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Business Officer Magazine

Outwitting Inertia

You can sometimes fool human nature, says neuroscientist and consultant Eric Haseltine, but in the end you can never change it. Dynamic leaders must face that reality and relentlessly motivate the drive for change-most likely through Machiavellian means.

By Bill Dillon

*What do man's ancient survival techniques have to do with today's leadership? Plenty, according to Eric Haseltine, who holds a doctorate in physiological psychology and specializes in applying neuroscience to organizational performance. Talking by phone from his office in Silver Spring, Maryland, Haseltine, who is president and managing partner of Haseltine Partners LLC, explained several concepts covered in his new book, Long Fuse, Big Bang: Achieving Long-Term Success Through Daily Victories (Hyperion, 2010). His comments expanded on a presentation he made at NACUBO's Executive Symposium earlier this year.

Haseltine defines the long fuse as "any period of time longer than that of the most immediate reward you are anticipating or the most immediate disaster you are avoiding." The big bang? That's the payoff organization leaders, including chief business officers, can  get if they can ignore the brain's instinct to react to the current crisis (there's always at least one) and spend some serious time planning for longer-term issues. That's not so easy, says Haseltine. "While it's not a very flattering picture of how our brains work, I'd basically boil things down to two words: 'anxiety' and 'greed.'"

Survival Habits Hamper Strategic Thinking

What are the fundamental sea changes that are inevitably going to affect higher education? What do we think the future looks like, and what do we do today to prepare for that future?

We come by that anxiety honestly. "We lived in a world 200,000 years ago, when our brains evolved in an environment in which we constantly faced life-and-death problems—starvation, disease, drought, and enemy attacks. The world was just unimaginably more perilous than it is today," notes Haseltine, who applies this knowledge of brain functionality to business methodologies. His assignments—head of science and technology for the U.S. intelligence community, director of research at the National Security Agency, and executive vice president and head of research and development for Walt Disney Imagineering, to name a few—have resulted in numerous organizational improvements as well as patents for innovative products.

The extremely dangerous world of the past made anxiety a key motivator of behavior. "When you're scared or angry, you get ready to go do something," explains Haseltine. "And, you had to do something all the time. So, we were wired to react quickly and extremely." While we don't live in that world anymore, our brains think we do and a phenomenon called "sensory adaptation" kicks in. Our brains dial our senses and emotions up or down, explains Haseltine, to adjust to the fact that there's a lot of energy out there—or, conversely, because there's very little threat posed by the modern world.

Consequently, even comparatively small things cause big reactions. For example, when you have a big report due, it causes a lot of anxiety, which motivates you to work on that project until you get it done. And, then you may say, "Well, my anxiety was a good thing, because without it I might not have gotten the report done." But, says Haseltine, that just masks the fact that we have this urgent voice in our gut saying, "Act now, act now, get it done." It deafens us and blinds us to things other than the immediate.

What's the overall result? Haseltine concludes: "We're always responding to our anxiety about some near-term problem, and we spend zero time worrying about longer-term issues. And, the irony is that we've forced ourselves into an eternal game of whack-a-mole, because we haven't spent time thinking about long-term problems."

A good example is the auto industry in 2008. When the recession hit, it was far too late for General Motors and Chrysler to do the things they needed to do to survive, and so they needed a bailout. On the other hand, Ford, two years earlier, had completely restructured itself and its finances against the day when some horrible thing might happen, and so they did not need a bailout. For some reason, Ford was able to look long.

The irony is that the very thing that would reduce your near-term anxiety—the adoption of a longer-term outlook—is something you will seldom do, because you're too anxious to do it.

Greed is the other main brain stimulus, Haseltine says. Looking at hunter-gatherer societies in Africa and Indonesia, we believe that humans ate what they found as soon as they found it. They didn't haul it back and share it. It was all about instant gratification. Applying that today, if we had no guilt about gaining weight or having heart disease, we would just eat donuts, sweets, and greasy food to our heart's content, because our brains are wired to avoid starvation—and that means eat as much as you can as soon as you can. The problem, says Haseltine, is that "most of us don't live in a world of starvation and subsistence, but the eat-as-much-as-you-can switch is still on and we now have an obesity epidemic."

Not a very flattering picture of the way our brain works, but it's accurate, says Haseltine. Rather than think of ourselves as greedy and scared, we like to feel civilized, intellectual, logical, advanced, and reasonable. While those things are all true to a point, they go right out the window when our survival instinct takes over. "The problem is, in the modern world that we live in, those quick and dirty algorithms for survival just create more problems than they solve," he says.

Learning to Look Ahead

If you don't have dynamic leadership with the will or the ability to fundamentally change things and make them stick, you can still get about 15 percent of what you want by finding, nurturing, and protecting a group that does things normally.

In considering the long-fuse, big-bang concept in an academic setting, says Haseltine, "my guess is that colleges and universities are faced with a lot of near-term crises, money being the most prominent. For state- and government-supported schools, governments are running out of money, so institutions are being asked to do a lot more. While students are coming into the universities at increasing rates, funding is going down. The tendency is to solve the problem right now. How do we get more money? How do we spend it? I'm oversimplifying to the extent that there are other problems for higher education. But, survival has to be at the top of the list. If you can't meet payroll, it's kind of hard to reinvent how you should educate young minds."

Nevertheless, suggests Haseltine, it's useful to think about how higher education got into this bind in the first place. "Is there something the industry could have done 10 or 15 years ago that would have mitigated this threat? And, is there anyone in higher education actually doing well right now? If so, what did they do a decade or more ago—that others could have done, but didn't—that insulated them against this?

"I don't know higher education well enough to know the answer to this," admits Haseltine. "But, I look at outfits like Kaplan and the University of Phoenix, for example. They embraced online learning and a completely new paradigm, bringing higher education to a new breed of students rather than having the students come to them. This is not necessarily correct, but, to a layperson interested in these matters, that's what I see happening.

"Innovative schools democratized the system, embraced new technology, and lowered the barrier to entry for a completely new class of students. Those were long-term decisions that were made years ago. And so, to the extent that some in higher education are doing better than others with this current crisis, you'd have to look at the roots of that going back many years."

Looking forward, Haseltine suggests that you ask: "What are the fundamental sea changes that are inevitably going to affect higher education? And, what do we think the future looks like 15 or 20 years from now, and what do we do today to prepare for that future?" One obvious thing, he says, is to look at international markets, like India, China, and Africa. As the middle class in these countries grows, there's going to be a big demand for high-quality higher education, and brand is going to matter a lot.

"One big advantage for American colleges and universities," says Haseltine, "is that they are still to this day perceived as being the world's best higher education system. So, how do you leverage that brand such that you capture some of these international growth markets?" For example, MIT has looked at that, as has Cornell, in terms of what they're doing in the Middle East.

Manipulation With a Motive

Read More About It

For more about ways that Eric Haseltine has applied discoveries about the human brain to other fields, refer to his book, Long Fuse, Big Bang: Achieving Long-Term Success Through Daily Victories (Hyperion, 2010). In Haseltine's work in fields as diverse as aerospace, entertainment, and national defense, he's often observed short-term thinking that focuses on putting out fires instead of the long-term thinking necessary to fuel and ignite far-reaching new opportunities.

The essence of long-fuse thinking is to imagine where the arc of history is going for your particular organization, and then figure out how to take short-term steps in that direction. Long Fuse, Big Bang shows readers how to apply enduring strategies in a quick-fix world-to arrive at future opportunities by taking incremental steps with short-term projects that are in harmony, not in conflict, with our "got-to-have-it-now" nature.

Even if you've identified the key areas of change for your industry, Haseltine cautions, the most committed change agent often misses the intended mark. "I'm a student of human nature," he says, "and what I know is that you never change it. You can fool it. You can trick people into doing the right thing. But, you can't rationally persuade them to do it."        

In his study of innovation and groundbreaking change in the private sector, Haseltine has reached a conclusion about when change works and why it works. When you see change and innovation at places like Procter and Gamble, IBM, and elsewhere, and then you see companies where people try to innovate and fail-or try to change their ways and fail-"the one common thing that separates the winners from the losers is leadership," says Haseltine. "It's so crystal clear. When you have dynamic leadership at the top and, even better, throughout the organization, people are motivated to drive change and follow through, and create a set of measurements and rewards to keep the thing going."

A lot of the leaders set up the right approach, do a big kickoff with fiery speeches, get it all going—and then somehow things degrade and fall back on the old way. That is typically what happens. "It's the powerful inertia of habit," says Haseltine, "and the inevitable fact that leadership gets distracted by emergencies."

In higher education, Haseltine speculates, let's say you have a vision of the future, you start hiring people who really get it, and you offer early retirement to people who don't get it. And, then, all of a sudden, the speaker of the house in the state legislature calls and says your budget will be cut by 30 percent starting this year—and some of the money you already have is going to be decommitted. How much time are you going to spend advancing your future vision, versus reacting to that fire?

"It takes unbelievably strong visionary, gutsy, courageous leadership to stick to your big goals under those circumstances," says Haseltine. "And, if you don't have the right people, you're never going to get anywhere significantly new. True, you have very limited tools in academia—in part due to tenure—for recruiting people who want change and for removing people who don't. Nevertheless, I would embark upon a strategy of changing out the status quo mind-set, by changing out the people."

And, by the way, if you don't have a leader at the top who is willing and able to do this, he says, "it's probably not going to work."

Given a bureaucratic, risk-averse culture and political restrictions and regulations, what do you do?

Take advantage of a "rebel alliance." One of the great weaknesses of a big bureaucracy is that it's slow and clueless as to what's really going on. While that can be a great weakness, admits Haseltine, "it's also a strength in that it allows passionate people to form a rebel alliance, or a group of mavericks, who get together and go do something. In my book," he says, "I use the example of Intellipedia, a wiki for intelligence sharing created by just such a group of intelligence officers at the CIA that completely transformed the way intelligence is done from the bottom up. Basically, they ignored what their leadership said it wanted and produced something without permission or a budget."

Haseltine calls such action the "15 percent solution." If you don't have dynamic leadership with the will or the ability to fundamentally change things and make them stick, you can still get about 15 percent of what you want by finding, nurturing, and protecting a group that does things informally. In this case, people made use of a wiki and other new tools, like social networks and new media, to collaborate on a big idea without necessarily asking for permission.

To sell a big idea, make it look as small as the mind that has to approve it. For example, explains Haseltine, "You don't have to get the dean's permission to do a bold new initiative in international online learning for your university. Take a sabbatical at the University of Mumbai, and, as part of your research, do a project on online collaborative learning—just a little experiment. While it's a complete revolution in how you're doing higher education, just don't call it that. You just call it a 'little project' you did with a sister university in Mumbai; and then you let the rebel alliance take it and make it grow. Above all, let that dean take credit for it when it succeeds. You may even put his or her name on it. This is what I mean about manipulating the brain into doing the right thing. It's actually devious and underhanded, but, do you want to do the right thing or do things the right way? They often are not the same."

The Accidental Visionary

It's often a CFO of an enterprise who is the voice of survival, notes Haseltine. "I don't know how this works in higher education, but I'll tell you that in every other realm of human endeavor, the CFO's power is way out of proportion to his or her placement on the organizational chart. When leaders manage people with conflicting needs and interests, someone has to make the hard decisions about where to cut resources. The gutless leader does what we call 'salami slicing,' trimming a little bit off everything and hurting everybody equally.

"Courageous leaders kill whole things and keep healthy whatever's left. When I was a leader, I simply used the nuclear option, getting rid of whole departments and entire initiatives so that what remained was left fully functional. My premise was that it's better to do a few things really well than everything really poorly.

"The point is that often a leader will realize that these decisions are politically risky and difficult in many other ways. Better to give it to the CFO to come back with recommendations for the way we go about this budget cut. 'After all,' the leader could say after the decisions were made, 'it's the finance people who did this; this is a budget decision, right?'"

It's the CBO, then, in higher education who often is the one who decides the future of the institution.

"My point is that business officers and CFOs wield enormous power in terms of where they're going to take the enterprise," says Haseltine. "Some of you may be timid, thinking 'wait a minute, I'm in accounting and finance; I shouldn't be the one making the decisions about the future of this enterprise.' And, yet, you are.

"I would simply say this: Have a point of view about what the future is. You may not have asked for the role of visionary. You may not have wanted it. But, it will be thrust upon you. So, be prepared to stand for something, and have the courage to back it up."

BILL DILLON is executive vice president of NACUBO.

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