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April 29, 2014

How executives make decisions: Inside the CEO brain

Daily Briefing

Writing in the Wall Street Journal this week, Andrew Blackman highlights emerging research into neuroimaging, with some experts arguing that the insights could help managers better understand how to manage events that trigger certain brain responses—and ultimately become better executives.

Using neuroimaging technology, researchers have made several conclusions about how a brain functions when making executive-type decisions, including:

  • Deadlines decrease creative thinking. Although the brain's "task positive" network lights up while working under tight deadlines, "research shows us that the more stressful a deadline is, the less open you are to other ways of approaching the problem," says researcher Richard Boyatzis of Case Western Reserve University. To prevent this from occurring, people should engage in meditation and other exercises that allow the brain to wander, according to Srini Pillay, an assistant clinical professor at Harvard Medical School and founder of the executive coaching firm NeuroBusiness Group.

  • Uncertainty breeds anxiety, poor decisions. The parts of the brain associated with anxiety are activated when a person is feeling uncertain—such as worrying about a company's future or the economy—causing the person to make decisions based on fear. One study found 75% of people in such situations incorrectly predicted the future and made decisions based on that prediction. To counter the tendency, Pillay says executives should focus on the idea that no decision is final.

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  • Good leaders rely on feelings, not just the facts. When leaders make decisions, areas of the brain associated with social and emotional thinking are more activated than areas associated with critical reasoning, according to one study.  "When you're making a decision in an organization, you also need to think about people and their reactions," says David Rock, director of the research organization NeuroLeadership Institute.

  • Good leaders use encouragement, positive motivation with subordinates. When employees were asked to recall interactions with effective leaders, the same areas of the brain were activated as when a person is being coached positively, according to one study. "We still have this lingering thought that you have to be negative and tough to get things done, when the data says that's just not true at a very basic human level," Boyatzis says. He added effective leaders appear to make these connections naturally, while less effective leaders have to work at it.

Arizona State University's David Waldman and his colleagues even argue that neuroimaging sessions can help people to become better leaders, Blackman writes.

"We are right on the cusp of being able to assist leaders to rewire their own brains through neurofeedback," Waldman claims, adding, "the idea is to identify patterns of brain activity that are reflective of a better leader, then give direct computer training to help people develop those patterns for themselves" (Blackman, Wall Street Journal, 4/27).

How leaders make decisions—in the real world

See the Daily Briefing's interviews with some of the nation's top health care CEOs, who share their insights into leadership and management:

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