Organisations have to master dynamic changes both on the outside and on the inside. The role of collaboration becomes increasingly important in today´s (business) world.

Insights in the field of neuroscience can help leaders, managers and innovators to learn what needs to be done and what to avoid in developing their organisations.

 Organisations under stress

 Jack Welch once said: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”

 On the outside organisations are experiencing a rapid development of new technologies, a creation of new and the disruption of existing business models as well as major changes in today’s societies. Climate change drives the need to understand the fundamental importance of finding solutions. There are benefits from scientific progress in a variety of different topics. Societies are living globalisation and segregation at the same time and dealing with various geopolitical challenges. Has this world ever been more complex? And how do organisations get along with it? 

 To illustrate the dynamic of change the world is currently experiencing it is worthwhile taking a look at the knowledge doubling curve by Richard Buckminster-Fuller. He introduced the concept in his book „Critical Path“ in 1982. He elaborated that in 1900 the knowledge (existing in scientific literature) doubled roughly every hundred years, in 1945 every 25 years and in 1982 each 12 to 13 months. IBM expanded the time scale and estimates that knowledge doubles every 12 hours by 2020. At that speed, yesterday´s solutions are outdated for the world of today and tomorrow. This increasingly puts organisations, leaders and teams under pressure.

Organisational Struggles

 Organisations need to solve this challenge to match the speed of the outside world in order to grow or to survive. How do they cope with dynamic changes and the pressure internally? Despite all advances in science and the development of new management and leadership models, it seems many organisations are facing roadblocks. Many of them are dealing with difficult market situations, war for talent, different mindsets of different generations, with adversities in their transformation projects and struggles with introducing and establishing effective innovation processes. 

 This would be easier if all organisations or teams are equally functional. Particularly in times of change lots of teams are beginning to struggle and could become dysfunctional as their weaknesses become more apparent. Functional teams are able to deal with changing environments more effectively than dysfunctional teams. They can draw more easily from e. g. new scientific developments to foster collaboration or create new solutions. However, as even functional teams struggle in today´s VUCA (volatility, uncertainty, complexity and ambiguity) world, dysfunctional teams face an even bigger challenge.

 In his book „The Five Dysfunctions of a Team“ Patrick Lencioni elaborates on the causes of struggling teams. He regards teamwork as the essential ingredient, the differentiator for successful organisations. Diverse teams working effectively together can process more crucial information for innovation and transformation. To create the best outcome, people with different mindsets, skills and perspectives need to collaborate. But how to lay fertile soil for teamwork, where

  • a dedicated exchange and conflict on the topic are welcome, 
  • tough decisions in a transformation project can effectively be discussed and 
  • open innovation is fostered and groups from different teams, different partner organisations or clients are willing to leave their comfort zone, take an active part in the process and share their ideas even though they could be ripped apart. 

The foundation of Lencioni´s model for effective and substantial teamwork is: Trust. Trust is one important fertilizer of teamwork and thus its role in change, transformation and innovation is essential. Team members repeatedly need to put themselves into a position of vulnerability in a dedicated discussion, working through conflicts to generate ideas and implement them to meet the challenges mentioned above. 

 But how to create an authentic culture of trust where teamwork can thrive? Trust is a feeling leaders, managers, innovators and colleagues need to develop towards each other over time. Although organisations would very much like to establish such a culture quickly due to external and internal necessity, there is no shortcut. However, there are invaluable insights thanks to scientific progress in Neuroscience.  

 New insights from scientific crossovers

 The evergreen of the Homo Oeconomicus has been laid to rest a while ago. In the two recent decades new interdisciplinary scientific fields around Neuroscience like Neuroeconomics have put further nails in the coffin. Research on how the brain affects (economic) behaviour and decision-making processes is valuable, not only for marketing purposes. Neuromanagement and Neuroleadership, two overlapping fields of research, could provide helpful insights on what needs to be regarded to set up high-performing teams and organisations capable of dealing with the dynamic changes of today’s economic world. 

Are we really making conscious (economic) decisions? According to science many of our daily decisions happen instantly on a subconscious level within the limbic system. It reacts efficiently to specific situations or patterns with automated habits. The limbic system is a relatively old part of the brain compared to the prefrontal cortex, which is responsible for higher complex thinking processes and therefore requires more time and energy. 

Thanks to the rapid evolution of technology there has been a giant leap in better understanding the functions and processes of the brain. Furthermore, progress in the field of biochemistry proves to be valuable. Researching chemical processes in living organisms provides insights into the effects of hormones and neurotransmitters on the activation of specific brain regions and our cardiovascular system. The understanding of their behavioural impacts is highly valuable for managers and leaders. The effects of the following chemicals are important to regard in this case:

 Studies found that Serotonin has several positive effects on the mood. It reduces anxiety and improves confidence levels. It helps to calm down and supports a feeling of contentedness. Good nutrition is essential for the production of serotonin, as are exercise and bright light.

  • Dopamine, the “Feel-good” neurotransmitter is at the center of our reward- and pleasure-system. It selects desirable activities with potential rewards and drives motivation. It has an important role in a variety of functions (e. g.  for the motor-, memory-system and for the prefrontal cortex for high-order-thinking) of the brain. Don’t forget: too much stress is counterproductive for the release of Dopamine.
  • Endorphin is well-known through the „Runner‘s high“. Its release improves the mood up to euphoria and reduces both stress and pain. Exercise and laughing with friends induce the release of Endorphins. 
  • Oxytocin, also known as the “love hormone”, was discovered by Henry Dale in 1906. It is responsible for a lot of aspects of human interaction. Research was initially focussed on its role in childbirth and the relation between a newborn and its parents. Oxytocin is both hormone and neurotransmitter and serves a variety of physiological and psychological functions. One of the positives is that it is at the basis of the process of trust, which is essential in effectively working together. 
  • Epinephrine and Norepinephrine (also known as adrenaline and noradrenaline) are essential for our sympathetic nervous and blood-system, playing a crucial role in stressful situations. Their release immediately (within seconds) increases heart rate, blood-sugar-levels and blood pressure. They ensure that further energy reserves instantly become available when required. That means increased muscle strength, higher brain activity and attention. Their release eats up a lot of energy, so Epinephrine and Norepinephrine are designed for sprints, but not for running a marathon.
  • Cortisol, due to its connection to the stress response is also known as the „Stress Hormone“. It also serves a variety of other functions, such as regulating blood-sugar-levels or metabolism, too. In contrast to Epinephrine, Cortisol levels do not build up immediately. It rather takes minutes than seconds. It needs to be regarded that Cortisol also takes long to dissipate and thus the effects (e. g. increased blood pressure) last longer than actually needed. 

 Fostering teamwork with insights from Neuroscience

 Let´s get back to the importance of teamwork. A few thousand years ago, facing a sabretooth alone was a bold decision. Chances to survive and to collect the praise were rather low. Our ancestors increased the likelihood of their survival manifold by being a member of a group. As a team, they were able to rise to challenges a single tribe member was unable to overcome. The bottom line is that in its history mankind was able to rise to the occasion countless times through teamwork.

Increasing speed on the outside and the growing struggles on the inside of a company are nothing else than another opportunity for a group to rise to the occasion. For the reasons mentioned above, it has become increasingly difficult to create an environment that prevents teams from becoming dysfunctional or that fosters the kind of teamwork required to kick off sustainable transformation and innovation processes. And no, teams don’t want another carrot on the stick either.

The insights about the effects of neurotransmitters and hormones on trust, mood or stress levels can help to install a fitting framework for effective teamwork. 

Sometimes the biggest gain can be achieved by reduction. The brain has the memory of an elephant, when it comes to negative events, such as constant pressure, negative communication, fear or criticism. In most of today‘s organisational stress, leading to anger and resentment is a common theme due to external and internal challenges. In these cases, the release of the stress-hormone Cortisol automatically activates protective behaviour and withdrawal. It increases focus, but simultaneously limits the logic thinking centre and the memory function of the brain. This is not an optimal premise for effective teamwork and innovation.

Daniel Kahneman and Amos Tversky demonstrated that the negative emotional impact of losses is felt twice as intense as the positive effect of gains. This affects behaviour and decision making in predictable ways. Unfortunately, positive outcomes are also not very persistent, because Cortisol takes longer to dissipate than Oxytocin or Dopamine. This seems to be quite unfair, but that’s the way things are. 

Christoph Bergland describes Oxytocin and Cortisol as Yin and Yang of relationships in his article „Holding a Grudge produces Cortisol and diminishes Oxytocin“ in Psychology Today (11th April 2015). Stress through constant pressure or negative communication jeopardize healthy relations and teamwork. Anger towards other persons leads to increases in cortisol levels while befriending others increases the production of Oxytocin. 

Oxytocin activates regions in the brain that enhance empathy. This leads to better understanding other team members, their behaviour, their motivation and their values. Ultimately it helps to build trust as it strengthens the links between group members and thus improves teamwork. 

To make sure that Oxytocin flows successfully the management needs to regard a few aspects when setting up the environment for teamwork. Simply working together in groups on a topic is a good foundation to induce the release of Oxytocin. Thus management is required to identify and establish productive meeting formats, which fosters effective collaboration through a robust set of meeting ground rules. The undivided attention with all kinds of distractions of today’s modern world, e. g. constantly checking Social Media, is difficult to obtain. A lack of attention however leads to ineffective teamwork and thus limits oxytocin production.

In a LinkedIn-post, Jack Welch emphasises the importance of celebrating the team’s big wins, new ideas or risk-taking. He underlines that it cannot be done enough. Neuroscience backs that up. Celebrations are a major booster for Oxytocin. According to Paul J. Zak (in his book “Trust Factor”), public ovations work best. They enhance the connection of the team members and, wow, they also foster the release of Dopamine. 

It might also be a good idea to celebrate mistakes, as, without them, there would be no innovation. Establishing formats as „fuck-up-nights“ might help organisations to learn from failures without harming individuals. Punishment on the other hand, also triggering Cortisol-release, has extremely negative effects.  It will lead to avoidance of making mistakes and thus to less innovation.

 There are side-effects. With too much Oxytocin in the system, groups could become too tight. In-group and out-group behaviour might jeopardize the positives through insubstantial and unconstructive conflict.

Mood, and therefore Serotonin and Endorphin, also plays a vital role in good teamwork. J. P. Forgas, H. P. Bower and S. E. Krantz elaborate in their study “The Influence of Mood on Social Interactions“ from 1983 that mood has a variety of positive effects on cognitive functions like memory or interpreting social behaviour. If team members are in a good mood it is more likely that they interpret the behaviour of colleagues more positively, meaning that a mood-induced bias in social interactions – and how interactions are being remembered – exists. As the interaction between colleagues is the main factor of teamwork also, it is essential to be aware of this. 

How to increase Serotonin and Endorphin levels? From the support of creating good and stable relationships between team members to introducing team exercise a lot of options exist for the management to boost Serotonin and Endorphin production. Specific nutrition is also beneficial to increase levels of both as is bright light or visualising happy moments. 

 Turn the lights on

 Photo by Izhak Agency on Unsplash

Combining the insights and efforts from different scientific disciplines has often helped to shine a bright light on challenges and problems in the past. It also led to huge and game-changing improvements. The combination of economics and studies of human behaviour has helped to gain insights into the mystery of rational choice and thus to the emergence of behavioural economics. Connecting the fields of economics and neuroscience will not only deepen these insights but also extend the understanding of the driving mechanisms behind them. Applying this knowledge within organisations can make innovation and transformation more effective. 

Although it is desirable for a company to adopt and apply these insights in general right away, focusing on the teams that are or should be driving the change within the organisations should be a priority. Especially as time and resources are scarce, being able to assemble high-performance teams in a short time is paramount. Members need to click right away to effectively and efficiently work on strategic tasks to speed up the organisation from within.  In order to overcome the adversities of transformation processes they need to be close, highly motivated and positive, stick together and trust each other. In this process, these teams will also share this knowledge with the rest of the organisation.

Leaders and managers who consider these insights will be able to create a competitive advantage for their organisations. They will be able to set up and disassemble teams for specific purposes more quickly and drive change more effectively. Thus they will both require less time and create more sustainable outcomes.

Does adhering to these insights from Neuroscience guarantee a successful change process? No, it does not. There are so many other aspects to consider. However, they make it easier to help dysfunctional teams, to get most out of collaboration with the ecosystem or to set up effective teams driving transformation. These insights are valuable for speeding up the organisation from the inside and match the speed on the outside.

This is why every organisation should consider looking more into Neuroscience! It does require some effort, but the potential benefits in times of change are huge – for each individual, for each organisation, for the business and society.