The Business Brain In Close-Up

First there was "neuroeconomics," a burgeoning field that uses brain scans to explore economic decisions, such as why we won't dump a dog stock. Then came "neuromarketing," the sometimes controversial technique of using functional magnetic-resonance imaging (fMRI) to study how our brains respond to pricey Super Bowl ads or, say, brand images of Coke (KO ) or Pepsi (PEP ).

And now, thanks to an aspiring coaching guru, we have "neuroleadership." The catchy term was coined last year by David Rock, a leadership consultant who has been importing notions from neuroscience to help explain managerial behavior. Rock is just one of a small but growing group of people connecting the two fields. Business school professors at Arizona State University and Emory University are working with neuroscientists to use electroencephalograph (EEG) machines and fMRIs to study the brain waves or images of executives rather than those of traditional undergraduates. And in May, Rock helped organize a NeuroLeadership Summit in Asolo, Italy, where scientists mingled with executives from companies such as fashion house Hugo Boss and agribusiness giant Cargill. Participants ponied up $3,500 to attend the summit, which was held at CIMBA, an MBA program that has made the neuroscience of leadership core to its curriculum.

While neuroleadership may have a creepy Brave New World ring to it, don't worry. Your boss isn't going to scan your brain and compare it to Jack Welch's gray matter anytime soon. The explosion of fMRI research over the last decade has led to compelling findings on how our brains make decisions or weigh ethics, but the research has often been overhyped. And like most newfangled trends that capture the minds and checkbooks of executives, neuroleadership may hold promise for managers, but it also may mean profits for some people plugging it. "It's full of possibilities," says University of Southern California leadership sage Warren Bennis, who has long been interested in neuroscience's lessons for leaders. "What worries me is people being taken in by the language of it and ending up with stuff we've known all along."

Still, the people linking the two fields believe the "hard" science of the brain will someday offer fresh insights for the "soft" art of leadership. At Emory, researchers asked 16 executives to respond to PowerPoint slides about moral quandaries, such as acting on privileged information, while inside an MRI machine. They found that managers weighing ethical dilemmas use the part of their brain associated with early memories, which could mean moral thinking is formed early in life. This could indicate that sending leaders with an appetite for Enron-style accounting through ethics seminars will do little good, says Roderick Gilkey, a management and psychiatry professor who was part of the study.

And in what they have dubbed "The Leadership Neuroscience Project," Pierre A. Balthazard and David A. Waldman, both at ASU's School of Global Management & Leadership, have used EEGs to monitor the brains of 44 business leaders while they discussed scenarios such as layoffs. Working with neuroscientists, they hope to eventually find patterns in effective leaders' EEGs and use the readings to supplement training. They also plan to have students in two new master's programs go through EEGs this fall.

Rock and collaborator Jeffrey M. Schwartz, a research psychiatrist at the University of California at Los Angeles, have been taking a different tack, applying broader themes from neuroscience to leadership rather than trying to map individual managers' brains. One of their main ideas emphasizes that mindful, focused attention on new management practices, rather than on old habits, can rewire the brain. Such concepts have already attracted fans: McKinsey & Co. uses Schwartz's lingo in client workshops. "I think they're very leading edge," says Michael Rennie, a leader of the firm's Organization Practice. An article by the pair in Booz Allen Hamilton's Strategy + Business journal was the publication's most downloaded article last year.

Several companies have caught the neuroleadership bug, too, peppering training for managers with talk of their amygdalas and prefrontal cortexes. After attending the summit in Italy, Jim Merwin, Cargill's manager for learning design and development, says he is planning to use the duo's ideas in some of the $75 billion private company's training programs. And at American International Group's (AIG ) Retirement Services Div., Jim Smalley, director of training and leadership development, has been working with Rock to school managers. One insight: Focus on just three goals to "quiet all the background noise in the brain," says Smalley. The brain, they're reminded, can hold only a few ideas at a time in its working memory.

If such concepts strike you as familiar management axioms, you aren't alone. USC's Bennis found Rock and Schwartz's article to be "filled with banalities" about leadership. And some summit attendees intrigued by neuroscience's promise for business were turned off by what they saw as Rock's attempts to carve out his own brain-based consulting niche. Rock says business leaders are drawn to scientific explanations; Schwartz says he hopes managers will be receptive to his attempts "to create a new language for self-awareness."

Some, including a handful of managers at AIG, Cargill, and elsewhere already are. Executives have long turned to other fields to give them a new vocabulary to speak about change. "When you start talking about things like behavior change and psychology," says McKinsey's Rennie, "[executives'] eyes glaze over. What helps them change their behavior is a cognitive frame." And whenever they're ready, Rock will surely be happy to sell them one.