How Emotions Affect Strategy

On the face of it little sounds more rational (head) and less emotional (heart) than the formation of business strategy. Yet, as neuroscience has proved to be the case in other presumed to be rational activities, our emotions play a large part in the way teams develop strategy.

In command-and-control hierarchies of the past one can imagine over-bearing senior leaders using emotional force to get there way, but in today’s flatter more democratic organizations we like to think of strategy development as a rational activity, carried out in a calm, formal, environment and based on ‘facts’, perhaps provided by extensive prior data analysis. Unfortunately, this denies the fact that, while people have the capacity for rational thought, this capacity exists on top of a large neurobiological apparatus that is driven by emotion.

Knowing how to integrate emotion and rational thought is key to all decision-making processes. How this plays out in business strategy development is revealed by a close-up study of top management team meetings by Professor Sally Maitlis of Saïd Business Schoo and Feng Liu, previously of Warwick Business School, which not only shows how creating strategy is a highly emotional process, but also how expressing emotion is key to successful strategy development.

The focus of Maitlis and Liu’s research into this important but largely unexplored issue is on how emotion affects the discursive processes through which strategy is constructed, and how the emotional dynamics generated through displayed emotions in strategic conversations shape a top management team's strategizing.

Using video cameras to capture the process of strategy development by a top management team over several months the researchers observed a wide range of emotional dynamics that occur during strategy meetings. These dynamics – some full of positive emotions, others involving both positive and negative emotions – produce different kinds of strategic conversation that in turn influence how critical organizational issues are proposed, discussed and evaluated, and whether team members make or postpone decisions about those issues.

When members of a top management team discuss issues with energy, excitement and even some humour, they feel more connected to one another and are able to engage in constructive, collaborative strategy processes in which proposals are thoroughly discussed and decisions made that are widely accepted. In contrast, when those around the table show a lack of empathy for one another, or use intense emotional displays to attack each other’s ideas, individuals disengage from each other and the team loses energy. These kinds of ‘emotional tugs of war’ and the distance they create between team members make it difficult to find common ground, leading to the postponement of decisions or decisions made without full team commitment.

The research shows that creating business strategy is an emotional process – and that the emotional dynamics of a strategic conversation shape the course it will take and its outcomes. Importantly, when executives express their disagreements with humour or emotions that do not alienate others, strategy teams can explore issues more broadly and deeply, making decisions that integrate different parties’ inputs and that are widely accepted.

Access the original research paper: Emotional dynamics and strategizing processes: A study of strategic conversations in top team meetings, Sally Maitlis and Feng Liu, Journal of Management Studies.