Episode 66: How Neuroscience Can Help Organisations Drive Meaningful Change (Interview with David Rock)
My guest this week is Dr. David Rock, who coined the term NeuroLeadership and is the Co-Founder and CEO of the NeuroLeadership Institute, which has worked with over 50% of the Fortune 100 companies, to make organisations better for humans through science.
David has authored four successful books, including Your Brain At Work, a business best seller and has written for and been quoted in hundreds of articles about leadership, organisational effectiveness and the brain.
The centrepiece of my discussion with David is his SCARF Model, which is based on neuroscience and is designed to help us work more effectively with others.
When I came across the model a few years ago, it helped me better understand myself and change the way I interact in social situations. The SCARF Model is comprised of five key domains that influence our behaviour in social and work situations. Firstly, Status - our relative importance to others. Secondly, Certainty - our ability to predict the future. Third, Autonomy - our sense of control over events. Fourth, Relatedness - how safe we feel with others. And finally fifth, Fairness - how fair we perceive the exchanges between people to be. As David explains in our discussion, these five domains activate the same threat and reward responses in our brain that we rely on for physical survival. This explains why ourselves and others will sometimes have strong emotional reactions in social situations, both at home and at work. It is a fascinating topic and one, I know, that listeners will enjoy.
You can listen to this week’s episode below, or by using your podcast app of choice, just click the corresponding image to get access via the podcast website here.
In our conversation, David and I discuss
How the SCARF Model has grown in relevance during the pandemic
The window of opportunity companies and leaders have to solve for autonomy and build a better post pandemic normal
The role of leaders in enabling their organisations to be truly diverse, equitable and inclusive
How companies should approach Performance Management in the future
This episode is a must listen for anyone interested or involved in Neuroscience and its role in Leadership, collaboration, culture and performance. So that is Business Leaders, Chief People Officers and anyone in a Behavioural Science, People Analytics or HR Business Partner role.
Support for this podcast is brought to you by Quantum Workplace. To learn more, visit www.quantumworkplace.com/digitalhr.
Interview Transcript
David Green: Today I am delighted to welcome David Rock, Co-Founder and Chief Executive Officer at the NeuroLeadership Institute, to The Digital HR Leaders Podcast. David, it is great to have you on the show. Can you provide listeners with a brief introduction to yourself as well as introducing the NeuroLeadership Institute?
David Rock: I guess the first thing I am originally Australian, born and bred there, based now full-time in New York City. It has been an amazing year to be there, actually, lots of highs and lows and quite an experience. I have a Doctorate in the Neuroscience of Leadership, one of the first people to get that.
And I coined the term NeuroLeadership around 2007, essentially when I had been doing Leadership Development and Culture work for a decade or so and I noticed that adding a real biological foundation to the Leadership work was tremendously helpful for people to, essentially, have bigger insights about themselves and Leadership overall and it just provided this fantastic understanding.
So I spent the last 23 years all up, but spent the last roughly 15 or so really building a foundation for the Neuroscience of Leadership. Writing academic papers and publishing a journal, I have been involved in about 50 or 60 research papers. I run a big global conference every year and then my organisation also consults right now with about half of the fortune 100, on how to make their organisations better for humans, but through science. And so that is what we do, but I continue to do research, right now very focused on the hybrid workplace, how to get that right and all the noise around innovation.
We have a big Diversity, Equity and Inclusion Practice as well. It was big before the pandemic and continued to be, obviously since then. So essentially I am a Change Practitioner/Leadership Practitioner, first. Neuroscience, second and wrote three or four books on this and a lot of papers to help everyone understand the deeper biology of leadership activities. Not to assess Leaders, but to actually make them better.
David Green: I can imagine you have been quite busy in the last year with those, that's for sure. You developed the SCARF Model in 2008, which has been widely adopted to enhance self-awareness and social interactions.
Interestingly, a few of my colleagues at Insight222 like Ian, who is producing this episode and Caroline are particularly big fans of the SCARF Model. Can you tell listeners a little bit more?
David Rock: Yeah, sure. It actually took about three years to develop. I published it in 2008, the first time. But I developed it because I kept seeing this pattern in lots of different research that was coming out at the time.
And the pattern was, they were just starting to use fMRI to really look at what the brain was doing during social interactions, for the first time. So for a long time fMRI and other technologies like EEG, PET scans and CAT scans, all this stuff, they were basically very isolated activities, so you would study a brain trying to remember something. But about 15 to 20 years ago they started to be able to create, if not actual social interactions, then at least facsimiles of social interactions. They started to basically say, Hey, look what the brain does when people are trying to influence each other, understand each other or interact in any way. There was this sort of whole birth of a field, Social Cognitive Affective Neuroscience it is called but also sometimes Social Neuroscience. This whole field has started with a handful of Scientists and now has well over 500 Scientists in this space, probably nudging towards a thousand. This whole field started to emerge that was essentially saying, Hey look what the brain does when you interact and one of the things that was really surprising to me was the way that social issues, like feeling maybe left out of a meeting for example, activated a surprising network in the brain that you wouldn't expect would be activated. Essentially like the pain network, not exactly the same as the pain network, very, very similar with the same kind of components, it looked like the same kind of network as physical pain and it worked in a very similar way as well.
So I started to see this and this same finding showed up in all these different social constructs. Feeling left out of a meeting, feeling someone else was better than you, feeling treated unfairly, feeling connected to someone, feeling disconnected to someone and the same was happening on the positive side. So there was a threat that would occur if you were left out of a meeting, but there was a reward network activated if you were included in a meeting. It turns out, in both cases they are very strong responses, very similar to literally pleasure and pain and that explained a lot. So the body is reacting as if there is a real pain response which is obviously a strong, strong response. There is a scientist who studied loneliness for a long time and he explained how feeling lonely is the body's response to dangerously low resources, in such a way that you have to pay attention, exactly the way that hunger is a response to dangerously low resources, so that you have to pay attention.
Right. So in one case loneliness is that you don't have enough people around you that if anything goes wrong, you will be okay and so you get this response that you want to fix. Anyways, that was an example. But the point is these social experiences were activating really strong threat and reward responses and I thought it would be so great to be able to organise that and be able to remember, with minimal effort, all the different kinds of things that people react to. Over about three years/three and a half years, I tried a number of different frameworks and tested this out with lots of different scientists, as well as audiences. At one point I didn't have the F and it was CARS then eventually I settled on SCARF. In fact, the acronym came to me at the bottom of a swimming pool in the Philippines at the time, it just suddenly came to me in a flash, the word, the concept, all the different elements, I had been mulling over it for a while. Then I quickly raced back to my room and looked it up and tried to see if it made sense and started to use that.
So that is the background, but it was really three and a half years of really immersing in this question of, could we organise, what I understand now as the big motivators. Because these are our strong intrinsic motivators and in some ways, SCARF is an evolution of Deci Ryan's work on mastery and autonomy, which was Self-Determination Theory, which was looking at why people do what they do. But SCARF has much more of a dynamic, social architecture to it, whereas some of the older theories were more individualistic. SCARF kind of describes what happens when we are interacting with each other.
David Green: Walk us through the five elements of SCARF. I think it would be helpful to understand how they apply in the workplace because I guess, having looked through the framework myself, you can see there are great things there for Managers of teams, but also for people in teams as well, to help understand how they react in different situations.
David Rock: Firstly, SCARF is what I now understand as something we call, disruptive language. And disruptive language is something that you don't have to work to remember, it just pops into your consciousness in relevant moments, it is disruptive in that sense. So once you learn it, you can't unlearn it and it shows up everywhere.
It is really describing why people are reacting emotionally or just positively, why they are motivated, why they are de-motivated, what is going on as we interact. The five domains, I will walk you through them. Each one can either be a threat, so a negative like a sense of danger or loss, which tends to be stronger by the way than the positive. So each one can either be negative, which is quite strong or positive, which can balance out the negative. So the first one is Status and so your brain is constantly detecting your status compared to other people’s. Not so much socioeconomic, that is a construct, it is more sociometric which is a concept of where you are in relation to the people around you, day to day.
David Green: Like in a team, for example?
David Rock: Or in an organisation. You might be the CEO, you are the highest possible status in that group. You might be two down from the CEO, so you are kind of the third status level. So, the brain naturally knows our status in every community. We know exactly what our status is, who we have to pay attention to, who has to pay attention to us. There are brain studies showing every person we interact with, we immediately, automatically, unconsciously, try to work out our status and theirs and we are actually uncomfortable until it is resolved.
So it is a natural drive to understand status, but what happens is feeling highest status is a nice little reward response. You feel positive and it actually lengthens your life over time but a potential status reduction, like a potential threat to status like someone telling you you have done something wrong or fearing you have made a mistake or speaking up in public. These things are quite strong responses and it is variable between people, but everyone has that possible status threat. A lot of Management, but also just working, involves trying to look good and trying not to look bad and this is driving our behaviour all the time. So there are three different brain networks that light up, according to the differential in status between you and someone else, that then guides your behaviour in these really, really significant ways. So anyway, that is one and it is relevant to every interaction we have with everyone, but particularly important for Managers.
The second one is certainty. Which is literally our ability to predict what is going to happen moment to moment.
It is really important to understand that the whole brain is built on predictive patterns, not predictive analytics directly, but the way I hold this bottle of water right now it is not something I am doing for the first time, I have done it a million times before, something similar and the brain has organised all those patterns and told me exactly how to hold this. It is a little heavier than normal, so it is making sure I am holding it firmly. So all our actions are actually based on predictions, based on past experiences and if you have seen those emails that went around where most letters were removed, but you could still see what someone was trying to say, even though most of the letters were wrong because your brain doesn't read every letter, it predicts based on probability of what is going on. So that is a long way of saying that when things become uncertain, you get anxious and when you can't predict what is going to happen because you have no past patterns to draw on or you can't see where you are going, you get a pretty strong threat response. There is a series of studies showing that uncertainty is more threatening than an actual threat. If you show someone a happy face, an angry face, an uncertain face, the uncertain face lights up the threat response more than the actual threatening face. A little bit of uncertainty is quite strong but on the flip side though giving people some certainty, answering questions, removing ambiguity, these kinds of things activate the reward response. So that is really powerful.
The third one is autonomy. We have been talking about autonomy a lot in the last few months, because I think it is kind of the killer app for helping people through this crazy time. Autonomy is basically a feeling of you are in control and you have choices. So often when something is really stressful, it is because we have unconsciously decided that we have no control and we don't know what to do, we don't have choices and that becomes really stressful. Then we realise an aspect we can control and it becomes more manageable. So uncontrollable stress is a term that they use for something that is really overwhelming. When you get to work one day and you just feel completely overwhelmed because you feel out of control and then you build a list of your top 10 things and you order them and you just start on the top three and you feel better again. All you have done is increased your sense of autonomy, just your perception of it. So autonomy is a feeling of control. Again, when it goes down, when your boss comes in and says, Hey, you have got to do this right now, this exact way, follow this exact thing, your autonomy has gone down. Your certainty has gone up a bit, but your autonomy has gone down a lot and it can be a threat. On the other hand, being given choices and your boss saying, Hey, look, we need to get here. Here are three different ways you could do it and it is up to you. That is increasing your autonomy, even though the boss has been pretty prescriptive, you have still got a greater sense of control than you expected.
So, so autonomy is sense of control.
Relatedness is a big one. We've got the Status, Certainty, Autonomy, R is for Relatedness.
Relatedness is literally having an experience of being in an in-group with people. You and I are both David, so we have got a strange in-group. We have in-group with people where we have similar experiences, similar past experiences, or it feels like we understand each other or even stronger if we have similar goals. So when you both are trying to work towards something together, it doesn't matter how different you are, how different your name, age, gender, everything is, you are working with someone on a similar task with a similar goal.
You create an in-group, you create relatedness.
David Green: It is a bit like when you meet someone for the first time who supports the same sports team as you, you have immediately got that connection and relatedness.
David Rock: Absolutely. We are both from the Commonwealth, there are different levels of relatedness and different kinds of relatedness. Essentially, when relatedness is low, so when you feel more like you are in an out-group with someone, your brain processes really differently than when you feel like you are in an in-group with someone. So you want to really have that in-group experience with everyone you possibly can, essentially you treat in-group members like you treat yourself.
Then the final one is fairness, the F is fairness. It was really interesting when it came later in the model because originally I thought it would be something like status or something else, but it turns out a fairness is something that we read really directly. Right now it is the 21st of April and last night, US Eastern time, around four or five PM, the entire country breathed a sigh of relief because the George Floyd situation was resolved somewhat in a way that felt fair. And I think pretty much the entire country was waiting for things to really explode if he was acquitted and it would have been intrinsically unfair, to the point that we probably would have seen riots and real disruption to millions of people's lives because something felt unfair. So clearly fairness matters a lot. It is not just in legal issues, it is in politics, it is in our interaction socially, it is in business. We are actually tracking who is fair and who is not and degrees of it, all the time.
So anyway, you have got these five domains. Status, Certainty, Autonomy, Relatedness and Fairness, essentially these are the things the brain feels really passionately about. Particularly avoiding negatives. We feel passionately about avoiding negatives because they are really bad, but we also feel passionately about obtaining positives. That is the architecture overall that is driving our behaviour really, all the time.
David Green: That is a really great explanation for our listeners. Obviously as you referred to at the start, it has been quite a year. How does the SCARF model remain relevant or maybe even more relevant, in the current pandemic environment?
David Rock: Well, we realised it was significantly more relevant. When February/March hit last year, we sort of saw it coming because we have got a lot of very global clients in China and other places so we were watching it. When March hit, we pretty much thought we were going to be out of business by June. Even though 78% of all our work was already virtual and our whole company was working virtually, so it was very seamless for us to transition both the delivery of the work and working, it was just pretty much every company stopped doing anything to do with developing people for a few months. So we were like, oh, it has been a great 23 years, where are we going next? Our vision is making organisations better for humans through science and suddenly, humans needed a whole lot of help and companies were listening to a whole lot more science. We got actually incredibly busy and had the biggest year we have ever had, by a long way, because companies were wanting to do things to help their people survive and thrive. Now at the heart of the pandemic was a huge drop in certainty, autonomy and relatedness. People have no idea what is going on, no sense of control and were disconnected from all the people that normally help them calm and soothe. So we were talking a lot about labelling that and understanding why that has been difficult and then also putting in place what we call buffers, against those drops. So how can you offset those effects with increasing certainty in your home office or increasing control of your diet and exercise. What can you do to buffer yourself against those? So we did a lot of work helping individuals and briefing CEOs about what you can do personally to get through this time.
And then like the social construct of an organisation, you also had a drop in status for people because they had lost their corner office, but also they just felt like a complete beginner in this new world. You had big issues with fairness as well for a lot of people with having to work at home and manage children. A lot of women suffering incredible pressure and people having to go to a factory, not having to go to a factory, all this stuff. There are a lot of fairness issues. One of the things that we talked to a lot of organisations about was sending what we call, positive SCARF signals, everywhere you can. Which is, how do we continue to celebrate wins through status?
How do we create clarity in any way possible with certainty, communicating a ton etc. One of the biggest variables that we came to was autonomy, which was the more you can let people be in control of not just where they work, that was sort of required, but also when they work and how they work. The more you could do that, the easier it is for people to actually manage, not just their lives, but their stresses. So it became really relevant. We brought back some research that we lightly touched on a few years ago, around the different levels of threat we experience to give companies a way to measure this. So if you have all five domains of SCARF in a threat, it is going to be level three, which is the worst, it is really intense. If you fire someone unfairly with no recourse, no information, you know you are going to make someone really, really upset. But if you do it in a fair way with information and give them some sense of control in the process, it is manageable.
In a similar way, we were talking about how can you use autonomy to offset the total tonnage of threat, so it is not a level three, which is the worst, it is maybe a one. So it is incredibly relevant, very, very relevant and actually now with going back to work and companies trying to force people back to the office, it is relevant again as a tool for thinking about how to do hybrid work the best way possible.
So we are now doing a lot of research into that and thinking about that as well. Then of course the whole racial crisis that happened in North America, but really globally, it is extremely relevant to that as well.
David Green: When I was looking through the model and re-analysing it, in relatedness, you talk about the importance of one to ones. I have also seen some research from Microsoft that analysed virtual working and its impact on Employees, they found that Managers are even more important during remote work in terms of touching in, making sure people are okay, being very clear in communications, showing vulnerability, because let's be honest it has been new for all of us. We had someone on the podcast recently you talked about, I've had to open up my life a little bit more to my team, they've seen I have got young children and now it is a joke which one is going to come into the meeting. So I guess that vulnerability helps, I imagine, a lot of the elements in the framework.
David Rock: That is relatedness. So Leaders who kept their cameras on and showed the chaos at home, increased the sense of relatedness because the people had now a shared experience with them. It is like, oh, you are human. But also we have shared goals like feeding the kids and trying to keep them out of the office while we are working. We have got shared goals. So it definitely increased the sense of relatedness in quite a big way, but that was important. We were talking a lot about showing some vulnerability, just a decent amount and really showing that you are human. That was one of the upsides of this time is that our humanity was more acceptable in organisations, it sort of had to be in everything that was happening.
David Green: We hear lots of talk about hybrid work, lots of talk about the new normal and all this other jargon that we hear, but obviously what we want to do is make sure that we are building a better normal. I think that is a phrase that you have used. What does that look like?
David Rock: Everything that you see about individual engagement and performance, one of the really big variables is people's relationship with their Boss. If you don't get on with your Boss, you feel treated unfairly, you feel uncertain, you feel like they are attacking you, all this stuff, it is a real issue. And so a lot of what we have got to do, to build a better normal, is educate Bosses and Leaders at all levels, about how to interact with humans more effectively. A lot of the push in organisations has been towards the other way, like let's put all the stuff that we need to do into software, let's take the human out of our interactions, let's give people a number for performance ratings, let's avoid having to have a conversation. And so I think there is a move to humanise Management a bit more. It has been kind of de-humanised for quite some time.
Overall, I think that is a piece of it. One of the powerful things about SCARF is that you literally see in real time, something that is about to go wrong and you can change. You literally ahead of time see yourself about to say, why did you send that? And you go, Ooh, that is going to create a status threat, maybe instead I will say, Hey, what are your thoughts about the next step here? And ask the person a question which raises their status and by the way their autonomy, versus attacking. You actually get to the same place with much less threat and a much better outcome. So it gives you this language to see ahead of time, what a conversation might do, or an email, or a strategy, or even a whole product launch. You can actually think about any kind of interaction at any scale through the lens of SCARF and ahead of time improve it because in almost every situation, less threat is better and more reward is better. Threat is stronger and easier to get, but it has all these negative consequences. Reward is longer lasting, more sustainable and better generally.
So how do you minimise threat, maximise reward through SCARF. During an interaction, you can also see what might go wrong and label it and make different plans. Then after an interaction, something that has gone horribly wrong, you can also clean it up. SCARF gives you this language in real time, to improve the quality of your interactions by reducing the unnecessary noise and creating more positive interactions. Which by the way, increases creativity. More positive interactions means people are literally more open-minded, their minds literally open up when they are in more of a positive state, they have more insights, more creative, they can hold more information in mind. So, engagement is positive SCARF in many ways. Engagement is people experiencing getting smarter, being more certain, having more control, working with people they like on good things together and being treated fairly, that is engaged positive SCARF.
It is a language for increasing engagement. It is a language for inclusion, for increasing inclusion. It is a language for just disrupting the bad things that happen as well.
We have built other disruptive language, we have got a whole framework around bias as well that is hugely impactful. It does a similar thing that SCARF does for motivation. It starts with catching biases, ideally ahead of time or as they happen and also a disruptive piece of language, but that is a whole other podcast for another time.
David Green: That's your SEEDS Model, is that right? We will put a link to that in the publicity around this, but I think that might be podcast part two.
So I suppose in your example earlier, when you were saying for Managers having an interaction with one of their team and they say, this is the outcome we have got to get, you can either do it one of three ways.
Instead of saying that, saying this is the outcome we have got to get how do you think we can get there? Something like that so you actually give that autonomy to the team member.
David Rock: It is respecting that a status attack creates unnecessary noise and a raise in autonomy is really helpful. I worked with one of the smartest people I have ever met, a few years ago, she ended up winning The Most Value Generating CEO of the Year, for the Fortune 500. Sara Matthew, she was the CEO of Dun and Bradstreet for a while, incredibly smart. An Indian woman, hyper intelligent and driven and all this stuff and she was a CEO in a very male dominated field. Anyway, cut a long story short, she read one of the first papers I put out on SCARF, someone sent it to her. She wrote to me and said, I really need to talk to you about this, this is messing with my head completely. I need to understand this. Can you come and see me? I went out and saw her, we sat down and walked through it, I got a little white board out and kind of explained it. She went quiet for a moment, then had this big insight. She was like, that is why people don't say anything in my meetings because they are having threat responses and I had never realised I was attacking their sense of status by continually firing questions and firing things. I just thought I was being smart and I want to really make them as smart as possible but you are telling me every threat that I create, makes them less intelligent. I said, yeah, it literally drops their IQ. When you walk in the room, their IQ drops before you say a word by nature of you being a higher status and then if they feel like you are constantly attacking them, they are on edge.
It is literally shutting down their prefrontal and making them, not just less creative, but less functional. She really took that to heart and actually changed her whole leadership style and went on to win this award. We continue to connect to this day, but it was really this poignant sort of insight that she had, I remember that moment where she was like, wow, I had no idea that my style was accidentally, literally, dropping people's IQ every time we meet. I said, well, good news you have hired smarter people than you realise, you just got to leave them alone a bit.
So anyway, that is one of the effects of these things.
David Green: You have said that you see a window of opportunity for organisations to build a better normal before the workforce settles into new ways of working.
I mean, how long is a piece of string, but how long is that window of opportunity and why?
David Rock: I think it would definitely be gone by Christmas unless we see this thing going differently than how it currently looks. With what is happening right now in Brazil, India and other places could be warning of this thing running on a lot longer, but it is hard to say. Assuming, particularly if we focus just on say UK, North America, Western nations, lots of people are going to be vaccinated and there will probably be some semblance of things being somewhat normal, by the end of this year. I think what is happening is the research on this while there is a lot of change going on, that is when you can do big things. It turns out while things are stable, it is really hard to create change, but when there is already change, you can get a lot more. So there is that effect, there is a lot of research on that.
There is also the fact that people are emotionally raw and ready for things to be different. Once they settle back into a pattern, they won’t want to change that because they have settled back in. However while everything is sort of unfrozen and in flux, and emotionally raw, you actually can do really different, really big things. So I would say that is going to be gone by the end of the year, unless some other things happen. We could get pandemic 2.0, touch wood not, but we will see.
Now, if you are a Talent Practitioner, if you are a HR Practitioner, or an OD Practitioner, you probably care about making companies better for humans, you probably care about people more than you care about technology or finance in that way. You are a people person. If you went into that space, you probably intrinsically like making the world better for humans. What I would say is this year 2021, may be the year that you will do your best work, your most revolutionary work, because of this effect. You have this window of opportunity, so I say go be the revolutionaries. Do really big things this year that you might never be able to do in years to come. This could be a once in a hundred year event, so far it is, hopefully it is. This amount of change may not be with us for another hundred years, in terms of people's willingness to really change the paradigm for how work is done.
David Green: And in terms of SCARF, I can see how it can be a great framework to help drive engagement and performance. How would you then measure that you are doing that? I mean, obviously there is ways of measuring engagement and ways of measuring performance, but in the context of SCARF, how do you measure that you are doing things effectively?
David Rock: Yeah. We were in the measurement business even before the neuroscience research really took off for us. So we have been measuring for 23 years, all the way since the beginning. In the last seven or eight years, we got much more fine-grained about how to measure effectively and really looked at the research.
We do a few things at the Institute. We do original research, we publish that, we tell people about it, but we also consult with organisations to build strategy in any part of the talent framework and then we also drive change. So we will help a company of a hundred thousand people become more inclusive in a month, for example, we do these big scalable change initiatives. What we do in any time we are trying to drive change is we are looking at what are the key things you would see someone doing differently, on a weekly basis, if they were changed. So if someone's more inclusive, we know that they are going to find common ground with people quite deliberately.
As an act of inclusion, that is one of the most valuable things to do and we teach them that. And so we want to ask how many times in the last week did you see your Manager really work hard to create shared goals or find things in common, how many times did they do that? So as you collect enough data for enough people about these particular habits, you can see people are actually creating a more inclusive environment now.
Inclusion for us is positive SCARF. It is sending positive signals of status, certainty, autonomy, relatedness and fairness. We simplify it into three steps rather than five around inclusion, that kind of covers all of SCARF, just to make it simpler. So you don't have to remember five things, just three. In the end what we want to know is how many times in the last week did your Leader find common ground, lift people up or really worked harder to create more clarity and sense of control so that people really felt included? Literally how many times? Then we look at the percentage of that and we start to collect really interesting data. So we know for example, with our inclusion work that if we do even a reasonable job, 80 to 90% of any number of people, we are absolutely convinced are being more inclusive now in a really meaningful way. If we do an amazing job, it might be 90 to 95% and this could be 10,000 people all around the world.
So we are in the habit activation business at the commercial end of what we do and then we measure that really deliberately, literally by the week to week habits that are activated.
David Green: That is really really good. We have touched on this a bit but if you are part of the Leadership Team. What is Leadership's role in building a better normal?
David Rock: There are a couple of perspectives about this, firstly, everyone talks about Leadership having to be top down. You have got to work with the Leaders first to change the culture. I disagree, I think the Leaders are the hardest people to work with, to change. You get much more change from people who are more open, who are not fixed in their ways and so I am not a huge fan of the top-down model. Now, do you need Leaders to be involved and engaged in a change initiative? Absolutely. But one of the better ways to do that is upward pressure. If you have got a company of 10,000 Employees with a thousand people Managers and a hundred top Leaders. You say to your one hundred top Leaders, Hey, we are about to teach your thousand Managers this month, all at once, to be more inclusive, so you better know what is happening and role model. And then we would rather teach those thousand people all at once and put all this upward pressure on these people and then you get real change. But if you try and initially do something with the hundred, firstly you never get it scheduled. Secondly, they don't turn up when they do, they are doing other things. They don't cascade it down and then when you try and cascade it the program you built for them, doesn't actually work for the rest, because it just doesn't scale with costs and all this stuff. So we are a bit backward with how we think about involving Leaders in change. Having said all that, one of the biggest effects from social science about why people change, is thinking everyone else is changing and particularly higher status people. If higher status people are doing something, you do pay a lot of attention. So there is a flip side to everything I just said, which is that you do want the highest status people to be role modelling things and doing things differently, but I wouldn't say start with them.
I would say, start with everyone and apply the upward pressure. So it is important. The normative effect is really important for sure.
David Green: It's quite interesting because in your example of 10,000, let's make the math easy for me, a hundred top Leaders a thousand People Managers that leaves you with 8,900 Employees. If you get the one thousand working, then you are effectively effecting 89% of the organisation and then as you said, that then filters up to the hundred to manage the thousand.
David Rock: It tends to, we looked at the data on that percentage that changes when you do a briefing to the Leaders versus when you don't. We do get about a 15% bump in the percentage of people now doing things differently weekly, if you brief the Leaders versus don’t involve them. So it is helpful to brief them. But the interesting thing also is with those thousand People Managers, the best strategy is to say, you guys are doing great, we are going to give you some tools to teach the 8,900 people, how to be even better. So we think about Manager led learning, where you are giving the Managers really easy to use tools that they can scale because now you can impact a whole company in a month. Now you can make a company of ten thousand, a hundred thousand or a million, much more inclusive in a month and a couple of months later work on something else and you can nudge the whole organisation very quickly. That is our model for driving real behaviour change into and down into organisations.
David Green: Great, well David, unfortunately we have come to the final question. I think we could probably talk a lot longer, we haven't even gotten to the SEEDS Model yet.
We are asking everyone this question on the series, many companies have done away with their annual performance management cycle over the last few years, but we haven't seen a new consistent model replace it as quickly as everyone expected. How do you think companies should approach performance management in the future?
David Rock: We have been thinking about this a lot and for a long time as well. We were one of the organisations that really put forward the idea of getting rid of ratings. In fact, we published a piece that became one of the biggest ever for Strategy in Business Magazine, which was called kill your performance ratings.
Still makes the rounds and it explains the underpinning neuroscience of why they might feel good to have ratings, but they do more harm that is invisible, than they do good. People are catching on to that more and more. So there has been a huge move to what you call, more continuous performance management.
Ultimately the really big skill that I think all People Managers need is firstly, defining what great looks like so that people have more certainty and more autonomy. Then you also have a shared goal with relatedness. So defining what great looks like as opposed to monitoring activity.
So on the one hand is Managers monitoring activity and then on the other hand you will have Managers saying, we are going to show you what great really looks like, so you can self manage towards it. It then becomes not so much about 40 hours, it is more are you producing great work? So I think there is a real lack in defining what great looks like.
Then there is a real issue around feedback. Our research shows that asking for feedback should be the driver, not giving feedback. So we want to teach people to ask because when a Manager asks a peer for feedback, the peer asks back. If a Manager asks one of their teams for feedback, it creates tremendous trust.
Then the team member asks them and our research shows it roughly halves the stress level for all parties, the person asking and receiving. We published several papers on this. So asking for feedback drops the stress for both sides, about half in the study that we did, which makes it easier to receive, but also you are more likely to give more accurate, honest feedback. So there is a whole different model around feedback, which should be driven by an asking culture.
The third thing I think that is really important, is having a growth mindset and is really helping people get better, rather than just pushing people to try to look good. It is how can we continually help this person improve and focus on progress?
So those are some of the things I think are really central to a new way of thinking about performance management. It is less management, more clarity about excellence and less giving feedback, more asking for feedback and really generating insight through that. And less trying to follow up and assess people and more looking at what is next and developing people.
So we think those three things are super important in the next generation of performance cultures.
David Green: As you were saying earlier, there is a great opportunity to build that into the new normal, now.
David Rock: Companies were forced to get rid of annual goals because they were just laughable for most of the last year. Even quarterly goals were laughable and a lot of people went back to more stand up meetings where you discuss what are we doing this week, within maybe a context of this month. It is a much more dynamic, much more agile. Many, many organisations developed the kind of agility by force, that they have always been trying to. Much more flexibility, much more agility and a lot of organisations have come through this time, obviously with incredible challenges and incredible crises, but a lot of organisations have also done really well in this time. In stripping out unnecessary costs, becoming much more flexible, much more customer responsive. At NLI we interacted with six times as many customers, over a 12 month period, than we did the year before. Because we just got into the online world and maximised it. So lots of organisations have become more flexible and adaptive through this time.
I think the performance management frameworks have had to follow suit. Although there is certainly some people holding on tight to those structures as sort of pain mechanisms as well.
David Green: David, thanks very much for being a guest on on the show. Can you let listeners know how they can stay in touch with you, follow you on social media and find out more about the NeuroLeadership Institute?
David Rock: Yeah, absolutely lots of different ways. My main book is called, Your Brain At Work. It is the best way of really digging into SCARF, it has got more than just SCARF in there but I just put out a new edition of that.
I have a blog, we have had lots and lots of readers of that blog. It is just at neuroleadership.com
Also we have our own podcast that has got 3/400,000 downloads so far, also called your brain at work.
But neuroleadership.com is the main site for work and we do have learning experiences for individuals. Although most of our work is with organisations, we do have some great learning experiences for individuals as well. So neuroleadership.com is a great place to start or my book is called Your Brain At Work, my most recent book.
David Green: Great. David, it has been a great conversation. I have really enjoyed it. I have learned a lot and I am sure our listeners have learned a lot as well. Thank you very much.
David Rock: Thanks very much, I appreciate the opportunity.