33 Performance Improvement, vol. 49, no. 7, August 2010 ©2010 International Society for Performance Improvement Published online in Wiley InterScience (www.interscience.wiley.com) • DOI: 10.1002/pfi.20164 LEADING THROUGH CRISIS: APPLIED NEUROSCIENCE AND MINDSIGHT Jo Ann Heydenfeldt, PhD Are neuroscientific principles relevant in efforts to manage change successfully? This article provides a case that demonstrates how persistent and purposeful attentional focus, as described by neuroscience, can help overcome human resistance to change and generate creative and successful solutions. A change management perspective growing out of fresh neurological insights into human behavior is also discussed. HOW DO LEADERS GO about nurturing or inspiring minds incapacitated by emotions such as fear or anger to appraise the situation realistically and create workable solutions? According to neuroscience, resolution depends on the ability to be open in the face of what may seem like unbearable, painful feelings and yet maintain integra- tion. The current business environment is fraught with sobering degrees of uncertainty. Some risk-averse insti- tutions may fare better than others, but few are exempt from managing ongoing crisis in the current economic upheaval. When leaders face the challenge of a devastat- ing reality and have the skill to focus attention purpose- fully on new objectives, they are ready to begin, according to some organizational theorists (Rock & Schwartz, 2006; Siegel & Hartzell, 2003). When this level of uncertainty and organizational pain exists, theorists ask how best to maintain a highly com- mitted and high-performing workforce (Eisenstadt, Beer, Foote, Fredberg, & Flemming, 2008). Some consultants suggest that companies that nurture socially intelligent behaviors such as flexibility, awareness, empathy, and resilience are more likely to survive the crisis and prosper (Bryan & Farrell, 2008). Other researchers conclude that organizational survival can be seen as a choice between delivering superior value to an unforgiving global mar- ketplace with an exclusive focus on the shareholder or maintaining the firm’s people, culture, and heritage. Still others maintain that some leaders manage to maintain this tension between people and performance without sacrificing either, all the while implementing change that may be wrenching and dramatic (Eisenstadt et al., 2008). This article describes a difficult and painful response to change that successfully employed neuroscientific princi- ples by focusing attention on new insights and solutions, closely enough and often enough and for a long enough time, to change the way employees think and behave (Jha, Krompinger & Baime, 2007; Rock & Schwartz 2006). A SUCCESSFUL CHANGE INITIATIVE AT SAFEWAY: NEUROBIOLOGICAL PERSPECTIVES An extraordinarily successful change effort was imple- mented at Safeway. In 2003, Safeway CEO Steve Burd estimated that t ...

1. 33
Performance Improvement, vol. 49, no. 7, August 2010
©2010 International Society for Performance Improvement
Published online in Wiley InterScience
(www.interscience.wiley.com) • DOI: 10.1002/pfi.20164
LEADING THROUGH CRISIS: APPLIED
NEUROSCIENCE AND MINDSIGHT
Jo Ann Heydenfeldt, PhD
Are neuroscientific principles relevant in efforts to manage
change successfully? This article
provides a case that demonstrates how persistent and purposeful
attentional focus, as described
by neuroscience, can help overcome human resistance to change
and generate creative and
successful solutions. A change management perspective
growing out of fresh neurological
insights into human behavior is also discussed.
HOW DO LEADERS GO about nurturing or inspiring
minds incapacitated by emotions such as fear or anger
to appraise the situation realistically and create workable
solutions? According to neuroscience, resolution depends
on the ability to be open in the face of what may seem like

2. unbearable, painful feelings and yet maintain integra-
tion. The current business environment is fraught with
sobering degrees of uncertainty. Some risk-averse insti-
tutions may fare better than others, but few are exempt
from managing ongoing crisis in the current economic
upheaval. When leaders face the challenge of a devastat-
ing reality and have the skill to focus attention purpose-
fully on new objectives, they are ready to begin, according
to some organizational theorists (Rock & Schwartz, 2006;
Siegel & Hartzell, 2003).
When this level of uncertainty and organizational pain
exists, theorists ask how best to maintain a highly com-
mitted and high-performing workforce (Eisenstadt, Beer,
Foote, Fredberg, & Flemming, 2008). Some consultants
suggest that companies that nurture socially intelligent
behaviors such as flexibility, awareness, empathy, and
resilience are more likely to survive the crisis and prosper
(Bryan & Farrell, 2008). Other researchers conclude that
organizational survival can be seen as a choice between
delivering superior value to an unforgiving global mar-
ketplace with an exclusive focus on the shareholder or
maintaining the firm’s people, culture, and heritage. Still
others maintain that some leaders manage to maintain
this tension between people and performance without
sacrificing either, all the while implementing change that
may be wrenching and dramatic (Eisenstadt et al., 2008).
This article describes a difficult and painful response to
change that successfully employed neuroscientific princi-
ples by focusing attention on new insights and solutions,
closely enough and often enough and for a long enough
time, to change the way employees think and behave (Jha,
Krompinger & Baime, 2007; Rock & Schwartz 2006).
A SUCCESSFUL CHANGE INITIATIVE

3. AT SAFEWAY: NEUROBIOLOGICAL
PERSPECTIVES
An extraordinarily successful change effort was imple-
mented at Safeway. In 2003, Safeway CEO Steve Burd
estimated that the retail grocery chain business model
would not be sustainable through 2010. Part of the rea-
son was that health care costs were rising at an annual
rate of 10% and the grocery chain could not continue to
pay these increased health benefits costs demanded by
the union. Safeway management, together with Ralphs,
Albertsons, and Vons, reached an agreement to maintain
health benefit costs at the 2003 level in all chains. Clearly
something radical had to be done to gain union accep-
tance of this change. Employees reacted to this joint
decision to contain health care costs with anger and a
prolonged strike involving protest marches and picket-
ing. Nevertheless, Burd’s compelling story addressed
head-on both the negative (“the current model is unsus-
tainable”) and the positive (“we can survive”). Safeway
also managed to overcome objections because humans
are risk averse (Nicholson, 1998): Employees were more
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34 www.ispi.org • DOI: 10.1002/pfi • AUGUST 2010
willing to take risks to avoid losing what they had than
they were to gain something unknown. Employees chose
to focus attention on continued employment.
Out of the 2003 strike came the Safeway Health
Initiative Task Force. Its members were stakeholders
from the risk management, benefits, strategic planning,

4. human resource, legal council, and other departments
within the organization. In 2005, Safeway embarked on a
health care reform plan based on market-based solutions
that rewards healthy behavior. This response directly
addressed the need to curtail benefits costs and at the
same time addressed employees’ focus on health care
concerns. Two key insights are the basis of this plan. The
first is that 70% of all health care costs are the direct result
of behavior. The second is that 74% of all health care
costs are confined to four chronic conditions: cardiovas-
cular disease, cancer, diabetes, and obesity. Furthermore,
80% of cardiovascular disease and diabetes is prevent-
able, 60% of cancer is preventable, and more than 90%
of obesity is preventable. Safeway’s Healthy Measures
Program has changed employee behavior by building a
culture of health and fitness. It offers pronounced differ-
ences in premiums that reward each covered member’s
healthy behaviors. The program is completely voluntary
and currently covers 74% of the nonunion employees
(Kosterlitz, 2009; D. Vielehr, personal communication,
August 2009).
This initiative shifted energy to focus on a new goal:
improving the health status of employees rather than
maintaining unsustainable benefit plans that subsidized
avoidable illness. To purposely and repeatedly focus on
new objectives, employees agree to be tested annually on
four measures: tobacco use, healthy weight, blood pres-
sure, and cholesterol levels. Skills training, gym member-
ship, and discounted healthy food choices are offered to
help them reach their goals, and they receive insurance
premium discounts for each test improvement. As a
result, Safeway health care costs have held constant for
the past 4 years. Obesity and smoking rates are currently
roughly 70% of the national average, and 78% of the
employees rate the plan as good to very good or excellent

5. (Burd, 2009).
CHANGE MANAGEMENT THEORY
WITH NEUROSCIENCE
Aiken and Keller (2009) have outlined some important
insights about how employees interpret their environ-
ment and choose to act. They reviewed the rational
holistic change management model by Price and Lawson
(2003; as cited in Aiken & Keller, 2009) that suggested
four basic conditions are necessary before employees
will change their behavior:
A compelling story.1. Employees must see the point and
agree with it.
Role modeling.2. They must see the CEO and colleagues
walking the talk.
Reinforcing mechanisms.3. Systems, processes, and incen-
tives must be in line.
Capacity building. 4. Employees must have the skills to
make the desired changes.
As appealing as this model was because it made sense
intuitively, only one in three change efforts is successful.
Aiken and Keller (2009) suggest that managers waste time
and energy implementing this prescription because they
may be disregarding certain elements of human nature
that are sometimes irrational but nevertheless predictable.
They outline nine insights into how human nature gets in
the way of successful change and how to manage them:
Create a compelling story, but realize that what moti-1.
vates you may not motivate most of your employees.

6. You are better off letting them create their own story. 2.
Choosing their own creates a powerful incentive.
It takes a story with both pluses and minuses to create 3.
real energy.
Leaders believe that they are the change, but they are mis-4.
taken because they do not think they need to change.
Influence leaders are not the panacea for making 5.
change happen; the whole society is.
Reinforcing mechanisms are important. Money, the most 6.
expensive mechanism, is not always the most effective.
The process and outcomes have to be fair.7.
Employees’ performance is driven by what they think, 8.
feel, and believe in regardless of their capabilities and
skills.
Good intentions are not enough. Follow-through is 9.
essential.
These insights support the neurobiological view that
people’s behavior is as greatly affected by neuroaffective,
or “irrational,” elements as they are by rational ones.
Employees’ performance is
driven by what they think,
feel, and believe in regardless
of their capabilities and skills.
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7. Performance Improvement • Volume 49 • Number 7 • DOI:
10.1002/pfi 35
Irrational elements the Safeway plan takes into account
are the following:
Create a compelling story but realize that what motivates •
you may not motivate most of your employees. Burd
had a compelling story that outlined unsustainable
benefits costs. However, employees were not motivated
to accept the reduction of benefits. They reacted with
anger, picketing, and a prolonged strike.
You are better off letting them write their own story; •
choosing for yourself creates a powerful incentive. Safeway
corporate created a voluntary plan—employees can
choose to participate in a culture of fitness. Employees’
behavioral changes are rewarded monetarily, and they
also enjoy better health. If employees stop smoking
and bring hypertension or obesity under control they
receive a reduction in benefits costs for the following
year as well as a refund for the higher amount paid the
previous year. They write their own story and choose
for themselves.
It takes a story that contains both pluses and minuses •
to create real energy. This was certainly true of Burd’s
realistic presentation of the Safeway situation with
bankruptcy a definite possibility.
Influence leaders are not the panacea for making change •
happen; the whole society is. Seventy-eight percent of
enrolled employees rate the plan good, very good, or
excellent. Safeway health care costs have held constant

8. for the past 4 years, and Safeway employees’ obesity
and smoking rates are currently roughly 70% of the
national average.
Leaders believe that they are the change but are mistaken •
because they do not think they have to change. When the
fitness tests were offered, Steve Burd was first in line
and has become a national spokesperson for health
economics.
The process and outcomes have to be fair• . The program
is voluntary. Employees can choose their own plan or
eat burgers and fries in the cafeteria if they want, but
healthy foods are prominently displayed and sold at a
discount. If they fail a fitness test, they can take it again
in 12 months.
Employees’ performance is driven by what they think, •
feel, and believe in regardless of their capabilities and
skills. Employees are given the opportunity to trans-
form themselves by taking personal responsibility
and, in the process, gain financial incentives as well.
Employees are not subsidizing unhealthy behavior
nor are they discriminated against for preexisting
conditions. The figures support the fact that they
believe in this approach.
Good intentions are not enough. Follow-through is essen-•
tial. Safeway designed the Healthy Measures plan in
2005 and has made improvements each year.
Safeway’s initiative embodies the application of
focused attention and the consideration of irrational
but predictable elements of human nature with stun-
ning success (Boyatzis & Goleman, 2008; Kosterlitz,
2009). Its culture is one of cost control; it seeks to

9. influence situations for the better by finding the most
appropriate cost levers. Safeway leaders articulate their
success in terms of market-based solutions, declining
per capita health care costs, and a sustainable business
model in the global economy (D. Vielehr, personal com-
munication, August 2009). It is also true that CEO Steve
Burd demonstrates the desire and ability to lead and has
maintained focused attention on solving this problem.
Safeway has become a nationally recognized leader in
health care economics and an influential player in the
debate over health care (Kosterlitz, 2009). Although
empathetic relationships may have been a result, leader-
ship in this example was not so much about developing
positive feelings as it was about thinking strategically
about employees’ socioemotional needs and creating a
program that met them in a tangible and practical way
that takes into account predictable human reactions. It
illustrates the claim that when so-called irrational ele-
ments are part of the equation, they add value and work
in concert with sound economics in ways that serve
change initiatives well.
WHY CHANGE IS PAINFUL
Rock and Schwartz (2006) wrote that “Change is pain. It
provokes sensations of physiological discomfort. Successful
change requires changing the day to day behavior of peo-
ple throughout the company. . . . But changing behavior is
hard even for individuals and even when new habits can
mean the difference between life and death” (p. 2). People
resist change stubbornly even when it is in their best inter-
est. They resist because encountering new information
engages the energy-intensive part of the brain. It is much
easier for people to operate on automatic, using behaviors
that have been shaped by extensive training and experi-
ence, than it is to learn new habits. Trying to change any
hardwired habit requires a lot of effort that most of us try

10. to avoid if possible. Changing routine habitual thinking
also stimulates a strong message in the brain that some-
thing is wrong, and these messages can overpower rational
thought, causing stress and discomfort (Rock & Schwartz,
2006). Boyatzis and Goleman (2008) describe socially
intelligent things that leaders do (exhibit empathy and
become attuned to others’ moods) that play a vital role in
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36 www.ispi.org • DOI: 10.1002/pfi • AUGUST 2010
overcoming this discomfort. In fact, research has demon-
strated that empathy and resonance or attunement with
others turns out to be especially important when guiding
institutions through rough times and maintaining high
performance in crisis situations. Here, however, I suggest
that there are specific ways in which empathic leaders can
focus attention and resonate with employees that will help
them overcome their resistance to change and create new
solutions.
NEUROBIOLOGY AND EVOLUTIONARY
PSYCHOLOGY
Evolutionary psychology suggests that humans are hard-
wired in ways that govern most human behavior—how
people think and feel and how they relate to one another,
for example. In an uncertain world, a cardinal evolutionary
psychological premise is emotions before reason. Those who
survive will have the emotional instincts to screen all infor-
mation. Businesspeople trained to dispense with emotion
and use rational analysis and logic exclusively can never
fully escape the effects of emotions, especially in the face

11. of bad news or massive change (Nicholson, 1998). Dodge
(1991) asserts that “all information processing is emo-
tional in that emotion is the energy that drives, organizes,
amplifies, and attenuates cognitive activity and in turn is
the experience and expression of this activity” (p. 159).
At the most basic level, “emotions help the brain
organize behavior in order to accomplish the tasks that
allow people to survive (Siegel, 1999, p. 137). Therefore,
because of the primacy of emotions, change leaders
should be sensitive to the role of emotions in mental pro-
cesses and thinking. Second, humans are risk averse and
resist change except when threatened. We are hardwired
to avoid loss when we are comfortable but fight frantically
when we are threatened (Nicholson, 1998). This suggests
that attuned communication to foster an environment
that can support innovation and risk in ambiguous situ-
ations is required (Siegel, 1999). Third, humans feel more
self-confident than justified by actual conditions. An
effective leader will evaluate the magnitude of challenges
and balance optimism with realistic appraisal. He or
she may also underline the gravity and urgency of situ-
ations by holding “survival meetings” that address such
questions as, “Does our plan make sense?” and, “How can
we turn pain into opportunity?” (Campbell & Sinclair,
2009). Finally, the passion to lead is the most important
characteristic a leader can possess (Nicholson, 1998).
The question then becomes, How do followers discern
between leaders who value attitudes and ways of being
that foster their own and others’ well-being and those
who do not? Here, social-emotional intelligence and
mindsight, or the ability to watch the brain create mean-
ing and the emotional considerations of both followers
and leaders, are seen as relevant.

12. NEUROAFFECTIVE SCIENCE AND
SOCIALLY INTELLIGENT LEADERSHIP?
In the past, emotional components of thinking and
behavior were disregarded in favor of cognitive analy-
sis. The accepted model for the mind’s operations was
the computer (Goleman, 2003). To fully understand
the relatively recent interest in emotions, we should
briefly review the historical context in which researchers
sought to base theory on quantifiable facts to rid science
of irrationality. The notion that emotions (irrational
considerations) continuously and significantly influence
cognition, consciously or not, differs from the historical
scientific tendency to separate emotions and rationality
(Siegel, 1999). The new area of research is called affective
neuroscience. Damasio (1998) wrote:
It would not be possible to discuss the integrative
aspects of brain function without considering the
operations that arise in large scale neural systems;
and it would be unreasonable not to single out emotion
among the critical integrative components arising in
that level. Yet, throughout the twentieth century, the
integrated brain and mind have often been discussed
with hardly any acknowledgement that emotion does
exist let alone that it is an important function and that
understanding its neural underpinnings is of great
advantage. (p. 83)
SOCIAL-EMOTIONAL INTELLIGENCE,
MINDSIGHT, AND LEADING THROUGH
CRISIS
Interpersonal biology research maps the interpersonal and
environmental conditions that support optimal social,
emotional, and cognitive function. Dan Siegel (1999), a
neuropsychiatrist at UCLA, describes ways in which we

13. can train our mind to develop what he calls mindsight—
the fundamental ability to watch the brain create mean-
ing in the present moment while being cognizant of
The passion to lead is the most
important characteristic a
leader can possess.
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Performance Improvement • Volume 49 • Number 7 • DOI:
10.1002/pfi 37
emotional considerations. It is a kind of focused attention
that allows us to see the internal workings of our own
minds. According to Siegel (2010), mindsight is the basic
skill that underlies everything we mean when we speak
of having social and emotional intelligence. Leaders and
performance improvement specialists who desire to lead
in treacherous waters will be well advised to develop
mindsight. Mindsight is not as much about being “nice”
or making people feel good as admonitions to dis-
play empathy or understanding might suggest. Leaders
should certainly be aware of strategic thinking tools such
as supply-side and consumer economics and financial
analysis as in the Safeway example. Having mindsight is
about being as much influenced by employees’ emotional
responses to crisis and challenge as it is about being influ-
enced by information about market share, profit and loss,
and shareholders while crafting business strategy. Perhaps
most important, leading change is about persistently
focusing attention on new and workable solutions.

14. References
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change management. McKinsey Quarterly. Retrieved from
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ligence and the biology of leadership. Harvard Business
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15. Goleman, D. (2003). Destructive emotions. New York: Bantam
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JO ANN HEYDENFELDT, PhD, is an organizational
psychologist researching the neurobiology of
cognition, leadership, and team building. She has written a
dissertation on U.S. and Mexican nego-
tiation behavior and has delivered a presentation on the
influence of culture on negotiation to execu-
tives in Mexico City. Her research paper, “The Influence of

16. Individualism/Collectivism on Mexican
and U.S. Business Negotiation,” was awarded Best Paper:
International Track at the Third Biannual
Conference on Advances in Management (1996) and was
published in the International Journal of
Intercultural Relations (2000). She is a lecturer at the School of
Economics and Business at St. Mary’s
College of California and is affiliated with the Emotional
Intelligence Global Consortium. She may be
reached at [email protected]
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