Human brain graphic

Empowering Sustainable Innovation

The interplay between neuroscience, wellbeing and rewards in organisations

Written by Linda O'Farrell FAIM
5 minute read
Human brain graphic

There’s no doubt that organisations are facing a complex range of challenges, with the drive to Artificial Intelligence (AI), energy transition, ongoing tightness in the labour market and the need to grow sustainably just some of the subjects that boards and executives are grappling with.

The geopolitical situation adds to the uncertainty and as we saw during the Covid pandemic, external factors can lead to the need for workplaces to change their approach rapidly.

All this says that innovation and the capacity to work on the frontiers of culture, technology and social requirements is more important than ever.

In delving into how we might work together to create cultures and reward structures that support innovation, new insights can be gained through the fields of neuroscience, neuroeconomics, psychology and organisational behaviour.

The recent REMSMART and Go Higher summit held at AIM WA walked through how our brains work, how we can best support brain health, how reward structures function at a neural level, whether money can buy happiness and how a more holistic approach to reward might just serve to create greater innovation and sustainability, in shifting towards rewards that are not purely material.

The neuroscience perspective on brain health and innovation

The conditions for healthy brains include what many of us know but may find difficult to practice – habits such as exercise to promote blood flow to the brain, a balanced diet, adequate sleep and minimising alcohol and other substances.

These foundational elements are core to healthy brains that can function well and allow us to think creatively and drive innovation.

Stress and fear are two other key elements impacting brain health. From the neuroscientific perspective, fear and associated stress plays a vital role in survival and can be a positive factor in motivating us to take risks and make change.

However, this positive role can be overtaken when our brains are constantly in high states of fear and stress, with research showing that we may ‘shut down’ in these circumstances and look for opportunities to hide or not contribute.

Ultimately too much fear can be fatal to innovation and even give rise to serious health problems.

Workplace cultures that focus on wellbeing are well-placed to support brain health and maximise creativity.

But as the REMSMART and Go Higher event panel noted, wellbeing programs that function as virtue-signalling do more to erode trust and engagement than they bring to the innovation table.

For people to thrive and build the habits needed to be at their best, trust is required.

This means clarity of purpose, open communication, listening to feedback and designing roles that allow for empowerment and stretch targets without pushing into the ‘long hours burn out’ territory, which erodes individual and organisational wellbeing over time.

A 15-minute desk massage is wonderful but will not make up for a punishing work schedule where people are afraid not to answer their emails at any time of the day or night.

The role of neuroeconomics on motivation

Research into neuroeconomics provided further insights when it comes to building workplaces that support innovation from the brain up.

Supporting brain health is the first step in creating the conditions for creative thinking and innovation. Another important aspect is the types of rewards offered for great performance and new ideas.

Our brains do not differentiate between monetary and non-monetary rewards, such as an authentic ‘thank you’ for a job well done, or some unexpected recognition tailored to the individual’s needs such as an extra day off after an intense period of work.

In fact, when it comes to rewards, money may reduce performance!

Numerous studies have shown that when people work because they are intrinsically motivated by the purpose of the work and enjoy the process and outcomes it produces, their engagement and performance is higher than when simply working for extrinsic rewards such as money.

Where extrinsic rewards are offered, people may lose the intrinsic satisfaction they initially had and this leads to lower engagement.

Incentive plans based on pay for performance may lead to temporary compliance with company requirements – money is important, after all – but truly great cultures bring purpose and leadership based on relationships to create high engagement, wellbeing and innovation.

Why is all this important for innovation?

And what does it all mean for us as individuals? Workplace culture can certainly contribute to the conditions for engagement and wellbeing, but all too often we find ourselves wondering if this is all there is and maybe that job over there in that competitor company that pays a little (or a lot!) more might just be the solution.

The extra dollars in the first few pays may well increase satisfaction until we find out what the person next to us is getting paid, because research indicates that happiness is a comparative construct.

We are happy until the dreaded envy or FOMO raises its head and then we may be at an even lower base of engagement and satisfaction than we were at initially.

Being unhappy, we may quit exercise to take up other habits which further erode our sense of agency and ability to create positive change.

Director and Chief Growth Officer at Go Higher, Linda O'Farrell FAIM

Understanding our own purpose, values and intrinsic motivators is essential in avoiding this loop.

When we know our own ‘north star’ we can see monetary rewards as fuel for the journey rather than an end in itself. True empowerment comes from clarity of purpose and being supported by positive people who share or at least respect your values and contributions.

Understanding what motivates you to be your best may change your relationship with financial rewards and open up opportunities to work in roles that bring huge satisfaction – and might just lead to new and innovative ideas that bring success in whole new ways.

And as leaders, when we help to empower our people through both monetary and non-monetary rewards, we build cultures that create these new ways of thinking while supporting wellbeing.

High-stress environments might drive financial outcomes, but the resulting burnout and turnover are indicators of a lack of psychological safety which is now recognised as being as important as physical safety.

Fear-based cultures inhibit positivity which further erodes empowerment. Go Higher conducted a survey recently on the factors that most influence the sense of empowerment and 52 per cent of the survey participants selected “being supported by positive people” as the key driver.

It’s akin to making the shift to clean energy sources. Empower people to determine their own path and support wellbeing authentically.

You may just find that cultural emissions are lower and you don’t have to keep throwing more and more money at people to make them stay.

Thinking differently about our brains and how we reward those bright ideas – that’s innovation in action.

With thanks to the REMSMART and Go Higher panellists - Associate Professor Jenny Rodger, Peta Slocombe, Allan Feinberg and Emeritus Professor Gary Martin.