When there’s less money coming in, the conventional wisdom holds that it’s prudent to cut your spending, whether you’re a consumer or a multinational corporation. This is particularly true if the economy is experiencing the worst downturn in eighty years, and it’s not at all clear when there will be a return to prosperity.

Sure, there are always opportunities, if the wolves aren’t yet at the door, for those willing to take a risk. While everyone else is being tight-fisted, you can get a great deal on that new Cadillac Escalade you’ve been lusting after. If all of your competitors are cutting back, a well-timed investment in marketing can help your company gain share.

But fearful times have a tendency to bring out the worst in people. The emotion-generating amygdala starts pumping cortisol into the system, slowing our thinking and narrowing our vision. Just when we need to be at our best, we become stupid. Across the board cost cutting driven from the top down isn’t always the smartest approach.

When you’re up to your neck in alligators, you may forget that your goal was to drain the swamp.  However, that doesn’t make the snapping jaws any less real. Nor will a trip aboard the Starship Enterprise to the final frontier of culture change, despite the assertions of a recent article in The Wall Street Journal.

It’s hard to argue against the two studies quoted in the article, claiming the limitations of cost-cutting initiatives.  I’m even willing to believe in the benefits of culture change, though the survey touting them was conducted by a consulting firm that makes its money from, of all things, selling culture change.

But what bothers me is the article’s mystification of culture. The “right” culture comes across as the magic beans that will grow a giant stalk of profitability. The definition we’re offered by a business school professor is “people believe in the organization, in their land manager, and therefore help them perform as much as possible, they think they are valued by the organization, both employers and workers are gaining mutual benefit.”

Now all of this is good stuff, but it’s just the kind of thing that gives my profession a bad name (or makes people question if it is a profession.)  I can’t see any one of my clients betting their company’s survival on “you’ve got to believe,” nor would I have any idea how to quickly effect such a belief.

Culture is the set of ingrained habits that determine the way people do things in the absence of prescriptive policies and procedures. But more than just belief is needed to realign those habits with the critical success factors of the business. It takes a consistent message, conveyed through everything leaders do and say, about how people can come together, behave in specific ways to overcome obstacles, and achieve an exciting vision of the future.

But when the alligators are restless, there’s a more immediate way to achieve efficiencies and refocus efforts. Gather the responsible people together and give them all of the unvarnished information you can about the state of the business. Share the financials and the challenges. Then ask them to work together to come up with recommendations on what to do.

This will engage them, give them control over their destiny, and create ownership for what needs to be done.  Since they’re closer to the work, they’ll avoid many of the mistakes that are inevitable when cost-cutting is mandated from the top down.  If two heads are better than one, an entire organization of minds is bound to come up with better ideas than an individual manager, no matter how smart he or she may be.

This approach can be implemented quickly and doesn’t depend on turning around the Queen Mary of corporate culture before results are achieved.  Nor does it require a starship, or beans of any kind.  And when it’s employed, a high performing culture magically takes hold.

The Strategic Imperative

It seems like everyday we’re treated to a business news story that just a couple of years ago would’ve seemed fantastic, but now is just taken in stride. Many of the pillars of American industry have either gone bankrupt or been acquired at fire sale prices, more than one quarter of all residential mortgages are under water, unemployment is at ten percent and could stay that high for years, and even Harvard has been forced to cut back because of the thirty percent drop in the value of its endowment.

All of these are just examples of what economists tell us is structural, not cyclical change. The business world is now a fundamentally different place, and things are not about to return to the way they were. In my day job, I see lots of pain out there, which drives an intense focus on cost reduction and a strong aversion to risk trying anything new. While it’s understandable that in such times people would just hunker down, I fear this is exactly the opposite of what needs to be done.

When a crisis hits, our fight or flight reaction kicks in, narrowing our vision to what it takes to survive. But the unexpected and painful event can also stop the automatic processing of the brain and change the way we look at things. We become more willing to change, and with a fresh perspective, we become more innovative and recognize new opportunities. How we respond is a conscious decision.

At the same time our economy is being transformed, so too is our understanding of how our minds work and how we make such decisions. We’re learning about how our perceptions shape the world we live in, how much our actions are driven by emotion and not logic, and how big ideas change the way the mind works. These and other findings of brain science challenge the conventional wisdom on how to conduct business.

The changes roiling the economy and the latest brain research combine to create an imperative for every company to fundamentally rethink their business. Customer needs have changed, but now we have better ways of understanding what they are. Costs must be controlled, but there are new management practices and organizational designs that ensure greater efficiency. Fundamental change is now a fact of life, but we have the tools to help people prosper from it.

Perhaps the most fundamental lesson of brain science is that the world is only what we think it is, but our thoughts will determine our actions. My bet is that those that see the present as an opportunity are going to take the bold action needed to flourish. Those that don’t will be yesterday’s news.

Tiger Woods on the Brain

In a recent interview, I was asked what effect all of the time we spend in front of a computer has on the brain. Setting aside the effect of staring at a screen might have on our neurons, I immediately thought of the incredible access we have to information over the internet.

Unfortunately, it’s a double-edged sword. It certainly saved me a lot of time and trouble writing my recent book, but I also find I know far more about Tiger Woods’s sexual peccadilloes than I care to. In the past, my knowledge would’ve been limited to what I could pick up from the tabloids while I stood in the checkout line at the supermarket. Now I’m just a click away from the article in the Hindustan Times on the “25,000 pounds on orgies with hookers” he spent, and it doesn’t even appear until tomorrow.

Despite the fact that I’m the one that decides to click on such articles, it’s easy to fault the internet for clogging my brain with garbage. But like every aspect of our experience, it’s not so much what something is, but what our minds do with it that determines its worth. The brain is a vast network of relationships, and when one piece of data is linked to another, the mind can generate valuable insights even from information that seems worthless at first glance.

The internet vastly extends the network of relationships, because it gives us access not just to bits of data, but to other minds making connections between the bits of data. In an op-ed piece in the New York Times, Gail Collins frames the “hysteria over Tiger Woods” as a useful way for us to gain respite from the really depressing news on healthcare reform and the escalation of the war in Afghanistan.

Sam Tanenhaus links the story to the historian Daniel Boorstin’s distinction between celebrity and heroism. Celebrity is created by the media, while heroism is a result of the acts of the individual. Our focus on celebrity is an indication of the decline of society’s values. But by trying to remain aloof, Woods has paradoxically allowed the media to define him, both for good and for ill.

This same theme is picked up by Belinda Luscombe in an article in Time. She writes that Woods’s wife Elin should take a lesson from Jenny Sanford, the “new hero” of “cheated-upon spouses.” “Sanford deftly and subtly grasped her part of the narrative and spun it. Hers is not the story of a dull wife who was passed over for an exotic soul mate in Argentina, but rather the tale of the true captain of a family ship, unbowed by the squalls.”

By refusing to stand by her husband at his news conference and through her own interview with AP and a profile in Vogue, she defined herself, preempting the media’s spin. We now see her through her own, self-created narrative.

My link is to organizational leadership.  Most cognitive scientists now believe that our minds work through stories, and we are defined both for ourselves and for others through the story we tell. As Tiger Woods has learned from his silence, in the absence of a carefully crafted story, others will impose their own story on events. The story we tell is not just a pejorative “spin,” but an heroic act.

All organizations have a collective story their members tell. In times like these, marked by devastating layoffs and examples of corporate greed, the story being told is not good either for the business or for the individual. It saps any sense of loyalty and desire to work for the common good, and it leads to lives of not so quiet desperation.

Leaders need to create a counter-narrative with an aspirational vision of the future that gets people committed and excited. The story is told with words, but it’s also told with decisions and actions. There’s no magic to creating stories, for they are just what the individual leaders need to tell themselves to ensure their own commitment.  By thinking about what we need, we’ll know what others need as well.

Maybe following the Tiger Woods saga isn’t such a waste of time after all, but one of those teachable moments we keep hearing about today. Then again, maybe every moment is teachable, if we make the right connections. To be valuable, internet links need more than just a mouse click. They need an open mind.