3 minutes
Understanding the emotional state of your stakeholders is key to successfully introducing change.
“I think retail banking will go off in 20 years,” said Baba Shiv during a Q&A break at CUES 2018 Symposium. “Branches will disappear. We see more and more the trend where millennials don’t want to travel to get their goods and services. Retail banking will have to exist in some form, but it will have to change.”
That may be an exciting proposition for innovation experts and enthusiasts, but not every board member or CU leader will embrace such a paradigm shift. Shiv, professor of marketing, co-director of the Strategic Marketing Management Executive Program and director of the Innovative Technology Leader Executive Program at Stanford Graduate School of Business, spoke about how to help them in this transition.
“What we often end up doing to persuade the individual is present rational arguments. But keep in mind … first and foremost, you’ve got to play into that person’s emotion,” said Shiv. Getting buy-in requires the right mindset to explore innovative change.
Shiv illustrated this and the opposing mindset during his session, “Designing Solutions Through Brain-Based Insights,” using the “X-framework”: The bottom points of the X are negative states, bored and stressed, and the top points are positive states, comforted and excited.
The Type 1 mindset spans from stressed (the lower right point of the X) to comforted (the upper left point). Individuals in this state desire the familiar and trusted, no/low risk options. In this mindset, there is a great fear of making mistakes because failure is perceived as painful.
“When your brain is experiencing stress, its first instinct is not going to be to seek excitement, to explore,” Shiv explained.
A Type 2 mindset ranges from boredom (the lower left point of the X) to excitement (in the upper right). Individuals in this state fear missing out on opportunities, and the prospect of failure equates to being challenging and exciting. An audience in this mindset will be open to discovery and have a higher tolerance for risk—exactly the environment needed for innovation.
“Do people vacillate between these?” asked Shiv. “Yes. Good leaders can recognize this. The human brain is very sensitive to tone of voice, etc. The dynamics of the meeting can fluctuate. It’s the leader’s responsibility to make sure the group is in the right sort of mindset.”
For the brain to switch from a risk-averse Type 1 mindset to a risk-tolerant Type 2 mindset, it must reach a stable level of comfort, Shiv explained. One way to achieve this is to include an element of familiarity and trust to the plan for change, such as having team members from a successful previous project involved.
Also, “there’s a lot more exploratory behavior in the morning,” Shiv said. The earlier in the day, the higher your levels of serotonin, which means a higher level of comfort. So schedule your pitch meetings early in the day, and if you have to schedule for the afternoon, include drinks (hydration decreases cortisol) or consider conducting a walking meeting à la Steve Jobs to increase dopamine and excitement.
“Laughter, by the way, is one of the fastest ways to change a Type 1 mindset to a Type 2,” said Shiv. “Even fake laughter is enough to create a high enough level of comfort to be able to change mindset.”
Danielle Dyer is CUES’ assistant editor.
Learn more about setting a credit union's strategy at Execu/Blend, April 29-May 2, Santa Rosa, Calif.
Learn more from top Stanford Graduate School of Business faculty at CUES Strategic Innovation Institute, July 15-20, 2018, at Stanford University.
