strategy+business is published by PwC Strategy& LLC.
or, sign in with:
strategy and business
 / Spring 2011 / Issue 62(originally published by Booz & Company)


“That’s the Way We (Used to) Do Things Around Here”

Step 1: Recognize the Need for Change

“Every organization wants to be in a groove,” says venture capitalist Jeff Stiefler. “But no one wants to be in a rut. The problem is when grooves become ruts. The key is to be able to recognize when you’re in a rut and then [figure out] how to get out of it.”

That’s the essence of this first step, which is particularly important for leaders of a change initiative. You cannot expect others to reflect on their behavior if you have not started to look dispassionately at yourself and to recognize where you need to change. After all, you are one of those responsible for painting a positive vision of the future, articulating the new possibilities in the collective mind, and calming the sense of upheaval. Your behavior therefore gives employees a highly charged impression of the changes you espouse, directly affecting many circuits of the brain.

But participation in this step is not limited to leaders. Anyone enlisted for change, at both an individual and a group level, should take part. For individuals, this means reflection. You must build greater awareness of your thoughts, emotions, and actions and their connection to real-life outcomes. After a difficult exchange or episode, you can step back and ask yourself: “What was I thinking? How am I feeling now? Was my behavior aligned with my goal at hand and with the big picture?” You can begin to recognize the effect that high-energy emotions have on your rational judgment and decision making — and the changes worth making in your own thinking and behavior.

At a group level, the recognition step involves bringing a group of self-aware people together to talk about the possibilities for change, with the premise that the current approach — “the way we do things around here” — cannot continue.

Practice of this step can send an emotionally charged signal to others, because it often means rejecting or abandoning some convenient but counterproductive actions. For example, Jim Cracchiolo, the CEO of Ameriprise, recognized the need for change in the financial-advice industry, which influenced him to decline TARP funding in May 2009. Government funding, he said, would hinder the company’s pursuit of its potential. This explanation resonated strongly with the people of the firm.

Step 2: Relabel Your Reactions

This step is an analogy to a necessary process in cognitive therapy for obsessive-compulsive disorder. By giving a new name to maladaptive behavior, an individual with OCD can override the content of dysfunctional thoughts (“I have to wash my hands to make sure they’re clean”) with the knowledge that they are merely thoughts (“Here comes that urge again, but it is simply a thought that my OCD condition produces”). The mental act of relabeling enhances your ability to make this distinction and thus decreases your personal attachment to what you are thinking. This improves your ability to clear-mindedly assess the content of the thought. By relabeling these thoughts, you can break the cycle of rumination, emphasizing that these thoughts are driven, not by some external factor, but by the patterns in the brain itself.

Relabeling means giving a new name to something, and though the idea of applying a mental label may seem simple, it has often been shown to have the power to calm emotions and engage the rational centers of the brain. Neuroscience researchers Kevin Ochsner and James Gross, for example, connected people to brain imaging devices and showed them photographs of horrific traffic accidents. There was an immediate rush of anxiety and fear — a classic amygdala hijack. But then Ochsner and Gross asked their subjects to think differently about these upsetting images: for example, to tell themselves, “I’m an emergency medical technician coming on the scene. I have to be calm and clear in my thinking about this.” Subjects in the experiments then found it easier to maintain a clear, calm perspective. In general, the act of relabeling changes the way the brain processes information in such emotion-related and instinct-related areas as the amygdala and hypothalamus. Activity shifts rapidly to the prefrontal cortex.

Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store



  1. Douglas Lennick, Financial Intelligence: How to Make Smart, Values-Based Decisions with Your Money and Your Life (FPA Press, 2010): Similar reframing principles applied to personal finance.
  2. Jeffrey Schwartz and Sharon Begley, The Mind and the Brain:Neuroplasticity and the Power of Mental Force (Regan Books/HarperCollins, 2002): Explains how human thinking and behavior changes through processes like this one.
  3. Jeffrey Schwartz and David Rock, “The Neuroscience of Leadership,” s+b, Summer 2006: How to develop far more effective leadership practices by taking the nature of the human brain into account.
  4. Adam Smith, The Theory of Moral Sentiments (1759): Smith’s masterwork (as he considered it) explicates the development of morality through the “impartial spectator”; people building awareness of themselves in the context of a larger community.
  5. For more thought leadership on this subject, visit the s+b website at:
Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.