Three Ways That a Business Functions Like the Human Brain

In today’s rapidly evolving business climate, it’s imperative that leaders are able to navigate uncertainty with resilience and agility. Science provides us with insight into how the brain’s response to change and problem-solving can help organizations become more resilient to external factors impacting their operations, as well as how to maximize business performance despite challenging circumstances.

Find out more about the parallels between the human brain and business with Dr. Tara Swart, Faculty Director in the MIT Sloan School of Management Neuroscience for Business online short course.

Transcript

Teams and departments don’t work in isolation from each other. The more businesses become aware of how interrelated everything is and how to adapt to the changing environment around them, the better they’ll do. So how can the parallels between a brain and a business be used to explain plasticity within organizations?

There are three mechanisms for inducing neuroplasticity in the human brain. Myelination, synaptic connection, and neurogenesis. Myelination is that fatty coating that speeds up transmission along axons and neurons. In a business, myelination relates to efficiency and effectiveness. Synaptic connection is about neurons that communicate with each other through chemical messages that pass through little gaps, called synapses between the neurons.

And there are many of these within a big neural pathway. So in a business, synaptic connection is about communication with key stakeholders. It’s about business-critical relationships. An organization with healthy synaptic connections triggers a lot of trust and excitement, which correlates with the bonding hormone, oxytocin.

We need the right balance of trust and excitement to prevent burnout, but to keep motivation going. When organizations get this right and they have high levels of oxytocin flourishing throughout the organization, research shows that that leads to increased innovation. That’s because neurogenesis, the third mechanism for plasticity in the brain, is about embryonic cells growing into fully formed neurons and connecting up with existing neurons through synapses.

When there are high circulating levels of cortisol in a brain, this actually leads to cell death. So stress can literally kill cells in your brain. When the synaptic connections are good and strong, and there’s more oxytocin in the system, this reduces the balance of cortisol and allows these embryonic cells to grow. Where you have higher levels of neurogenesis in an organization you’re cultivating and nurturing innovation.

Some great examples of highly plastic organizations are BlackRock, which essentially pivoted from being a financial services firm to a technology company. Amazon and Uber eats may look on the surface like they’re doing delivery and transportation, but they’re actually investing heavily in robotics. And even in terms of what they’ve been doing in the last few years, they’ve pivoted to what’s required in the world.