Communications of the ACM
Managers and Entrepreneurs se Brains Differently When Making Innovation Decisions
Credit: The Mommy Bus
Do entrepreneurs' brains work differently than managers when they are making key decisions? Do they have a better ability to innovate than managers? In an interdisciplinary collaboration between neuroscientists and management faculty, including MIT Sloan School of Management Visiting Prof. Maurizio Zollo, researchers found that entrepreneurs do not tend to innovate more frequently than managers. However, when entrepreneurs do innovate, they actually use their brains in a different and more complete way.
"This was the first attempt to apply techniques from neuroscience to understand how managers' and entrepreneurs' minds work when making different types of decisions," Zollo says. "We wanted to map what happens in the brain at the moment the decision is made to see whether we could explain differences across individuals based on their experience and work background."
The study involved scanning 25 entrepreneurs and a group of managers with similar demographics through functional magnetic resonance imaging (fMRI) while they performed simple tasks that replicated "exploitation" and "exploration" type of innovation decisions. The exploitation type is associated with optimizing the performance of current activities, and is connected to areas in the limbic system where expectations for short-term gratification form. In contrast, the exploration type of innovation decisions entail disengaging from the current task — resisting the urge for immediate gratification — to start a broad, uncertain, and emotionally taxing search for alternative courses of action, which will eventually generate novel and hopefully superior outcomes, Zollo says.
"We found, somewhat surprisingly, that managers and entrepreneurs did not differ in the probability with which they would undertake explorative courses of action. But when entrepreneurs did select explorative tasks, they used both the left and right sides of the frontal cortex of their brain whereas managers only used their left parts of the frontal cortex," he says, noting that this is an important difference because the right side of the frontal cortex is associated with creative thinking, involving to a larger extent emotional processes, whereas the left side is associated with rational decision-making and logic.
"The fMRIs showed that there are differences between managers and entrepreneurs in terms of what happens in their brains when they make decisions, and that the entrepreneurs use their brains in a more complete way when making explorative decisions," Zollo says. "This should not be taken to mean entrepreneurs are smarter or even that they are more innovative than managers, but when they do explore, they use more parts, and especially the more creative parts, of their brain."
He notes that this might explain the capacity of entrepreneurs to take more risks, as they can reason in a more complete way, leveraging both the rational and emotional/creative parts of their mind. However, it also raises the question of whether entrepreneurs use their brains differently as a result of their work experiences, which might have conditioned their brains to act in a certain way, or if they were born this way and then self-selected to undertake entrepreneurial careers.
"It's a nature versus nurture question. We can't answer it yet based on this study, but we do know that brains are incredibly plastic and that the ability of the brain to learn new skills based on experience is far greater than what neuroscientists believed only a decade ago. That plasticity could potentially explain why entrepreneurs' brains act differently when undertaking explorative decisions," Zollo says.
In support of this hypothesis, he points to a sub-result in the study related to a smaller group of managers whose jobs involved more innovative tasks within their organizations. It turns out that those managers' brains actually performed on average "in the middle" between managers and entrepreneurs during explorative tasks. Zollo observes, "There may be a continuum in the way business people engage with innovation decision-making where the more they are involved in entrepreneurial tasks, the more they develop certain patterns in the brain, which we are now beginning to understand."
The collaborative study was conducted by Zollo, who is currently visiting MIT Sloan from Bocconi University, Daniella Laureiro-Martinez and Stefano Brusoni of ETH Zurich, and Nicola Canessa, Frederica Alemanno, and Stefano Cappa of Vita-Salute San Raffaele University. Their work is published in a paper, "An Ambidextrous Mind: An fMRI Study of Attentional Control, Exploration-Exploitation Decisions and Performance."
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