What Neuroscience Teaches Us about Change Management

For anyone who has tried to implement a new technology or a new process in wealth management, resistance to change is inevitable. According to research from the Center for Creative Leadership, 75% of change initiatives fail because of resistant company culture. The question, therefore, is how to reduce the degree of this resistance?


Dr. Rachel Cotter Davis, Ph.D., argues that this happens because organizations are like human brains—resistant to change and reliant on stability. She presented this theory at the Laserfiche Empower Conference and offered several useful insights on human behavior and neuroscience that can be applied to change management.

Here are some takeaways from Dr. Davis’ presentation that you can apply to change in your own organization.

Why the Brain Hates Change


If your boss told you to rearrange your desk items and gave no explanation, how would you react? Though it seems like a miniscule request, most people’s immediate reaction would be to resist or question the demand.

This example demonstrates how our brains are prone to react negatively to change. According to Dr. Davis and other social neuroscience researchers, the reason lies in human evolution . In short, our human ancestors depended as much on social belonging for survival as they did on food and shelter. Poor social standing on both an individual and group basis can actually lead to a higher mortality rate .

When a person’s social environment changes, it challenges his sense of stability (or more specifically, his brain’s). If the brain decides the change is, in fact, threatening, then it will resist or avoid the change as much as possible — “fight or flight” mode, as it’s often called.

Though the workplace is often perceived as a logical, transaction-based environment, it is still occupied by humans — and we humans are emotional beings. When leaders drive some kind of change in the organization, they must consider the impact it will have on their people.

Change Management—You’re Doing It Wrong


Some leaders working on a change initiative might be tempted to say, “I know this change will be for the better — everyone will just have to get used to it.” However, a “my way or the highway” attitude fosters an office full of anxious or distrustful workers.

It’s not just steamrollers that create negative energy in the workplace. Micromanagers have the same effect by impeding the autonomy of their workers. This type of leadership actually impairs employees’ analytical, creative and problem solving abilities. Dr. Davis explained this neurological effect with a helpful analogy:

“Your boss micromanaging you is like someone walking behind you in a dark alley, in terms of what it does to your brain.”

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These approaches cause leaders to undermine their employees and make initiating change far more difficult. A change management approach based in neuroscience (“ NeuroLeadership ” as it’s becoming known) helps engage the hearts and minds of those who need to change. They will not only be able to accept the solution; they will be willing to accept it.

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Applying Neuroscience to Change Management


Dr. Davis identifies four stages of change resistance and offers ways that leaders can address them.

Stage 1: Denial

Employees deny that there is a need for change and try to prove that the new method or solution won’t work. DOL rule will take effect in one year’s time, and many firms are still in the denial stage. Leaders should a pproach this stage with what might seem like excessive communication. Dr. Davis says, “Create a vision for the future, maximize face-to-face communication and reiterate everything at least 10 times. Don’t just send out an email announcement—have a dialogue.” Think of this stage as a marketing campaign—you have to sell the idea.

Stage 2: Anger

Employees complain, become bitter and blame others. Leaders should brace the storm by having an empathetic ear. “People need the ability to vent,” says Dr. Davis. Even if the leader doesn’t take every complaint into serious consideration, allowing people to approach and speak openly fosters trust.

Stage 3: Exploring

Employees try to negotiate favorable outcomes and offer alternatives to the proposed solution. Leaders should facilitate involvement in the project and encourage employees to offer their suggestions in a constructive manner. Leaders will recognize when this stage begins because employees will complain less and focus more on optimizing the solution.

Stage 4: Acceptance

Employees accept that the change is necessary and engage with the new solution or process. Leaders should reward employees for their dedication and acceptance and also recognize the success of the change initiative through ROI, anecdotal evidence, etc. Leaders should also look ahead to future improvements on the change that has been implemented.

Resisting change is not unique to advisors. Following these human behavior fundamentals, wealth firms can become better at adopting new procedures and the right technology tools to steer their enterprises through an unpredictable weather of compliance.