Jacobs is the founder and managing partner of 180 Partners, and the author of Management Rewired:  Why Feedback Doesn’t Work and Other Surprising Lessons from the Latest Brain Science. For over two decades, he has worked with leaders in Europe, Asia, and the U.S. to improve the performance of their businesses, numbering among his clients fifty of the Fortune 100. His unique approach uses our understanding of how the brain works to comprehensively rethink businesses, creating more robust competitive strategies and the performance-oriented organizations needed to implement them. His work provides the key to overcome the number one obstacle to meaningful improvement in business performance—the rapid and effective management of change.

Morris: Before asking you to discuss specific issues addressed in your brilliant book, Management Rewired, a few general questions. When and why did you first become interested in brain science?

Jacobs: Even as a child, I was fascinated by the mind. I played baseball and did the other things that kids do, but I would find myself standing in the outfield thinking about how the mind worked, usually as the ball dropped in front of me. In my early teens, I stumbled across The Collected Works of Sigmund Freud, and was set for a career as a psychoanalyst.

After my freshman year in college, I landed a job in a state mental hospital, working with schizophrenics. One would give speeches to an unseen audience that could become testy at times, another would periodically be commanded by God to smite sinners with his cane, and a third would walk up and down the hall all day repeating, “Red light, green light.” For the first time, I started to appreciate how profoundly different our versions of the world could be.

Behavioral science didn’t help me understand any of what I had experienced in the hospital. I started to explore other fields, such as literature, philosophy, linguistics, social psychology, evolutionary biology, and history of science.  After graduate school, I taught in various colleges and universities, but I found it rather insular. When I moved to the business world, I was able to focus on the practical applications of my work.

I’ve always read whatever I could get my hands on, regardless of the field, and in the early nineties, I came across some of the early research using MRIs to track the flow of information through the brain. I found it stunning that we could finally move beyond theory and actually see the brain at work. We could watch as the brain assembled our experience of the world from our perceptions, desires, emotions, and memories.

When my first company was acquired and I was sidelined with a non-compete agreement, I decided to pursue my research full time. I spent two years learning everything I could about this new field called neuroscience and another two years trying to put the pieces together in a book that people would want to read.

Morris: Some of the worst business mistakes are made because of false assumptions and premises. Presumably you agree with what Peter Drucker observed in 1963: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”

Jacobs: In business, we have an understandable preoccupation with rationalization and efficiency to reduce costs. But such efficiency takes time to develop, while the market environment changes rapidly.

We get really good at building planned obsolescence into cars, only to find we’re trumped by those who went for quality instead.

This is mirrored in the brain. The more we use a neural network responsible for a thought or a behavior, the more deeply ingrained it becomes until it’s on automatic. Since change requires attention and energy, we unconsciously opt instead for getting better and better at doing things that no longer make sense.

 

Morris: Most change initiatives fail and reasons vary but in many instances, the resistance is cultural, the result of what James O’Toole aptly characterizes as “the ideology of comfort and the tyranny of custom.” Your own thoughts about resistance to change?

 

Jacobs: Our minds favor the status quo and deceive us into thinking there is no reason to change. Culture then becomes a product of many minds reinforcing each other in this mistaken belief. So we need to count on resistance to change whenever we design a new initiative.

At the same time, our brains have evolved to deal with change. Old neural networks die off, and new ones are created all the time in response to the environment. But we’ve got to attend to the change and have a reason to endure the discomfort it brings. It’s almost as if our brains are saying, “If you want me to change, convince me that change is needed and it will benefit me.”

General Motors’s bankruptcy has captured the attention of the employees, but real change will only take hold only when there’s the promise of a different kind of company that will better meet the needs of its people.

 

Morris: Now please shift your attention to your latest work, Management Rewired. I am intrigued by both its title and subtitle, hence these questions. First, does management (as an organizational component) need to be “rewired” or do the mindsets of managers need to be “rewired”?

Jacobs: This is a book about fundamentally changing the way we think about management, and that requires stopping the way we currently think. People don’t ordinarily think about management as wiring, let alone rewiring, so the combination of the two words is just unexpected enough to stop the mind’s automatic processing. The word “management” refers both to a system and a group of people called managers, and both need to be rewired.

Neuroscientists see the brain as wired since it works through electrical impulses sent through networks of nerve cells. Hopefully, the evidence that our commonly accepted management practices fail is the spur that opens the mind to the new, scientifically-based ideas of how to manage. These ideas change the wiring, leading to different ways of thinking and behaving.

But as O’Toole’s quote makes it clear, it’s easier not to change and simply revert to habit.  I’ve always thought of management structure and systems as the way to compensate for human fallibility.  If self-management is wired into the organization, it makes it easier for managers to shift their role from controlling to supporting.

Morris: It seems reasonable to assume that efforts to rewire anyone and anything will encounter resistance from defenders of the status quo. Is that a fair assumption?

Jacobs: From my experience, it’s a certainty. The more we have invested in the status quo and the more successful we’ve been, the more we’re going to be unwilling to change. But we can’t force people to do anything, let alone rewire their brains. All we can do is create the conditions for the rewiring to take place. Nor can the process be Orwellian. This is not about insisting on one way of thinking, but about giving people the data to reach their own conclusions about what they need to do.

Morris: With regard to the subtitle, “Why Feedback Doesn’t Work and Other Surprising Lessons from the Latest Brain Science,” why doesn’t feedback work?

Jacobs: Our positive self-image is critical to our well-being. When we receive information that is in conflict with that image, it creates discomfort and we seek to reduce it the easiest way possible. Discounting the dissonant information is the path of least resistance.

No matter how constructive a manager may believe the feedback to be, the employee will tend to see it as critical. Imagine how you feel when someone walks up to you and says, “Let me give you a little feedback.” Rather than a nice warm feeling engendered by the opportunity to improve, our bodies tense and we get ready to defend ourselves. So we deny, rationalize, or ignore the feedback.

Or we discount the source of the feedback. If the feedback is experienced as punitive, it then becomes in our psychological interests to be aggressive toward the source and punish in return. One of the favored ways to express the aggression is to continue in the behavior the boss would like to see changed.

Morris: What are a few of the other “surprising lessons”?

Jacobs: The pleasure chemical dopamine is released not when we receive a reward, but when we’re fully engaged in the work that leads to the reward. It’s not monetary rewards that are motivational, but the work itself.

The objective thinking favored in the business world is just not possible. There’s a reciprocal connection between the areas of the brain responsible for emotion and logic. When we try to be objective in our thinking, we lose access to past experiences that are anchored emotionally, causing us to lose our capacity for forethought. Measureable objectives focus us on the short-term, not the long-term.

In fact, our objective thinking is not how we make decisions at all. Our decisions are driven by emotions that mark alternatives as good or bad, prior to our use of logic. If we get rid of the emotions, we lose the capacity for good decision-making.

Morris: During their exit interviews, highly-valued workers who have accepted a position elsewhere indicate that lack of constructive criticism from their supervisors is one of the main reasons they are leaving. Given your response to the previous question about feedback, what specifically do you suggest?

Jacobs: Because we see criticism as punitive, no matter how constructively it may be intended, I would expect a lot of employees to believe their managers fail to give them constructive criticism. To be effective, feedback must bypass the mind’s tendency to reduce the cognitive dissonance it creates, and that means it comes from the employee, not the manager.

The manager’s role then is to encourage self-feedback through questions, so that owning the feedback and taking corrective action is aligned with the employee’s self-image. The manager encourages the employee to critique their own performance and to generate their own ways of improving.

Morris: For those who have not as yet read the book, what are some of the other “surprising lessons” about the brain that research and your analysis of it have revealed?

Jacobs: Ideas change the chemistry of the brain and how it operates. Ideas at higher levels prompt the activation of networks responsible for decisions and actions at lower levels that are in harmony with them. This means that rather than focusing on behaviors, it’s much more effective to focus on the ideas that will drive the behavior, and the bigger the ideas, the better.

Specialized nerve cells, called mirror neurons, fire not only when we perform an action, but also when we observe others performing the action, capturing the intent behind the action as well. Our brains are hard-wired for empathy, and it’s the key to managing relationships when everyone is operating off of their own version of events.

Brain scans show that when we encounter the unexpected, the area of the brain responsible for seeing the big picture is activated. We’re prompted to step back, reflect on what we’re doing, and look for more effective approaches.

Morris: During the rewiring process, you offer a number of specific recommendations. For example, to consciously use natural selection as a “lens” through which to view your experience. What does that mean?

Jacobs: The lens we view the world through determines what we focus on and how we interpret it, driving how we think and act. A lens is like water to a fish, because it isn’t noticed, yet it shapes reality. But not all lenses are created equal.

The dominant one in our culture comes from the inanimate physical world, causing us to see the world working through Newtonian forces acting on objects. When it comes to people, the lens makes us believe we need to motivate them, literally move them, usually through rewards, threats of punishment, or reasons.

Darwin’s brilliant insight was that the natural world doesn’t work this way.  Instead, the demands of the environment select out certain organisms and traits over others because they are a better fit. Research has established that this is how the brain works. Networks of neurons survive because they meet the demands of the mental and physical environment, and the same is true of the thinking and behavior they’re responsible for.

This lens changes the way we think about interacting with other people. We can’t force people to do anything, but we can create the conditions that will select out the behavior we want. We can structure organizations, shape culture, and manage so that the behavior that leads to business success is selected. In economics we call it a free market and it’s more efficient than anything else we’ve come up with. There’s no reason we shouldn’t let the same process work inside of companies.

Morris: You also assert that all that can be known is the representation of it in the brain in the form of ideas, “so the world we experience is mental, not physical.” We all see it differently. Therefore, the challenge for transformational leaders is to change how others think, to rewire their minds, and one of the most effective ways to do that is “to package the right kind of ideas into a story and to effectively communicate it to the organization.” Are you suggesting that, to rewire effectively, an “electrician” must also be a “storyteller”?

Jacobs: There are many times when I’d enjoy having one of those electricians rewire my brain, but unfortunately there aren’t any available. There are drugs that will reset the synaptic connections between nerve cells, such as antidepressants, but we don’t yet have one that treats management dysfunction.

But stories do rewire the brain. Most scientists now believe that they are the way the mind naturally makes sense of its experience, so they’re immediately accessible to us.  Because stories don’t assert that they are true, but only ask us to entertain them, they don’t summon up the defensiveness of reason.

People are already telling themselves a story about the organization and their place in it. The way to rewire is to replace it with a more attractive story that drives behavior and decision-making more aligned with the needs of the business. Yes, great leaders are great storytellers, and they tell the story not just with their words, but with everything they do.

Morris: You cite several transformational leaders who offer a template for the corporate world. They include Winston Churchill, Franklin Delano Roosevelt, and John F. Kennedy. However different they may be in other respects, what do they share in common?

Jacobs: All of them personally struggled with monumental failure in their lives, and it was one of those “stopping” experiences that are key to change. It broadened their perspective, taught them to learn from mistakes, and made them more empathetic.

So each could create the kind of vision of the future people aspire to, and articulate it in a meaningful way. They did not fear failure so they could admit mistakes and learn from them in pursuit of their goals, getting better and better, just like natural selection operates.

Morris: My own experience suggests that one of the biggest problems leaders have is that they do not know what they think they know. Do you have any advice as to how to avoid or solve that problem?

Jacobs: I believe the same is true of all us, whether we’re in a leadership position or not. The mind only gives us a partial view, and is a storyteller, not an objective recorder of experience, so it can deceive us.

That’s why Socrates, who anticipated many of neuroscience’s discoveries, claimed ignorance. He was smart enough to know how little he knew, so he believed in dialogues, where one point of view is played off another, enabling everyone to rise to a perspective incorporating both.

I think a leader needs to have confidence in their vision and their ability to achieve it, but they also need the humility to recognize their own fallibility.  I’m forever trying to test my view against others and I ask for feedback from everyone I interact with.  My wife and daughters are particularly forthcoming.

Morris: Which question do you wish you had been asked – but weren’t — and what is your response to it?

Jacobs: How about the standard business question: what’s the bottom line?

All of the brain science points to the same conclusion—let the brain work the way it naturally does and let people work the way they naturally do. For managers, this means channeling, rather than vainly trying to thwart, the natural inclinations of their people. There’s decades of management research demonstrating that the practices that do this produce better business performance. It’s good for the business and good for the people, so why not do it?

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