University of Pennsylvania ScholarlyCommons Legal Studies and Business Ethics Papers Wharton Faculty Research 12-2015 Using the Whole Brain to Improve Strategic Reasoning Roderick Gilkey Ricardo Caceda Andrew Bate Diana C. Robertson University of Pennsylvania Clint Kilts Follow this and additional works at: https://repository.upenn.edu/lgst_papers Part of the Arts and Humanities Commons, Business Commons, and the Social and Behavioral Sciences Commons Recommended Citation Gilkey, R., Caceda, R., Bate, A., Robertson, D. C., & Kilts, C. (2015). Using the Whole Brain to Improve Strategic Reasoning. Neuro Leadership Journal, 1-9. Retrieved from https://repository.upenn.edu/ lgst_papers/16 This paper is posted at ScholarlyCommons. https://repository.upenn.edu/lgst_papers/16 For more information, please contact [email protected]. Using the Whole Brain to Improve Strategic Reasoning Abstract Traditional views of strategic reasoning have emphasized the role of cognitive analytic processes, often to the neglect of affective and social behavioral functions. This bias has influenced both the theory and the practice of strategic planning. Neuroscientific esearr ch holds the promise of identifying a much broader range of human capacities that contribute to the ability to engage and excel in strategic reasoning. Our study of the strategic reasoning performance of a group of mid-career business leaders identified the engagement of social and emotional brain processes that play an important role in strategic thinking ability. In identifying the neural processing correlates of strategic and tactical thinking, we hope to expand and revise the theories of strategic thinking and help develop models for more effective application. We suggest that understanding and engaging the brain’s fuller range of information- processing capacity in accomplishing strategic expertise is itself an important strategy for enhancing the performance of individuals and organizations. We also explore the need to create brain-friendly organizational environments to enhance human performance. Disciplines Arts and Humanities | Business | Social and Behavioral Sciences This working paper is available at ScholarlyCommons: https://repository.upenn.edu/lgst_papers/16 Using the whole brain to improve strategic reasoning Roderick Gilkey, Ph.D.,1 Ricardo Cáceda, MD, Ph.D.,2 Andrew Bate, M.B.A.,1 Diana Robertson, Ph.D.3 and Clint Kilts, Ph.D.4 This article was published in the NeuroLeadershipjouRnAl issUe FOUR The attached copy is furnished to the author for non-commercial research and education use, including for instruction at the author’s institution, sharing with colleagues and providing to institutional administration. 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We recommend sending in a two-page proposal before submitting a finished paper and welcome pure science, as well as case studies and discussion pieces. For further information as to how to submit a paper for © NeuroLeadership Institute 2012 For Permissions, email [email protected] Permissions, 2012 For Institute © NeuroLeadership the next Journal go to www.NeuroLeadership.org RESEARCH Using the whole brain to improve strategic reasoning Roderick Gilkey, Ph.D.,1 Ricardo Cáceda, MD, Ph.D.,2 Andrew Bate, M.B.A.,1 Diana Robertson, Ph.D.3 and Clint Kilts, Ph.D.4 1 Goizueta Business school, emory University 2 Department of Psychiatry and Behavioral sciences, University of Miami Miller school of Medicine 3 Wharton school, University of Pennsylvania 4 Psychiatric Research institute, University of Arkansas for Medical sciences ABSTRACT hefty price tag. The annual expenditure for consulting services in the U.s. was approximately $170 billion dollars in 2011, Traditional views of strategic reasoning have with strategic consulting accounting for approximately 12% emphasized the role of cognitive analytic processes, (or about $20 billion) of the total (First Research, 2012). The often to the neglect of affective and social behavioral expenditures associated with strategic consulting represent functions. This bias has influenced both the theory conservative estimates, because the bulk of these expenses and the practice of strategic planning. neuroscientific are incurred by high-end private firms that do not make research holds the promise of identifying a much their revenues public. Despite these investments, strategic broader range of human capacities that contribute to planning efforts produce what appear to be disappointing the ability to engage and excel in strategic reasoning. or uncertain results. While there are many explanations for our study of the strategic reasoning performance of this suboptimal performance, including poor downstream a group of mid-career business leaders identified the implementation processes, the prime cause may lie engagement of social and emotional brain processes upstream, the result of a flawed or limited understanding of that play an important role in strategic thinking the very nature of strategic thinking and planning itself. We ability. In identifying the neural processing correlates would be well advised to ask if our emphasis on cognitive, of strategic and tactical thinking, we hope to expand linear, and analytic approaches to strategic thinking is and revise the theories of strategic thinking and help misplaced and contributes to underperformance. develop models for more effective application. We suggest that understanding and engaging the brain’s Could our failure to appreciate the emotional/affective, fuller range of information-processing capacity in social, or deliberative (versus automated) elements of accomplishing strategic expertise is itself an important strategy explain why so many strategic initiatives fail strategy for enhancing the performance of individuals because of lack of engagement and execution? From a and organizations. We also explore the need to create neuroscience perspective, we might ask if the current model brain-friendly organizational environments to enhance of strategic thinking – involving a selective and limited use human performance. of some brain capacities (reflective or analytically focused) without drawing upon other perspectives and brain Introduction capabilities – affective, social, and reflexive – could be the Despite the heavy and costly emphasis on cognitive source of failed strategies. Can it be that the first challenge approaches to enhancing strategic planning ability, outcomes in strategic planning is to re-conceptualize and expand remain disappointingly mixed. For example, a recent report our definition and understanding of strategic thinking? in The economist (2011) examined 197 companies and found eisenhardt and Zbaracki, in their seminal paper “strategic only 63% of them reporting positive anticipated results from Decision-Making” (1992), advocate for such a reformulation their strategic planning initiatives. This disconnect carries a of our view of strategy: “we … propose a broader agenda. 1 email [email protected] Permissions, 2012 For Institute © NeuroLeadership NeuroLeadershipJOURNAL Issue FOuR RESEARCH Part of that agenda involves creating a more realistic view we developed to assess the relative performance of each of strategic decision-making by opening up our conceptions subject on a series of strategic thinking questions in order of cognition … to include insight, intuition, (and) emotion” to identify the most and least proficient strategic thinkers (p. 35). The authors are responding to what has become on a continuum. the gold standard for defining and creating strategy first The study was organized in the following sequence: espoused by Michael Porter (1996). Porter describes 1. Identifying subjects from an executive MBA leadership strategic thinking as a rational decision-making process course and conducting a brief interview