Understanding Organizational Restructuring Through Neuroleadership

How Organizational Restructuring Affects The Brain
How Organizational Restructuring Affects The Brain

We live in a world that is increasingly digital, interconnected and in a constant flow of change. It is therefore necessary to increment our skills concerning collaboration and leadership. But how does our brain and biology conditions our social behavior? Can such an understanding help us improving our skills and leadership? NeuroLeadership is a recent field that in its essence is about using the knowledge and research coming from the different fields of Neuroscience and Psychology such as Neuroscience, Cognitive Neuroscience, Social Neuroscience, Positive psychology and others, and applying it to the areas of Leadership development, Change management Management training Education,  Consulting Coaching. Neuroleadership aims to help leaders and people in general improve their ability to:

  • make decisions and solve problems
  • regulate better their emotions – help people stay cool under pressure
  • collaborate and engage better in team work
  • be able to better manage change

In the  following video Dr. David Rock, gives us an overview of what neuroleadership is:

Over the following article I will look at a particular situation, a company undergoing organizational restructuring,  as a case study on how Neuroleadership works in situations of change concerning management processes.

Organizational restructuring When a situation of organizational restructuring happens, especially if it lasts for several years, and involving the need for some people to leave the company, a threat environment is created. This environment provokes uncertainty in people’s minds, as they may have a constant unconscious thought of uncertainty concerning whether they are going to leave the company or not. This situation causes a difficulty in using properly the capacities / features of an area of the brain called the Pre Frontal Cortex (PFC), as people are driven mainly by the perceptions and fear of what can be happening to them over the course of the restructuring. Planning, strategizing, having the ability to focus on what’s really needed and important to do to keep the business going on, albeit what is going on around people, becomes immensely difficult. People unconsciously start to use more the areas of their brains more responsible for their reflexive (automatic) systems. Those areas are the amygdala and their limbic system, (the Ventromedial Prefrontal Cortex and basal ganglia are also regions that become  more active), whereas the reflective system (driven by medial, lateral and dorsomedial prefrontal cortex, and medial temporal lobe) are less used. On the other hand, when a situation of organizational restructuring occurs, corporations direct people and organizations /business units to start acting in the new way of doing things, using mainly a top down approach, deciding at a top level the new organizational hierarchies, by drawing “boxes” where they are going to put the directors, executives, managers, etc., most of the times without consulting / hearing operational people that really know how to do the job, and what’s important for it to be done properly. By lacking to find a common purpose and by not involving some of the implicated people, restructurings becomes more of  an imposed exercise than an engagement exercise. But impositions coming from the top, combined with the stress usually attached with uncertainty / lack of proper / timely communications are a powerful combination for restructuring not to provide the results forecasted and desired at the top. Employees begin mainly to function in autopilot (lead by the working of the basal ganglia region of their brain), doing things in their known and habitual way, and being prone to be very sensitive and ready to give emotional responses very quickly. Learning to do things in the new way, having the capacity to pay focused attention on what are their assigned tasks is almost humanly impossible.They become  “victims” of their limbic system and  “survival” (finding a new job / finding ways to escape being fired) becomes the underlying driver of people’s behavior. Unfortunately, top management deciding reorganizations keep doing things the same way, in spite of all the negative signs given by their internal  surveys, and the results of more than 4 decades of research on such situations of organizational change, indicating that only around 30% of such change initiatives actually succeed. If the C level people, the ones deciding upon reorganizations, were aware of how the brain works in a threatening environment, and how it end ups affecting the whole company,  they hopefully would start to conduct things in a different way. Likewise, when in a threatening environment, people automatically move “away” from the situations/people that trigger in them perceived or real threats, as their brain area of the Pre Frontal Cortex (PFC) is not working properly, and what reigns are the fight or flight responses – the brain prepares the motor sensors for survival related action(s). This means that the heart and lungs get an extra supply of blood and oxygen, reducing the amount of such substances in the brain, especially in the PFC. With fewer resources to work according to its natural functions, the PFC reduces its leading role in the brain, causing people’s focused attention to become scarcer.

Organizational restructuring triggers a threat environment In an organizational restructuring environment, since threats are “in the air”, threats act as distractors all the time, making attention to be directed towards stimuli that can signal that a threat is about to happen. The brain is always scanning the environment and neurons are always active to decide if and how to respond. Even if employees are directed to keep their focus on the business and ignore the “noise” caused by the restructuring, their brains have difficulty in paying attention to what is relevant to do concerning their jobs,  as threats are perceived as coming from everywhere. Attention is focused not on the business goals, but on the individual’s personal goals – usually related to survival instincts. During such restructuring phases, cortisol, the stress related hormone, is spread across the whole body and brain, and if restructuring lasts for a significant period of time, people’s brain’s start to physically change in response to the attention being constantly driven to scanning the environment. An overactive amygdala also inhibits other important and useful hormones to be released and able to do their job properly. The so called “feel good hormone” – dopamine – that normally acts on virtually every part of the brain in order to modulate neuronal activity, making us positive, motivated, engaged and able to work towards goals, reduces its flow. This again has implications on the organizational environment – demotivated, disengaged people produce and perform much less, are more prone to errors, and have more difficulty in relating in a normal way with managers, colleagues and also clients. The negative Impact in the service to clients, can be just another spark towards increased negative financial impact, as since organizations are typically more concerned to what is happening inside (dealing with the reorganization), they start serving clients as if they are not the reason the company exists for. In a quick summary – people in high alert for internal organizational threats, become less focused, less prone to collaboration, less attentive, disengaged, demotivated, which can lead to a poor client service, triggering clients leaving or not renewing contracts, which in the long term has a negative financial impact on the whole company. Memory, a key component in learning new things, which are the new way of doing things dictated by the top, is also negatively impacted, as with the amygdala taking the lead, there is a negative impact to the hippocampus, inhibiting new memories to be formed. Learning is therefore more difficult, if not impossible. Training courses risk being awasteful way to spend money, as a strategy to keep people busy and not focused on the business priorities, as people are in an away mode.

How to Improve the environment in a company undergoing an organizational restructuring

When a company faces a necessary restructuring environment, it is therefore important that the ones deciding on the restructuring initiatives, consider the importance of including programs that can help people become less stressed (work life balance programs – partially financing gyms / health club attendance, massage at work, meditation, mindfulness and yoga, etc.). Also important is to start providing employees with some kind of personal assistance in the form of personal / leadership development programs – including coaching and mentoring. This will start to restore people’s confidence in themselves, reducing their anxiety, which will enable the possibility for increased motivation and engagement, creating more certainty and less “noise” in their brains. With the brains working in a more quiet environment, solutions, alternatives and insights are more likely to appear, as people start to direct their attention and actions more to possibilities than to problems. This can be then a possible first step towards increasing the likelihood of successful organizational and financial results, which are precisely the goals of a restructuring initiative.

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