The processes of creating new things, implementing innovations and managing daily business are tasks that each demand a different type of usage of the brain. We talk of intuition, will/instinct and reason. Today, people often attempt to push forward innovations simply by using the powers of reason from their daily business. But that won’t work!

by Prof. Dr Gunter Dueck

A long time ago now, my children were considering what subjects they should study. A wise professor said something along these lines: “Your best path is to choose the area of work that is dictating the crucial ideas of the age. At one time that was nuclear physics, then management; today it is probably biotechnology or Industry 2.0.” That is what they both did, but many relatives advised them to focus instead on something with secure employment prospects. Each had particular conceptions of this solid security; today, however, when my children have graduated, these have become highly questionable.

Thus, there are people who love new beginnings and discoveries, and others who even as children take out a mortgage savings plan, who dream of finding a partner for life “from the same village” and who apply for a secure position at a larger firm. The latter are in the vast majority, but the digital revolution is bringing up new questions: How much is secure consistency worth? How much innovation do we need to aim for? The priorities are shifting.

The discussion of such opposite poles has been going on within the field of psychology for a long time. In his acclaimed book, Basic Forms of Anxiety (1961), Fritz Riemann contrasts ­various pairs of anxieties or fears. For example, compulsive personality has a fear of change, while the hysterical personality longs for change, becoming bored with consistency and moving on with irritation if nothing new ever happens. Compulsive people are neat, perfectionist, ­traditional, clean, hard-working, solid, conservative, careful and thrifty. Hysterical people need excitement, enterprise and variety. They always want to be meeting new people, having adventures and having fun. Taking risks? No problem. In this sense, the unsteadiness of “disruptive” digitalisation is uncomfortable for all those people whose personalities lie closer to the compulsive end of the spectrum. People who tend towards the hysterical side, on the other hand, find the ongoing transformation great: Things are cooking!

When it comes to innovation, we almost ­automatically look across the pond. Where ­Germans tend to struggle with major changes, the Americans in Silicon Valley, for instance, are already cheerfully trying everything out in a way we find too unselfconscious and naive in terms of consequences. Americans, you could therefore claim, are more hysterical than us Germans. A glance at old school reports is ­almost enough to confirm this. Top marks ­require effort, organisation, co-operation and good ­behaviour – not humour, creativity, courage, energy, initiative or entrepreneurial spirit. Do we really want things to stay this way? The compulsives prevalent in today’s society are amazed at the young people of “Gen Y”, the millennials or digital natives with their conception of meaningful work, flexibility, mobility, ­personal responsibility and independence, of achievement and happiness, internationality and multiculturalism. “They are a totally different kind of people,” we hear it said. At the same time, it is more the hysterical replacement of the old by the young that gives us hope.

The current situation can be explained using a model for humans with a mathematical touch: Sigmund Freud sees in us a super-ego (the rules of our lives including from our parents or the education system), the ego and the id, which denotes the drives that want to or have to be lived out and enjoyed. The Bible recognises belief in God and sin in the body (like the id). The teachings of the Buddha distinguish between manas – keen, often self-seeking, analytical understanding – and buddhi – a holistic intuition, which is able to detach itself from ego and see the world as it truly is, rather than through the filter of the self and the fetters of culturally imposed rules. C.G. Jung differentiates between the perceptive functions of directly absorbing individual facts (nowadays, for example, numbers management) and intuitive perception ­(picturing the whole before you intuitively). For some time – since Jung – it has been fashionable to situate these two kinds of perception in the two halves of the brain. We talk about left-brain and right-brain functions. According to this, the left is where we find the more black-and-white world of logic, while the right houses the more colourful world of ideas, principles and images from the imagination. Pure left-brainers act as controllers in head office or consistently reliable line managers. Right-brainers lean towards research and development or ­become pioneers if they have sufficient volition to make something of their discoveries. The makers, doers and entrepreneurs of start-ups are the ones who can turn discoveries into ­innovations.

There are – disputed – tests which suggest that in most companies a good 80 per cent of managers are “left”. They only ask about thinking, not about action, not about gut decisions, responses when faced with danger or uncertainty. This promotes the idea of a third half of the brain, perhaps the nerve cells in the spinal cord and in the stomach? That is where we find ­instinct, which sends us lightning-flash warnings! Is this where we find the soul of entrepreneurs and athletes? It is not the sin and the id, like the instinct condemned by Christianity as animal and described by Freud as drives. No, we find in it a valuable entity representing the will, the energy to act, the instinctive judgement of the captain in a storm. From all this you could argue:

Efficiency innovations reside at the top – reason

Improvement innovations reside at the bottom right – intuition

Disruptive change has more to do with willpower in uncertainty and requires a fine business instinct

Business economics is seated in the left camp and only knows the “homo economicus” who makes cold, rational decisions. The management of large businesses is dominated by the left-brain thinking of numbers management; will and vision are applied for the purpose of reaching numerical targets, but lack the necessary strength for radical digitalisation. This deficit is expressed in the management literature of the day. The purely left-brained ­attitude of the kind of process thinking that was almost celebrated in the past, is today increasingly criticised as being excessive: “That is how managers think, and definitely not leaders!” This phrase expresses the belief that the ­classic “white collar manager” of the old American school or the classic German executive should be replaced by a more proactive model. ­“Management” is associated with planning, organisation, co-ordination and oversight (the ­daily ­business of a large company), while “leadership” is connected with persuasive ­communication, vision, cross-cultural integration, employee coaching and talent ­development, networking and active encouragement of innovation.

How does the management model mutate from the left to the opposite side? That requires a very fundamental shift in the psyche of a ­business. It needs to transform as a whole;its heart must beat differently, its soul mutate. This fundamental set of problems is rarely discussed from the ground up – the whole is ­hardly a topic for general discussion, not in the least! Instead, it is possible to ­observe the transition from one model to the ­other drop by drop in many places.

The good old brainstorming technique is currently being energetically dusted off and ­upgraded to design thinking. It has become more than about just coming up with ideas for improvement within your own department. The current method is to discuss ideas in general, including with future customers, and to have them tested as early as possible with initial ­prototypes of an idea. The classic approaches of ideas and innovation management with their notions of stages and funnelling are losing ground to more active alternatives. The word “agile” is being bandied about almost like a magic word. Everything must now be agile – many large companies are converting the classic organisation with stages of development (“waterfall model”) to agile cycles, in which ­after each phase (“sprint”), the current status is repeatedly discussed with the subsequent ­customer, who is always able to contribute new ideas and improvements.

More and more, high-ranking company ­directors as well as politicians report back from visits to Silicon Valley. They generally return deeply impressed by the entrepreneurial “agile” ways of the mostly young people. They think about how they can turn their employees into entrepreneurs, how their managers can ­become leaders, how everyone in the company can work as willing and loyal followers towards a vision for the future. For about three years, the Gartner Group has been pushing the idea of “bimodal IT”, IT which has one branch managing the day-to-day IT and the other branch engaged in constant agile innovation in IT. These ideas are now being transferred to the whole company, not just to IT.

In essence, all companies are noticing that they must more or less reinvent, reanimate or create anew their entrepreneurial and creative sides in order to overcome the disruptive revolution. What they do not yet understand, however, is that to do so, their psychology is fundamentally changing, that this squabbling around the question of “Is the new a blessing or a curse?” is not an objective discussion but ­dissent in the face of the “brain preferences of a company”.

But how does one go about transforming the soul of a company? How do dutiful employees of large organisations learn to feel “passion for the business”? How do “responsible administrators” become “customer advisers”? How can perfectionist planners in an error-free environment be encouraged to start something when it is not 1000 per cent certain that everything will work as it always does? How do companies behave under conditions of absolute insecurity in the markets – in view of all the crises that now erupt almost on a yearly basis and, time and again, snatch away successes that were believed secure?

A good start might be to take a critical look at models of thinking and processes in a company, but not from the perspective of efficiency or cost cutting this time! Instead, the question to ask is whether the company has a great ­passion for innovation or simply responds to changes? Does it want to get going of its own accord or does it wait until there is no choice? Does it struggle with changes or is it confident that it will benefit from them? Is the company ship robust in the face of the approaching storm? Can is also prosper in unfamiliar circumstances (“resilience”)?

The rigidity that hyper-efficiency has given us must be softened in favour of a new flexibility. Often this means that we must take something that we celebrated as an accomplishment (of efficiency) only a few years ago, and give it up again. And we are not allowed to be hurt by it! But it does hurt! We must simply listen much more to the young employees of Generation Y, who change everything with the necessary joy and intrepidness. Anyone who has successfully steeled themselves in today’s internship gene­ration is resilient and entrepreneurial, makes the required decisions and lives with the consequences. The “new ones” can speak more ­languages, are more international, have lived through more crises, are happier experimenting and are more flexible regarding location than any other generation on Earth has ever been. They will help us. Because: The spirit of enterprise must return! Look forward to an exciting future!

Illustrator: Alexander Glandien

Prof. Dr Gunter Dueck, mathematics professor and former Chief Technology Officer at IBM Germany, is today a freelance writer, philo­sopher and satirist – with a second home on the Internet.

Alexander Glandien works as an artist and illustrator in Vienna. Since 2009, he has lectured at the University of Art and Design Linz. He regularly works for the New York Times, the Neue Zürcher Zeitung and Brand Eins. His artworks are held in Federal collections, as well as at the Albertina in Vienna and elsewhere.