Managing to change

Since human nature does not lend itself to the business environment, business should adapt to human nature, says Nigel Nicholson.

New Darwinism, or evolutionary psychology (EP), has focused attention on the idea that human nature has evolved over time. It says that our minds as well as our bodies equip us for a way of life - that of clan-dwelling hunter-foraging - that has predominated over the millions of years of our evolution.

Some of this is hotly debated, but there is an emerging consensus that, far from being a blank slate on which experience can inscribe what it wills, the brain comes well stocked with biases, possibilities and patterns of behaviour. Add to this the idea that there has been too little time and no consistent pressure to reshape human psychology in the brief interval since we built cities and organisations, and some profound and disturbing implications arise about the limits to change, the imperfect nature of human kind and the inevitability of stress arising from the misfit between what we are and the environments we have created.

The psychology I was taught as an undergraduate some decades ago invited us to debate two opposites: are we shaped by nature or nurture? Against the EP perspective, these now look less opposing than they then seemed, for they are united by a single falsehood - that human nature can invent and reinvent itself.

For those who take the nature route, this invention and reinvention occurs through right living, or social engineering, while for those who favour the nurture argument, right thinking, that is schooling and indoctrination, is the answer. One place where this approach persists is the field of business and management, where there is a strong vested interest in its open-ended optimism. Yet, despite our idealistic engineering, we continue to see leadership failures, discriminatory practices and strategic errors all around us. EP tells us these are directly related to the collision between our natural instincts and the rational business model.

In the past five years, I have been seeking to introduce EP to business in the belief that we can do better by managing with, rather than against, the grain of human nature and by exploiting the opportunities offered by the innovations of the new economy. For example, gender relations continue to be a source of problems, because we have failed to recognise how organisations are designed by men around paradigms of male psychology - such as power hierarchies and competition. In the new economy, there is a greater premium on teamwork, communication skills and problem-solving. Here women can have more influence than they have had in traditional corporate hierarchies. But where leadership carries big rewards men will continue to contest most strenuously - and often prevail - for positions of power. Leadership suffers from the fact that status hierarchies are monolithic and rigid. Becoming a leader is often the only way an ambitious person can secure status and recognition, with the result that many leaders have no real desire for responsibility over or through people. This cannot be readily manufactured.

If, in the new economy, the hierarchy becomes more flexible and resembles more the communitarian order of the clan, then we can increase the supply of emergent leaders who really want to lead. Our decision-making is often poor because we rely on qualities that were of high value to our ancestors but are short cuts to disaster in today's complex environments. One is the premium we place on confidence in the face of uncertainty and difficulty. This leads to unreasonable risk-taking and exaggerated beliefs in the ability to control complex situations. Another is our reaction to threats of loss. Like many other species, we tend to react in extreme ways to loss - rogue traders and threatened animals alike double up rather than cut their losses. In business, this is the cause of many of the most ill-considered strategic decisions. New technology offers the possibility of sophisticated systems to help harness our excessive impulses.

Human nature, in the form of political impulses and communitarian sensibilities, shapes our behaviour in all of these arenas. The critical question is: how can we steer these towards healthy rather than unhealthy expression in the business community? We can never go back to the world for which we were designed, but we can construct a sympathetic architecture through the tools of the new economy and through the insights we are acquiring about the human animal.

Nigel Nicholson is professor of organisational behaviour at London Business School and author of Managing the Human Animal , published this week by Texere, London.