent to stay on at an organization, and greater productivity while being at that organization.
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Another study showed that even when people behave as if they trust information, they consider communicative efforts of individuals whose interests are aligned with their own to be slightly more informative than those of individuals who are made trustworthy by an institution.
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However, paradoxically, trust cannot be based on the absence of information, and too much trust can be harmful, as we have seen in the cases of Bernie Madoff, Enron, and WorldCom.
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In this context, management loses legitimacy. Therefore, it is as important to build trust as it is to be able to have it.
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A recent article in the
Harvard Business Review
stated the following: “Surveys have shown that 80% of Americans don’t trust corporate executives and—worse—that roughly half of all managers don’t trust their own leaders. Mergers, downsizing, and globalization have accelerated the pace of change in organizations, creating a crisis of trust that didn’t exist a generation ago....”
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Therefore, it is critical to understand trust as deeply as we can. Brain biology can add to our depth of understanding.

Concept 1

The amygdala plays a critical role in registering threat even before the threat can be clearly defined.
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Abnormal amygdala activation may also occur when trust and cooperation are impaired,
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and the anterior insula and ACC may also be involved. Recall that fear increases amygdala activation. Now we know that ruptured trust has the same effect.

People reliably and automatically make personality inferences from facial appearance despite little evidence for their accuracy.
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A recent study showed that as untrustworthiness of faces increased, so did the right amygdala response. Areas in the left and right putamen and the anterior insula showed similar responses
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(indicating, perhaps, that this is registered at a “gut” level). Other authors have suggested that the trustworthiness of faces has less to do with the identity of the face and probably has to do with some other element.
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Concept 2

The hormone oxytocin has been associated with decreasing amygdala activation in situations of high trust and low fear.
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In fact, when your trust is breached but you trust again, oxytocin has been implicated in not adequately stimulating amygdala activation to register the previous punishment.
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Usually, when trust is breached, the amygdala will activate and a person will behave in accordance with this amygdala feedback after the dorsal striatum is informed.
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In people who have excessive oxytocin, this does not occur, because amygdala activation has never been optimal.

Concept 3

When two people interact, the building of the trust relationship is related to activity in the paracingulate cortex (the area around the ACC), which activates as each person learns to read the intentions of the other. If people trust each other based on certain conditions being met, the brain’s reward center, the VTA (vental tegmental area) activates, whereas unconditional trust activates the septal area.
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Thus, different types of trust activate different brain regions, as shown in
Figure 3.2
.

Figure 3.2. Trust areas in the brain