With Strategy In Mind: Part II

Advancing Strategic Capacity in Leaders

Whatever political agendas might have been served by declaring the 1990’s the “Decade of the Brain”, the timing was fortuitous. What we have learned about the brain in the past 20 to 30 years (in part through new technologies such as MRIs) has exponentially surpassed the sum total of all knowledge accumulated before. With 100 billion neurons, each firing 5-50 times per second, and capable of forming 10 to the millionth power different combinations, the brain inside your head is likely the most complex organism created by nature; perhaps more so than physical universe in which we live. Very possibly what goes on inside the brain is more complex than what the brain observes to be going on outside. That is a startling revelation. Mental capacity is obviously the single most essential tool of business leadership -- the “sine qua non” – that without which, literally, nothing happens. All this calls for a new leadership strategy: look inside.

To illustrate what kind of strategic capacity might evolve in leaders from new neurological insights, we explore here four paradigms that are implicit in the thinking captured in the McKinsey articles.

1. Paradigm: Individual bias is an unfortunate and unwelcome departure from the ideal strategic decision making process in business.

To fully grasp the pervasiveness of bias at work in the brain is humbling. Most business writing picks up on what many of us think of as pre-conceived aversions and attachments: the boss’ irrational aversion to risk in a certain market, or some pet project that loses money but never seems to get the axe. But long before emotional bias sets in -- the likes and dislikes that seem to cloud otherwise rational choices – perceptual bias is already present at the front door of the data we take in, influencing and shaping the “objective” information we see or hear. It is also deeply engrained in the very process of thinking itself – it is part of how we learn. 

 

The drawing to the right is called the Kanizsa Triangle.  There actually is no triangle drawn;  it is an optical illusion,made possible because our minds fill in what is not there based on our preconceived expectations.

What we learn from studying the brain is that mental bias is not some isolated malfunction resulting from ignorance, some socially awkward management gaffe that we should be embarrassed about in the privacy of our own office. Neuroscience reveals it to be a perfectly normal, perhaps necessary part of the learning process that enables us to survive. Ever since the Greek philosophers, we humans have wanted to set ourselves apart as the rational, logical thinking creatures. Indeed, the neo-cortex does some pretty impressive heavy lifting in that department, but it does not work alone.

A whole field of behavioral economics has grown up around the realization that a surprisingly high number of decisions are made somewhere outside the parameters of an objective, fully rational assessment. At times subtle, other times not, our decisions can be badly skewed by our fears and desires, or our base emotions like anger, frustration, sexual arousal, even hunger; often we realize all this only in hindsight. In the immediacy of physical survival, the brain translates raw physical pain as something dangerous and to be avoided; pleasure, largely to be sought as desirable. The more primitive part of the brain directly responsible for judging everything at this level of good and bad, likes and dislikes, is old in evolutionary terms. The newer part that we rely upon heavily for our more thoughtful rational analysis, the neocrotex, has simply grown in around the old. Neurologically, biologically, chemically speaking, these are different but inseparable parts of one brain.